ANNUAL
REP ORT
TABLE OF CONTENTS
Corporate Directory
Chairman’s Letter to Shareholders ......................................................................... i
Review of Operations ............................................................................................ ii
Resources and Reserves ...................................................................................... xii
Community .......................................................................................................... xv
Annual Financial Statements ................................................................................. 1
Directors’ Report ................................................................................................... 2
Auditor’s Independence Declaration .................................................................. 20
Consolidated Statement of Profit or Loss
and Other Comprehensive Income ..................................................................... 21
Consolidated Statement of Financial Position .................................................... 22
Consolidated Statement of Changes In Equity .................................................... 23
Consolidated Statement of Cash Flows ............................................................... 24
Notes to the Financial Statements ...................................................................... 25
Directors’ Declaration ......................................................................................... 61
Independent Auditor’s Audit Report ................................................................... 62
ASX Additional Information ................................................................................. 69
Tenement Schedule ............................................................................................. 71
CORPOR ATE GOVERNANCE
In recognising the need for the highest standards of corporate behaviour and
accountability, the Directors of the Company support and have adhered to
the principles of corporate governance. The Company’s corporate governance
statement may be accessed on the Company’s website at
www.daciangold.com.au.
CORPORATE DIRECTORY
DIRECTORS
Rohan Williams
Barry Patterson
Robert Reynolds
Ian Cochrane
Executive Chairman & CEO
Non-Executive Director
Non-Executive Director
Non-Executive Director
COMPANY SECRETARY
Kevin Hart
REGISTERED OFFICE AND
PRINCIPAL PLACE OF BUSINESS
Level 2, 1 Preston Street
Como WA 6152
AUDITOR
KPMG
235 St Georges Terrace
PERTH WA 6000
SHARE REGISTRY
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace, Perth WA 6000
STOCK EXCHANGE LISTING
The Company’s shares are quoted on the Australian Securities Exchange. The
home exchange is Perth, Western Australia.
ASX CODE
DCN – Ordinary shares
COMPANY INFORMATION
The Company was incorporated and registered under the Corporations Act 2001
in Western Australia on 23 November 2011.
The Company is domiciled in Australia.
CONTACT
Telephone:
Facsimile:
Email:
Website:
08 6323 9000
08 6323 9099
info@daciangold.com.au
www.daciangold.com.au
CHAIRMAN’S LET TER TO SHAREHOLDERS
Dear Fellow Shareholders,
On behalf of your Board of Directors I am pleased to present
to you Dacian Gold’s seventh Annual Report for the financial
year ended 30 June 2019 at a time when the Australian gold
industry is experiencing record high gold prices.
The 2019 year started well and unfortunately ended on a
low note following missing production guidance in the June
quarter. It was a disappointing end to what was otherwise
a strong production performance in our very first year of
being Australia’s newest gold producer.
For the full year, Dacian produced 138,911 ounces of gold
which, from when gold was first mined at Mt Morgans
in the late 1890s, is the highest annual production level
yet achieved. The underground operations at Westralia
produced over 830,000 tonnes of ore which contained
85,000 ounces of gold. The Jupiter open pit produced a
total of almost 2 million tonnes of ore for 65,000 ounces
of gold. The processing plant had an excellent first year of
throughput with over 2.6 million tonnes of ore processed
– already exceeding the nameplate capacity of 2.5 million
tonnes per annum. Gold recovery from the treatment plant
averaged 95.1% for the full year, another excellent result.
On the 1st January 2019, the Company declared Commercial
Production at its Mt Morgans operation. Other milestones
achieved during the year included increasing Ore Reserves
at Mt Morgans by 16% to 1.4 million ounces of gold and
increasing measured and indicated mineral resources by
11% to 2.5 million ounces of gold.
In early July 2019, we released a life of mine (LOM) plan for
Mt Morgans. The LOM plan sees 1.1 million ounces of gold
mined over the next 8 years from Mt Morgans at an average
all-in-cost (inclusive of all capital expenditure) of A$1,280-
1,380 per ounce. The first 5 years averages 170,000 ounces
of gold production each year with the maximum forecast
production of 189,000 ounces of gold in FY2022.
As with previous years, Dacian was busy on the exploration
front with over 57km of drilling completed. Most of the
drilling activity centred on the Westralia area with over
38km of diamond drilling completed. The highlight of the
Westralia exploration drilling was the discovery of the
Phoenix Ridge gold deposit.
Drilling at Phoenix Ridge returned several of the best
exploration drill intersections yet recorded at Mt Morgans,
and included 1.7m @ 127g/t gold, 31m @ 6.3g/t gold and
14.3m @ 12.7g/t gold. The maiden resource estimate for
Phoenix Ridge was released in October 2019 and showed an
initial resource of 125,000 ounces at the high grade of 8.1g/t
gold. Infill drilling into Phoenix Ridge is continuing and we
are hopeful we will be able to generate a new, high-grade
production source for Mt Morgans in the near term.
i DAC I A N G O L D | ANNUAL REPORT 2019
This FY2020 year is forecast to produce between 150,000-
170,000 ounces of gold at an all-in-cost (inclusive of all
capital expenditure) of A$1,400-1,500 per ounce. The
Company delivered a strong first quarter of FY2020 with
over 42,000 ounces of gold production that delivered $20
million in operational cash flow. Cash and gold on hand at the
end of September 2019 was $54 million, up from the $45.6
million at the end of June 2019. The increase in cash from
the end of June 2019 to the end of September 2019 was all
the more significant because we also made a $10.8 million
debt repayment in the September. At the end of September
Dacian’s outstanding bank debt was $94.7 million.
The Company has learnt a lot from its first full year of
production at Mt Morgans. We have made changes in how
we plan, execute and account for our mining activities – all of
which is not unusual for a new mining operation. At the time
of writing this report, our mill-reconciled production when
compared to the corresponding grade control models for all
of our production to date over the last 18 months, is sitting
at 100.2%. This is an excellent result for a new mine start-
up. We will continue to look for operation improvements
that enhance the financial performance at Mt Morgans.
Delivering on stated production guidance and costs is of
paramount importance for the Company.
In closing, I would like to thank all our dedicated staff,
contractors and stakeholders for their support throughout
the year. Their continued hard work in ‘getting the job done’
is integral to the ongoing success of Dacian.
On behalf of the Directors of the Company, I would also like
to thank all of our shareholders for their continued support
and interest in the Company.
Rohan Williams
Executive Chairman
REVIEW OF OPERATIONS
INTRODUCTION AND DACIAN GOLD LIMITED’S CORPORATE OBJECTIVE
Dacian Gold Limited’s Mt Morgans Gold Operation (MMGO)
is located 25km west of Laverton, being approximately
750km north-east of Perth in Western Australia (see Figure
1).
The MMGO 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.
Several milestones were achieved during the financial year
with the focus centred on ramping up the MMGO to steady-
state production levels, and included the following key
milestones:
• The Company’s first year of gold production resulted in
the production of 138,911 ounces of gold;
• Commercial production was declared on 1 January 2019;
• MMGO Ore Reserves increased by 16% to 1.4Moz;
• Measured and Indicated Resources increased by 11% to
2.5Moz;
• Total Mineral Resources for MMGO now comprise
55.2Mt at 2.1g/t Au for 3.65Moz;
• An updated 8-year Life-of-Mine Plan for MMGO under-
pinned by 1.1Moz in total gold production was released;
and
• A maiden resource of 125,000 ounces at 8.1g/t for the
newly discovered Phoenix Ridge project was released.
Each of the key achievements completed during FY2019
is described in more detail in the following pages under
Figure 1: Location of Dacian Gold’s Mt Morgans Gold Operation area in
Western Australia
the headings: First Year of Gold Production Delivers
138,911 Ounces; Mt Morgans Gold Operation and Mine
Development; Updated Life-of-Mine Plan; and Exploration
and Drilling. Also included after the Review of Operations is
an updated Mineral Resource and Ore Reserve statement.
Dacian Gold’s corporate objective is to cement its position as
an Australian mid-tier gold producer. Coupled with a strong
focus on exploration, the Company remains confident it can
realise the undiscovered gold endowment that it believes is
to be found at Mt Morgans.
Figure 2: Location map showing Dacian Gold’s
100%-owned MMGO tenure (orange), including
the Westralia, Jupiter, and Cameron Well
Deposits. Also shown is the location of key
infrastructure, as well as proximal multi-million
ounce gold deposits.
DAC I A N G O L D | ANNUAL REPORT 2019
ii
REVIEW OF OPERATIONS
FIRST YEAR OF GOLD PRODUCTION DELIVERS 138,911 OUNCES
The Company completed its first full-year of production in
FY2019, producing 138,911 ounces.
The treatment plant processed over 2.6Mt at a head grade
of 1.7g/t with average recoveries of 95%. The Company
reported its inaugural All-In-Sustaining-Cost in the second
half of the financial year, averaging $1,500/oz over that
period.
For FY2020, the Company expects to produce between
150,000-170,000 ounces at an MMGO All-In Cost of $1,400-
$1,500/oz.
A summary of key operating statistics for FY2019 is provided
in Figure 3 below:
Q/Q FY19
Underground
Stope Ore Mined
Development Ore Mined
Total Ore Mined
Mined Ore Grade
Contained Gold Mined
Ore Mining Rate
Metres Developed - Capital
Metres Developed - Operating
Total Development
Open Pit
Ore Mined
Mined Ore Grade
Contained Gold Mined
Ore Mining Rate
Waste Mined
All Mining
Ore Mined
Mined Ore Grade
Contained Gold Mined
Processing
Ore Milled
Processed Grade
Contained Gold
Gold Recoveries
Mill Throughput
Gold Produced
Gold Sold
Gold-on-Hand
Average Sell Price
AISC (Produced Gold)
Unit
SQ
DQ
MQ
JQ
kt
kt
kt
g/t
oz
tpd
m
m
m
kt
g/t
oz
tpd
kbcm
kt
g/t
oz
kt
g/t
oz
%
tpd
oz
oz
oz
A$/oz
A$/oz
101
76
177
3.3
18,999
1,924
1,678
1,689
3,367
443
0.8
11,419
4,896
1,887
620
1.5
30,418
681
1.4
30,879
94.9%
7,402
29,316
29,249
5,445
1,734
-
113
82
195
4.2
25,925
2,137
1,355
1,945
3,300
537
0.9
15,304
5,838
2,107
732
1.8
41,229
630
2.0
40,775
93.0%
6,842
37,934
34,055
9,913
1,733
-
197
53
250
3.0
23,637
2,778
984
1,815
2,799
445
0.9
13,007
4,944
2,089
694
1.6
36,644
688
1.7
36,641
96.0%
7,644
35,003
39,315
4,474
1,770
1,488
185
30
215
2.5
16,959
2,360
1,712
698
2,410
572
1.4
25,158
6,288
2,212
787
1.7
42,117
665
1.8
37,754
97.0%
7,310
36,658
35,685
5,026
1,764
1,519
Figure 3: Summary of MMGO operating statistics for FY2019
iii DAC I A N G O L D | ANNUAL REPORT 2019
REVIEW OF OPERATIONS
MT MORGANS GOLD OPERATION AND MINE DEVELOPMENT
2.5Mtpa CIL Treatment Plant
At MMGO, commercial production was declared on 1 January
2019 with the mine officially transitioning into producer
status following the achievement of this key milestone.
The milestone was achieved following a steady build up in
processing rates at the MMGO treatment plant, as well as
increasing underground and open pit productivities during
the first half of financial year 2019.
Figure 4: Aerial view of the back-end of the 2.5Mtpa treatment plant at MMGO showing ball and SAG mills; CIL tanks, gold room, water storage
and the gas-fired power station
Figure 5: Coarse ore stockpile, SAG and ball mill assembly
DAC I A N G O L D | ANNUAL REPORT 2019
iv
REVIEW OF OPERATIONS
MT MORGANS GOLD OPERATION AND MINE DEVELOPMENT
Jupiter Mine Area
The Jupiter mine area continued to advance during the
financial year with the Heffernans deposit the primary
source of ore mining. Mining activities focused on accessing
the high-grade Cornwall Shear Zone (CSZ) in the latter part of
the financial year. Ore mining rates averaged over 5,500tpd
throughout the year.
Figure 6 : Aerial view of mining activities at the Heffernans Pit during the year.
Westralia Mine Area
The Westralia mine area is located immediately below the
historic Westralia open pit from which the access portals to
the Beresford and Allanson underground mines are located.
After mining over 180 stopes since commencement of
mining activities at Westralia, mined dilution levels were
consistently in line with design expectations.
in
Beresford South and North were well progressed
both stoping and development activities during the year,
providing the majority of underground ore.
At Allanson, development advanced in the second half of
the year with stoping rates contributing to overall mining
activities at the time of this report.
The Company also accelerated underground grade control
drilling through the year.
v DAC I A N G O L D | ANNUAL REPORT 2019
REVIEW OF OPERATIONS
MT MORGANS GOLD OPERATION AND MINE DEVELOPMENT
Figure 7: Underground jumbo development
Figure 8: Good stoping conditions have been
observed in the first year of production at Westralia
UPDATED LIFE-OF-MINE PLAN1
The Company released an updated Life-of-Mine (LOM)
mine plan that demonstrates over one million ounces of
gold production over an 8-year period with the first 5 years
averaging 170,000 ounces per annum (see ASX release 10
July 2019).
The updated 8-year MMGO LOM is for the period FY2020 –
FY2027. Over the 8-year LOM period a total of 1.08 million
ounces is forecast to be produced1. The MMGO All-in-Cost
(AIC) for this production is A$1,280-A$1,380/oz (which is
inclusive of all capital expenditure).
Based on an assumed gold price of A$1,800/oz and a
discount rate of 5%, the discounted pre-tax MMGO cash
flows over the initial 8-year LOM are forecast to be in excess
of A$420 million.
Figure 9 below summarises the updated LOM mine plan
annual production profile and associated AIC (inclusive
of all capital) for MMGO to FY2027. Note the aggregate
production in FY2026 and FY2027 of approximately 105,000
ounces is predominantly from the treatment of existing low
grade stockpiles.
The LOM plan demonstrates an average annual production
rate of 170,000oz over the first 5 years through to FY2024 at
an average MMGO AIC (inclusive of all capital) of A$1,340 –
A$1,440/oz.
FY20
FY21
FY22
FY23
FY24
FY25
FY26
FY27
FY20-24
Average
Production
(Koz)
150-170
174
189
176
148
117
65
40
170
MMGO AIC
(A$/oz)
1,350-1,450
1225-1,325
1,350-1,450 1,325-1,425 1,400-1,500 1,025-1,125 1,140-1,240 1,025-1,125
1,390
Figure 9: Updated MMGO LOM plan annual production and All-in-Cost profile
1Cautionary Statement: The LOM plan is based partly on Inferred Mineral Resources (8% of the LOM) – please refer to page viii for a Cautionary Statement
regarding the low level of geological confidence in Inferred Mineral Resource
DAC I A N G O L D | ANNUAL REPORT 2019 vi
REVIEW OF OPERATIONS
UPDATED LIFE-OF-MINE PLAN
Figure 10 shows the individual production sources for the
next 6 years to FY2025 and Figure 11 shows what proportion
of each of those years is underpinned by Ore Reserve and
Inferred Mineral Resource.
200,000
175,000
150,000
125,000
100,000
75,000
50,000
d
e
c
u
d
o
r
P
s
e
c
n
u
O
FY21
FY22
FY20
Westralia
Cameron Well
King St
Stockpiles
FY24
FY23
Jupiter
Transvaal
Morgans North/Phoenix
Potential Converson of Established Mineral Resources
FY25
Figure 10: Updated MMGO LOM mine plan by production source. Note the cross-hatched areas shown in FY24 and FY25 are not
included in the Production Target in this report
200,000
175,000
d
e
c
u
d
o
r
P
s
e
c
n
u
O
150,000
125,000
100,000
75,000
50,000
FY20
FY21
FY22
FY23
FY24
FY25
2018 Ore Reserve
2018 Inferred Resource
Figure 11: MMGO LOM mine plan production source by classification
vii DAC I A N G O L D | ANNUAL REPORT 2019
REVIEW OF OPERATIONS
UPDATED LIFE-OF-MINE PLAN
Cautionary Statement: The LOM plan is a Production Target
that contains 92% Ore Reserve and 8% Inferred Mineral
Resource. There is a low level of geological confidence
associated with Inferred Mineral Resource and there is
no certainty that further exploration work will result in
the conversion to Indicated Mineral Resource or that the
Production Target itself will be realised.
Figures 10 and 11 show that the LOM mine plan has a
consistent base load of Westralia and Jupiter Ore Reserves
of approximately 150,000oz per annum through to FY2023
at which time the current Ore Reserves at Westralia are
depleted and underground production turns to the Transvaal
Ore Reserve. Peak gold production is in FY2022 with
189,000oz sourced from Westralia, Jupiter and Cameron
Well.
The Company is confident it can convert existing Mineral
Resources and identify extensions to known Ore Reserves
to increase production levels from FY2024 and beyond, as
shown in Figure 10. Sources of Ore Reserve extension and
conversion of existing Mineral Resources are potentially
available at Westralia, Cameron Well and Jupiter.
Figure 12 below shows the key operating outputs from the
MMGO mine plan through to FY2025. As noted in Figure 9,
FY2026 and FY2027 exhibit lower production levels based
on processing of existing stockpiles.
The MMGO treatment plant has consistently operated
above nameplate operating rates of 2.5Mtpa in various ore
types since commissioning, and the Company expects these
processing levels to continue.
FY20
FY21
FY22
FY23
FY24
FY25
Processed
Grade
Recoveries
Production
(Mtpa)
(g/t)
(%)
(Koz)
2.7
2.0
94
150-170
2.9
2.0
94
174
2.9
2.2
94
189
2.9
2.0
94
176
2.9
1.7
94
148
2.9
1.3
94
117
Figure 12: Key operating summary outputs for MMGO LOM
FY20-24
Average
2.9
2.0
94
170
The location of all production sources shown in Figures 10
and 11 are shown in Figure 13. Note the close proximity
of the processing plant to all LOM mine plan production
sources.
the Company is focused on ongoing conversion of Inferred
Mineral Resource and is pursuing the targeted areas to
the north of Beresford and Allanson for potential resource
growth.
As discussed above the Company is confident that through
ongoing Mineral Resource conversion and extensional
drilling, specifically at Westralia, sustaining an annual
production rate of 170,000ozpa through to FY2025, as
well as extending mine life, is achievable. In this regard,
Recent drilling success at Phoenix Ridge (see Exploration
and Drilling section), as well as at Cameron Well, provides
strong validation that the Company’s current exploration
model has the potential for new areas of production.
Figure 13: Location Map of MMGO LOM mine plan production sources
DAC I A N G O L D | ANNUAL REPORT 2019 viii
REVIEW OF OPERATIONS
EXPLORATION AND DRILLING
Westralia Mine Area Exploration Activity
Exploration drilling at the Westralia Mine Area during the
year focussed on testing areas outside the existing Ore
Reserve and Mineral Resource boundaries. Approximately
38,000m of diamond drilling was conducted over three
principal areas:
(i) An area north of, and down-plunge of an interpreted
high grade trend, below the historic Morgans Nth open
pit. This drilling led to the high-grade discovery of the
Phoenix Ridge Mineral Resource as shown in Figure 14
below;
(ii) An undrilled section of the ore-hosting banded iron
formation (BIF) lying between the north end of the
Beresford North Ore Reserve and the south end of the
Allanson Ore Reserve. This area is referred to in Figure
14 as Area 1; and
(iii) The area between the northern limits of the Allanson
Ore Reserve and the Morgans North open pit. This area
is described as Area 2 in Figure 14.
Figure 14: Longitudinal section of the Westralia Mine Area showing the location of the Beresford and Allanson underground mines; as well as the location
of the Phoenix Ridge Discovery and Areas 1 and 2 which were also successful in identifying mineralised extensions to existing Ore Reserves and Mineral
Resource. Note the Drill Target areas shown as blue arrows are based on high-grade trends seen in the mine environment.
(i) Phoenix Ridge Discovery
The Phoenix Ridge Discovery was made by drill-testing
along the same high-grade trend direction observed in the
mine environment at Beresford and Allanson, below and to
the north of the historic Morgans North open pit (see ASX
release of 20 June 2019).
The discovery is located only 15km north-east of the
MMGO treatment plant and 750m north of the Allanson
Ore Reserve. It has a broadly similar geological setting to
that seen at Allanson and returned some of the thickest
and highest grade intersections Dacian has encountered at
Westralia, including:
• 1.7m @ 127.0g/t Au in 19MMDD0501 (see Figure 15)
• 31.0m @ 6.3g/t Au in 19MMDD0523
• 14.3m @ 12.7g/t Au in 19MMDD0496
• 3.2m @ 12.5g/t Au in 19MMDD0497
ix DAC I A N G O L D | ANNUAL REPORT 2019
Figure 15: Strong development of visible gold in 19MMDD0501 which
returned 1.7m @ 127g/t Au
REVIEW OF OPERATIONS
EXPLORATION AND DRILLING
Three of the four high grade results from the discovery
intersections listed above are located on the same section,
referred to as the Phoenix Ridge Discovery Section,
and repeated below as Figure 16. Note the high grade
mineralisation is defined over a continuously interpreted dip
extent of over 200m.
Subsequent drilling resulted in the release of a maiden
Inferred Mineral Resource of:
481,000t @ 8.1g/t Au for 125,000 ounces
(see ASX release 3 October 2019)
(ii) Area 1 Drilling – Between the Beresford North and
Allanson Ore Reserves
Twenty-two diamond drill holes were drilled into a previously
undrilled area measuring 350m x 300m and located between
the Beresford North and Allanson Ore Reserves (referred to
as Area 1 in Figure 14).
The drilling was prioritised in order to test for economic
mineralisation that, if present, may warrant the development
of an additional decline at Westralia and provide possible
near-term production opportunities.
The Company is optimistic that with ongoing infill-drilling
there is a strong potential that Phoenix Ridge may become a
new, near-term production source for the MMGO.
Drilling was conducted on broadly 50-100m spaced centres
and returned numerous highly encouraging intersections
including (see ASX release of 21 February 2019):
• 16.15m @ 7.7g/t Au in 18MMDD0477W1
• 9.55m @ 6.4g/t Au in 18MMDD0477
• 5.90m @ 7.0g/t Au in 18MMDD0435W2
• 6.00m @ 7.8g/t Au in 18MMDD0447
• 6.25m @ 5.1g/t Au in 18MMDD0451
• 4.85m @ 4.4g/t Au in 18MMDD0447W1
• 2.75m @ 6.2g/t Au in 18MMDD0449
• 2.80m @ 6.4g/t Au in 18MMDD0454
• 7.50m @ 3.1g/t Au in 18MMDD0477
The high grade results confirmed the flat, north plunge
direction of the high grade shoots commonly observed
throughout the Westralia ore system.
(iii) Area 2 Drilling– North of the Allanson Ore Reserve
Seventeen broad-spaced diamond drill holes were drilled
north of the Allanson Ore Reserve testing for the flat, north-
plunging high-grade extensions observed throughout the
Westralia mine, and successfully targeted in the Phoenix
Ridge Discovery and the Area 1 Drilling, referred to above.
Drilling confirmed the flat, north-plunging high grade trends
seen in the upper levels of Allanson continues for up to
300m north of the Allanson Ore Reserve. Better results from
this drilling include (see ASX release of 21 February 2019):
• 3.00m @ 33.0g/t Au in 15MMRD021W1
• 1.30m @ 9.4g/t Au in 15MMRD021W1
• 3.10m @ 5.4g/t Au in 18MMDD0471
• 5.80m @ 2.6g/t Au in 18MMDD0467
• 1.35m @ 3.8g/t Au in 18MMDD0460
DAC I A N G O L D | ANNUAL REPORT 2019 x
Figure 16: Phoenix Ridge Discovery Section showing the location of several
thick and high grade drill results over approximately a 200m dip-extent
REVIEW OF OPERATIONS
EXPLORATION AND DRILLING (CONT.)
Cameron Well Exploration Activity
Cameron Well has an existing 245,000 ounce Mineral
Resource which includes a maiden oxide Ore Reserve of
1.3Mt @ 1.1 g/t gold for 45,000 ounces (see ASX release 18
December 2018).
The current Mineral Resource is centrally located within a
large 6km² near-surface oxide gold anomaly discovered by
Dacian Gold (see ASX release 6 August 2018). The Mineral
Resource area is drilled by RC drilling techniques and
represents only 25% of the size of the 6km2 near surface
oxide anomaly.
As part of an ongoing drilling campaign at Cameron Well
since the declaration of the maiden Ore Reserve, 64 RC drill
holes for approximately 7,200m were reported (see ASX
release of 21 February 2019), with drilling of those holes
focused on testing within the Inferred Mineral Resource
zones that define mineralised extensions of the Ore Reserve,
and infill-drilling below and within existing Ore Reserve pit
shells. Better results returned form the drilling programs
included:
(i)
Significant Results within Inferred Resources along
strike from the Ore Reserve
• 2m @ 11.8g/t Au in 18CWRC0446
• 4m @ 4.2g/t Au in 18CWRC0446
• 3m @ 2.3g/t Au in 18CWRC0473
• 3m @ 2.4g/t Au in 18CWRC0474
• 1m @ 12g/t Au in 18CWRC0476
• 9m @ 1.2g/t Au in 18CWRC0476
• 1m @ 8.9g/t Au in 18CWRC0474
(ii) Significant Results within and below the Ore Reserve
• 12m @ 3.8g/t Au in 18CWRC0456
• 6m @ 2.7g/t Au in 18CWRC0459
• 8m @ 2.4g/t Au in 18CWRC0430
• 5m @ 2.4g/t Au in 18CWRC0427
• 10m @ 1.6g/t Au in 18CWRC0440
• 4m @ 3.4g/t Au in 18CWRC0449
• 4m @ 2.0g/t Au in 18CWRC0465
Drilling remains ongoing at Cameron Well with programs
designed to continue infilling and extending mineralisation
around the current Ore Reserve open pits, as well as testing
the depth expression of those primary structures located
beneath the 6km2 oxide gold anomaly.
During the year the Company announced Ore Reserves at
MMGO increased 16% to 1.39Moz.
An updated Ore Reserve and Mineral Resource Statement
is provided in the following section of this Annual Report.
xi DAC I A N G O L D | ANNUAL REPORT 2019
RESOURCES AND RESERVES
2019 MINERAL RESOURCES & ORE RESERVES STATEMENT (DCN: 100%)
Table 1: Mt Morgans Gold Operation Mineral Resources
Cut-off
Grade
Measured
Indicated
Inferred
Total Mineral Resource
Au g/t
Tonnes
Au g/t
Au Oz
Tonnes
Au g/t
Au Oz
Tonnes
Au g/t
Au Oz
Tonnes
Au g/t
Au Oz
1,304,000
5.3
222,000
4,662,000
5.1
767,000
4,018,000
4.1
528,000
9,985,000
4.7
1,518,000
2,363,000
1.3
101,000 21,979,000
1.3
954,000
5,353,000
1.1
188,000 29,695,000
1.3
1,242,000
-
-
-
3,494,000
0.5
58,000
-
-
-
-
-
-
525,000
2.0
34,000
525,000
2.0
34,000
-
-
-
3,494,000
0.5
58,000
-
-
-
3,465,000
1.1
117,000
2,808,000
1.4
127,000
6,273,000
1.2
245,000
367,000
5.8
68,000
404,000
5.3
69,000
482,000
4.7
73,000
1,253,000
5.2
210,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
160,000
4.1
21,000
422,000
4.0
55,000
582,000
4.1
76,000
413,000
1.2
16,000
309,000
0.9
9,000
722,000
1.1
25,000
69,000
8.2
18,000
120,000
7.1
27,000
189,000
7.5
46,000
-
-
-
532,000
2.0
33,000
532,000
2.0
33,000
151,000
0.9
4,000
-
-
-
1,276,000
0.7
30,000
-
-
-
-
-
-
1,276,000
0.7
30,000
151,000
0.9
4,000
7,678,000
1.8
453,000 32,428,000
1.9
1,992,000 14,570,000
2.3
1,075,000 54,676,000
2.0
3,520,000
Deposit
Westralia
Jupiter
Jupiter UG
Jupiter LG Stockpile
Cameron Well
Transvaal
Ramornie
Maxwells
Craic*
King St*
Low Grade Stockpiles
Mine Stockpiles
MINERAL RESOURCE
1 July 2018
* JORC 2004
2.0
0.5
1.5
0.5
0.4
2.0
2.0
0.5
2.0
0.5
0.5
0.5
Other than Cameron Well all Mineral Resource
estimates are at 1 July 2018. Cameron Well Resource
estimate is at 31 July 2018.
There has been no change to the previously reported
Mineral Resources (Table 1) since the 2018 Mineral
Resources and Ore Reserves Statement. The Company
expects to update the MMGO resources table in late
2019. It is noted that reported 2019 full year production
has depleted the reported Mineral Resource by
approximately 155,000ozs.
Since 30 June 2019, the Mineral Resource estimates
for MMGO have increased due to the inclusion of
the maiden Mineral Resource estimate for Phoenix
Ridge being an inferred Mineral Resource estimate
of 481,000t at 8.1g/t for 125,000 ounces (Refer ASX
release, 3 October 2019).
Deposit
Beresford UG
Allanson UG
Westralia UG Low Grade
Transvaal UG
Jupiter OP
Cameron Well OP
Jupiter Low Grade Stockpile
Low Grade Stockpiles
Mine Stockpiles
ORE RESERVE 1 July 2018
Table 2: Mt Morgans Gold Operation Ore Reserves
Cut-off
Grade
Au g/t
Proved
Probable
Total
Tonnes
Au g/t
Au Oz
Tonnes
Au g/t
Au Oz
Tonnes
Au g/t
Au Oz
1.2/2.1*
749,000
4.3
104,000
2,355,000
1.2/2.1*
0.5/1.8*
-
-
1.4
0.5
0.4
0.5
0.5
0.5
193,000
2,213,000
-
3,494,000
-
151,000
6,799,000
-
-
4.7
1.2
-
0.5
-
0.9
1.3
-
-
1,175,000
458,000
29,000
325,000
88,000
13,049,000
-
1,300,000
58,000
-
-
1,276,000
4,000
-
3.5
5.0
1.2
3.4
1.3
1.1
-
0.7
-
265,000
3,104,000
188,000
1,175,000
18,000
458,000
36,000
518,000
523,000
15,262,000
45,000
1,300,000
-
3,494,000
30,000
1,276,000
-
151,000
284,000
19,938,000
1.7
1,105,000
26,737,000
3.7
5.0
1.2
3.9
1.2
1.1
0.5
0.7
0.9
1.6
369,000
188,000
18,000
65,000
611,000
45,000
58,000
30,000
4,000
1,389,000
* Development and Stoping cut-off grades. Rounding errors will occur.
There has been no change to the previously reported
Ore Reserves (Table 2), (refer ASX Release, 18 December
2018). The Company expects to update the MMGO Ore
Reserve in late 2019. It is noted that reported 2019
financial year production has depleted the reported
Reserves by approximately 155,000ozs.
DAC I A N G O L D | ANNUAL REPORT 2019 xii
RESOURCES AND RESERVES
2019 MINERAL RESOURCES & ORE RESERVES STATEMENT (DCN: 100%)
Governance
Mineral Resources
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.
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.
The information in this report that relates to Mineral
Resources for Westralia, Jupiter, Cameron Well, Ramornie,
Mine and Low Grade Stockpiles (Refer ASX release, 6 August
2018), and Transvaal (Refer ASX release, 16 September
2015) is based on information compiled by Mr Shaun Searle
who is a Member of the Australian Institute of Geoscientists
and a full-time employee of Ashmore Advisory. 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 Mineral
Resources for Craic and King Street 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 Ltd. 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 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.
xiii DAC I A N G O L D | ANNUAL REPORT 2019
RESOURCES AND RESERVES
2019 MINERAL RESOURCES & ORE RESERVES STATEMENT (DCN: 100%)
Ore Reserves
The information in this report that relates to Ore Reserves
for the Westralia Mining Area (see ASX announcement
18 December 2018) is based on information compiled or
reviewed by Mr James Howard. Mr Howard has 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). Mr Howard 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 they are accepting responsibility. Mr
Howard is a Member of the Australasian Institute of Mining
and Metallurgy and a full time employee of Dacian Gold
Limited and 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 Ore Reserves
for the 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 a Member 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 his 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 and Cameron Well Area is
based on information compiled or reviewed by Mr Mathew
Lovelock. Mr Lovelock has 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 Lovelock is a member of
The Australasian Institute of Mining and Metallurgy and a
full-time employee of Dacian Gold Limited and consents
to the inclusion in the report of the matters based on his
information in the form and context in which it appears.
DAC I A N G O L D | ANNUAL REPORT 2019 xiv
COMMUNITY
Dacian Gold understands that a lasting, positive and
mutually beneficial relationship with local communities is
critical to the success of its MMGO. The Company is pleased
to be able to support the nearby Mt Margaret and Laverton
school communities (see Figures 17 and 18 below).
Figure 17: Dacian assisted the Mt Margaret Remote Community School during NAIDOC Week
Figure 18: Dacian supplied uniforms to the Laverton Community netball team
xv DAC I A N G O L D | ANNUAL REPORT 2019
9
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2
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A
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E
H
T
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O
F
S
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M
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T
A
T
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L
A
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A
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A
DIRECTORS’ REPORT
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 2019. In order to comply with the provisions of the
Corporations Act 2001, the Directors’ Report is as follows:
Directors
The Directors of the Company in office since 1 July 2018 and up to the date of this report are:
Rohan Williams BSc (Hons), MAusIMM
DIRECTORS’ REPORT
(Executive Chairman & CEO)
Mr Williams was founding CEO and Managing Director of Avoca Resources Ltd, and led that company from its
The Directors present the financial statements of Dacian Gold Limited (“the Company”) and its controlled
$7 million exploration IPO in 2002 until its merger with Anatolia Minerals in 2011 to form Alacer Gold Corp, which
subsidiaries (“the Group”) for the year ended 30 June 2019. In order to comply with the provisions of the
valued Avoca at $1 billion. At the time of the merger, Avoca Resources Ltd was the third largest ASX listed
Corporations Act 2001, the Directors’ Report is as follows:
Australian gold producer.
Kevin Hart
Ian Cochrane
Rohan Williams
Robert Reynolds
Serving as the merged group’s Chief Strategic Officer until the end of 2011, Mr Williams resigned as a Non-
Directors
Barry Patterson
Executive Director of Alacer Gold Corp on 10 September 2013.
The Directors of the Company in office since 1 July 2018 and up to the date of this report are:
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.
Rohan Williams BSc (Hons), MAusIMM
He has over 30 years of experience in exploration, mine development and operations in both Australia and
(Executive Chairman & CEO)
overseas. Mr Williams also serves on the Board of the Telethon Kids Institute.
Mr Williams was founding CEO and Managing Director of Avoca Resources Ltd, and led that company from its
On 14 March 2014, Mr Williams became Executive Chairman of the Company. Prior to this date, Mr Williams
$7 million exploration IPO in 2002 until its merger with Anatolia Minerals in 2011 to form Alacer Gold Corp, which
undertook the Chairman’s role on a Non-Executive basis.
valued Avoca at $1 billion. At the time of the merger, Avoca Resources Ltd was the third largest ASX listed
Australian gold producer.
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 the 2019 financial year.
Serving as the merged group’s Chief Strategic Officer until the end of 2011, Mr Williams resigned as a Non-
Executive Director of Alacer Gold Corp on 10 September 2013.
Robert Reynolds MAusIMM
Prior to his time with Avoca Resources Ltd, Mr Williams worked with WMC Resources Limited where he held
(Non-Executive Director)
Chief Geologist positions at St Ives Gold Mines and the Norseman Gold Operation.
Mr Reynolds was the Non-Executive Chairman of Avoca Resources Ltd from 2002 until it merged with Anatolia
He has over 30 years of experience in exploration, mine development and operations in both Australia and
Minerals to form Alacer Gold Corp in 2011. Mr Reynolds was Non-Executive Chairman of Alacer Gold Corp until
overseas. Mr Williams also serves on the Board of the Telethon Kids Institute.
23 August 2011.
On 14 March 2014, Mr Williams became Executive Chairman of the Company. Prior to this date, Mr Williams
With over 35 years’ commercial experience in the mining sector, Mr Reynolds has worked on mining projects in
undertook the Chairman’s role on a Non-Executive basis.
a number of locations including Australia, Africa and across the Oceania region and has extensive experience in
Other than as stated above, Mr Williams has not served as a Director of any other listed companies in the three
mineral exploration, development and mining operations.
years immediately before the end of the 2019 financial year.
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
Robert Reynolds MAusIMM
a Director of Canadian company Exeter Resource Corporation when it was acquired by Goldcorp Inc. on 2 August
(Non-Executive Director)
2017 for CAD$184 million. Mr Reynolds currently holds a Directorship with Canadian company Rugby Mining
Limited. Mr Reynolds was previously a Director of ASX listed companies Chesser Resources, Convergent Minerals
Mr Reynolds was the Non-Executive Chairman of Avoca Resources Ltd from 2002 until it merged with Anatolia
Limited and Global Geoscience Limited.
Minerals to form Alacer Gold Corp in 2011. Mr Reynolds was Non-Executive Chairman of Alacer Gold Corp until
23 August 2011.
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 the 2019 financial year.
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 holds 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.
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 the 2019 financial year.
Dacian Gold Limited 2019 Annual Report
2 | P a g e
2 DAC I A N G O L D | ANNUAL REPORT 2019
Dacian Gold Limited 2019 Annual Report
2 | P a g e
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 2019. In order to comply with the provisions of the
Corporations Act 2001, the Directors’ Report is as follows:
Directors
The Directors of the Company in office since 1 July 2018 and up to the date of this report are:
Rohan Williams BSc (Hons), MAusIMM
DIRECTORS’ REPORT
(Executive Chairman & CEO)
Mr Williams was founding CEO and Managing Director of Avoca Resources Ltd, and led that company from its
The Directors present the financial statements of Dacian Gold Limited (“the Company”) and its controlled
$7 million exploration IPO in 2002 until its merger with Anatolia Minerals in 2011 to form Alacer Gold Corp, which
subsidiaries (“the Group”) for the year ended 30 June 2019. In order to comply with the provisions of the
valued Avoca at $1 billion. At the time of the merger, Avoca Resources Ltd was the third largest ASX listed
Corporations Act 2001, the Directors’ Report is as follows:
Australian gold producer.
Serving as the merged group’s Chief Strategic Officer until the end of 2011, Mr Williams resigned as a Non-
Directors
Executive Director of Alacer Gold Corp on 10 September 2013.
The Directors of the Company in office since 1 July 2018 and up to the date of this report are:
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.
Rohan Williams BSc (Hons), MAusIMM
He has over 30 years of experience in exploration, mine development and operations in both Australia and
(Executive Chairman & CEO)
overseas. Mr Williams also serves on the Board of the Telethon Kids Institute.
Mr Williams was founding CEO and Managing Director of Avoca Resources Ltd, and led that company from its
On 14 March 2014, Mr Williams became Executive Chairman of the Company. Prior to this date, Mr Williams
$7 million exploration IPO in 2002 until its merger with Anatolia Minerals in 2011 to form Alacer Gold Corp, which
undertook the Chairman’s role on a Non-Executive basis.
valued Avoca at $1 billion. At the time of the merger, Avoca Resources Ltd was the third largest ASX listed
Australian gold producer.
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 the 2019 financial year.
Serving as the merged group’s Chief Strategic Officer until the end of 2011, Mr Williams resigned as a Non-
Executive Director of Alacer Gold Corp on 10 September 2013.
Robert Reynolds MAusIMM
Prior to his time with Avoca Resources Ltd, Mr Williams worked with WMC Resources Limited where he held
(Non-Executive Director)
Chief Geologist positions at St Ives Gold Mines and the Norseman Gold Operation.
Mr Reynolds was the Non-Executive Chairman of Avoca Resources Ltd from 2002 until it merged with Anatolia
He has over 30 years of experience in exploration, mine development and operations in both Australia and
Minerals to form Alacer Gold Corp in 2011. Mr Reynolds was Non-Executive Chairman of Alacer Gold Corp until
overseas. Mr Williams also serves on the Board of the Telethon Kids Institute.
23 August 2011.
On 14 March 2014, Mr Williams became Executive Chairman of the Company. Prior to this date, Mr Williams
With over 35 years’ commercial experience in the mining sector, Mr Reynolds has worked on mining projects in
undertook the Chairman’s role on a Non-Executive basis.
a number of locations including Australia, Africa and across the Oceania region and has extensive experience in
Other than as stated above, Mr Williams has not served as a Director of any other listed companies in the three
mineral exploration, development and mining operations.
years immediately before the end of the 2019 financial year.
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
Robert Reynolds MAusIMM
a Director of Canadian company Exeter Resource Corporation when it was acquired by Goldcorp Inc. on 2 August
(Non-Executive Director)
2017 for CAD$184 million. Mr Reynolds currently holds a Directorship with Canadian company Rugby Mining
Limited. Mr Reynolds was previously a Director of ASX listed companies Chesser Resources, Convergent Minerals
Mr Reynolds was the Non-Executive Chairman of Avoca Resources Ltd from 2002 until it merged with Anatolia
Limited and Global Geoscience Limited.
Minerals to form Alacer Gold Corp in 2011. Mr Reynolds was Non-Executive Chairman of Alacer Gold Corp until
23 August 2011.
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 the 2019 financial year.
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 holds 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.
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 the 2019 financial year.
Dacian Gold Limited 2019 Annual Report
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Dacian Gold Limited 2019 Annual Report
2 | P a g e
DIRECTORS’ REPORT
DIRECTORS’ REPORT
Barry Patterson ASMM, MAusIMM, FAICD
(Non-Executive Director)
Mr Patterson is a mining engineer with over 50 years of experience in the mining industry and is co-founder and
Non-Executive Director of ASX listed GR Engineering Limited.
Mr Patterson was also a founding shareholder of leading engineering services provider JR Engineering, which
became Roche Mining after being taken over by Downer EDI in 2002. He also co-founded contract mining
companies Eltin, Australian Mine Management and National Mine Management.
Mr Patterson has served as a Director of a number of public companies across a range of industries. He was
formerly the Non-Executive Chairman of Sonic Healthcare Limited for 11 years, during which time the company’s
market capitalisation increased from $20 million to $4 billion, and Silex Systems Limited.
Other than as stated above, Mr Patterson has not served as a Director of any other listed companies in the three
years immediately before the end of the 2019 financial year.
Ian Cochrane BCom LLB
(Non-Executive Director)
Mr Cochrane is a corporate lawyer and was widely regarded as one of Australia’s leading M&A lawyers until his
retirement from the practice of law in December 2013.
Educated in South Africa where he completed degrees in Commerce and Law, he immigrated to Australia in 1986
and joined national law firm Corrs Chambers Westgarth and then Mallesons Stephen Jaques, specialising in
Mergers & Acquisitions.
In 2006, Mr Cochrane co-established boutique law firm Cochrane Lishman, which was eventually acquired by the
global law firm Clifford Chance in early 2011.
Mr Cochrane is currently the Chairman of VOC Group Limited and Chairman of diversified ASX-listed mining
services group Perenti Global (previously Ausdrill Limited). He is also a Director of Wright Prospecting Pty Ltd
and Ardross Estates Pty Ltd.
He was previously Chairman of Little World Beverages Limited, which produced the Little Creatures beers and
was taken over by Lion Nathan in 2012. He was also previously a Director of Rugby WA and the West Australian
Ballet.
Other than as stated above, Mr Cochrane has not served as a Director of any other listed companies in the three
years immediately before the end of the 2019 financial year.
Company Secretary
Kevin Hart B.Comm, FCA
Mr Hart is a Chartered Accountant and was appointed to the position of Company Secretary on 27 November
2012. He has over 35 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.
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
8,482,851
2,730,555
8,954,987
265,295
2,000,000
-
-
300,000
Dacian Gold Limited 2019 Annual Report
3 | P a g e
DAC I A N G O L D | ANNUAL REPORT 2019 3
DIRECTORS’ REPORT
DIRECTORS’ REPORT
Interests in the Shares and Options of the Company (continued)
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
Ian Cochrane
Number of options vested and exercisable
2,000,000
300,000
Further details of the vesting conditions applicable to these options are disclosed in the remuneration report
section of this Directors’ Report.
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 2019, and the number of meetings attended by each Director were:
Director
Board Meetings
Rohan Williams
Robert Reynolds
Barry Patterson
Ian Cochrane
A
10
10
10
10
B
10
10
9
9
Remuneration &
Nomination Committee
Audit Committee
A
-
2
2
2
B
-
2
2
2
A
-
2
2
2
B
-
2
2
1
A = the number of meetings the Director was entitled to attend
B = the number of meetings the Director attended
Securities
Shares
During or since the end of the financial year, the Company issued ordinary shares as a result of the exercise of
options and performance rights as follows (there were no amounts unpaid on the shares issued):
Date options granted
25 September 2014
5 October 2015
5 February 2016
25 September 2014
Exercise price of options
$0.58
$1.15
$1.16
$0.58
Number of shares issued
500,000
1,100,000
100,000
267,291(i)
(i) Total shares of 267,294 were issued on the cashless exercise of 500,000 options exercisable at $0.58 each
pursuant to the cashless exercise provisions of the Dacian Gold Limited Employee Option Plan.
Date performance rights granted
Performance right value
Number of shares issued
17 October 2016
17 October 2016
7 April 2017
30 August 2017
30 August 2017
$3.30
$2.67
$1.93
$1.56
$2.33
265,000
100,000
20,250
64,767
64,767
Dacian Gold Limited 2019 Annual Report
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Interests in the Shares and Options of the Company (continued)
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:
Further details of the vesting conditions applicable to these options are disclosed in the remuneration report
Number of options vested and exercisable
2,000,000
300,000
DIRECTORS’ REPORT
Director
Rohan Williams
Ian Cochrane
section of this Directors’ Report.
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 2019, and the number of meetings attended by each Director were:
Director
Board Meetings
Audit Committee
Remuneration &
Nomination Committee
Rohan Williams
Robert Reynolds
Barry Patterson
Ian Cochrane
A
10
10
10
10
B
10
10
9
9
A
-
2
2
2
A = the number of meetings the Director was entitled to attend
B = the number of meetings the Director attended
B
-
2
2
2
A
-
2
2
2
B
-
2
2
1
During or since the end of the financial year, the Company issued ordinary shares as a result of the exercise of
options and performance rights as follows (there were no amounts unpaid on the shares issued):
Exercise price of options
Number of shares issued
(i) Total shares of 267,294 were issued on the cashless exercise of 500,000 options exercisable at $0.58 each
pursuant to the cashless exercise provisions of the Dacian Gold Limited Employee Option Plan.
Date performance rights granted
Performance right value
Number of shares issued
$0.58
$1.15
$1.16
$0.58
$3.30
$2.67
$1.93
$1.56
$2.33
500,000
1,100,000
100,000
267,291(i)
265,000
100,000
20,250
64,767
64,767
Securities
Shares
Date options granted
25 September 2014
5 October 2015
5 February 2016
25 September 2014
17 October 2016
17 October 2016
7 April 2017
30 August 2017
30 August 2017
DIRECTORS’ REPORT
DIRECTORS’ REPORT
Securities (continued)
Options
At the date of this report unissued ordinary shares of the Company under option are:
Number of options
Exercise price
2,000,000
400,000
1,550,000
300,000
500,000
Performance Rights
$0.39
$1.15
$1.16
$1.99
$3.66
Expiry date
17 November 2019
30 September 2020
31 January 2021
28 February 2021
30 June 2021
No performance rights were issued during the financial year (2018: 391,682). A reconciliation of performance
rights outstanding at the date of this report appears below.
Rights outstanding at 30 June 2019
Rights vested & shares issued post year end
Rights forfeited post year end
Rights awarded post year end
Rights outstanding at the date of this report
Dividends
Number of
Rights
299,893
(129,534)
(100,658)
1,601,019
1,670,720
No dividends have been paid or declared since the start of the financial year and the Directors do not recommend
the payment of a dividend in respect of the financial year.
Nature of Operations and Principal Activities
Dacian Gold Limited is an Australian mid-tier gold producer with its head office in Perth, Western Australia. The
Company operates the Mt Morgans Gold Operation (“MMGO”) near Laverton, Western Australia. The operation
comprises a 2.5 Mtpa CIL treatment plant, the Westralia underground and the Jupiter open pit mining areas.
The principal activities of the Group during the course of the financial year were gold mining, processing and
exploration at its 100% owned MMGO.
During the financial year the Group declared commercial production at the MMGO. The declaration, which was
made on 1 January 2019, followed a 9-month commissioning period subsequent to the commencement of gold
production in late March 2018.
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DAC I A N G O L D | ANNUAL REPORT 2019 5
DIRECTORS’ REPORT
DIRECTORS’ REPORT
Operating and Financial Review
A summary of the operating result for the Group is set out below:
Key Financial Data
Financial Performance
Sales revenue
Costs of sales (excluding D&A)(i)
Exploration costs expensed and written off
Corporate, admin and other costs
EBITDA(i)
Depreciation & amortisation (D&A)
Net interest revenue / (expense)
Loss before tax(i)
Income tax benefit
Reported profit / (loss) after tax
Financial Position
Cash flow from operating activities
Cash flow from investing activities
Cash and cash equivalents
Net assets
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
2019
$’000
2018
$’000
Change
$’000
Change
%
132,821
(90,278)
(12,247)
(10,277)
20,019
(18,889)
(2,462)
(1,332)
4,350
3,018
47,186
(77,322)
35,515
184,875
1.4
1.3
-
-
(27,445)
(6,070)
(33,515)
(528)
1,168
(32,875)
27,473
(5,402)
(17,538)
(160,233)
62,866
132,866
(2.6)
(2.6)
132,821
(90,278)
15,198
(4,205)
53,534
(18,361)
(3,630)
31,543
(23,123)
8,420
64,724
82,911
(27,351)
52,009
4.0
3.9
100%
(100%)
55%
(69%)
158%
(3,478%)
(311%)
96%
(84%)
156%
369%
52%
(44%)
39%
154%
150%
(i) EBITDA is an adjusted measure of earnings before interest, taxes, depreciation and amortisation. Cost of sales (excluding D&A)
and EBITDA are non-IFRS financial information and are not subject to audit. These measures are included to assist investors to
better understand the performance of the business
Financial performance
During the period, MMGO successfully transitioned from project development phase to commercial production.
Ore production at Westralia and Jupiter reached Feasibility Study level during the December 2018 quarter,
allowing the Group to declare Commercial Production on 1 January 2019. During the commissioning phase (prior
to the commencement of commercial production) expenditure of an operating nature was capitalised to mine
properties in development. Revenue from the sale of gold was treated as pre-production income and credited
to capitalised mine properties in development.
Ore mined from the Westralia underground mine from stopes and development for the period totalled 836,250
tonnes at a grade of 3.2 g/t. Mining activities during the period focused on the following underground mining
areas: Beresford South 65.4%, Beresford North 32.1% and Allanson 2.5% of ore tonnes hoist. The Jupiter open
pit mined 1,997,289 tonnes of ore at a grade of 1.0g/t.
Total gold production for the year was 138,911 ounces. Actual throughput totalled 2,663,419 tonnes of ore at a
recovery of 95.1%. Full year comparatives are not available for the 2018 financial year as first gold production
did not occur until late in March 2018. A summary of the production performance for year ended 30 June 2019
is provided in the following table.
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DIRECTORS’ REPORT
Operating and Financial Review
A summary of the operating result for the Group is set out below:
Key Financial Data
Financial Performance
Sales revenue
Costs of sales (excluding D&A)(i)
Exploration costs expensed and written off
Corporate, admin and other costs
EBITDA(i)
Depreciation & amortisation (D&A)
Net interest revenue / (expense)
Loss before tax(i)
Income tax benefit
Reported profit / (loss) after tax
Financial Position
Cash flow from operating activities
Cash flow from investing activities
Cash and cash equivalents
Net assets
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
better understand the performance of the business
Financial performance
2019
$’000
2018
$’000
Change
$’000
Change
%
132,821
(90,278)
(12,247)
(10,277)
20,019
(18,889)
(2,462)
(1,332)
4,350
3,018
47,186
(77,322)
35,515
184,875
1.4
1.3
-
-
(27,445)
(6,070)
(33,515)
(528)
1,168
(32,875)
27,473
(5,402)
(17,538)
(160,233)
62,866
132,866
(2.6)
(2.6)
132,821
(90,278)
15,198
(4,205)
53,534
(18,361)
(3,630)
31,543
(23,123)
8,420
64,724
82,911
(27,351)
52,009
4.0
3.9
100%
(100%)
55%
(69%)
158%
(3,478%)
(311%)
96%
(84%)
156%
369%
52%
(44%)
39%
154%
150%
(i) EBITDA is an adjusted measure of earnings before interest, taxes, depreciation and amortisation. Cost of sales (excluding D&A)
and EBITDA are non-IFRS financial information and are not subject to audit. These measures are included to assist investors to
During the period, MMGO successfully transitioned from project development phase to commercial production.
Ore production at Westralia and Jupiter reached Feasibility Study level during the December 2018 quarter,
allowing the Group to declare Commercial Production on 1 January 2019. During the commissioning phase (prior
to the commencement of commercial production) expenditure of an operating nature was capitalised to mine
properties in development. Revenue from the sale of gold was treated as pre-production income and credited
to capitalised mine properties in development.
Ore mined from the Westralia underground mine from stopes and development for the period totalled 836,250
tonnes at a grade of 3.2 g/t. Mining activities during the period focused on the following underground mining
areas: Beresford South 65.4%, Beresford North 32.1% and Allanson 2.5% of ore tonnes hoist. The Jupiter open
pit mined 1,997,289 tonnes of ore at a grade of 1.0g/t.
Total gold production for the year was 138,911 ounces. Actual throughput totalled 2,663,419 tonnes of ore at a
recovery of 95.1%. Full year comparatives are not available for the 2018 financial year as first gold production
did not occur until late in March 2018. A summary of the production performance for year ended 30 June 2019
is provided in the following table.
DIRECTORS’ REPORT
DIRECTORS’ REPORT
Operating and Financial Review (continued)
Financial performance (continued)
Underground
Stope Ore Mined
Development Ore Mined
Mined Ore Grade
Contained Gold
Open Pit Operations
Ore Mined
Mined Ore Grade
Contained Gold
Waste Mined
Processing
Ore Milled
Head Grade
Recovery
Gold produced
Gold Sold
Gold on Hand
All-in sustaining cost (‘’AISC’’)
UOM
Qtr
Sep-18
Qtr
Dec-18
Qtr
Mar-19
Qtr
Jun-19
kt
kt
g/t
oz
kt
g/t
oz
kbcm
kt
g/t
%
oz
oz
oz
A$/oz
101
76
3.3
18,999
443
0.8
11,419
1,887
681
1.4
94.9%
29,316
29,249
5,445
-
113
82
4.2
25,925
537
0.9
15,304
2,107
630
2.0
93.0%
37,934
34,055
9,913
-
197
53
3.0
23,637
445
0.9
13,007
2,089
688
1.7
96.0%
35,003
39,315
4,474
1,488
185
30
2.5
16,959
572
1.4
25,158
2,212
665
1.8
97.0%
36,658
35,685
5,026
1,519
FY2019
596
241
3.2
85,520
1,997
1.0
64,888
8,295
2,664
1.71
95.1%
138,911
138,304
5,026
-
Following the achievement of commercial production on 1 January 2019, gold sales revenue of $132.6 million
(2018: $Nil) was generated from the sale of 75,000 ounces at an average gold price of A$1,767 (2018: $Nil). Total
cost of goods sold inclusive of amortisation and depreciation was $108.9 million (2018: $Nil). The increase in
revenue and costs compared to the prior year reflects the commencement of commercial production.
Exploration costs expensed and written off during the period were $12.2 million (2018: $27.4 million). The prior
period expense included the cost of terminating a life-of-mine Jupiter royalty deed for $11.5 million.
Corporate and administration costs for the year totalled $10.3 million (2018: $6.3 million), which included
expenses related to the corporate office, borrowing, compliance and operational support.
Depreciation and amortisation of fixed assets and capitalised mine properties expenditure totalled $18.9 million
(2018: $0.5 million) for the period. The higher depreciation and amortisation charge for the period resulted from
the commencement of commercial production and first time use of project mine properties and infrastructure
during the period.
The Income tax benefit for the period was $4.4 million (2018: $27.5 million). The prior period income tax benefit
included the initial recognition of the Group’s carry forward tax losses at 30 June 2018.
Financial position
The Group held cash on hand as at 30 June 2019 of $35.5 million (30 June 2018: $62.9 million) and $10.1 million
in unsold gold on hand recognised in inventory at cost (5,026 ounces valued at the 30 June 2019 closing spot gold
price of A$2,015 per ounce). As at 30 June 2019 the Group has a working capital deficit of $21.1 million (2018:
$48.1 million).
As at 30 June 2019 the Group’s net asset position increased to $184.9 million (2018: $132.9 million). The increase
is attributable to a $7.6 million increase in inventories, a $20.5 million net increase in Property, Plant &
Equipment and Mine properties, a $49.4 million reduction in trade payables and borrowings offset by a $27.4
million reduction in cash and cash equivalents.
In the Directors’ opinion there are reasonable grounds to believe that the Group will be able to pay its debts as
and when they become due and payable.
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DAC I A N G O L D | ANNUAL REPORT 2019 7
DIRECTORS’ REPORT
DIRECTORS’ REPORT
Operating and Financial Review (continued)
Cash flows
At the end of the financial year the Group had $35.5 million (2018: $62.9 million) in cash and had drawn
$105.5 million (2018: $150.0 million) under the syndicated debt facility. Bullion on hand not sold at balance date
comprised 5,026 ounces which had an estimated sale value of A$10.1 million. As a result of the above, available
funding lines at balance date totalled $45.6 million.
Cash flow from operating activities for the year was $47.2 million (2018: $17.5 million outflow). The increase
resulted from the first-time recognition of gold sales revenue and project operating costs that would have been
capitalised to mine properties expenditure prior to the commencement of commercial production.
Cash flow used in investing activities amounted to $77.3 million (2018: $160.2 million) and mainly comprised the
following areas:
- Mine properties, plant and infrastructure expenditure at MMGO - $62.9 million
-
Consideration paid to terminate a Jupiter life-of-mine royalty obligation - $11.5 million
Prior period expenditure included MMGO project construction and capitalised project operating costs which
were capitalised prior to the commencement of commercial production.
Cash flow from financing activities totalled $2.8 million (2018: $150.5 million) which during the year included net
proceeds from capital raisings / issue of shares (net of costs) of $48.1 million (2018: $1.5 million) and project
debt facility repayments of $44.5 million (2018: $150.0 million in drawdowns).
Gold sales receipts following the declaration of commercial production on 1 January 2019 comprise 75,000
ounces of gold at an average price of $1,767 per ounce. Gold sales receipts prior to commercial production have
been offset against mine properties in development expenditure. The Company delivered gold produced into a
combination of forward contracts and the prevailing spot price.
Exploration
During the period, a total of 56,814 metres of exploration drilling was completed across the MMGO project
tenements.
On 6 August 2018 the Group announced an increase in its Measured and Indicated Mineral Resources of 11% to
2.5 million ounces. This increase also saw the total Mineral Resource base rise to 3.5 million ounces.
On 18 December 2018, the Group announced an increase in its Ore Reserves of 16% to 1.39 million ounces (net
of mining depletion). The updated statement included an initial maiden Ore Reserve at Cameron Well of 45,000
ounces.
Corporate
At the end of the June quarter, the Group implemented additional hedging commitments of 24,000 ounces at
A$2,019 per ounce. At year end, total hedge commitments totalled 147,449 ounces at A$1,810 per ounce. These
commitments are spread over the 2 year period from 30 June 2019.
Significant Changes in the State of Affairs
On 11 July 2018 the Group announced an Institutional Placement of approximately $37.0 million, with the ability
to take over-subscriptions to raise up to an additional $3.0 million. This institutional placement was completed
on 13 July 2018 with $40.0 million raised at $2.70 per new share. The Institutional Placement was accompanied
by a Share Purchase Plan to raise a further $5.0 million at $2.70 per new share. On 2 August 2018, the Group
announced it had amended the terms of the share purchase plan to allow and subsequently accept over-
subscriptions of $3.3 million. Together with the Institutional Placement the Group raised a total of $48.3 million
before costs.
There were no other significant changes in the state of affairs of the Group during the financial year, not
otherwise disclosed in this report.
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DIRECTORS’ REPORT
Operating and Financial Review (continued)
Cash flows
At the end of the financial year the Group had $35.5 million (2018: $62.9 million) in cash and had drawn
$105.5 million (2018: $150.0 million) under the syndicated debt facility. Bullion on hand not sold at balance date
comprised 5,026 ounces which had an estimated sale value of A$10.1 million. As a result of the above, available
funding lines at balance date totalled $45.6 million.
Cash flow from operating activities for the year was $47.2 million (2018: $17.5 million outflow). The increase
resulted from the first-time recognition of gold sales revenue and project operating costs that would have been
capitalised to mine properties expenditure prior to the commencement of commercial production.
Cash flow used in investing activities amounted to $77.3 million (2018: $160.2 million) and mainly comprised the
following areas:
- Mine properties, plant and infrastructure expenditure at MMGO - $62.9 million
-
Consideration paid to terminate a Jupiter life-of-mine royalty obligation - $11.5 million
Prior period expenditure included MMGO project construction and capitalised project operating costs which
were capitalised prior to the commencement of commercial production.
Cash flow from financing activities totalled $2.8 million (2018: $150.5 million) which during the year included net
proceeds from capital raisings / issue of shares (net of costs) of $48.1 million (2018: $1.5 million) and project
debt facility repayments of $44.5 million (2018: $150.0 million in drawdowns).
Gold sales receipts following the declaration of commercial production on 1 January 2019 comprise 75,000
ounces of gold at an average price of $1,767 per ounce. Gold sales receipts prior to commercial production have
been offset against mine properties in development expenditure. The Company delivered gold produced into a
combination of forward contracts and the prevailing spot price.
During the period, a total of 56,814 metres of exploration drilling was completed across the MMGO project
On 6 August 2018 the Group announced an increase in its Measured and Indicated Mineral Resources of 11% to
2.5 million ounces. This increase also saw the total Mineral Resource base rise to 3.5 million ounces.
On 18 December 2018, the Group announced an increase in its Ore Reserves of 16% to 1.39 million ounces (net
of mining depletion). The updated statement included an initial maiden Ore Reserve at Cameron Well of 45,000
Exploration
tenements.
ounces.
Corporate
At the end of the June quarter, the Group implemented additional hedging commitments of 24,000 ounces at
A$2,019 per ounce. At year end, total hedge commitments totalled 147,449 ounces at A$1,810 per ounce. These
commitments are spread over the 2 year period from 30 June 2019.
Significant Changes in the State of Affairs
On 11 July 2018 the Group announced an Institutional Placement of approximately $37.0 million, with the ability
to take over-subscriptions to raise up to an additional $3.0 million. This institutional placement was completed
on 13 July 2018 with $40.0 million raised at $2.70 per new share. The Institutional Placement was accompanied
by a Share Purchase Plan to raise a further $5.0 million at $2.70 per new share. On 2 August 2018, the Group
announced it had amended the terms of the share purchase plan to allow and subsequently accept over-
subscriptions of $3.3 million. Together with the Institutional Placement the Group raised a total of $48.3 million
before costs.
otherwise disclosed in this report.
There were no other significant changes in the state of affairs of the Group during the financial year, not
DIRECTORS’ REPORT
DIRECTORS’ REPORT
Events Subsequent to the Reporting Date
There has not arisen in the interval between the end of the reporting period and the date of this report, any
item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company
to affect substantially the operations of the Group, the results of those operations or the state of affairs of the
Group in subsequent financial years.
Likely Developments and Expected Results
Following several recent unsolicited enquiries, the Company announced a strategic review process in June 2019
to consider potential corporate and funding initiatives which could culminate in a change of control transaction.
This process is ongoing and there are no assurances that any discussions will eventuate in a transaction occurring.
There are no other likely developments of which the Directors are aware which could be expected to significantly
affect the results of the Group’s operations in subsequent financial years not otherwise disclosed in the Nature
of Operations and Principal Activities and Operating and Financial Review or the Events Subsequent to the
Reporting Date sections of the Directors’ Report.
Environmental Regulation and Performance
The Group’s mining 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.
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.
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DAC I A N G O L D | ANNUAL REPORT 2019 9
DIRECTORS’ REPORT
DIRECTORS’ REPORT
Non-audit services
During the period, the following fees were paid or payable for services provided by the auditor of the parent
entity, its related practices and non-related audit firms:
Grant Thornton
Audit and review of financial statements
Fees in respect to prior year
KPMG
Audit and review of financial statements
Other Services
Grant Thornton - research and development claims
Total
30 June
2019
$
-
21,588
85,000
-
106,588
30 June
2018
$
60,316
-
-
10,000
70,316
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.
Rounding off
The company is of a kind referred to in ASIC Instrument 2016/191 dated 24 March 2016 and in accordance with
that instrument, amounts in the Financial Statements and Directors’ Report have been rounded to the nearest
thousand dollars, unless otherwise stated.
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DIRECTORS’ REPORT
Non-audit services
During the period, the following fees were paid or payable for services provided by the auditor of the parent
entity, its related practices and non-related audit firms:
Grant Thornton
Audit and review of financial statements
Fees in respect to prior year
Audit and review of financial statements
KPMG
Other Services
Total
Grant Thornton - research and development claims
30 June
2019
30 June
2018
$
-
-
21,588
85,000
106,588
60,316
$
-
-
10,000
70,316
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.
Rounding off
The company is of a kind referred to in ASIC Instrument 2016/191 dated 24 March 2016 and in accordance with
that instrument, amounts in the Financial Statements and Directors’ Report have been rounded to the nearest
thousand dollars, unless otherwise stated.
DIRECTORS’ REPORT
DIRECTORS’ REPORT
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 mining and 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.
Key Management Personnel
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 & CEO
Non-Executive Director
Non-Executive Director
Non-Executive Director
Chief Financial Officer
Remuneration & Nomination Committee
The Board has adopted a formal Remuneration & Nomination 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.
2.
Setting remuneration packages for Executive Directors, Non-Executive Directors and other Key
Management Personnel; and
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.
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DAC I A N G O L D | ANNUAL REPORT 2019 11
DIRECTORS’ REPORT
DIRECTORS’ REPORT
Remuneration Report Audited (Continued)
Incentive Plans
The Company provides long-term incentives to Directors and Employees pursuant to the Dacian Gold Limited
Employee Option Plan, which was last approved by shareholders on 26 November 2018. Short term incentives
are also awarded to Employees to align remuneration with the strategy and performance of the Company.
The Board, acting in remuneration matters:
1.
Ensures that incentive plans are designed around appropriate and realistic performance targets and provide
rewards when those targets are achieved;
2.
Reviews and improves existing incentive plans established for employees; and
3. Approves the administration of the incentive plans, including receiving recommendations for, and the
consideration and approval of grants pursuant to such incentive plans.
Engagement of Non-Executive Directors
Non-Executive Directors conduct their duties under the following terms:
1. A Non-Executive Director may resign from his/her position and thus terminate their contract on written
notice to the Company; and
2. A Non-Executive Director may, following resolution of the Company’s shareholders, be removed before the
expiration of their period of office (if applicable). Payment is made in lieu of any notice period if termination
is initiated by the Company, except where termination is initiated for serious misconduct.
In consideration of the services provided by Mr Robert Reynolds, Mr Barry Patterson and Mr Ian Cochrane as
Non-Executive Directors, the Company will pay them $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 2019, 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 & CEO
are summarised below.
In respect of his engagement as Executive Chairman & CEO, Mr Williams will receive a salary of $629,625 per
annum inclusive of statutory superannuation (Total Fixed Remuneration). 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 Total Fixed Remuneration. 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.
Shareholding Qualifications
The Directors are not required to hold any shares in Dacian Gold Limited under the terms of the Company’s
constitution.
Dacian Gold Limited 2019 Annual Report
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12 | P a g e
DIRECTORS’ REPORT
Remuneration Report Audited (Continued)
Incentive Plans
The Company provides long-term incentives to Directors and Employees pursuant to the Dacian Gold Limited
Employee Option Plan, which was last approved by shareholders on 26 November 2018. Short term incentives
are also awarded to Employees to align remuneration with the strategy and performance of the Company.
The Board, acting in remuneration matters:
1.
Ensures that incentive plans are designed around appropriate and realistic performance targets and provide
rewards when those targets are achieved;
2.
Reviews and improves existing incentive plans established for employees; and
3. Approves the administration of the incentive plans, including receiving recommendations for, and the
consideration and approval of grants pursuant to such incentive plans.
Engagement of Non-Executive Directors
Non-Executive Directors conduct their duties under the following terms:
1. A Non-Executive Director may resign from his/her position and thus terminate their contract on written
notice to the Company; and
2. A Non-Executive Director may, following resolution of the Company’s shareholders, be removed before the
expiration of their period of office (if applicable). Payment is made in lieu of any notice period if termination
is initiated by the Company, except where termination is initiated for serious misconduct.
In consideration of the services provided by Mr Robert Reynolds, Mr Barry Patterson and Mr Ian Cochrane as
Non-Executive Directors, the Company will pay them $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
During the financial year ended 30 June 2019, the Company incurred no costs in respect of additional services
the Company.
provided by Directors.
Engagement of Executive Directors
are summarised below.
discretion of the Board.
contract.
discretion of the Board.
plans adopted by the Board.
Shareholding Qualifications
constitution.
The terms of Mr Rohan Williams’ Executive Services Agreement governing his role as Executive Chairman & CEO
In respect of his engagement as Executive Chairman & CEO, Mr Williams will receive a salary of $629,625 per
annum inclusive of statutory superannuation (Total Fixed Remuneration). Any increase in salary is subject to the
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
Mr Williams may also receive a short-term performance based reward in the form of a cash bonus up to 40% of
the Total Fixed Remuneration. The performance criteria, assessment and timing of which are determined at the
Mr Williams may participate in the Dacian Gold Limited Employee Option Plan and other long-term incentive
The Directors are not required to hold any shares in Dacian Gold Limited under the terms of the Company’s
DIRECTORS’ REPORT
DIRECTORS’ REPORT
Remuneration Report Audited (Continued)
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).
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 short-term and long-term incentive schemes. The performance criteria,
percentage of base salary, 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 2018 Annual General Meeting (“AGM”)
At the last AGM 81.8% of the shareholders voted to adopt the remuneration report for the year ended 30 June
2018. The Company did not receive any specific feedback at the AGM regarding its remuneration practices.
Consequences of Company Performance on Shareholder Wealth
The Company aims to align executive remuneration to strategic and business objectives and the creation of
shareholder wealth. The table below outlines indicators of Company performance over the last five years as
required by the Corporations Act 2001.
Revenue
2019
$’000
$132,821
2018
$’000
-
2017
$’000
-
2016
$’000
-
Net profit/(loss) after tax
$3,018
($5,402)
($18,858)
($21,833)
Net assets
Share Price
$184,875
$132,866
$134,313
$13,259
$0.53
$2.85
$1.98
$2.90
2015
$’000
-
($8,048)
$10,235
$0.43
Market Capitalisation
$119,628
$586,658
$399,430
$386,588
$41,323
These indicators are not always consistent with those used to determine variable amounts of remuneration
awarded to Key Management Personnel, as discussed below. As a result, there may not always be a correlation
between these statutory performance indicators and the quantum of variable remuneration awarded to Key
Management Personnel. As a gold producer which entered into commercial production on 1 January 2019, the
Board considers the following as more appropriate performance indicators to assess the performance of
management:
(a) Construction and the successful ramp up to commercial production at the new MMGO on time and on
budget;
(b) Exploration success to increase production and mine life at MMGO;
(c) Safety and environmental performance; and
(d) The responsible management of cash resources and the Company’s other assets.
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DAC I A N G O L D | ANNUAL REPORT 2019 13
DIRECTORS’ REPORT
DIRECTORS’ REPORT
Remuneration Report Audited (Continued)
Short-Term Incentives
The Remuneration & Nomination Committee 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.
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. Following a
performance evaluation process in respect of the 12-month period ended 31 December 2018, short-term
incentive payments were made to Executives.
Total short-term incentives paid to Directors or Key Management Personnel of the Company inclusive of
superannuation during the period ended 30 June 2019 was $317,500.
Name
Position
Achieved STI
Rohan Williams
Grant Dyker
Executive Chairman & CEO
CFO
100%
100%
Awarded
STI
$230,000
$87,500
The Remuneration & Nomination 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.
Long-Term Incentives
Under the Dacian Gold Limited Employee Option plan, performance rights are made to executives to align
remuneration with the creation of shareholder wealth. Historically options were also issued to Key Management
Personnel under the same plan.
Options over Unissued Shares
The options can be granted free of charge and are exercisable at a fixed price in accordance with the Plan.
Options issued under the Plan have vesting periods prior to exercise, except under certain circumstances
whereby options may be capable of exercise prior to the expiry of the vesting period.
No options were granted during the 2018 and 2019 financial years. No options lapsed during the 2019 financial
year. The table below outlines movements in options during 2019 and the balance held by each Key
Management Personnel at 30 June 2019.
Number
of
options
Fair
value of
options
Grant date
Exercise
price
Vesting
date
Expiry date
Number
vested &
Exercisable
Number
exercised
during the
year
18/11/2014
2,000,000
$201,320
$0.39
18/11/2016
17/11/2019
2,000,000
05/02/2016
05/02/2016
05/02/2016
750,000
375,000
375,000
$247,828
$123,914
$123,914
$1.16
$1.16
$1.16
31/01/2018
31/01/2019
31/07/2019
31/01/2021
31/01/2021
31/01/2021
750,000
375,000
-
26/02/2016
300,000
$173,695
$1.99
26/02/2016
28/02/2021
300,000
3,800,000
3,425,000
-
-
-
-
-
-
Balance
at the end
of the
year
2,000,000
750,000
375,000
375,000
300,000
3,800,000
Name
Rohan
Williams
Grant
Dyker
Ian
Cochrane
Total
All options were granted for nil consideration. Options lapse if the Key Management Personnel ceases
employment with the Company. 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.
Dacian Gold Limited 2019 Annual Report
14 DAC I A N G O L D | ANNUAL REPORT 2019
14 | P a g e
DIRECTORS’ REPORT
Remuneration Report Audited (Continued)
Short-Term Incentives
The Remuneration & Nomination Committee 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.
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. Following a
performance evaluation process in respect of the 12-month period ended 31 December 2018, short-term
incentive payments were made to Executives.
Total short-term incentives paid to Directors or Key Management Personnel of the Company inclusive of
superannuation during the period ended 30 June 2019 was $317,500.
Name
Position
Achieved STI
Rohan Williams
Executive Chairman & CEO
Grant Dyker
CFO
100%
100%
Awarded
STI
$230,000
$87,500
The Remuneration & Nomination 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.
Long-Term Incentives
Personnel under the same plan.
Options over Unissued Shares
Under the Dacian Gold Limited Employee Option plan, performance rights are made to executives to align
remuneration with the creation of shareholder wealth. Historically options were also issued to Key Management
The options can be granted free of charge and are exercisable at a fixed price in accordance with the Plan.
Options issued under the Plan have vesting periods prior to exercise, except under certain circumstances
whereby options may be capable of exercise prior to the expiry of the vesting period.
No options were granted during the 2018 and 2019 financial years. No options lapsed during the 2019 financial
year. The table below outlines movements in options during 2019 and the balance held by each Key
Management Personnel at 30 June 2019.
Number
Fair
Grant date
options
of
value of
options
Exercise
price
Vesting
date
Number
vested &
Number
Balance
exercised
at the end
during the
Expiry date
Exercisable
year
18/11/2014
2,000,000
$201,320
$0.39
18/11/2016
17/11/2019
2,000,000
05/02/2016
05/02/2016
05/02/2016
750,000
375,000
375,000
$247,828
$123,914
$123,914
$1.16
$1.16
$1.16
31/01/2018
31/01/2021
31/01/2019
31/01/2021
31/07/2019
31/01/2021
750,000
375,000
-
26/02/2016
300,000
$173,695
$1.99
26/02/2016
28/02/2021
300,000
of the
year
2,000,000
750,000
375,000
375,000
300,000
-
-
-
-
-
-
3,800,000
3,425,000
3,800,000
All options were granted for nil consideration. Options lapse if the Key Management Personnel ceases
employment with the Company. 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
Name
Rohan
Williams
Grant
Dyker
Ian
Cochrane
Total
date.
DIRECTORS’ REPORT
DIRECTORS’ REPORT
Remuneration Report Audited (Continued)
Performance Rights Granted as Remuneration
Performance rights were introduced during the 2017 financial year with effect from October 2016.
No performance rights were issued pursuant to the Dacian Gold Limited Employee Option Plan during the 2019
financial year. Subsequent to year end an additional 95,628 performance rights were issued to Mr Dyker.
The performance rights are granted for nil consideration and vest subject to certain operational and market
performance conditions being met. The fair value of the performance rights granted were determined using
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 table below outlines the movements in performance rights during the 2019 financial year and the balance
held by each executive at 30 June 2019.
Name
Rohan
Williams
Grant date
17 October 2016
Number of
rights issued
165,000
Fair value
of rights
$544,500
Measurement
date
30 June 2019
17 October 2016
165,000
$458,370
30 June 2019
Grant
Dyker
30 August 2017
30 August 2017
20 April 2018
20 April 2018
Total
22,668
22,669
15,479
15,479
406,295
$35,363
$52,818
$47,366
$32,197
1 July 2018
1 July 2018
1 July 2019
1 July 2019
Number
vested
during
the year
165,000
-
-
-
-
-
Number
lapsed
during
the year
-
165,000
-
-
-
-
Balance
at end
of the
year
-
-
22,669
22,669
15,479
15,479
165,000 165,000
76,296
During the 2017 financial year the company issued the following performance rights to Mr Williams. The
performance rights will vest at the measurement date and are subject to certain operational and market
performance conditions being met. The number of performance rights that vest will be subject to the Company’s
performance against Total Shareholder Return (“TSR”) and Company performance vesting conditions.
Measurement
date
30 June 2018
Number
100,000(i)
Achieved
LTI
100%
100,000(i)
100%
30 June 2019
165,000(ii)
100%
165,000
0%
Metric
50% - First gold production at Mt Morgans
Gold Operation on time and budget
50% - TSR performance to peers above 50th
percentile (measured over the 2 year period
to 30 June 2018)
50% - Ore reserves at Mt Morgans Gold
Operation exceeding 1.2 million ounces
50% - TSR performance to peers above 50th
percentile (measured over the 3 year period
to 30 June 2019)
Vested
100,000
Lapsed
-
100,000
-
165,000
-
-
165,000
(i) The share rights vesting in the 2018 financial year were issued during the 2019 financial year.
(ii) The share rights vesting during the current financial year were issued subsequent to 30 June 2019.
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DAC I A N G O L D | ANNUAL REPORT 2019 15
DIRECTORS’ REPORT
DIRECTORS’ REPORT
Remuneration Report Audited (Continued)
Performance Rights Granted as Remuneration (Continued)
During the 2018 financial year the company issued the following performance rights to Mr Dyker. The
performance rights are subject to certain operational and market performance conditions being met, are subject
to a 12 month service condition and vest one year from the measurement date. The number of performance
rights that vest will be subject to the Company’s performance against Total Shareholder Return and company
performance vesting conditions.
Measurement
date
1 July 2018
Number
22,669
Achieved
LTI
100%
22,668
100%
1 July 2019
15,479(i)
15,479(i)
-
-
Awarded
Lapsed
Metric
50% - First gold production at Mt Morgans
Gold Operation on time and budget
50% - TSR performance to peers above 50th
percentile (measured over the 1 year period
to 30 June 2018)
50% - Ore reserves at Mt Morgans Gold
Operation exceeding 1.2 million ounces
50% - TSR performance to peers above 50th
percentile (measured over the 1 year period
to 30 June 2019)
22,669
22,668
-
-
-
-
-
-
(i) Subsequent to 30 June 2019 it was determined that 0% of the TSR and 100% of the company performance
conditions had been satisfied.
On vesting, each right automatically converts to one ordinary share. If the employee ceases employment before
the rights vest, the rights will be forfeited, except in limited circumstances that are approved by the Board.
The Company’s TSR performance for all share rights on issue at 30 June 2019 are assessed against the following
10 peer group companies.
Peer Companies
1
2
3
4
5
6
7
8
9
10
St Barbara Limited
Saracen Mineral Holdings Limited
Resolute Mining Limited
Gold Road Resources Limited
Perseus Mining Limited
Beadell Resources Limited
Silver Lake Resources Limited
Doray Minerals Limited
Troy Resources Limited
Ramelius Resources Limited
ASX Codes
SBM
SAR
RSG
GOR
PRU
BDR
SLR
DRM
TRY
RMS
Dacian Gold Limited 2019 Annual Report
16 DAC I A N G O L D | ANNUAL REPORT 2019
16 | P a g e
DIRECTORS’ REPORT
Remuneration Report Audited (Continued)
Performance Rights Granted as Remuneration (Continued)
During the 2018 financial year the company issued the following performance rights to Mr Dyker. The
performance rights are subject to certain operational and market performance conditions being met, are subject
to a 12 month service condition and vest one year from the measurement date. The number of performance
rights that vest will be subject to the Company’s performance against Total Shareholder Return and company
performance vesting conditions.
Measurement
Achieved
date
Number
LTI
Metric
Awarded
Lapsed
1 July 2018
22,669
100%
50% - First gold production at Mt Morgans
22,669
22,668
100%
50% - TSR performance to peers above 50th
22,668
Gold Operation on time and budget
1 July 2019
15,479(i)
-
-
15,479(i)
percentile (measured over the 1 year period
to 30 June 2018)
50% - Ore reserves at Mt Morgans Gold
Operation exceeding 1.2 million ounces
50% - TSR performance to peers above 50th
percentile (measured over the 1 year period
-
-
to 30 June 2019)
(i) Subsequent to 30 June 2019 it was determined that 0% of the TSR and 100% of the company performance
conditions had been satisfied.
On vesting, each right automatically converts to one ordinary share. If the employee ceases employment before
the rights vest, the rights will be forfeited, except in limited circumstances that are approved by the Board.
The Company’s TSR performance for all share rights on issue at 30 June 2019 are assessed against the following
10 peer group companies.
Peer Companies
1
2
3
4
5
6
7
8
9
St Barbara Limited
Saracen Mineral Holdings Limited
Resolute Mining Limited
Gold Road Resources Limited
Perseus Mining Limited
Beadell Resources Limited
Silver Lake Resources Limited
Doray Minerals Limited
Troy Resources Limited
10
Ramelius Resources Limited
-
-
-
-
ASX Codes
SBM
SAR
RSG
GOR
PRU
BDR
SLR
DRM
TRY
RMS
DIRECTORS’ REPORT
DIRECTORS’ REPORT
Remuneration Report Audited (Continued)
Remuneration Disclosures
The details of the remuneration of each Director and member of Key Management Personnel of the Company
for the years ending 30 June 2019 and 2018 was as follows:
Cash
Non-Cash
Short-term
Benefits
Post-
employment
benefits
Long-
term
benefits
Salary (i)
$
Cash
Bonus (ii)
$
Super-
annuation
$
Long
service
leave
$
Share-
based
payments
Share
rights(iii) &
options(iv)
$
Total
Remuneration
$
Performance
Related
%
Rohan
Williams
Ian
Cochrane
Barry
Patterson
Robert
Reynolds
Grant
Dyker
FY19
584,734
230,000
25,000
15,094
371,433
1,226,261
FY18
648,601
230,000
25,000
12,559
722,845
1,639,005
FY19
FY18
FY19
FY18
FY19
FY18
80,000
80,000
80,000
80,000
80,000
80,000
-
-
-
-
-
-
FY19
355,814
87,500
FY18
364,790
87,500
7,600
7,600
7,600
7,600
7,600
7,600
20,172
20,049
-
-
-
-
-
-
-
-
-
-
-
-
2,424
134,197
4,226
203,926
87,600
87,600
87,600
87,600
87,600
87,600
600,107
680,491
Total
FY19 1,180,548
317,500
67,972
17,518
505,630
2,089,168
FY18
1,253,391
317,500
67,849
16,785
926,771
2,582,296
49.0%
58.1%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
36.9%
42.8%
39.4%
48.2%
(i) Salary includes movements in annual leave provision during the year. Entitlements cashed out above the
minimum statutory superannuation threshold have been included in salaries.
(ii) Cash bonus paid is inclusive of superannuation. Superannuation contributions on bonuses which exceed the
minimum statutory superannuation threshold that are cashed out have been included in the cash bonus.
(iii) The fair value of share 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.
(iv) 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.
Dacian Gold Limited 2019 Annual Report
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DAC I A N G O L D | ANNUAL REPORT 2019 17
DIRECTORS’ REPORT
DIRECTORS’ REPORT
Remuneration Report Audited (Continued)
Share holdings
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.
Name
Rohan Williams
Ian Cochrane
Barry Patterson
Robert Reynolds
Grant Dyker
Balance at start of
the year
8,112,296
Vested and issued as
remuneration
200,000
Other changes
during the period
5,555
Balance at the
end of the year
8,317,851
259,740
6,954,987
2,725,000
137,455
-
-
-
-
5,555
2,000,000
5,555
-
265,295
8,954,987
2,730,555
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
For the year ended 30 June 2019, services totalling $216,042 (2018: $6,948) were provided on normal
commercial terms to the Group by Perenti Global and its subsidiaries (previously Ausdrill Limited), of which Mr
Cochrane is Non-Executive Chairman. The services provided related to open pit grade control drilling and mineral
analysis. Mr Cochrane was not party to any contract negotiations for either party.
Other than the above, there have been no other transactions with, and no amounts are owing to or owed by Key
Management Personnel.
End of Remuneration Report
Dacian Gold Limited 2019 Annual Report
18 DAC I A N G O L D | ANNUAL REPORT 2019
18 | P a g e
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.
A copy of the Auditor’s Independence Declaration as required under Section 307C of the Corporations Act is set
out on the following page.
Balance at start of
Vested and issued as
Other changes
remuneration
during the period
Balance at the
end of the year
This report is made in accordance with a resolution of the Directors.
DIRECTORS’ REPORT
DIRECTORS’ REPORT
Auditor’s Independence Declaration
DATED at Perth this 13th day of September 2019.
Rohan Williams
Executive Chairman & CEO
DIRECTORS’ REPORT
Remuneration Report Audited (Continued)
Share holdings
Name
Rohan Williams
Ian Cochrane
Barry Patterson
Robert Reynolds
Grant Dyker
the year
8,112,296
259,740
6,954,987
2,725,000
137,455
Loans Made to Key Management Personnel
200,000
-
-
-
-
2,000,000
5,555
5,555
5,555
-
8,317,851
265,295
8,954,987
2,730,555
137,455
No loans were made to key personnel, including personally related entities during the reporting period.
Other Transactions with Key Management Personnel
For the year ended 30 June 2019, services totalling $216,042 (2018: $6,948) were provided on normal
commercial terms to the Group by Perenti Global and its subsidiaries (previously Ausdrill Limited), of which Mr
Cochrane is Non-Executive Chairman. The services provided related to open pit grade control drilling and mineral
analysis. Mr Cochrane was not party to any contract negotiations for either party.
Other than the above, there have been no other transactions with, and no amounts are owing to or owed by Key
Management Personnel.
End of Remuneration Report
Dacian Gold Limited 2019 Annual Report
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DAC I A N G O L D | ANNUAL REPORT 2019 19
DIRECTORS’ REPORT
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Dacian Gold Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Dacian Gold Limited for
the financial year ended 30 June 2019 there have been:
To the Directors of Dacian Gold Limited
i.
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
I declare that, to the best of my knowledge and belief, in relation to the audit of Dacian Gold Limited for
the financial year ended 30 June 2019 there have been:
no contraventions of any applicable code of professional conduct in relation to the audit.
ii.
i.
ii.
KPMG
KPMG
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
Graham Hogg
Partner
Perth
13 September 2019
Graham Hogg
Partner
Perth
13 September 2019
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under
Professional Standards Legislation.
20 DAC I A N G O L D | ANNUAL REPORT 2019
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under
Professional Standards Legislation.
CONSOLIDATED STATEMENT OF PROFIT
OR LOSS AND OTHER COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Revenue
Cost of goods sold
Gross Profit
Employee expenses
Share-based employee expense
Net finance costs / (income)
Exploration costs expensed and written off
Other expenses
Loss before income tax
Income tax benefit
Net profit / (loss) for the period attributable to the
members of the parent entity
Other comprehensive income for the period, net of tax
Total comprehensive profit / (loss) for the period
attributable to the members of the parent entity
Profit / (loss) per share
Basic earnings per share attributable to ordinary equity
holders of the parent (cents per share)
Diluted earnings per share attributable to ordinary
equity holders of the parent (cents per share)
Note
2
3
3
20
3
11
4
18
5
5
Consolidated
30 June
2019
$’000
30 June
2018
$’000
132,821
(108,943)
23,878
(3,632)
(760)
(4,946)
(12,247)
(3,625)
(1,332)
4,350
3,018
-
3,018
1.4
1.3
-
-
-
(2,634)
(1,368)
1,168
(27,445)
(2,596)
(32,875)
27,473
(5,402)
-
(5,402)
(2.6)
(2.6)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction
with the accompanying notes.
Dacian Gold Limited 2019 Annual Report
DAC I A N G O L D | ANNUAL REPORT 2019 21
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CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 30 JUNE 2019
AS AT 30 JUNE 2019
Consolidated
Current assets
Cash and cash equivalents
Receivables
Inventories
Total current assets
Non-current assets
Property, plant and equipment
Exploration and evaluation assets
Mine properties
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Provisions
Borrowings
Total current liabilities
Non-current liabilities
Provisions
Borrowings
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Share-based payments reserve
Accumulated losses
Total equity
Note
7
8
9
10
11
12
19
14
15
16
15
16
18
18
18
30 June
2019
$’000
35,515
5,173
20,674
61,362
130,858
4,072
142,763
32,573
310,266
371,628
43,954
1,151
37,395
82,500
18,608
85,645
104,253
186,753
184,875
244,513
3,007
(62,645)
184,875
30 June
2018
$’000
62,866
3,724
13,096
79,686
150,073
4,163
103,004
28,143
285,383
365,069
50,297
784
76,656
127,737
15,001
89,465
104,466
232,203
132,866
195,187
3,516
(65,837)
132,866
The above consolidated statement of financial position should be read in conjunction with the accompanying
notes.
22 DAC I A N G O L D | ANNUAL REPORT 2019
Dacian Gold Limited 2019 Annual Report
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
Consolidated
Note
7
8
9
10
11
12
19
14
15
16
15
16
18
18
18
30 June
2019
$’000
35,515
5,173
20,674
61,362
130,858
4,072
142,763
32,573
310,266
371,628
43,954
1,151
37,395
82,500
18,608
85,645
104,253
186,753
184,875
244,513
3,007
(62,645)
184,875
30 June
2018
$’000
62,866
3,724
13,096
79,686
150,073
4,163
103,004
28,143
285,383
365,069
50,297
784
76,656
127,737
15,001
89,465
104,466
232,203
132,866
195,187
3,516
(65,837)
132,866
Current assets
Cash and cash equivalents
Receivables
Inventories
Total current assets
Non-current assets
Property, plant and equipment
Exploration and evaluation assets
Mine properties
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Provisions
Borrowings
Total current liabilities
Non-current liabilities
Provisions
Borrowings
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Total equity
notes.
Share-based payments reserve
Accumulated losses
The above consolidated statement of financial position should be read in conjunction with the accompanying
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note
Issued
capital
Share reserve
Accumulated
losses
Consolidated
$’000
$’000
$’000
191,783
2,965
(60,435)
Balance at 1 July 2017
Reported loss for the year
Other comprehensive income
Total comprehensive loss for the year
Deferred tax on share issue costs(i)
Options exercised (cash)
Options exercised (non-cash)
Performance rights exercised
Share-based payments expense
-
-
-
1,075
1,512
586
231
-
Balance at 30 June 2018
195,187
Reported profit for the year
Other comprehensive income
Total comprehensive profit for the year
Shares issued
Share issue transaction costs
Options exercised (cash)
Options exercised (non-cash)
Performance rights exercised
Performance rights forfeited
Share-based payments expense
-
-
-
48,429
(1,868)
1,670
458
637
-
-
Attributable to
owners of the
parent
$’000
134,313
(5,402)
-
(5,402)
1,075
1,512
-
-
1,368
(5,402)
-
(5,402)
-
-
-
-
-
(65,837)
132,866
3,018
-
3,018
-
-
-
-
-
174
-
3,018
-
3,018
48,429
(1,868)
1,670
-
-
-
760
-
-
-
-
-
(586)
(231)
1,368
3,516
-
-
-
-
-
-
(458)
(637)
(174)
760
Balance at 30 June 2019
18
244,513
3,007
(62,645)
184,875
(i) Relates to tax effect of prior period equity raising costs first brought to account at 30 June 2018. Refer note 4
for further discussion.
The above statement of changes in equity should be read in conjunction with the accompanying notes.
Dacian Gold Limited 2019 Annual Report
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Dacian Gold Limited 2019 Annual Report
DAC I A N G O L D | ANNUAL REPORT 2019 23
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CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2019
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2019
Note
Cash flows from operating activities
Gold sales
Interest received
Research & development tax concession income
Other income
Interest paid
Payments for exploration and evaluation
Payments to suppliers and employees
Net cash from operating activities
7
Cash flows from investing activities
Payments for mine properties expenditure (net of pre-
production revenue)
Payments for plant and equipment
Payments for capitalised interest during development
Payments to acquire exploration assets(i)
Net cash from investing activities
Cash flows from financing activities
Proceeds from issue of share capital
Proceeds from issue of options
Share issue transaction costs
Proceeds from borrowings
Repayment of borrowings
Transaction costs associated with borrowings
Net cash from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
7
7
Consolidated
30 June
2019
$’000
132,550
1,046
-
272
(3,229)
(13,009)
(70,444)
47,186
30 June
2018
$’000
-
1,479
502
-
(243)
(17,196)
(2,080)
(17,538)
(59,496)
(156,816)
(3,432)
(2,894)
(11,500)
(77,322)
48,330
1,670
(1,948)
-
(44,500)
(767)
2,785
(27,351)
62,866
35,515
(195)
(3,222)
-
(160,233)
-
1,512
-
150,000
-
(1,038)
150,474
(27,297)
90,163
62,866
(i) Consideration paid to terminate a Jupiter life-of-mine royalty obligation accrued in the prior year.
The above statement of cash flows should be read in conjunction with the accompanying notes.
24 DAC I A N G O L D | ANNUAL REPORT 2019
Dacian Gold Limited 2019 Annual Report
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Basis of Preparation .............................................................................................................................. 26
Performance for the Year ..................................................................................................................... 29
Segment Information ........................................................................................................ 29
Note 1
Revenue ............................................................................................................................ 29
Note 2
Expenses ........................................................................................................................... 30
Note 3
Income Tax ........................................................................................................................ 31
Note 4
Earnings per Share ............................................................................................................ 33
Note 5
Note 6
Dividends .......................................................................................................................... 33
Operating Assets and Liabilities ........................................................................................................... 34
Cash and Cash Equivalents ............................................................................................... 34
Note 7
Receivables ....................................................................................................................... 35
Note 8
Inventories ........................................................................................................................ 35
Note 9
Property, Plant and Equipment ........................................................................................ 36
Note 10
Note 11
Exploration and Evaluation Assets .................................................................................... 37
Note 12 Mine Properties ................................................................................................................ 38
Impairment of Assets ........................................................................................................ 40
Note 13
Trade and Other Payables................................................................................................. 41
Note 14
Note 15
Provisions .......................................................................................................................... 42
Capital Structure, Financial Instruments and Risk ............................................................................... 44
Borrowings and Finance Costs .......................................................................................... 44
Note 16
Financial Instruments........................................................................................................ 46
Note 17
Note 18
Issued Capital and Reserves .............................................................................................. 49
Other Disclosures .................................................................................................................................. 50
Deferred Tax ..................................................................................................................... 50
Note 19
Share-Based Payments ..................................................................................................... 52
Note 20
Commitments ................................................................................................................... 56
Note 21
Contingencies .................................................................................................................... 57
Note 22
Related Party Disclosures ................................................................................................. 57
Note 23
Key Management Personnel ............................................................................................. 58
Note 24
Auditors Remuneration .................................................................................................... 58
Note 25
Events Subsequent to the Reporting Date ....................................................................... 59
Note 26
New and Revised Accounting Standards .......................................................................... 59
Note 27
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2019
Consolidated
Note
Cash flows from operating activities
Gold sales
Interest received
Other income
Interest paid
Research & development tax concession income
Payments for exploration and evaluation
Payments to suppliers and employees
Net cash from operating activities
7
Cash flows from investing activities
production revenue)
Payments for plant and equipment
Payments for capitalised interest during development
Payments to acquire exploration assets(i)
Net cash from investing activities
Cash flows from financing activities
Proceeds from issue of share capital
Proceeds from issue of options
Share issue transaction costs
Proceeds from borrowings
Repayment of borrowings
Transaction costs associated with borrowings
Net cash from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
7
7
30 June
2019
$’000
132,550
1,046
-
272
(3,229)
(13,009)
(70,444)
47,186
(3,432)
(2,894)
(11,500)
(77,322)
48,330
1,670
(1,948)
-
(44,500)
(767)
2,785
(27,351)
62,866
35,515
30 June
2018
$’000
1,479
502
-
-
(243)
(17,196)
(2,080)
(17,538)
(195)
(3,222)
(160,233)
-
-
-
-
1,512
150,000
(1,038)
150,474
(27,297)
90,163
62,866
Payments for mine properties expenditure (net of pre-
(59,496)
(156,816)
(i) Consideration paid to terminate a Jupiter life-of-mine royalty obligation accrued in the prior year.
The above statement of cash flows should be read in conjunction with the accompanying notes.
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DAC I A N G O L D | ANNUAL REPORT 2019 25
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Basis of Preparation
Dacian Gold Limited (“Dacian” or the “Company”) is a for profit company limited by shares, incorporated and
domiciled in Australia, whose shares are publicly traded on the Australian Securities Exchange.
A description of the nature of operations and principal activities of Dacian and its subsidiaries (collectively, the
“Group”) is included in the Directors’ Report, which is not part of these financial statements.
The financial statements were authorised for issue in accordance with a resolution of the Directors on 13
September 2019.
The financial report is a general purpose financial report which:
-
-
-
-
-
has been prepared in accordance with the requirements of the Corporations Act 2001, Australian
Accounting Standards and other authoritative pronouncements of the Australian Accounting
Standards Board (AASB) and complies with International Financial Reporting Standards (IFRS) as issued
by the International Accounting Standards Board (IASB);
has been prepared on a historical cost basis except for assets and liabilities and share-based payments
which are required to be measured at fair value. The basis of measurement is discussed further in the
individual notes;
is presented in Australian dollars with all values rounded to the nearest thousand dollars ($’000) unless
otherwise stated, in accordance with ASIC Instrument 2016/191;
adopts all new and amended Accounting Standards and Interpretations issued by the AASB that are
relevant to the operations of the Group and effective for reporting periods beginning on or after 1 July
2018. Refer to note 27 for further details;
does not early adopt Accounting Standards and Interpretations that have been issued or amended but
are not yet effective. Refer to note 27 for further details.
Going Concern Basis for Preparation of Financial Statements
These financial statements have been prepared on the going concern basis, which contemplates the continuity
of normal business activities and the realisation of assets and discharge of liabilities in the normal course of
business.
The Group held cash on hand as at 30 June 2019 of $35.5 million (30 June 2018: $62.9 million) and $10.1 million
in unsold gold on hand (5,026 ounces valued at the 30 June 2019 closing spot gold price of A$2,015 per ounce).
As at 30 June 2019 the Group has a working capital deficit of $21.1 million (2018: $48.1 million), which includes
a current liability for scheduled bank debt repayments totalling $33.3 million.
For the year ended 30 June 2019 the Group made an after tax profit of $3.0 million. At 30 June 2019 the Group
held total assets of $371.6 million. Cash outflows from operations and investment activities were $30.1 million.
This includes expenditure incurred to terminate a Jupiter life-of-mine private royalty obligation ($11.5 million),
and pre-commercial production operating and development expenditure net of gold revenue ($39.3 million).
Cash flows for the year have been impacted by lower than expected gold production due to a combination of the
underperformance of the underground mining contractor, lower than expected grade performance from certain
subordinate lodes and the failure of the ball mill motor in June 2019.
The Directors consider the going concern basis of preparation to be appropriate based on forecast cash flows.
The cash flow forecast is dependent on the MMGO achieving forecast targets for gold revenue, mining operations
and processing activities that are in accordance with management’s schedules and Board approved budgets and
forecast gold price and foreign exchange assumptions to enable the cash flow forecast to be achieved. Key to
achieving forecast cash flows is the Group’s ability to achieve forecast gold production.
As disclosed in note 16, at 30 June 2019 the MMGO Project Debt Facility held with a syndicate of financiers, was
fully drawn to $105.5 million. The loan agreement contains a number of typical financial covenants that are
assessed and reported to financiers on a quarterly basis. As a result of becoming aware of the lower than planned
gold production for the June quarter 2019, a forecast breach of a financial covenant as at 30 June 2019 was
identified. In anticipation of the ratio breach, MMGO obtained a waiver from the Financiers prior to 30 June
2019.
Dacian Gold Limited 2019 Annual Report
26 DAC I A N G O L D | ANNUAL REPORT 2019
26 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Basis of Preparation
Dacian Gold Limited (“Dacian” or the “Company”) is a for profit company limited by shares, incorporated and
domiciled in Australia, whose shares are publicly traded on the Australian Securities Exchange.
A description of the nature of operations and principal activities of Dacian and its subsidiaries (collectively, the
“Group”) is included in the Directors’ Report, which is not part of these financial statements.
The financial statements were authorised for issue in accordance with a resolution of the Directors on 13
September 2019.
The financial report is a general purpose financial report which:
-
has been prepared in accordance with the requirements of the Corporations Act 2001, Australian
Accounting Standards and other authoritative pronouncements of the Australian Accounting
Standards Board (AASB) and complies with International Financial Reporting Standards (IFRS) as issued
by the International Accounting Standards Board (IASB);
has been prepared on a historical cost basis except for assets and liabilities and share-based payments
which are required to be measured at fair value. The basis of measurement is discussed further in the
individual notes;
is presented in Australian dollars with all values rounded to the nearest thousand dollars ($’000) unless
otherwise stated, in accordance with ASIC Instrument 2016/191;
adopts all new and amended Accounting Standards and Interpretations issued by the AASB that are
relevant to the operations of the Group and effective for reporting periods beginning on or after 1 July
2018. Refer to note 27 for further details;
does not early adopt Accounting Standards and Interpretations that have been issued or amended but
are not yet effective. Refer to note 27 for further details.
-
-
-
-
Going Concern Basis for Preparation of Financial Statements
These financial statements have been prepared on the going concern basis, which contemplates the continuity
of normal business activities and the realisation of assets and discharge of liabilities in the normal course of
business.
The Group held cash on hand as at 30 June 2019 of $35.5 million (30 June 2018: $62.9 million) and $10.1 million
in unsold gold on hand (5,026 ounces valued at the 30 June 2019 closing spot gold price of A$2,015 per ounce).
As at 30 June 2019 the Group has a working capital deficit of $21.1 million (2018: $48.1 million), which includes
a current liability for scheduled bank debt repayments totalling $33.3 million.
For the year ended 30 June 2019 the Group made an after tax profit of $3.0 million. At 30 June 2019 the Group
held total assets of $371.6 million. Cash outflows from operations and investment activities were $30.1 million.
This includes expenditure incurred to terminate a Jupiter life-of-mine private royalty obligation ($11.5 million),
and pre-commercial production operating and development expenditure net of gold revenue ($39.3 million).
Cash flows for the year have been impacted by lower than expected gold production due to a combination of the
underperformance of the underground mining contractor, lower than expected grade performance from certain
subordinate lodes and the failure of the ball mill motor in June 2019.
The Directors consider the going concern basis of preparation to be appropriate based on forecast cash flows.
The cash flow forecast is dependent on the MMGO achieving forecast targets for gold revenue, mining operations
and processing activities that are in accordance with management’s schedules and Board approved budgets and
forecast gold price and foreign exchange assumptions to enable the cash flow forecast to be achieved. Key to
achieving forecast cash flows is the Group’s ability to achieve forecast gold production.
As disclosed in note 16, at 30 June 2019 the MMGO Project Debt Facility held with a syndicate of financiers, was
fully drawn to $105.5 million. The loan agreement contains a number of typical financial covenants that are
assessed and reported to financiers on a quarterly basis. As a result of becoming aware of the lower than planned
gold production for the June quarter 2019, a forecast breach of a financial covenant as at 30 June 2019 was
identified. In anticipation of the ratio breach, MMGO obtained a waiver from the Financiers prior to 30 June
2019.
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Basis of Preparation (continued)
Going Concern Basis for Preparation of Financial Statements (continued)
Under the terms of the Project Debt Facility, ‘Project Completion’ is required to be achieved by 31 December
2019. Project Completion requires a number of physical and financial tests conducted over a 60 day period.
Failure to achieve the Project Completion by this date would, unless waived or extended further by the syndicate
of financiers, trigger an event of default under the facility. In addition, prior to the achievement of Project
Completion, Dacian Gold Limited is unable to withdraw funds from Mt Morgans WA Mining Pty Ltd, the subsidiary
owning and operating the MMGO. The Directors have a reasonable expectation Project Completion can be
achieved in the required timeframe and anticipate meeting all other forecast debt covenants.
Should the Group not successfully achieve some or all of these forecast targets and assumptions, the Group may
require funding support which may include using the cash reserved on deposit account to meet debt repayment
obligations, rescheduling of debt repayments, obtaining waivers of certain covenants in the Project Debt Facility
or accessing the capital markets.
Principles of Consolidation
The consolidated financial statements comprise the financial statements of the Group. A list of controlled
entities (subsidiaries) at year end is contained in note 23.
The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using
consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that
may exist.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and
expenses and profits and losses resulting from intra-group transactions have been eliminated. Subsidiaries are
consolidated from the date on which control is obtained to the date on which control is disposed. The acquisition
of subsidiaries is accounted for using the acquisition method of accounting.
Foreign Currencies
Both the functional currency of each entity within the Group and the Group’s presentation currency is Australian
dollars.
Transactions in foreign currencies are initially recorded in Australian dollars at the exchange rate of the day.
Foreign currency monetary assets and liabilities are translated to Australian dollars at the reporting date
exchange rate. Foreign exchange gains and losses are generally recognised in the profit or loss.
Other Accounting Policies
Significant and other accounting policies that summarise the measurement basis used and are relevant to an
understanding of the financial statements are provided throughout the notes to the financial statements. Where
possible, wording has been simplified to provide clearer commentary on the financial report of the Group.
Accounting policies determined non-significant are not included in the financial statements.
Key Estimates and Judgements
In the process of applying the Group’s accounting policies, management has made a number of judgements and
applied estimates of future events. Judgements and estimates which are material to the financial report are
found in the following notes.
Note 3 Expenses page 30
Note 9 Inventories page 35
Note 11 Exploration and evaluation assets page 37
Note 12 Mine properties page 38
Note 13 Impairment page 40
Note 15 Provisions page 42
Note 19 Deferred tax page 50
Note 20 Share-based payments page 52
Refer to page 26 for further discussion on going concern.
Dacian Gold Limited 2019 Annual Report
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DAC I A N G O L D | ANNUAL REPORT 2019 27
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Basis of Preparation (continued)
The Notes to the Financial Statements
The notes include information which is required to understand the financial statements and is material and
relevant to the operations and the financial position and performance of the Group. Information is considered
relevant and material if, for example:
- the amount is significant due to its size or nature;
- the amount is important for understanding the results of the Group;
- it helps to explain the impact of significant changes in the Group’s business; or
- it relates to an aspect of the Group’s operations that is important to its future performance.
The notes are organised into the following sections:
- Performance for the year;
- Operating assets and liabilities;
- Capital structure and risk;
- Other disclosures.
A brief explanation is included under each section.
Dacian Gold Limited 2019 Annual Report
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Basis of Preparation (continued)
The Notes to the Financial Statements
The notes include information which is required to understand the financial statements and is material and
relevant to the operations and the financial position and performance of the Group. Information is considered
relevant and material if, for example:
- the amount is significant due to its size or nature;
- the amount is important for understanding the results of the Group;
- it helps to explain the impact of significant changes in the Group’s business; or
- it relates to an aspect of the Group’s operations that is important to its future performance.
The notes are organised into the following sections:
- Performance for the year;
- Operating assets and liabilities;
- Capital structure and risk;
- Other disclosures.
A brief explanation is included under each section.
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Performance for the Year
This section of the notes provides further information on key line items relevant to the financial performance of
the Group. It includes profitability, the resultant return to shareholders via earnings per share and dividends.
Note 1 Segment Information
The Group has identified its operating segments based on the internal reports that are reviewed and used by the
Board of Directors in assessing performance and determining the allocation of resources.
Reportable segments disclosed are based on aggregating operating segments, where the segments have similar
characteristics. The Group’s sole activity is mineral production, exploration and development at the Mt Morgans
Gold Operation (“MMGO”) wholly within Australia, therefore it has aggregated all operating segments into the
one reportable segment being mineral production, exploration and development.
The reportable segment is represented by the primary statements forming these financial statements.
Note 2 Revenue
Accounting Policies
Gold Sales
The specific recognition criteria for the Group’s gold sales is upon settlement and when ownership of the gold is
transferred to the customer. Prior to the commencement of commercial production on 1 January 2019 revenue
from the sale of gold and silver was treated as a pre-production income and credited to capitalised mine properties
in development.
The Group has applied AASB 15 Revenue from Contracts with Customers from 1 July 2018 with adoption of the
standard not having a material effect on the Group’s financial statements.
Under AASB 15, revenue is recognised when a customer obtains control of the goods or services. Determining the
timing of the transfer of control requires judgement. With the sale of gold bullion, this occurs when physical
bullion, from a contracted sale, is transferred from the Company’s account into the account of the buyer.
Revenue from contracts with customers
Gold Sales
Silver Sales
Gold delivery commitments
30 June
2019
$’000
132,550
271
132,821
30 June
2018
$,000
-
-
-
The Group enters into gold forward contracts to manage the gold price of a proportion of anticipated gold sales.
The forward contracts are settled by the physical delivery of gold as per the contract terms. The contracts are
accounted for as gold sales contracts with revenue recognised once the gold has been delivered to the
counterparties. Consistent with the gold sales revenue recognition policy above, the physical gold delivery
contracts are considered contracts to sell a non-financial item and therefore do not fall within the scope of AASB
9 Financial Instruments.
Due within 1 year
Due after 1 year but not more than 5 years
Gold for physical
delivery
oz
123,449
24,000
Average contract
sale price
A$/oz
1,823
1,743
Value of
committed sales
$’000
225,073
41,841
147,449
1,810
266,914
Dacian Gold Limited 2019 Annual Report
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Dacian Gold Limited 2019 Annual Report
DAC I A N G O L D | ANNUAL REPORT 2019 29
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 3 Expenses
Accounting Policies
Prior to the commencement of commercial production at the MMGO on 1 January 2019 expenditure of an
operating nature was capitalised to mine properties in development including cash costs of pre-commercial
production, depreciation and amortisation.
Costs of production
Cash costs of production is a component of cost of goods sold and includes direct costs incurred for mining,
processing and mine site administration, net of costs capitalised to mine properties, pre-strip and production
stripping assets. This category also includes movements in the cost of inventory.
Cost of goods sold
Costs of production
Royalties
Depreciation of mine plant and equipment
Amortisation of mine properties
Depreciation & Amortisation
30 June
2019
$’000
86,924
3,354
8,020
10,645
108,943
30 June
2018
$’000
-
-
-
-
-
Depreciation is calculated on units of production, straight-line or written down value basis over the estimated
useful life of the assets as follows:
Class of Fixed Asset
▪ Office equipment and fixtures
▪ Computer equipment & software
▪ Motor Vehicles
▪ Plant and equipment
Useful Life
3 - 4 years
2 - 4 years
3 years
3 - 10 years / units of production
Depreciation methods, useful lives and residual values are reviewed at each reporting date.
Mine properties are amortised on a unit-of-production basis over the resource of the relevant mining area. The
unit of account is tonnes of ore mined.
The Group assesses future production stripping and mine development costs required to bring existing reserves
into production and includes an estimate of these costs in the base when calculating amortisation expense.
Depreciation and Amortisation
Depreciation expense – recognised in cost of goods sold
Depreciation expense – other
Amortisation expense
30 June
2019
$’000
8,020
224
10,645
18,889
30 June
2018
$’000
-
528
-
528
Key estimates and assumptions
Unit-of-production method of depreciation/amortisation
The Group uses the unit-of-production basis when depreciating/amortising life-of-mine specific assets which
results in a depreciation/amortisation charge proportionate to the depletion of the anticipated remaining life-of-
mine production. Each item’s economic life, which is assessed annually, has due regard for both its physical life
limitations and to present assessments of the available resource of the mine property at which it is located.
Dacian Gold Limited 2019 Annual Report
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 3 Expenses (continued)
Borrowings and finance costs
General and specific borrowing costs that are directly attributable to the acquisition, construction or production
of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset
for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get
ready for their use or sale. Other borrowing costs are expensed in the period in which they are incurred. Prior to
the commencement of commercial production on 1 January 2019 borrowing costs attributable to the MMGO have
been capitalised and are amortised over the life of the qualifying asset.
Interest income
Interest income is recognised on a time proportion basis and is recognised as it accrues.
Rehabilitation and restoration unwind
Borrowing costs (i)
Interest expense on borrowings
Interest income
30 June
2019
$’000
94
2,484
3,414
(1,046)
4,946
30 June
2018
$’000
-
-
275
(1,443)
(1,168)
Depreciation is calculated on units of production, straight-line or written down value basis over the estimated
Employee expenses
(i) Borrowing costs includes an expense of $2.3 million for previously capitalised transaction costs. Refer note 16.
Corporate Employee expenses
Salaries and wages
Director fees and consulting expenses
Defined contribution superannuation
Other employment expenses
Note 4
Income Tax
Accounting Policy
30 June
2019
$’000
2,829
240
292
271
3,632
30 June
2018
$’000
1,883
240
213
298
2,634
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
(a)
Income Statement
Current income tax:
Current income tax charge / (benefit)
Research and development tax concession
Deferred income tax:
Tax losses brought to account for the first time
Relating to origination and reversal of timing differences
Income tax (benefit) / expense reported in the Statement
of Profit or Loss and Other Comprehensive Income
30 June
2019
$’000
(11,997)
-
(9,884)
17,531
(4,350)
30 June
2018
$’000
(12,364)
(405)
(18,203)
3,499
(27,473)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Note 3 Expenses
Accounting Policies
Prior to the commencement of commercial production at the MMGO on 1 January 2019 expenditure of an
operating nature was capitalised to mine properties in development including cash costs of pre-commercial
production, depreciation and amortisation.
Costs of production
Cash costs of production is a component of cost of goods sold and includes direct costs incurred for mining,
processing and mine site administration, net of costs capitalised to mine properties, pre-strip and production
stripping assets. This category also includes movements in the cost of inventory.
30 June
2019
$’000
86,924
3,354
8,020
10,645
108,943
30 June
2018
$’000
-
-
-
-
-
Cost of goods sold
Costs of production
Royalties
Depreciation of mine plant and equipment
Amortisation of mine properties
Depreciation & Amortisation
useful life of the assets as follows:
Class of Fixed Asset
▪ Office equipment and fixtures
▪ Computer equipment & software
▪ Motor Vehicles
▪ Plant and equipment
Useful Life
3 - 4 years
2 - 4 years
3 years
3 - 10 years / units of production
Depreciation methods, useful lives and residual values are reviewed at each reporting date.
Mine properties are amortised on a unit-of-production basis over the resource of the relevant mining area. The
unit of account is tonnes of ore mined.
The Group assesses future production stripping and mine development costs required to bring existing reserves
into production and includes an estimate of these costs in the base when calculating amortisation expense.
30 June
2019
$’000
8,020
224
10,645
18,889
30 June
2018
$’000
528
-
-
528
Depreciation and Amortisation
Depreciation expense – recognised in cost of goods sold
Depreciation expense – other
Amortisation expense
Key estimates and assumptions
Unit-of-production method of depreciation/amortisation
The Group uses the unit-of-production basis when depreciating/amortising life-of-mine specific assets which
results in a depreciation/amortisation charge proportionate to the depletion of the anticipated remaining life-of-
mine production. Each item’s economic life, which is assessed annually, has due regard for both its physical life
limitations and to present assessments of the available resource of the mine property at which it is located.
Dacian Gold Limited 2019 Annual Report
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 4
Income Tax (continued)
(b) Statement of Changes in Equity
Deferred income tax:
Capital Raising Costs
30 June
2019
$’000
30 June
2018
$’000
(80)
(1,075)
(c) Reconciliation of consolidated income tax expense to prima facie tax payable
Accounting loss from continuing operations before income
tax expense
Tax at the Australian rate of 30% (2018: 30%)
Non-deductible expenses
Research and development tax concession
Capital raising costs claimed
Temporary difference and losses now brought to account
Adjustment in respect of previous year(i)
Income tax (benefit) / expense reported in Profit or Loss and
Other Comprehensive Income
30 June
2019
$’000
30 June
2018
$’000
(1,332)
(32,875)
(400)
231
-
(505)
-
(3,676)
(4,350)
(9,862)
414
(405)
(388)
(17,232)
-
(27,473)
(i) Following the commissioning of the treatment plant, management undertook a review of the effective lives of
its assets which resulted in an income tax benefit in the 2019 financial year.
Dacian Gold Limited 2019 Annual Report
32 DAC I A N G O L D | ANNUAL REPORT 2019
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Note 4
Income Tax (continued)
(b) Statement of Changes in Equity
Deferred income tax:
Capital Raising Costs
(c) Reconciliation of consolidated income tax expense to prima facie tax payable
30 June
2019
$’000
30 June
2018
$’000
(80)
(1,075)
30 June
2019
$’000
(400)
231
(505)
-
-
(3,676)
(4,350)
30 June
2018
$’000
(9,862)
414
(405)
(388)
(17,232)
-
(27,473)
Accounting loss from continuing operations before income
tax expense
(1,332)
(32,875)
Tax at the Australian rate of 30% (2018: 30%)
Non-deductible expenses
Research and development tax concession
Capital raising costs claimed
Temporary difference and losses now brought to account
Adjustment in respect of previous year(i)
Income tax (benefit) / expense reported in Profit or Loss and
Other Comprehensive Income
its assets which resulted in an income tax benefit in the 2019 financial year.
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 5 Earnings per Share
Accounting Policy
Earnings per share (“EPS”) is the amount of post-tax profit attributable to each share. The Group presents basic
and diluted EPS data for ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to
ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the
period.
Diluted EPS takes into account the dilutive effect of all potential ordinary shares, being unlisted employee share
options and performance rights on issue.
(i) Following the commissioning of the treatment plant, management undertook a review of the effective lives of
d) Weighted average number of shares
a) Basic earnings per share
Profit / (loss) attributable to ordinary equity holders of the
Company
b) Diluted earnings per share
Profit / (loss) attributable to ordinary equity holders of the
Company
c) Profit / (Loss) used in calculation of basic and diluted loss per
share
Profit / (loss) after tax from continuing operations
30 June
2019
Cents
1.4
1.3
$’000
3,018
No.
30 June
2018
Cents
(2.6)
(2.6)
$’000
(5,402)
No.
Issued Ordinary shares at 1 July
Effect of shares issued
Weighted average number of ordinary shares at 30 June
Effect of dilution:
Share options (i)
Performance rights (i)
Weighted average number of ordinary shares adjusted for the
effect of dilution
205,844,814
201,732,155
18,071,798
3,314,485
223,916,612
205,046,640
528,302
299,893
-
-
224,744,807
205,046,640
(i) Share options and performance rights have been excluded from the 2018 financial year calculation as the
Company was loss making and their effect would have been anti-dilutive.
Note 6 Dividends
No dividends were paid or proposed during the financial year ended 30 June 2019 (2018: Nil).
Dacian Gold Limited 2019 Annual Report
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DAC I A N G O L D | ANNUAL REPORT 2019 33
33 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Operating Assets and Liabilities
This section of the notes shows cash generation, the assets used to generate the Group’s trading performance and
the liabilities incurred as a result. Liabilities relating to the Group’s financing activities are addressed in the Capital
Structure, Financial Instruments and Risk section on page 44.
Note 7 Cash and Cash Equivalents
Accounting Policy
Cash and short-term deposits in the statement of financial position comprise cash at bank and in hand. Cash
equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value. Cash at bank earns interest at floating rates based
on daily deposit rates.
At 30 June 2019, the Group had drawn debt totalling A$105,500,000. Refer to note 16 for further discussion.
Cash at bank
Cash reserved on deposit (i)
30 June
2019
$’000
35,515
-
35,515
30 June
2018
$’000
47,866
15,000
62,866
(i) At 30 June 2018 an amount of $15.0 million was reserved on deposit in respect of debt service obligations under
the Project Debt Facility. At 30 June 2019, the $15.0 million reserve amount was utilised in full to fund (in part) a
scheduled debt repayment obligation of $18.0 million paid in June 2019. The balance of the debt repayment, $3.0
million was sourced from MMGO operating cash flows. Use of the reserve was in accordance with the existing
terms and conditions of the loan agreement and was supported by the Company’s syndicate of banks. Since 30
June 2019, $10.0 million has been deposited to the reserve account from MMGO operational cash flows. MMGO
has an obligation to fully fund the reserve account to $15.0 million by 30 September 2019. MMGO cash flow
forecasts indicate this obligation will be met.
The Project Debt Facility allows MMGO the use of this reserve in future periods should operational cash flows be
insufficient to meet scheduled debt repayments. If used, MMGO has an obligation to refund the reserve back to
its limit of $15.0 million from operating cash flows in the following periods. Whilst the reserve is not fully funded,
distributions to the Parent Entity, Dacian Gold Limited are not permitted.
Reconciliation of profit / (loss) after tax to net cash outflow from operating activities:
Profit / (loss) from ordinary activities after income tax
Depreciation
Net loss on sale of assets
Share-based payments expense
Exploration write-off
Capitalised exploration expenditure
Expense of previously capitalised borrowing costs
Movement in assets and liabilities:
(Increase)/decrease in financial assets
(Increase)/decrease in other receivables
(Increase)/decrease in inventories
Increase/(decrease) in employee leave provisions
Increase/(decrease) in trade and other payables
Increase/(decrease) in deferred tax liabilities
Net cash flow from operating activities
30 June
2019
$’000
3,018
18,889
-
760
91
-
2,349
-
(1,941)
(1,231)
231
29,369
(4,349)
47,186
30 June
2018
$’000
(5,402)
528
47
1,368
-
(2,038)
-
37
(240)
-
82
15,553
(27,473)
(17,538)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Operating Assets and Liabilities
This section of the notes shows cash generation, the assets used to generate the Group’s trading performance and
the liabilities incurred as a result. Liabilities relating to the Group’s financing activities are addressed in the Capital
Structure, Financial Instruments and Risk section on page 44.
Note 7 Cash and Cash Equivalents
Accounting Policy
Cash and short-term deposits in the statement of financial position comprise cash at bank and in hand. Cash
equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value. Cash at bank earns interest at floating rates based
on daily deposit rates.
At 30 June 2019, the Group had drawn debt totalling A$105,500,000. Refer to note 16 for further discussion.
Cash at bank
Cash reserved on deposit (i)
(i) At 30 June 2018 an amount of $15.0 million was reserved on deposit in respect of debt service obligations under
the Project Debt Facility. At 30 June 2019, the $15.0 million reserve amount was utilised in full to fund (in part) a
scheduled debt repayment obligation of $18.0 million paid in June 2019. The balance of the debt repayment, $3.0
million was sourced from MMGO operating cash flows. Use of the reserve was in accordance with the existing
terms and conditions of the loan agreement and was supported by the Company’s syndicate of banks. Since 30
June 2019, $10.0 million has been deposited to the reserve account from MMGO operational cash flows. MMGO
has an obligation to fully fund the reserve account to $15.0 million by 30 September 2019. MMGO cash flow
forecasts indicate this obligation will be met.
The Project Debt Facility allows MMGO the use of this reserve in future periods should operational cash flows be
insufficient to meet scheduled debt repayments. If used, MMGO has an obligation to refund the reserve back to
its limit of $15.0 million from operating cash flows in the following periods. Whilst the reserve is not fully funded,
distributions to the Parent Entity, Dacian Gold Limited are not permitted.
Reconciliation of profit / (loss) after tax to net cash outflow from operating activities:
Profit / (loss) from ordinary activities after income tax
Depreciation
Net loss on sale of assets
Share-based payments expense
Exploration write-off
Capitalised exploration expenditure
Expense of previously capitalised borrowing costs
Movement in assets and liabilities:
(Increase)/decrease in financial assets
(Increase)/decrease in other receivables
(Increase)/decrease in inventories
Increase/(decrease) in employee leave provisions
Increase/(decrease) in trade and other payables
Increase/(decrease) in deferred tax liabilities
Net cash flow from operating activities
30 June
2019
$’000
3,018
18,889
760
91
2,349
-
-
-
(1,941)
(1,231)
231
29,369
(4,349)
47,186
30 June
2018
$’000
(5,402)
528
47
1,368
(2,038)
-
-
37
(240)
-
82
15,553
(27,473)
(17,538)
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 8 Receivables
Accounting Policy
Receivables are initially recognised at fair value and subsequently at the amounts considered receivable (financial
assets at amortised cost). Balances within receivables do not contain impaired assets, are not past due and are
expected to be received when due.
The Group does not have trade receivables in relation to gold sales. The only material receivables at year end are
for GST and fuel tax credits receivable from the Australian Taxation Office and therefore, the Group is not generally
exposed to credit risk in relation to its receivables.
Due to the short-term nature of these receivables, their carrying value is assumed to approximate fair value.
30 June
2019
$’000
35,515
-
35,515
30 June
2018
$’000
47,866
15,000
62,866
Current receivables
GST receivable
Prepayments
Other receivables
Note 9
Inventories
Accounting Policy
30 June
2019
$’000
2,354
2,055
764
5,173
30 June
2018
$’000
1,945
1,110
669
3,724
Gold bullion, gold-in-circuit and ore stockpiles are physically measured or estimated and valued at the lower of
cost and net realisable value. Cost is determined by the weighted average method and comprises direct purchase
costs and an appropriate portion of fixed and variable overhead costs, including depreciation and amortisation,
incurred in converting ore into gold bullion. Net realisable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and costs of selling the final product, including royalties.
Consumable stores are valued at the lower of cost and net realisable value. The cost of consumable stores is
measured on a first-in first-out basis. Inventories expected to be sold (or consumed in the case of stores) within
12 months after the balance sheet date are classified as current assets, all other inventories are classified as non-
current.
ROM inventory – at cost
Crushed ore – at cost
Gold in circuit– at cost
Gold dore – at cost
Mine spares and stores – at cost
Key Estimates and Assumptions
Inventories
30 June
2019
$’000
4,635
1,462
4,292
6,464
3,821
20,674
30 June
2018
$’000
1,547
649
2,145
6,086
2,669
13,096
Net realisable value tests are performed at each reporting date and represent the estimated future sales price of
the product based on prevailing spot metals process at the reporting date, less estimated costs to complete
production and bring the product to sale.
Stockpiles are measured by estimating the number of tonnes added and removed from the stockpile, the number
of contained gold ounces based on assay data, and the estimated recovery percentage. Stockpile tonnages are
verified by periodic surveys.
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 10 Property, Plant and Equipment
Accounting Policy
The value of property, plant and equipment is measured as the cost of the asset, less accumulated depreciation
and impairment. The cost of the asset also includes the cost of replacing parts that are eligible for capitalisation,
the cost of major inspections and an initial estimate of the cost of dismantling and removing the item from site at
the end of its useful life (rehabilitation provisions). Changes in the rehabilitation provisions resulting from changes
in the size or timing of the cost or from changes in the discount rate are also recognised as part of the asset cost.
De-recognition and Disposal
An item of property, plant and equipment is derecognised when it is sold or otherwise disposed of, or when its use
is expected to bring no further economic benefits. Any gain or loss from derecognising the asset (the difference
between the proceeds on disposal and the carrying amount of the asset) is included in the income statement in
the period the item is derecognised.
Impairment
The carrying values of property, plant and equipment are reviewed for impairment at each reporting date, with
recoverable amount being estimated when events or changes in circumstances indicate that the carrying value
may be impaired. Refer to note 13 for further discussion of impairment.
Office
Equipment
& Fixtures
$’000
Computer
Equipment
& Software
$’000
Motor
Vehicles
$’000
Plant &
Equipment
$’000
Leased
Equipment
$’000
Capital
WIP
$’000
Total
$’000
Year ended 30 June 2019
Cost
Accumulated depreciation
Net Book Value
Movements
Opening net book value
Additions
Disposals
Transfers to mine dev
Depreciation expense
Depreciation capitalised(i)
Closing net book value
Year ended 30 June 2018
Cost
Accumulated depreciation
Net Book Value
Movements
Opening net book value
Additions
Disposals
Transfers from mine dev
Depreciation expense
Depreciation capitalised(i)
Closing net book value
263
(149)
114
130
30
-
-
(42)
(4)
114
233
(103)
130
195
-
(18)
17
(62)
(2)
130
1,587
(928)
659
1,128
139
-
-
(361)
(247)
659
1,448
(320)
1,128
442
61
(9)
891
(129)
(128)
1,128
2,274
(1,254)
1,020
130,232
(16,498)
113,734
18,173
(3,028)
15,145
186
152,715
-
(21,857)
186
130,858
1,668
129,082
17,462
36
-
-
(375)
(309)
1,020
2,238
(570)
1,668
454
415
(5)
1,201
(261)
(136)
1,668
2,513
(54)
(5,065)
(6,308)
(6,434)
113,734
132,981
(3,899)
129,082
281
90,883
(16)
41,282
(76)
(3,272)
129,082
-
-
-
(1,158)
(1,159)
15,145
18,173
(711)
17,462
603
186
-
150,073
2,904
(54)
(603)
(5,668)
-
-
(8,244)
(8,153)
186
130,858
603
155,676
-
(5,603)
603
150,073
-
35
1,407
18,173
603
110,135
-
-
-
(711)
-
(48)
(35)
43,356
-
-
(528)
(4,249)
17,462
603
150,073
(i) Prior to the commencement of commercial production on 1 January 2019 depreciation has been capitalised to
mine properties in development (refer to note 12).
36 DAC I A N G O L D | ANNUAL REPORT 2019
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Note 10 Property, Plant and Equipment
Accounting Policy
The value of property, plant and equipment is measured as the cost of the asset, less accumulated depreciation
and impairment. The cost of the asset also includes the cost of replacing parts that are eligible for capitalisation,
the cost of major inspections and an initial estimate of the cost of dismantling and removing the item from site at
the end of its useful life (rehabilitation provisions). Changes in the rehabilitation provisions resulting from changes
in the size or timing of the cost or from changes in the discount rate are also recognised as part of the asset cost.
An item of property, plant and equipment is derecognised when it is sold or otherwise disposed of, or when its use
is expected to bring no further economic benefits. Any gain or loss from derecognising the asset (the difference
between the proceeds on disposal and the carrying amount of the asset) is included in the income statement in
De-recognition and Disposal
the period the item is derecognised.
Impairment
The carrying values of property, plant and equipment are reviewed for impairment at each reporting date, with
recoverable amount being estimated when events or changes in circumstances indicate that the carrying value
may be impaired. Refer to note 13 for further discussion of impairment.
Office
Computer
Equipment
Equipment
Motor
Plant &
Leased
& Fixtures
& Software
Vehicles
Equipment
Equipment
$’000
$’000
$’000
$’000
$’000
Capital
WIP
$’000
Total
$’000
Year ended 30 June 2019
Cost
Accumulated depreciation
Net Book Value
Movements
Opening net book value
Additions
Disposals
Transfers to mine dev
Depreciation expense
Depreciation capitalised(i)
Closing net book value
Year ended 30 June 2018
Cost
Accumulated depreciation
Net Book Value
Movements
Opening net book value
Additions
Disposals
Transfers from mine dev
Depreciation expense
Depreciation capitalised(i)
Closing net book value
263
(149)
114
130
30
-
-
(42)
(4)
114
233
(103)
130
195
-
(18)
17
(62)
(2)
130
1,587
(928)
659
1,128
139
-
-
(361)
(247)
659
1,448
(320)
1,128
442
61
(9)
891
(129)
(128)
1,128
2,274
(1,254)
1,020
130,232
(16,498)
113,734
18,173
(3,028)
15,145
186
152,715
-
(21,857)
186
130,858
1,668
129,082
17,462
36
-
-
(375)
(309)
1,020
2,238
(570)
1,668
454
415
(5)
1,201
(261)
(136)
1,668
2,513
(54)
(5,065)
(6,308)
(6,434)
113,734
132,981
(3,899)
129,082
281
90,883
(16)
41,282
(76)
(3,272)
129,082
(1,158)
(1,159)
15,145
18,173
(711)
17,462
-
-
-
-
-
-
-
603
186
150,073
2,904
(54)
(603)
(5,668)
(8,244)
(8,153)
186
130,858
603
155,676
-
(5,603)
603
150,073
-
-
-
-
-
-
35
1,407
18,173
603
110,135
(35)
43,356
(48)
(528)
(4,249)
(711)
17,462
603
150,073
(i) Prior to the commencement of commercial production on 1 January 2019 depreciation has been capitalised to
mine properties in development (refer to note 12).
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 11 Exploration and Evaluation Assets
Accounting Policy
Exploration and evaluation costs are expensed in the year they are incurred, apart from acquisition costs and those
costs that are incurred on an area of interest that contains a JORC Ore Reserve.
Capitalised exploration and evaluation expenditures in relation to specific areas of interest continue to be
recognised as an exploration and evaluation asset where the following conditions are satisfied:
the rights to tenure of the area of interest are current; and
(i)
(ii) at least one of the following conditions is also met:
(a)
(b)
the exploration and evaluation expenditures are expected to be recouped through successful
development and exploration of the area of interest, or alternatively, by its sale; or
exploration and evaluation activities in the area of interest have not at the reporting date reached a
stage which permits a reasonable assessment of the existence or otherwise of economically
recoverable reserves, and active and significant operations in, or in relation to, the area of interest
are continuing.
Exploration and evaluation costs include acquisition of rights to explore, studies, exploratory drilling, trenching and
sampling and associated activities and an allocation of depreciation and amortisation of assets used in exploration
and evaluation activities. General and administrative costs are only included in the measurement of exploration
and evaluation costs where they are related directly to operational activities in a particular area of interest.
Deferred exploration costs at the start of the financial year
Exploration and evaluation costs incurred
Royalty termination costs (i)
Transfers to mine properties in development
Exploration and evaluation costs expensed and written off
30 June
2019
$’000
4,163
12,156
-
-
(12,247)
4,072
30 June
2018
$’000
4,163
17,963
11,520
(2,038)
(27,445)
4,163
(i) On 21 June 2018, the Company entered into an agreement to terminate the life-of-mine Jupiter royalty for
$11.5 million. Transactions costs incurred in respect of preparing the Deed of Settlement and Release to
terminate the Jupiter Mine Royalty Deed amounted to $0.02 million.
Impairment
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the
carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable
amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated
being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if
any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised
estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss been recognised for the asset in
previous years.
Where a decision has been made to proceed with development in respect of a particular area of interest, the
relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified to mine
properties in development.
An impairment loss of $0.1 million (2018: $nil) in relation to exploration and evaluation assets has been recognised
during the period. The impairments relates to historical tenement acquisition costs.
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 11 Exploration and Evaluation Assets (continued)
Key Estimates and Assumptions
Impairment of exploration and evaluation assets
The future recoverability of capitalised exploration and evaluation expenditure is dependent upon a number of
factors, including whether the Group decides to exploit the related lease itself or, if not, whether it successfully
recovers the related exploration and evaluation asset through sale.
Factors that could impact future recoverability include the level of reserves and resources, future technological
changes which could impact the cost of mining, future legal changes (including changes to environmental
restoration obligations) and changes to commodity prices.
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the
future, profits and net assets will be reduced in the period in which the determination is made.
Exploration commitments
The Group has certain obligations for payment of tenement rent, shire rates and to perform minimum exploration
work on mineral leases held. These obligations may vary over time, depending on the Group’s exploration
programmes and priorities.
Note 12 Mine Properties
Accounting Policies
Mine Properties Under Development
Mine properties under development represents the costs incurred in preparing mines for production and includes
plant and equipment under construction and operating costs incurred before production commences. These costs
are capitalised to the extent they are expected to be recouped through the successful exploitation of the related
mining leases. Once production commences, these costs are transferred to property, plant and equipment and
mine properties, as relevant, and are depreciated and amortised using the units-of-production method based on
the estimated economically recoverable resources to which they relate or are written off if the mine property is
abandoned.
Mine Properties in Production
Other mine properties represent expenditure in respect of exploration, evaluation, feasibility and pre-production
operating costs incurred by the Group previously accumulated and carried forward in mine properties under
development in relation to areas of interest in which mining has now commenced. Other mine properties are
stated at cost, less accumulated amortisation and accumulated impairment losses.
Other mine properties are amortised on a unit-of-production basis over the economically recoverable resource of
the mine concerned. The unit of account is tonnes of ore mined.
Deferred Stripping
Stripping activity costs incurred in the development phase of an open pit mine are capitalised as part of the cost
of constructing the mine and subsequently amortised over the life of the mine on a units-of-production basis.
Stripping activity incurred during the production phase of a mine is assessed as to whether the benefit accruing
from that activity is to provide access to ore that can be used to produce ore inventory, or whether it in addition
provides improved access to ore that will be mined in future periods.
To the extent that the benefit from the stripping activity is realised in the form of inventory produced, the Group
accounts for those stripping activity costs in accordance with AASB 102 Inventories. A stripping activity asset is
brought to account if it is probable that future economic benefits (improved access to that ore body) will flow to
the Group, the component of the ore body for which access has been improved can be identified and costs relating
to the stripping activity can be measured reliably.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Note 11 Exploration and Evaluation Assets (continued)
Key Estimates and Assumptions
Impairment of exploration and evaluation assets
The future recoverability of capitalised exploration and evaluation expenditure is dependent upon a number of
factors, including whether the Group decides to exploit the related lease itself or, if not, whether it successfully
recovers the related exploration and evaluation asset through sale.
Factors that could impact future recoverability include the level of reserves and resources, future technological
changes which could impact the cost of mining, future legal changes (including changes to environmental
restoration obligations) and changes to commodity prices.
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the
future, profits and net assets will be reduced in the period in which the determination is made.
The Group has certain obligations for payment of tenement rent, shire rates and to perform minimum exploration
work on mineral leases held. These obligations may vary over time, depending on the Group’s exploration
Exploration commitments
programmes and priorities.
Note 12 Mine Properties
Accounting Policies
Mine Properties Under Development
Mine properties under development represents the costs incurred in preparing mines for production and includes
plant and equipment under construction and operating costs incurred before production commences. These costs
are capitalised to the extent they are expected to be recouped through the successful exploitation of the related
mining leases. Once production commences, these costs are transferred to property, plant and equipment and
mine properties, as relevant, and are depreciated and amortised using the units-of-production method based on
the estimated economically recoverable resources to which they relate or are written off if the mine property is
abandoned.
Mine Properties in Production
Other mine properties represent expenditure in respect of exploration, evaluation, feasibility and pre-production
operating costs incurred by the Group previously accumulated and carried forward in mine properties under
development in relation to areas of interest in which mining has now commenced. Other mine properties are
stated at cost, less accumulated amortisation and accumulated impairment losses.
Other mine properties are amortised on a unit-of-production basis over the economically recoverable resource of
the mine concerned. The unit of account is tonnes of ore mined.
Deferred Stripping
Stripping activity costs incurred in the development phase of an open pit mine are capitalised as part of the cost
of constructing the mine and subsequently amortised over the life of the mine on a units-of-production basis.
Stripping activity incurred during the production phase of a mine is assessed as to whether the benefit accruing
from that activity is to provide access to ore that can be used to produce ore inventory, or whether it in addition
provides improved access to ore that will be mined in future periods.
To the extent that the benefit from the stripping activity is realised in the form of inventory produced, the Group
accounts for those stripping activity costs in accordance with AASB 102 Inventories. A stripping activity asset is
brought to account if it is probable that future economic benefits (improved access to that ore body) will flow to
the Group, the component of the ore body for which access has been improved can be identified and costs relating
to the stripping activity can be measured reliably.
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 12 Mine Properties (continued)
Accounting Policies (continued)
Deferred Stripping (continued)
The amount of stripping activity costs that are capitalised is determined based on a comparison of the stripping
ratio in the relevant period with the life-of-mine stripping ratio. To the extent that there is a period of sustained
stripping that exceeds the average life-of-mine stripping ratio, mine waste stripping costs are capitalised to the
stripping activity asset. Such capitalised costs are amortised over the life of that component on a units-of-
production basis. Changes to the life-of-mine are accounted for prospectively.
Year ended 30 June 2019
Cost
Accumulated amortisation
Net book value
Movements
Opening carrying amount
Additions(i)
Transfers from PPE
Transfers
Change in rehabilitation provision
Amortisation expense
Borrowing costs capitalised / (expensed)(ii)
Closing net book value
Year ended 30 June 2018
Cost
Accumulated amortisation
Net book value
Movements
Opening carrying amount
Additions(i)
Transfers to PPE
Transfers from exploration
Change in rehabilitation provision
Borrowing costs capitalised(ii)
Reclassification of transaction costs to bank loan
Closing net book value
Mine
Properties in
Development
$’000
Mine
Properties
in
Production
$’000
Deferred
Stripping
$’000
Total
-
-
-
103,004
6,665
5,467
(122,234)
1,106
-
5,992
-
103,004
-
103,004
60,959
74,081
(43,391)
2,038
6,981
4,803
(2,467)
103,004
142,249
(9,088)
133,161
-
19,795
201
122,234
2,368
(9,088)
(2,349)
133,161
11,159
(1,557)
153,408
(10,645)
9,602
142,763
-
11,159
-
-
-
(1,557)
-
103,004
37,619
5,668
-
3,474
(10,645)
3,643
9,602
142,763
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
103,004
-
103,004
60,959
74,081
(43,391)
2,038
6,981
4,803
(2,467)
103,004
(i) Additions comprise mine development and capitalised operating costs (including depreciation and amortisation)
net of revenue from gold sales. During the commissioning phase (before the commencement of commercial
production on 1 January 2019) expenditures of an operating nature are capitalised to mine properties in
development. Revenue from the sale of gold prior to 1 January 2019 has been treated as pre-production income
and was credited to capitalised mine properties in development.
(ii) Borrowing costs include capitalised interest of $2.9 million (30 June 2018: $3.8 million).
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 12 Mine Properties (continued)
Key Estimates and Assumptions
Commencement of commercial production – Mt Morgans Gold Operation
On 1 January 2019 the Group announced the commencement of commercial production at MMGO. The criteria
used to assess this were based on the unique nature of the mine including its complexity and location and requires
judgement.
The assessment considered the following: (1) all major capital expenditures to bring the mine to the condition
necessary for it to be capable of operating in the manner intended by the Company have been completed; (2) the
treatment plant and other surface infrastructure has been transferred to the control of the operations team from
the commissioning team; (3) the power station is capable of delivering the required electricity; (4) the treatment
plant’s crushing and milling circuits are capable of running at design capacity; (5) gold recoveries are at or near
expected production levels; and (6) underground and open pit mining operations have achieved their required
production levels and have the ability to sustain the ongoing production of ore at the required volumes.
During the commissioning phase (prior to the commencement of commercial production) expenditures of an
operating nature was capitalised to mine properties in development. Revenue from the sale of gold during the
year has been treated as pre-production income and credited to capitalised mine properties in development.
Production Stripping Costs
The Group defers advanced stripping costs incurred during the production stage of its operations. This calculation
requires the use of judgements and estimates, such as estimates of tonnes of waste to be removed over the life of
the mining area and economically recoverable reserves extracted as a result. Changes in a mine’s life and design
may result in changes to the expected stripping ratio (waste to mineral reserves ratio) and amortisation which is
calculated on a units of production basis. Any resulting changes are accounted for prospectively.
Determination of mineral resources and reserves
The Group uses the concept of life-of-mine as an accounting value to determine the amortisation of mine
properties in production and deferred stripping costs. In determining life-of-mine, the Group prepares ore
resource and reserve estimates in accordance with JORC Code 2012, guidelines prepared by the Joint Ore Reserves
Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and
Minerals Council of Australia. The estimate of these resources and ore reserves, by their very nature, require
judgements, estimates and assumptions.
Where the resource estimates need to be modified, the amortisation expense is accounted for prospectively from
the date of the assessment until the end of the revised mine life (for both the current and future years).
Note 13 Impairment of Assets
Accounting Policy
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any
such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate
of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of its fair value less costs of disposal and its value in use and is
determined for an individual asset, unless the asset does not generate cash inflows that are largely independent
of those from other assets or groups of assets and the asset's value in use cannot be estimated to be close to its
fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs.
When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-
generating unit is considered impaired and is written down to its recoverable amount.
In assessing the fair value less cost of disposal, the estimated future cash flows are discounted to their present
value using a post-tax discount rate that reflects current market assessments of the time value of money and the
risks specific to the asset.
40 DAC I A N G O L D | ANNUAL REPORT 2019
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Note 12 Mine Properties (continued)
Key Estimates and Assumptions
Commencement of commercial production – Mt Morgans Gold Operation
On 1 January 2019 the Group announced the commencement of commercial production at MMGO. The criteria
used to assess this were based on the unique nature of the mine including its complexity and location and requires
judgement.
The assessment considered the following: (1) all major capital expenditures to bring the mine to the condition
necessary for it to be capable of operating in the manner intended by the Company have been completed; (2) the
treatment plant and other surface infrastructure has been transferred to the control of the operations team from
the commissioning team; (3) the power station is capable of delivering the required electricity; (4) the treatment
plant’s crushing and milling circuits are capable of running at design capacity; (5) gold recoveries are at or near
expected production levels; and (6) underground and open pit mining operations have achieved their required
production levels and have the ability to sustain the ongoing production of ore at the required volumes.
During the commissioning phase (prior to the commencement of commercial production) expenditures of an
operating nature was capitalised to mine properties in development. Revenue from the sale of gold during the
year has been treated as pre-production income and credited to capitalised mine properties in development.
Production Stripping Costs
The Group defers advanced stripping costs incurred during the production stage of its operations. This calculation
requires the use of judgements and estimates, such as estimates of tonnes of waste to be removed over the life of
the mining area and economically recoverable reserves extracted as a result. Changes in a mine’s life and design
may result in changes to the expected stripping ratio (waste to mineral reserves ratio) and amortisation which is
calculated on a units of production basis. Any resulting changes are accounted for prospectively.
Determination of mineral resources and reserves
The Group uses the concept of life-of-mine as an accounting value to determine the amortisation of mine
properties in production and deferred stripping costs. In determining life-of-mine, the Group prepares ore
resource and reserve estimates in accordance with JORC Code 2012, guidelines prepared by the Joint Ore Reserves
Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and
Minerals Council of Australia. The estimate of these resources and ore reserves, by their very nature, require
judgements, estimates and assumptions.
Where the resource estimates need to be modified, the amortisation expense is accounted for prospectively from
the date of the assessment until the end of the revised mine life (for both the current and future years).
Note 13 Impairment of Assets
Accounting Policy
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any
such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate
of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of its fair value less costs of disposal and its value in use and is
determined for an individual asset, unless the asset does not generate cash inflows that are largely independent
of those from other assets or groups of assets and the asset's value in use cannot be estimated to be close to its
fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs.
When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-
generating unit is considered impaired and is written down to its recoverable amount.
In assessing the fair value less cost of disposal, the estimated future cash flows are discounted to their present
value using a post-tax discount rate that reflects current market assessments of the time value of money and the
risks specific to the asset.
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 13 Impairment of Assets (continued)
Accounting Policy (continued)
An assessment is also made at each reporting date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount
is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates
used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the
case the carrying amount of the asset is increased to its recoverable amount.
That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation,
had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss
unless the asset is carried at the re-valued amount, in which case the reversal is treated as a re-valuation increase.
After such a reversal, the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying
amount, less any residual value, on a systematic basis over its remaining useful life.
Key Estimates and Assumptions
Determination of Mineral Resources & Ore Reserves
The determination of mineral resources and ore reserves impacts the accounting for asset carrying values. The
Group estimates its mineral resources and ore reserves in accordance with the Australian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves 2012 (the “JORC” Code). The information on mineral
resources and ore reserves was prepared by or under the supervision of Competent Persons as defined in the JORC
Code. The amounts presented are based on the mineral resources and ore reserves determined under the JORC
Code.
There are numerous uncertainties inherent in estimating mineral resources and ore reserves, and assumptions
that are valid at the time of estimation may change significantly when new information becomes available.
Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the
economic status of reserves and may ultimately result in reserves being restated.
Note 14 Trade and Other Payables
Accounting Policy
Trade and other payables are initially recognised at the value of the invoice received from a supplier and
subsequently measured at amortised cost. They represent liabilities for goods and services provided to the Group
prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future
payments in respect of the purchase of these goods and services. The amounts are unsecured and generally paid
within 30 days of recognition.
Current liabilities
Trade and other payables
Accrued expenses (i)
30 June
2019
$’000
26,082
17,872
43,954
30 June
2018
$’000
22,283
28,014
50,297
(i) Accrued expenses at 30 June 2018 included $11.5 million for the termination of a life-of-mine Jupiter Royalty.
Refer note 11 for further discussion.
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 15 Provisions
Accounting Policy
Rehabilitation and Restoration
Long-term environmental obligations are based on the Group’s environmental management plans, in compliance
with current environmental and regulatory requirements.
Full provision is made based on the net present value of the estimated cost of restoring the environmental
disturbance that has occurred up to the reporting date. To the extent that future economic benefits are expected
to arise, these costs are capitalised and amortised over the remaining lives of mines.
Annual increases in the provision relating to the change in the net present value of the provision are recognised as
finance costs. The estimated costs of rehabilitation are reviewed annually and adjusted as appropriate for changes
in legislation, technology or other circumstances. Cost estimates are not reduced by the potential proceeds from
the sale of assets or from plant clear-up closure.
Employee Benefits
The provision for employee benefits represents annual leave and long service leave entitlements accrued by
employees.
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits and accumulating sick leave that are expected
to be settled wholly within 12 months after the end of the period in which the employees render the related service
are recognised in respect of the employees’ services up to the end of the reporting period and are measured at
the amounts expected to be paid when the liabilities are settled.
Long service leave
The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that
employees have earned in return for their service up to reporting date, plus related on costs. The benefit is
discounted to determine its present value and the discount rate is the yield at the reporting date on high-quality
corporate bonds that have maturity dates approximating the terms of the Group’s obligations.
Current:
Employee leave liabilities
Non-current:
Employee leave liabilities
Rehabilitation provision
Provision for rehabilitation
Balance at the start of the financial year
Provisions recognised during the year
Unwinding of discount
Balance at the end of the financial year
30 June
2019
$’000
1,151
1,151
213
18,395
18,608
14,827
3,157
411
18,395
30 June
2018
$’000
784
784
174
14,827
15,001
7,846
6,920
61
14,827
42 DAC I A N G O L D | ANNUAL REPORT 2019
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 15 Provisions (continued)
Key Estimates and Assumptions
Rehabilitation Obligations
The provision for rehabilitation and restoration costs is based on the net present value of the estimated cost of
restoring the environmental disturbance that has occurred up to the reporting date. Significant estimates and
assumptions are made in determining the provision for mine rehabilitation as there are numerous factors that will
affect the ultimate liability payable. These factors include an estimate of the extent and costs of rehabilitation
activities, technological changes, regulatory changes, costs increases as compared to the inflation rates and
changes in discount rates. These uncertainties may result in future actual expenditure differing from the amounts
currently provided. The provision at reporting date represents management’s best estimate of the present value
of the future rehabilitation costs required.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Note 15 Provisions
Accounting Policy
Rehabilitation and Restoration
Long-term environmental obligations are based on the Group’s environmental management plans, in compliance
with current environmental and regulatory requirements.
Full provision is made based on the net present value of the estimated cost of restoring the environmental
disturbance that has occurred up to the reporting date. To the extent that future economic benefits are expected
to arise, these costs are capitalised and amortised over the remaining lives of mines.
Annual increases in the provision relating to the change in the net present value of the provision are recognised as
finance costs. The estimated costs of rehabilitation are reviewed annually and adjusted as appropriate for changes
in legislation, technology or other circumstances. Cost estimates are not reduced by the potential proceeds from
the sale of assets or from plant clear-up closure.
The provision for employee benefits represents annual leave and long service leave entitlements accrued by
Liabilities for wages and salaries, including non-monetary benefits and accumulating sick leave that are expected
to be settled wholly within 12 months after the end of the period in which the employees render the related service
are recognised in respect of the employees’ services up to the end of the reporting period and are measured at
the amounts expected to be paid when the liabilities are settled.
The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that
employees have earned in return for their service up to reporting date, plus related on costs. The benefit is
discounted to determine its present value and the discount rate is the yield at the reporting date on high-quality
corporate bonds that have maturity dates approximating the terms of the Group’s obligations.
Employee Benefits
employees.
Short-term obligations
Long service leave
Current:
Employee leave liabilities
Non-current:
Employee leave liabilities
Rehabilitation provision
Provision for rehabilitation
Balance at the start of the financial year
Provisions recognised during the year
Unwinding of discount
Balance at the end of the financial year
30 June
2019
$’000
1,151
1,151
213
18,395
18,608
14,827
3,157
411
18,395
30 June
2018
$’000
784
784
174
14,827
15,001
7,846
6,920
61
14,827
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Capital Structure, Financial Instruments and Risk
This section provides further information about the Group’s contributed equity, financial liabilities, related
financing costs and its exposure to various financial risks. It explains how these risks affect the Group’s financial
position and performance and what the Group does to manage these risks.
Note 16 Borrowings and Finance Costs
Accounting Policies
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of borrowings using the effective interest rate method.
Fees paid on establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is
probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down
occurs and amortised over the period of the remaining facility.
Finance Leases
Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership for the
lease item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the
present value of the minimum lease payments. Lease payments are apportioned between the finance charges and
reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.
Finance charges are recognised as an expense in profit or loss.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease
term if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term. The
corresponding finance lease liability is reduced by the leased payments net of finance charges. The interest
element of lease payments represents a constant proportion of the outstanding capital balance and is charged to
profit or loss, as finance costs over the period of the lease. The carrying amounts of the Group’s current and non-
current borrowings approximate their fair value.
Refer to note 21 for further details of finance leases entered into by the Group at period end.
Unwinding of discount on provisions
The unwinding of discount on provisions represents the cost associated with the passage of time. Rehabilitation
provisions are recognised at the discounted value of the present obligation to restore, dismantle and rehabilitate
each mine site with the increase in the provision due to the passage of time being recognised as a finance cost in
accordance with the policy described in note 15.
44 DAC I A N G O L D | ANNUAL REPORT 2019
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Capital Structure, Financial Instruments and Risk
Note 16 Borrowings and Finance Costs
Accounting Policies
Borrowings
This section provides further information about the Group’s contributed equity, financial liabilities, related
financing costs and its exposure to various financial risks. It explains how these risks affect the Group’s financial
position and performance and what the Group does to manage these risks.
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of borrowings using the effective interest rate method.
Fees paid on establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is
probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down
occurs and amortised over the period of the remaining facility.
Finance Leases
Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership for the
lease item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the
present value of the minimum lease payments. Lease payments are apportioned between the finance charges and
reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.
Finance charges are recognised as an expense in profit or loss.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease
term if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term. The
corresponding finance lease liability is reduced by the leased payments net of finance charges. The interest
element of lease payments represents a constant proportion of the outstanding capital balance and is charged to
profit or loss, as finance costs over the period of the lease. The carrying amounts of the Group’s current and non-
current borrowings approximate their fair value.
Refer to note 21 for further details of finance leases entered into by the Group at period end.
Unwinding of discount on provisions
The unwinding of discount on provisions represents the cost associated with the passage of time. Rehabilitation
provisions are recognised at the discounted value of the present obligation to restore, dismantle and rehabilitate
each mine site with the increase in the provision due to the passage of time being recognised as a finance cost in
accordance with the policy described in note 15.
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 16 Borrowings and Financing Costs (continued)
Current
Insurance premium funding liability
Lease Liabilities
Bank Loans
Non-Current
Lease Liabilities
Bank Loans
a) Project Debt Facility
30 June
2019
$’000
1,989
2,106
33,300
37,395
13,445
72,200
85,645
30 June
2018
$’000
1,022
2,011
73,623
76,656
15,555
73,910
89,465
At 30 June 2019 the MMGO Project Debt Facility held with a syndicate of financiers, comprising Westpac Banking
Corporation, Australia and New Zealand Banking Group Limited and BNP Paribas, was fully drawn to $105.5 million
(2018: $150.0 million).
During the year, scheduled debt repayments were made totalling $44.5 million (2018: Nil). As a result, and in
accordance with the loan agreement, the available debt limit was reduced by the same amount as all facilities had
transitioned into the repayment phase.
The key terms of the Facility are:
-
-
-
Fixed schedule of repayments starting September 2018 through to June 2022;
The Facility can be repaid early at the Company’s option at any time without restriction or financial penalty;
Security is provided by a fixed and floating charge over the assets of Dacian Gold’s operating subsidiary, Mt
Morgans WA Mining Pty Ltd and a featherweight security over the assets of Dacian Gold Limited capped to a
maximum value of $5,000. The transaction banking accounts for the Group are secured assets. The security
provided by the Parent Entity, Dacian Gold Limited supports the guarantee provided to Mt Morgans WA
Mining Pty Ltd.
In December 2018, the scheduled debt repayments in the Project Debt Facility were re-sculpted to better align
cash flows with forecast production. The tenor of the facility was extended by six months to 30 June 2022. The
change to the debt repayment schedule resulted in the immediate expense of $2.3 million in previously capitalised
transaction costs. The principal repayment profile of the Facility following the reschedule and as at 30 June 2019
appears in the table below.
Bank Loan
6 months
or less
$’000
17,850
6-12
months
$’000
15,450
1-2 years
2-3 years
$’000
31,800
$’000
40,400
The loan agreement contains a number of typical financial covenants that are assessed and reported to financiers
on a quarterly basis. As a result of becoming aware of the lower than planned gold production for the June quarter
2019, as announced to the ASX on 5 June 2019 a forecast breach of a financial covenant as at 30 June 2019 was
identified. In anticipation of the ratio breach, MMGO obtained an irrevocable waiver from the Financiers prior to
30 June 2019.
The weighted average effective interest rate on the facility at 30 June 2019 is 4.6% (30 June 2018: 5.2%).
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 16 Borrowings and Financing Costs (continued)
b) Financing facilities
Total Facilities
Project Debt Facility
Cost Overrun Facility
Working Capital Facility
Bank Guarantee Facility
Facilities used at reporting date
Project Debt Facility
Cost Overrun Facility
Working Capital Facility
Bank Guarantee Facility
Facilities unused at reporting date
Project Debt Facility
Cost Overrun Facility
Working Capital Facility
Bank Guarantee Facility
Note 17 Financial Instruments
30 June
2019
$’000
105,500
-
-
950
106,450
105,500
-
-
674
106,174
-
-
-
276
276
30 June
2018
$’000
140,000
10,000
10,000
150
160,150
140,000
-
10,000
111
150,111
-
10,000
-
39
10,039
The Group has exposure to a variety of risks arising from its use of financial instruments. This note presents
information about the Group’s exposure to the specific risks, and the policies and processes for measuring and
managing those risks. The Board of Directors has the overall responsibility for the risk management framework
and has adopted a Risk Management Policy.
(a) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to
meet its contractual obligations, and arises principally from transactions with customers and investments.
Gold Bullion Sales
Credit risk arising from the sale of gold bullion to the Group’s customer is low as the payment by the customer
(being The Perth Mint Australia) is guaranteed under statute by the Western Australian State Government. In
addition, sales are made to high credit quality financial institutions, hence credit risk arising from these
transactions is low.
Trade and other receivables
The nature of the business activity of the Group does not result in trading receivables. The receivables that the
Group does experience through its normal course of business are short-term and the risk of non-recovery of
receivables is considered to be negligible.
Other
In respect of derivative financial instruments, the Group’s exposure to credit risk arises from potential default of
the counterparty, with a maximum exposure equal to the mark to market of these instruments. The Group does
not hold any credit derivatives to offset its credit exposure.
The Directors do not consider that the Group’s financial assets are subject to anything more than a negligible level
of credit risk, and as such no disclosures are made.
46 DAC I A N G O L D | ANNUAL REPORT 2019
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Note 16 Borrowings and Financing Costs (continued)
b) Financing facilities
Total Facilities
Project Debt Facility
Cost Overrun Facility
Working Capital Facility
Bank Guarantee Facility
Facilities used at reporting date
Project Debt Facility
Cost Overrun Facility
Working Capital Facility
Bank Guarantee Facility
Facilities unused at reporting date
Project Debt Facility
Cost Overrun Facility
Working Capital Facility
Bank Guarantee Facility
Note 17 Financial Instruments
30 June
2019
$’000
105,500
-
-
950
106,450
105,500
674
106,174
-
-
-
-
-
276
276
30 June
2018
$’000
140,000
10,000
10,000
150
160,150
140,000
-
10,000
111
150,111
10,000
-
-
39
10,039
The Group has exposure to a variety of risks arising from its use of financial instruments. This note presents
information about the Group’s exposure to the specific risks, and the policies and processes for measuring and
managing those risks. The Board of Directors has the overall responsibility for the risk management framework
and has adopted a Risk Management Policy.
(a) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to
meet its contractual obligations, and arises principally from transactions with customers and investments.
Credit risk arising from the sale of gold bullion to the Group’s customer is low as the payment by the customer
(being The Perth Mint Australia) is guaranteed under statute by the Western Australian State Government. In
addition, sales are made to high credit quality financial institutions, hence credit risk arising from these
Gold Bullion Sales
transactions is low.
Trade and other receivables
The nature of the business activity of the Group does not result in trading receivables. The receivables that the
Group does experience through its normal course of business are short-term and the risk of non-recovery of
receivables is considered to be negligible.
Other
In respect of derivative financial instruments, the Group’s exposure to credit risk arises from potential default of
the counterparty, with a maximum exposure equal to the mark to market of these instruments. The Group does
not hold any credit derivatives to offset its credit exposure.
The Directors do not consider that the Group’s financial assets are subject to anything more than a negligible level
of credit risk, and as such no disclosures are made.
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 17 Financial Instruments (continued)
(b) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet
its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to the Company’s reputation.
The Group manages its liquidity risk by monitoring its cash reserves and forecast spending. Management is
cognisant of the future demands for liquid finance resources to finance the Group’s current and future operations,
and consideration is given to the liquid assets available to the Group before commitment is made to future
expenditure or investment.
The following are the contractual maturities of financial liabilities, including estimated interest payments and
excluding the impact of netting agreements:
Carrying
amount
Contractual
cash flows
6 months
or less
$’000
$’000
$’000
6-12
months
$’000
1-2 years
2-5 years More than
5 years
$’000
$’000
$’000
43,954
43,954
43,954
-
-
-
-
1,989
15,551
105,500
1,989
17,498
113,310
166,994
176,751
870
1,337
19,973
66,134
746
1,336
17,221
19,303
373
2,673
34,442
37,488
-
7,866
41,674
49,540
-
4,286
-
4,286
22,283
22,283
22,283
-
-
-
-
1,021
17,567
147,533
1,021
20,171
158,911
188,404
202,386
557
1,386
45,980
70,206
464
1,337
34,146
35,947
-
2,806
39,935
42,741
-
7,866
38,850
46,716
-
6,776
-
6,776
2019
Trade & other payables
Insurance premium
funding liability
Lease liabilities
Bank Loan
2018
Trade & other payables
Insurance premium
funding liability
Lease liabilities
Bank Loan
(c) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, commodity
prices and equity prices will affect the Group’s income or the value of its holdings of financial instruments. The
objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising any return.
Commodity Price Risk
The Group’s exposure to commodity price risk arises largely from Australian dollar gold price fluctuations. The
Group’s exposure to movements in the gold price is managed through the use of Australian dollar gold forward
contracts. The gold forward sale contracts do not meet the criteria of financial instruments for accounting
purposes on the basis that they meet the normal purchase/sale exemption because physical gold will be delivered
into the contract. Further information relating to these forward sale contracts is included in note 2. No sensitivity
analysis is provided for these contracts as they are outside the scope of AASB 9 Financial Instruments.
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 17 Financial Instruments (continued)
(c) Market risk (continued)
Interest rate risk
The Group’s exposure to interest rate risk is the risk that a financial instrument’s value will fluctuate as a result of
changes in market interest rates. At the reporting date, the Group had the following exposure to interest rate risk
on financial instruments.
Variable rate instruments
Cash and cash equivalents
Borrowings
Foreign Currency/Equity risk
Carrying amount ($)
30 June
2019
$’000
35,515
105,500
141,015
30 June
2018
$’000
62,866
147,533
210,399
The Group does not have any direct contact with foreign exchange or equity risks other than their effect on the
general economy.
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) profit or loss
before tax by the amounts shown below. This analysis assumes that all other variables remain constant.
Interest Revenue
Increase 1.0% (2018: 1.0%)
Decrease 1.0% (2018: 1.0%)
Interest Expense
Increase 1.0% (2018: 1.0%)
Decrease 1.0% (2018: 1.0%)
(d) Fair values
Fair values versus carrying amounts
30 June
2019
$’000
355
(355)
(1,055)
1,055
30 June
2018
$’000
629
(629)
(1,500)
1,500
The carrying amounts and estimated fair values of all the Group’s financial instruments recognised in the financial
statements are materially the same. The methods and assumptions used to estimate the fair value of financial
instruments are disclosed in the respective notes.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Note 17 Financial Instruments (continued)
(c) Market risk (continued)
Interest rate risk
The Group’s exposure to interest rate risk is the risk that a financial instrument’s value will fluctuate as a result of
changes in market interest rates. At the reporting date, the Group had the following exposure to interest rate risk
on financial instruments.
The Group does not have any direct contact with foreign exchange or equity risks other than their effect on the
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) profit or loss
before tax by the amounts shown below. This analysis assumes that all other variables remain constant.
Variable rate instruments
Cash and cash equivalents
Borrowings
Foreign Currency/Equity risk
general economy.
Interest Revenue
Increase 1.0% (2018: 1.0%)
Decrease 1.0% (2018: 1.0%)
Interest Expense
Increase 1.0% (2018: 1.0%)
Decrease 1.0% (2018: 1.0%)
(d) Fair values
Fair values versus carrying amounts
Carrying amount ($)
30 June
2019
$’000
35,515
105,500
141,015
30 June
2018
$’000
62,866
147,533
210,399
30 June
2019
$’000
355
(355)
(1,055)
1,055
30 June
2018
$’000
629
(629)
(1,500)
1,500
The carrying amounts and estimated fair values of all the Group’s financial instruments recognised in the financial
statements are materially the same. The methods and assumptions used to estimate the fair value of financial
instruments are disclosed in the respective notes.
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 18 Issued Capital and Reserves
Accounting Policy
Ordinary shares are classified as equity. Transaction costs directly attributable to the issue of shares or options
are recognised as a deduction from equity, net of any related income tax effects.
30 June
2019
No.
30 June
2018
No.
30 June
2019
$’000
30 June
2018
$’000
Issued share capital
225,713,403
205,844,814
244,765
195,187
Share movements during the year
Balance at the start of the financial year
Share issue
Exercise of options (cash)
Exercise of options (non-cash)
Exercise of performance rights (non-
cash)
Less share issue costs
Deferred tax on share issue costs (i)
205,844,814
17,948,339
1,700,000
-
220,250
201,732,155
-
4,042,659
-
70,000
-
-
-
-
195,187
48,429
1,670
458
637
(1,948)
80
191,783
-
1,512
586
231
-
1,075
Balance at the end of the financial year
225,713,403
205,844,814
244,513
195,187
(i) The balance at 30 June 2018 comprises the tax effect of prior period equity raising costs first brought to account
during that financial year. Refer note 4 for further discussion.
30 June 2019
30 June 2018
Balance at the beginning of the year
Profit / (loss) for the period
Transfer to issued capital on exercise of
options
Transfer to issued capital on exercise of
performance rights
Transfer to accumulated losses due to
market conditions not met
Share-based payments for the period
Accumulated
losses
$’000
(65,837)
3,018
-
-
174
-
Balance at the end of the year
(62,645)
Share-based
payments
reserve (i)
$’000
3,516
-
(458)
(637)
(174)
760
3,007
Accumulated
losses
$’000
(60,435)
(5,402)
-
-
-
-
(65,837)
Share-based
payments
reserve (i)
$’000
2,965
-
(586)
(231)
-
1,368
3,516
(i) The share-based payments reserve is used to recognise the fair value of options over unissued shares and
performance rights provided to employees and Key Management Personnel.
Dacian Gold Limited 2019 Annual Report
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Dacian Gold Limited 2019 Annual Report
DAC I A N G O L D | ANNUAL REPORT 2019 49
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Other Disclosures
This section provides information on items which require disclosure to comply with Australian Accounting
Standards and other regulatory pronouncements.
Note 19 Deferred Tax
Deferred tax assets and liabilities are recognised for temporary timing differences at the tax rates expected to
apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or
substantially enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of
deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made
for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset
or liability is recognised in relation to those timing differences if they arose in a transaction, other than a business
combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and
tax bases of investments in controlled entities where the parent is able to control the timing of the reversal of the
temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and
liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net
basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly
in equity.
Amounts receivable from the Australian Tax Office in respect of research and development tax concession claims
are recognised when management have a reasonable basis to estimate claim proceeds.
Tax consolidation
The company and its 100% owned controlled entities have formed a tax consolidated group. Members of the
Consolidated Entity have entered into a tax sharing arrangement in order to allocate income tax expense to the
wholly owned controlled entities on a pro-rate basis. The agreement provides for the allocation of income tax
liabilities between the entities should the head entity default on its tax payment obligations. At reporting date,
the possibility of default is remote. The head entity of the tax consolidated group is Dacian Gold Limited.
50 DAC I A N G O L D | ANNUAL REPORT 2019
Dacian Gold Limited 2019 Annual Report
50 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Other Disclosures
Standards and other regulatory pronouncements.
Note 19 Deferred Tax
This section provides information on items which require disclosure to comply with Australian Accounting
Deferred tax assets and liabilities are recognised for temporary timing differences at the tax rates expected to
apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or
substantially enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of
deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made
for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset
or liability is recognised in relation to those timing differences if they arose in a transaction, other than a business
combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and
tax bases of investments in controlled entities where the parent is able to control the timing of the reversal of the
temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and
liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net
basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly
Amounts receivable from the Australian Tax Office in respect of research and development tax concession claims
are recognised when management have a reasonable basis to estimate claim proceeds.
in equity.
Tax consolidation
The company and its 100% owned controlled entities have formed a tax consolidated group. Members of the
Consolidated Entity have entered into a tax sharing arrangement in order to allocate income tax expense to the
wholly owned controlled entities on a pro-rate basis. The agreement provides for the allocation of income tax
liabilities between the entities should the head entity default on its tax payment obligations. At reporting date,
the possibility of default is remote. The head entity of the tax consolidated group is Dacian Gold Limited.
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 19 Deferred Tax (continued)
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
Deferred tax assets
Trade & other payables
Provisions
Borrowings – Finance lease liabilities
Borrowing costs
Business related costs – profit & loss
Exploration and evaluation assets
Capital raising costs – equity
Tax Losses
Deferred tax liabilities
Trade & other receivables
Inventories
Property, plant and equipment
Exploration and evaluation assets
Mine properties
Net deferred tax assets
Movement in temporary differences during the year:
30 June
2019
$’000
17
5,927
4,665
421
3,259
-
1,155
52,450
(283)
(347)
(11,912)
(956)
(21,823)
32,573
Trade and other receivables
Inventories
Property, plant & equipment
Exploration & evaluation
Mine properties in development
Trade & other payables
Provisions
Borrowings
Borrowing costs
Business related costs – profit & loss
Capital raising costs – equity
Tax losses
Balance
30 June
2018
$’000
184
267
1,029
(3,217)
10,247
(24)
(4,735)
-
(245)
(6)
(1,075)
(30,568)
(28,143)
Recognised in
income
$’000
99
80
10,883
4,173
11,576
7
(1,192)
(4,665)
(176)
(3,253)
-
(21,882)
(4,350)
Recognised in
Equity
$’000
-
-
-
-
-
-
-
-
-
-
(80)
-
(80)
30 June
2018
$’000
24
4,735
-
245
6
3,217
1,075
30,568
(184)
(267)
(1,029)
-
(10,247)
28,143
Balance
30 June
2019
$’000
283
347
11,912
956
21,823
(17)
(5,927)
(4,665)
(421)
(3,259)
(1,155)
(52,450)
(32,573)
During the 2019 financial year the Group recognised as a deferred tax asset an additional $21.9 million of carry
forward tax losses. The generation of these losses can be largely attributed to the commissioning and ramp up
period of the MMGO prior to the declaration of commercial production on 1 January 2019. The utilisation of losses
depends upon the generation of future taxable profits which the Group believes to be recoverable based on
current taxable income projections. Utilisation will also be subject to relevant tax legislation associated with
recoupment including the same business or continuity of ownership test.
Dacian Gold Limited 2019 Annual Report
50 | P a g e
Dacian Gold Limited 2019 Annual Report
DAC I A N G O L D | ANNUAL REPORT 2019 51
51 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 19 Deferred Tax (continued)
Key Estimates and Assumptions
Recognition of deferred tax assets
The extent to which deferred tax assets can be recognised is based on an assessment of the probability of the
Group’s future taxable income against which the deferred tax assets can be utilised. In addition, significant
judgement is required in assessing the impact of any legal or economic limits or uncertainties in various tax
jurisdictions.
To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the Group
to realise the net deferred tax assets recorded at the reporting date could be impacted. Additionally, future
changes in the tax laws in Australia could limit the ability of the Group to obtain tax deductions in future periods.
Note 20 Share-Based Payments
Accounting Policy
The Group provides benefits to employees (including senior executives) of the Group in the form of share-based
incentives, whereby employees render services in exchange for options and shares (equity-settled transactions).
There is currently a plan in place to provide these benefits, the Dacian Gold Limited Employee Option Plan, which
provides benefits to Executive Directors and other employees.
The cost of these equity-settled transactions with employees is measured by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by using an appropriate
valuation model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions
linked to the price of the underlying Shares to which the equity instrument relates (market and non-vesting
conditions) if applicable. The cost of equity-settled transactions is recognised, together with a corresponding
increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the
date on which the relevant employees become fully entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date
reflects:
the extent to which the vesting period has expired; and
(i)
(ii) the Group’s best estimate of the number of equity instruments that will ultimately vest.
No adjustment is made for the likelihood of market performance conditions being met as the effect of these
conditions is included in the determination of fair value at grant date. The statement of profit or loss charge or
credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that
period.
No expense is recognised for share-based incentives that do not ultimately vest, except for incentives where
vesting is only conditional upon market and non-vesting conditions.
If the terms of a share-based incentive are modified, as a minimum an expense is recognised as if the terms had
not been modified. In addition, an expense is recognised for any modification that increases the total fair value of
the incentive, or is otherwise beneficial to the employee, as measured at the date of modification.
If a share-based incentive is cancelled, it is treated as if it had vested on the date of cancellation, and any expense
not yet recognised for the award is recognised immediately. However, if a new award is substituted for the
cancelled incentive and designated as a replacement award on the date that it is granted, the cancelled incentive
and new awards are treated as if they were a modification of the incentive, as described in the previous paragraph.
The Group provides benefits to employees (including Executive Directors) of the Group through share-based
incentives. Information relating to these schemes is set out below.
52 DAC I A N G O L D | ANNUAL REPORT 2019
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52 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Note 19 Deferred Tax (continued)
Key Estimates and Assumptions
Recognition of deferred tax assets
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 20 Share-Based Payments (continued)
The extent to which deferred tax assets can be recognised is based on an assessment of the probability of the
Group’s future taxable income against which the deferred tax assets can be utilised. In addition, significant
judgement is required in assessing the impact of any legal or economic limits or uncertainties in various tax
jurisdictions.
To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the Group
to realise the net deferred tax assets recorded at the reporting date could be impacted. Additionally, future
changes in the tax laws in Australia could limit the ability of the Group to obtain tax deductions in future periods.
Recognised share-based payments expense
Employee share-based payments expense
Performance rights expense
Total share-based payments expense
Dacian Gold Limited Employee Option Plan
30 June
2019
$’000
131
629
760
30 June
2018
$’000
423
945
1,368
Note 20 Share-Based Payments
Accounting Policy
The Group provides benefits to employees (including senior executives) of the Group in the form of share-based
incentives, whereby employees render services in exchange for options and shares (equity-settled transactions).
There is currently a plan in place to provide these benefits, the Dacian Gold Limited Employee Option Plan, which
provides benefits to Executive Directors and other employees.
The cost of these equity-settled transactions with employees is measured by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by using an appropriate
valuation model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions
linked to the price of the underlying Shares to which the equity instrument relates (market and non-vesting
conditions) if applicable. The cost of equity-settled transactions is recognised, together with a corresponding
increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the
date on which the relevant employees become fully entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date
reflects:
period.
(i)
the extent to which the vesting period has expired; and
(ii) the Group’s best estimate of the number of equity instruments that will ultimately vest.
No adjustment is made for the likelihood of market performance conditions being met as the effect of these
conditions is included in the determination of fair value at grant date. The statement of profit or loss charge or
credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that
No expense is recognised for share-based incentives that do not ultimately vest, except for incentives where
vesting is only conditional upon market and non-vesting conditions.
If the terms of a share-based incentive are modified, as a minimum an expense is recognised as if the terms had
not been modified. In addition, an expense is recognised for any modification that increases the total fair value of
the incentive, or is otherwise beneficial to the employee, as measured at the date of modification.
If a share-based incentive is cancelled, it is treated as if it had vested on the date of cancellation, and any expense
not yet recognised for the award is recognised immediately. However, if a new award is substituted for the
cancelled incentive and designated as a replacement award on the date that it is granted, the cancelled incentive
and new awards are treated as if they were a modification of the incentive, as described in the previous paragraph.
The Group provides benefits to employees (including Executive Directors) of the Group through share-based
incentives. Information relating to these schemes is set out below.
The establishment of the Dacian Gold Limited Employee Option Plan (“the Plan”) was last approved by a resolution
of the shareholders of the Company on 26 November 2018. All eligible Directors, executive officers and employees
of Dacian Gold Limited who have been continuously employed by the Company are eligible to participate in the
Plan. The Plan allows the Company to issue free options or performance rights to eligible persons.
Options over Unissued Shares
The options can be granted free of charge and are exercisable at a fixed price in accordance with the Plan. Options
issued under the Plan have vesting periods prior to exercise, except under certain circumstances whereby options
may be capable of exercise prior to the expiry of the vesting period. The options are granted free of charge and
vest subject to certain operational and market performance conditions being met. Options lapse if the employee
ceases employment with the Company.
During the financial year no options over unissued shares were issued pursuant to the Company’s Employee Share
Option Plan (30 June 2018: Nil). Options issued have been valued and included in the financial statements over
the periods that they vest.
a) Reconciliation of movement of options over unissued shares during the period including weighted average
exercise price (WAEP)
30 June 2019
No.
Options outstanding at the start of the year
Options granted during the year
Options exercised during the year
Options outstanding at the end of the year
6,950,000
-
(1,700,000)
5,250,000
WAEP
$1.07
-
$0.98
$1.10
30 June 2018
No.
12,000,000
-
(5,050,000)
6,950,000
WAEP
$0.94
-
$0.73
$1.07
The terms of the options over unissued shares at 30 June 2019 are as follows:
Number of options outstanding
500,000
2,000,000
400,000
1,550,000
300,000
500,000
b) Subsequent to the reporting date
Exercise price
$0.58
$0.39
$1.15
$1.16
$1.99
$3.66
Expiry date
24 September 2019
17 November 2019
30 September 2020
31 January 2021
28 February 2021
30 June 2021
Subsequent to year end 267,291 shares were issued on the cashless exercise of 500,000 options exercisable at
$0.58 each pursuant to the cashless exercise provisions of the Dacian Gold Limited Employee Option Plan. No
options have been granted subsequent to the reporting date and to the date of signing this report.
c) Weighted average contractual life
The weighted average contractual life for vested and un-exercised options is 12 months (2018: 24 months).
Dacian Gold Limited 2019 Annual Report
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DAC I A N G O L D | ANNUAL REPORT 2019 53
53 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 20 Share-Based Payments (continued)
Performance Rights
During the financial year ended 30 June 2019, no performance rights (30 June 2018: 391,682) were issued to
employees, pursuant to the terms of the Dacian Gold Limited Employee Share Option Plan.
a) Reconciliation of movement of performance rights during the period
Measurement
date
30 June 2019
30 June 2019
1 July 2018
1 July 2018
1 July 2019
1 July 2019
Date of
vesting
30 June 2019
30 June 2019
1 July 2019
1 July 2019
1 July 2020
1 July 2020
Tranche
1
2
3
4
5
6
Total
Number of
rights at
start of year
165,000
165,000
82,578
82,578
107,956
107,956
711,068
Number of
rights
vested(i)
(165,000)
-
-
-
-
-
(165,000)
Number
of rights
lapsed
-
(165,000)
-
-
-
-
(165,000)
Number of
rights forfeited
-
-
(17,811)
(17,812)
(22,776)
(22,776)
(81,175)
Number of
rights at
end of year
-
-
64,767
64,766
85,180
85,180
299,893
The movement in weighted average fair value (“WAFV”) appears in the table below:
Rights outstanding at the start of the year
Rights issued during the year
Rights vested during the year(i)
Rights lapsed during the period
Rights forfeited during the year
Rights outstanding at the end of the year
30 June 2019
No.
WAFV
30 June 2018
No.
WAFV
711,068
-
(165,000)
(165,000)
(81,175)
299,893
$2.61
-
$3.30
$2.78
$2.23
$2.24
550,250
391,682
(220,250)
-
(10,614)
711,068
$2.98
$2.24
$2.89
-
$2.46
$2.61
(i) Relates to rights that vested during the year and were unissued at 30 June 2019.
b) Subsequent to reporting date
Subsequent to period end a further 1,601,019 performance rights were issued to employees of the company
pursuant to the terms and conditions of the Dacian Gold Limited Employee Option Plan. In addition, 129,533
shares were issued on the exercise of fully vested rights comprising tranche 3 and 4 in the table above.
c) Fair value of performance rights granted
The fair value of the performance rights granted were determined using Monte Carlo simulation, a review of
historical share price volatility and correlation of the share price of the Company to its Peer Group. Further details
of the basis of valuation of currently outstanding performance right appear below.
Date of grant
17 October 2016
17 October 2016
30 August 2017
30 August 2017
20 April 2018
20 April 2018
Measurement
date
30 June 2019
30 June 2019
1 July 2018
1 July 2018
1 July 2019
1 July 2019
Tranche
1
2
3
4
5
6
Total
Number
of
rights
at start
of year
165,000
165,000
82,578
82,578
107,956
107,956
711,068
Share
price
on
grant
date
$3.30
$3.30
$2.33
$2.33
$3.06
$3.06
Fair
value
at
grant
date
$2.78
$3.30
$1.56
$2.33
$2.08
$3.06
Expected
share
price
volatility
68%
68%
51%
51%
53%
53%
Date of
vesting
30 June 2019
30 June 2019
1 July 2019
1 July 2019
1 July 2020
1 July 2020
Expected
dividend
yield
0%
0%
0%
0%
0%
0%
Expected
risk free
rate
1.74%
1.74%
1.84%
1.84%
1.96%
1.96%
54 DAC I A N G O L D | ANNUAL REPORT 2019
Dacian Gold Limited 2019 Annual Report
54 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Note 20 Share-Based Payments (continued)
Performance Rights
During the financial year ended 30 June 2019, no performance rights (30 June 2018: 391,682) were issued to
employees, pursuant to the terms of the Dacian Gold Limited Employee Share Option Plan.
a) Reconciliation of movement of performance rights during the period
Measurement
Tranche
date
Date of
vesting
1
2
3
4
5
6
Total
30 June 2019
30 June 2019
30 June 2019
30 June 2019
1 July 2018
1 July 2018
1 July 2019
1 July 2019
1 July 2019
1 July 2019
1 July 2020
1 July 2020
165,000
165,000
82,578
82,578
107,956
107,956
711,068
Number of
rights at
start of year
Number of
rights
vested(i)
(165,000)
Number
of rights
lapsed
(165,000)
-
-
-
-
-
Number of
Number of
rights at
rights forfeited
end of year
-
-
(17,811)
(17,812)
(22,776)
(22,776)
(81,175)
-
-
64,767
64,766
85,180
85,180
299,893
-
-
-
-
-
(165,000)
(165,000)
The movement in weighted average fair value (“WAFV”) appears in the table below:
Rights outstanding at the start of the year
Rights issued during the year
Rights vested during the year(i)
Rights lapsed during the period
Rights forfeited during the year
Rights outstanding at the end of the year
30 June 2019
30 June 2018
No.
WAFV
No.
711,068
-
(165,000)
(165,000)
(81,175)
299,893
WAFV
$2.61
-
$3.30
$2.78
$2.23
$2.24
550,250
391,682
(220,250)
-
(10,614)
711,068
$2.98
$2.24
$2.89
-
$2.46
$2.61
(i) Relates to rights that vested during the year and were unissued at 30 June 2019.
b) Subsequent to reporting date
Subsequent to period end a further 1,601,019 performance rights were issued to employees of the company
pursuant to the terms and conditions of the Dacian Gold Limited Employee Option Plan. In addition, 129,533
shares were issued on the exercise of fully vested rights comprising tranche 3 and 4 in the table above.
c) Fair value of performance rights granted
The fair value of the performance rights granted were determined using Monte Carlo simulation, a review of
historical share price volatility and correlation of the share price of the Company to its Peer Group. Further details
of the basis of valuation of currently outstanding performance right appear below.
Tranche
Date of grant
date
Measurement
17 October 2016
30 June 2019
165,000
30 June 2019
17 October 2016
30 June 2019
165,000
30 June 2019
1
2
3
4
5
6
Total
30 August 2017
30 August 2017
20 April 2018
20 April 2018
1 July 2018
1 July 2018
1 July 2019
1 July 2019
Number
of
rights
at start
of year
82,578
82,578
107,956
107,956
711,068
Share
price
on
grant
date
$3.30
$3.30
$2.33
$2.33
$3.06
$3.06
Fair
value
at
grant
date
$2.78
$3.30
$1.56
$2.33
$2.08
$3.06
Expected
share
price
Expected
dividend
Expected
risk free
volatility
yield
68%
68%
51%
51%
53%
53%
0%
0%
0%
0%
0%
0%
rate
1.74%
1.74%
1.84%
1.84%
1.96%
1.96%
Date of
vesting
1 July 2019
1 July 2019
1 July 2020
1 July 2020
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 20 Share-Based Payments (continued)
Performance Rights (continued)
d) Vesting conditions of performance rights outstanding during the period
No performance rights were issued during the year. The 299,893 performance rights outstanding at 30 June 2019
(30 June 2018: 711,068) are subject to Total Shareholder Return (“TSR”) and company performance vesting
conditions.
Tranche
1
Measurement
Date
30 June 2019
Date of
vesting
30 June 2019
Number
of rights
at start of
year
165,000
2
3
4
5
6
30 June 2019
30 June 2019
165,000
1 July 2018
1 July 2019
82,578
1 July 2018
1 July 2019
82,578
1 July 2019
1 July 2020
107,956
1 July 2019
1 July 2020
107,956
Total
711,068
Metric
50% - TSR performance to peers above 50th
percentile (measured over the 3 year period to 30
June 2019)
50% - Ore reserves at MMGO exceeding 1.2
million ounces
50% - TSR performance to peers above 50th
percentile (measured over the 1 year period to 1
July 2018)
50% - First gold production at MMGO on time and
budget
50% - TSR performance to peers above 50th
percentile (measured over the 1 year period to 1
July 2019)
50% - Ore reserves at MMGO exceeding 1.2
million ounces
Achieved
LTI
0%
100%
-
-
-
-
Details of the measurement period for each tranche of performance rights is detailed in the table above. The
performance rights for tranches 1 and 2 vest immediately at the measurement date. The remaining tranches are
subject to a 12 month service condition. These vest one year from the measurement date. On vesting, each right
automatically converts to one ordinary share. If the employee ceases employment before the rights vest, the
rights will be forfeited, except in limited circumstances that are approved by the board.
The Company’s TSR performance for rights on issue are assessed against the following 10 peer group companies.
Peer Companies
1
2
3
4
5
6
7
8
9
10
St Barbara Limited
Saracen Mineral Holdings Limited
Resolute Mining Limited
Gold Road Resources Limited
Perseus Mining Limited
Beadell Resources Limited
Silver Lake Resources Limited
Doray Minerals Limited
Troy Resources Limited
Ramelius Resources Limited
Key Estimates and Assumptions
Share-Based Payments
ASX Codes
SBM
SAR
RSG
GOR
PRU
BDR
SLR
DRM
TRY
RMS
The Group measures the cost of equity settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined using an appropriate
valuation model. The valuation basis and related assumptions are detailed above. The accounting estimates and
assumptions relating to the equity settled transactions would have no impact on the carrying value of assets and
liabilities within the next annual reporting period but may impact expenses and equity.
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 21 Commitments
(a) Operating lease commitments
Due within 1 year
Due after 1 year but not more than 5 years
30 June
2019
$’000
212
271
483
30 June
2018
$’000
208
482
690
The operating lease commitment relates to the lease of the Group’s Perth office and car parking for a 5 year term
from 24 October 2016. The lease includes an option to extend for an additional 3 year period following expiry of
the initial lease term on 24 October 2021.
(b) Finance lease commitments
In the prior year, Mt Morgans WA Mining Pty Ltd entered into agreements with Zenith Pacific (JPT) Pty Ltd to build
and operate the power station located at the MMGO and APA Operations Pty Ltd to build and operate a gas spur
for the transport of gas to this facility. A finance lease for this infrastructure has been recognised over each
contract term.
In the prior year, Mt Morgans WA Mining Pty Ltd entered into an agreement with SGS Australia Pty Ltd for the
provision of laboratory services and equipment for a fixed term of five years. A finance lease for the laboratory
equipment has been recognised over the contract term.
A summary of finance lease commitments appears in the following table:
Within one year
Later than one year but not later than five years
Later than five years
Minimum lease payment
Future finance charges
Recognised as liability
Representing lease liabilities:
Current
Non-current
(c) Capital commitments
30 June
2019
$’000
2,673
10,540
4,285
17,498
(1,947)
15,551
2,106
13,445
15,551
30 June
2018
$’000
2,723
10,672
6,776
20,171
(2,605)
17,566
2,011
15,555
17,566
Significant capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is
as follows:
Mine Capital
30 June
2019
$’000
651
30 June
2018
$’000
5,475
56 DAC I A N G O L D | ANNUAL REPORT 2019
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Note 21 Commitments
(a) Operating lease commitments
Due within 1 year
Due after 1 year but not more than 5 years
The operating lease commitment relates to the lease of the Group’s Perth office and car parking for a 5 year term
from 24 October 2016. The lease includes an option to extend for an additional 3 year period following expiry of
the initial lease term on 24 October 2021.
(b) Finance lease commitments
In the prior year, Mt Morgans WA Mining Pty Ltd entered into agreements with Zenith Pacific (JPT) Pty Ltd to build
and operate the power station located at the MMGO and APA Operations Pty Ltd to build and operate a gas spur
for the transport of gas to this facility. A finance lease for this infrastructure has been recognised over each
contract term.
In the prior year, Mt Morgans WA Mining Pty Ltd entered into an agreement with SGS Australia Pty Ltd for the
provision of laboratory services and equipment for a fixed term of five years. A finance lease for the laboratory
equipment has been recognised over the contract term.
A summary of finance lease commitments appears in the following table:
Within one year
Later than one year but not later than five years
Later than five years
Minimum lease payment
Future finance charges
Recognised as liability
Representing lease liabilities:
Current
Non-current
(c) Capital commitments
as follows:
Mine Capital
Significant capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is
30 June
2019
$’000
212
271
483
30 June
2018
$’000
208
482
690
30 June
2019
$’000
2,673
10,540
4,285
17,498
(1,947)
15,551
2,106
13,445
15,551
30 June
2019
$’000
651
30 June
2018
$’000
2,723
10,672
6,776
20,171
(2,605)
17,566
2,011
15,555
17,566
30 June
2018
$’000
5,475
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 22 Contingencies
(a) Contingent liabilities
There are no material contingent liabilities at the reporting date.
(b) Contingent assets
There are no material contingent assets at the reporting date.
Note 23 Related Party Disclosures
(a) Controlled Entities
Parent Entity
Dacian Gold Limited
Subsidiaries
Dacian Gold Mining Pty Ltd
Mt Morgans WA Mining Pty Ltd
(b) Parent Entity
Ownership Interest
2019
%
100
100
Financial statements and notes for Dacian Gold Limited, the legal parent entity are provided below:
Financial position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Shareholders’ equity
Issued capital
Share-based payments reserve
Accumulated losses
Total equity
Financial performance
Loss / (profit) for the year
Other comprehensive (loss) / income
Total comprehensive (loss) / income
Commitments
Parent
30 June
2019
$’000
17,547
225,436
242,983
802
161
963
244,513
3,007
(5,500)
242,020
(20,721)
-
(20,721)
2018
%
100
100
30 June
2018
$’000
16,214
156,931
173,145
714
123
837
195,187
3,516
(26,395)
172,308
19,046
-
19,046
The parent entity had operating lease commitments of $0.5 million at 30 June 2019 (30 June 2018: $0.7 million)
relating to the lease of the Group’s Perth office and car park. A featherweight security is in place over the assets
of the Parent Entity capped to a maximum value of $5,000 for the benefit of the MMGO project debt facility
financiers. The transaction banking accounts for the Parent Entity are secured assets. This security supports the
guarantee provided by Parent Entity to Mt Morgans WA Mining Pty Ltd.
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 23 Related Party Disclosures (continued)
(c) Transactions with related parties
For the year ended 30 June 2019, services totalling $216,042 (2018: $6,948) were provided on normal commercial
terms to the Group by Perenti Global and its subsidiaries (previously Ausdrill Limited), of which Mr Cochrane is
Non-Executive Chairman. The services provided related to open pit grade control drilling and mineral analysis. Mr
Cochrane was not party to any contract negotiations for either party.
Other than transactions with parties related to Key Management Personnel mentioned above and in the
remuneration report, there have been no other transactions with parties related to the consolidated entity in the
financial year ending 30 June 2019.
Note 24 Key Management Personnel
(a) Directors and Key Management Personnel
The following persons were Directors or Key Management Personnel of the Company during the current and prior
financial year:
Rohan Williams
Robert Reynolds
Barry Patterson
Ian Cochrane
Grant Dyker
Executive Chairman & CEO
Non-Executive Director
Non-Executive Director
Non-Executive Director
Chief Financial Officer
There were no other persons employed by or contracted to the Company during the financial year, having
responsibility for planning, directing and controlling the activities of the Company, either directly or indirectly.
(b) Key management personnel compensation
Details of Key Management Personnel remuneration are contained in the Audited Remuneration Report in the
Directors’ Report. A summary of total compensation paid to Key Management Personnel during the year is as
follows:
Short-term employment benefits
Share-based payments
Other long-term benefits
Post-employment benefits
Total Key Management Personnel remuneration
Note 25 Auditors Remuneration
Grant Thornton
Audit and review of financial statements
Fees in respect to prior year
KPMG
Audit and review of financial statements
Other Services
Grant Thornton - research and development claims
Total
30 June
2019
$
1,498,048
505,630
17,518
67,972
2,089,168
30 June
2019
$
-
21,588
85,000
-
106,588
30 June
2018
$
1,570,891
926,771
16,785
67,849
2,582,296
30 June
2018
$
60,316
-
-
10,000
70,316
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Note 23 Related Party Disclosures (continued)
(c) Transactions with related parties
For the year ended 30 June 2019, services totalling $216,042 (2018: $6,948) were provided on normal commercial
terms to the Group by Perenti Global and its subsidiaries (previously Ausdrill Limited), of which Mr Cochrane is
Non-Executive Chairman. The services provided related to open pit grade control drilling and mineral analysis. Mr
Cochrane was not party to any contract negotiations for either party.
Other than transactions with parties related to Key Management Personnel mentioned above and in the
remuneration report, there have been no other transactions with parties related to the consolidated entity in the
The following persons were Directors or Key Management Personnel of the Company during the current and prior
financial year ending 30 June 2019.
Note 24 Key Management Personnel
(a) Directors and Key Management Personnel
financial year:
Rohan Williams
Robert Reynolds
Barry Patterson
Ian Cochrane
Grant Dyker
Executive Chairman & CEO
Non-Executive Director
Non-Executive Director
Non-Executive Director
Chief Financial Officer
There were no other persons employed by or contracted to the Company during the financial year, having
responsibility for planning, directing and controlling the activities of the Company, either directly or indirectly.
(b) Key management personnel compensation
Details of Key Management Personnel remuneration are contained in the Audited Remuneration Report in the
Directors’ Report. A summary of total compensation paid to Key Management Personnel during the year is as
follows:
Short-term employment benefits
Share-based payments
Other long-term benefits
Post-employment benefits
Total Key Management Personnel remuneration
Note 25 Auditors Remuneration
Grant Thornton
Audit and review of financial statements
Fees in respect to prior year
Audit and review of financial statements
KPMG
Other Services
Total
Grant Thornton - research and development claims
30 June
2019
$
1,498,048
505,630
17,518
67,972
2,089,168
30 June
2019
$
-
-
21,588
85,000
106,588
30 June
2018
$
1,570,891
926,771
16,785
67,849
2,582,296
30 June
2018
$
60,316
-
-
10,000
70,316
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 26 Events Subsequent to the Reporting Date
There has not arisen in the interval between the end of the reporting period and the date of this report, any item,
transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company to
affect substantially the operations of the Group, the results of those operations or the state of affairs of the Group
in subsequent financial years.
Note 27 New and Revised Accounting Standards
Changes in accounting policy
The Group has adopted the following new and revised accounting standards, amendments and interpretations as
of 1 July 2018.
AASB 9 Financial Instruments
AASB 9 Financial Instruments replaces the existing guidance in AASB 139 Financial Instruments: Recognition and
Measurement. AASB 9 includes revised guidance on the classification and measurement of financial instruments,
a new expected credit loss model for calculating impairment on financial assets, and new general hedge accounting
requirements. It also carries forward the guidance on recognition and de-recognition of financial instruments from
AASB 139. AASB 9 is effective for annual reporting periods beginning on or after 1 January 2018. The Group has
assessed that the implementation of this standard does not have a material impact on the financial statements.
Classification and measurement of financial instruments
AASB 9 contains three principal classification categories for financial assets: measured at amortised cost, Fair value
through other comprehensive income and Fair value through profit or loss. The classification of financial assets
under AASB 9 is generally based on the business model in which a financial asset is managed and its contractual
cash flow characteristics. AASB 9 eliminates the previous AASB 139 categories of held to maturity, loans and
receivables and available for sale.
AASB 9 largely retains the existing requirements in AASB 139 for the classification and measurement of financial
liabilities.
The table set out on below explains the original measurement categories under AASB 139 and the new
measurement categories under AASB 9 for each class of the Company’s financial assets as at 1 July 2018.
Original Classification
under AASB 139
New
Classification
under AASB 9
Original carrying
amount under
AASB 139
$’000
New carrying
amount under
AASB 9
$’000
Financial Assets
Cash and cash equivalents
Trade and other receivables
Loans and receivables
Loans and receivables
Amortised cost
Amortised cost
62,866
3,724
66,590
62,866
3,724
66,590
The adoption of AASB 9 did not have a significant impact on the Company’s financial statements.
AASB 15 Revenue from Contracts with Customers
Refer to note 2 for further discussion.
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NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
FOR THE YEAR ENDED 30 JUNE 2019
Note 27 New and Revised Accounting Standards (continued)
New standards and interpretations issued but not yet effective
AASB 16 Leases
AASB 16 sets out the principles for recognition, measurement, presentation and disclosure of leases for both
parties to a contract, i.e. the customer (‘’lessee’’) and the supplier (“lessor”). AASB 16 replaces the previous leases
standard AASB 117 Leases, and related interpretations. AASB 16 provides a new lessee accounting model which
will result in almost all leases being recognised on the balance sheet, as the distinction between operating and
finance leases is removed.
Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are
recognised. A lessee measures right-of-use assets similarly to other non-financial assets and lease liabilities
similarly to other financial liabilities. Assets and liabilities arising from a lease are initially measured on a present
value basis. The only exceptions are short term and low-value leases. The accounting for lessors will not
significantly change.
The Group plans to apply AASB 16 initially on 1 July 2019, using the modified retrospective approach. Therefore,
the cumulative effect of adopting AASB 16 will be recognised as an adjustment to the opening balance of retained
earnings at 1 July 2019, with no restatement of comparative information. The Group will elect to recognise the
right-of-use assets at an amount equal to the lease liability at 1 July 2019 and plans to apply the following practical
expedients for AASB 16:
• Leases for which the underlying asset is of low value;
• Arrangements that are subject to grandfathering provisions including mining services contracts; and
• Short term leases.
Management has compiled a list of potential leases across the Group and reviewed all related contracts in order
to identify and account for all leases in terms of AASB 16 across the Group. Based on the information currently
available, the Group estimates that the standard will not have a material impact on the Group at 1 July 2019 other
than finance leases already recognised being transferred to right of use assets (and therefore no net impact).
Application date of Standard: 1 January 2019
Application date for Group: 1 July 2019
60 DAC I A N G O L D | ANNUAL REPORT 2019
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
Note 27 New and Revised Accounting Standards (continued)
New standards and interpretations issued but not yet effective
AASB 16 Leases
AASB 16 sets out the principles for recognition, measurement, presentation and disclosure of leases for both
parties to a contract, i.e. the customer (‘’lessee’’) and the supplier (“lessor”). AASB 16 replaces the previous leases
standard AASB 117 Leases, and related interpretations. AASB 16 provides a new lessee accounting model which
will result in almost all leases being recognised on the balance sheet, as the distinction between operating and
finance leases is removed.
Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are
recognised. A lessee measures right-of-use assets similarly to other non-financial assets and lease liabilities
similarly to other financial liabilities. Assets and liabilities arising from a lease are initially measured on a present
value basis. The only exceptions are short term and low-value leases. The accounting for lessors will not
significantly change.
The Group plans to apply AASB 16 initially on 1 July 2019, using the modified retrospective approach. Therefore,
the cumulative effect of adopting AASB 16 will be recognised as an adjustment to the opening balance of retained
earnings at 1 July 2019, with no restatement of comparative information. The Group will elect to recognise the
right-of-use assets at an amount equal to the lease liability at 1 July 2019 and plans to apply the following practical
expedients for AASB 16:
• Leases for which the underlying asset is of low value;
• Arrangements that are subject to grandfathering provisions including mining services contracts; and
• Short term leases.
Management has compiled a list of potential leases across the Group and reviewed all related contracts in order
to identify and account for all leases in terms of AASB 16 across the Group. Based on the information currently
available, the Group estimates that the standard will not have a material impact on the Group at 1 July 2019 other
than finance leases already recognised being transferred to right of use assets (and therefore no net impact).
Application date of Standard: 1 January 2019
Application date for Group: 1 July 2019
DIRECTORS’ DECLARATION
DIRECTORS’ DECLARATION
In the opinion of the Directors of Dacian Gold Limited (the ‘Company’):
a. The accompanying financial statements and notes of the consolidated entity are in accordance with the
Corporations Act 2001, including:
i.
ii.
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2019 and
of its performance for the year then ended; and
complying with Australian Accounting Standards, the Corporations Regulations 2001,
professional reporting requirements and other mandatory requirements.
b. There are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
c. The financial statements and notes thereto are in accordance with International Financial Reporting
Standards issued by the International Accounting Standards Board.
This declaration has been made after receiving the declarations required to be made to the Directors in
accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2019.
This declaration is signed in accordance with a resolution of the Board of Directors.
DATED at Perth this 13th day of September 2019.
Rohan Williams
Executive Chairman & CEO
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DAC I A N G O L D | ANNUAL REPORT 2019 61
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INDEPENDENT AUDITOR’S REPORT
Independent Auditor’s Report
Independent Auditor’s Report
To the shareholders of Dacian Gold Limited
To the shareholders of Dacian Gold Limited
Report on the audit of the Financial Report
Report on the audit of the Financial Report
Opinion
Opinion
We have audited the Financial Report of Dacian
We have audited the Financial Report of Dacian
Gold Limited (the Company).
Gold Limited (the Company).
In our opinion, the accompanying Financial
In our opinion, the accompanying Financial
Report of the Company is in accordance with the
Report of the Company is in accordance with the
Corporations Act 2001, including:
Corporations Act 2001, including:
• Giving a true and fair view of the Group’s
• Giving a true and fair view of the Group’s
financial position as at 30 June 2019 and of
financial position as at 30 June 2019 and of
its financial performance for the year ended
its financial performance for the year ended
on that date; and
on that date; and
Complying with Australian Accounting
Complying with Australian Accounting
Standards and the Corporations Regulations
Standards and the Corporations Regulations
2001.
2001.
•
•
•
•
The Financial Report comprises:
The Financial Report comprises:
•
•
Consolidated statement of financial position
Consolidated statement of financial position
as at 30 June 2019.
as at 30 June 2019.
Consolidated statement of profit or loss and
Consolidated statement of profit or loss and
other comprehensive income, Consolidated
other comprehensive income, Consolidated
statement of changes in equity and
statement of changes in equity and
Consolidated statement of cash flows for
Consolidated statement of cash flows for
the year then ended.
the year then ended.
• Notes including a summary of significant
• Notes including a summary of significant
accounting policies.
accounting policies.
• Directors’ Declaration.
• Directors’ Declaration.
The Group consists of the Company and the
The Group consists of the Company and the
entities it controlled at the year-end or from time
entities it controlled at the year-end or from time
to time during the financial year.
to time during the financial year.
Basis for opinion
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for
Our responsibilities under those standards are further described in the Auditor’s responsibilities for
the audit of the Financial Report section of our report.
the audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics
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
for Professional Accountants (the Code) that are relevant to our audit of the Financial Report in
Australia. We have fulfilled our other ethical responsibilities in accordance with the Code.
Australia. We have fulfilled our other ethical responsibilities in accordance with the Code.
Key Audit Matters
Key Audit Matters
The Key Audit Matters we identified are:
The Key Audit Matters we identified are:
•
•
Value of property, plant and equipment and
Value of property, plant and equipment and
mine properties.
mine properties.
Recoverability of deferred tax assets.
Recoverability of deferred tax assets.
•
•
• Going concern basis of accounting.
• Going concern basis of accounting.
Key Audit Matters are those matters that, in our
Key Audit Matters are those matters that, in our
professional judgement, were of most
professional judgement, were of most
significance in our audit of the Financial Report of
significance in our audit of the Financial Report of
the current period.
the current period.
These matters were addressed in the context of
These matters were addressed in the context of
our audit of the Financial Report as a whole, and
our audit of the Financial Report as a whole, and
in forming our opinion thereon, and we do not
in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
provide a separate opinion on these matters.
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
KPMG, an Australian partnership and a member firm of the KPMG
International Cooperative (“KPMG International”), a Swiss entity.
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under
Professional Standards Legislation.
Liability limited by a scheme approved under
Professional Standards Legislation.
62 DAC I A N G O L D | ANNUAL REPORT 2019
INDEPENDENT AUDITOR’S REPORT
Value of property, plant and equipment and mine properties ($273,621,000)
Refer to Note 10, 12 and 13 to the Financial Report
The key audit matter
How the matter was addressed in our audit
The value of property, plant and equipment and
mine properties was considered a key audit
matter due to the:
•
•
Size of the property, plant and equipment
and mine properties balance (being 74% of
total assets).
Level of judgement required by us in
evaluating assumptions used by the Group in
its valuation assessment.
• Group’s market capitalisation at
30 June 2019 being less than the net assets
of the Group, bringing into question the
value ascribed to property, plant and
equipment and mine properties.
The valuation of the Group’s property, plant and
equipment and mine properties applies
significant assumptions in a fair value less costs
of disposal model. These assumptions include:
•
•
Forecast sales and production output,
production costs and capital expenditure.
The Group’s models are sensitive to changes
in these assumptions, reducing available
headroom. This drives additional audit effort
specific to their feasibility and consistency of
application to the Group’s strategy.
Forecast gold prices experiencing volatility,
increasing the risk of future fluctuations and
inaccurate forecasting.
• Discount rate, which is complicated in
nature.
•
Life of mineral reserves. The Group uses
internal and external experts to assist it in
producing the Reserves statement which
underlies the forecast production output
within the model.
The Group has not met its budget during the
current year, raising our focus on the reliability of
forecasts within the Group’s impairment testing.
These conditions necessitate additional scrutiny
and professional scepticism by us, in particular to
address the objectivity of sources used for
assumptions, and their consistent application.
In assessing this key audit matter, we involved
senior team members and valuation specialists.
Our procedures included:
• We considered the appropriateness of the
Group’s use of the fair value less costs of
disposal methodology against the
requirements of the accounting standards.
• We, along with our valuation specialists,
assessed the integrity of the fair value less
costs of disposal model used, including the
accuracy of the underlying calculation
formulas.
• We evaluated the sensitivity of the
valuation of property, plant and equipment
and mine properties by considering
reasonably possible changes to the key
assumptions, such as forecast sales and
production output, forecast gold prices,
production costs and the discount rate. We
did this to identify those assumptions at
higher risk of bias or inconsistency in
application and to focus our further
procedures.
• We assessed the historical accuracy of
previous Group budgets by comparing to
actual results to inform our evaluation of
forecasts incorporated in the model. We
evaluated the impact on the business, to
determine further testing required.
• We assessed key assumptions underlying
the discounted cash flows in the fair value
less costs of disposal model (including
forecast sales and production output,
production costs and capital expenditure)
using our knowledge of the Group, their
past performance, and our industry
experience. We challenged the Group’s
significant forecast cash flows and we
applied increased scepticism to forecasts in
the areas where previous budgets were not
achieved. We compared key events to the
Board approved budget and strategy.
• We compared expected forecast gold
prices to published views of market
commentators on future trends.
• We assessed the scope, competence and
objectivity of the Group’s internal and
external experts involved in the estimation
process of mineral reserves.
DAC I A N G O L D | ANNUAL REPORT 2019 63
INDEPENDENT AUDITOR’S REPORT
• We compared the life of mineral reserves
and production output assumptions in the
Group’s model to the Reserves statement
commissioned by the Group for
consistency.
• We evaluated the consistency of the life of
mineral reserves and production output
assumptions used in the Group’s model
with other information tested by us, such as
the Group’s rehabilitation provision, and our
understanding of the Group’s intentions.
• Working with our valuation specialists, we
independently developed a discount rate
range considered comparable, using
publicly available market data for
comparable entities.
• We assessed the Group’s analysis of the
market capitalisation shortfall versus the net
assets at year end. This included
comparison of the market capitalisation
range implied by broker target valuation
ranges to the Group’s valuation and
consideration of the movement in the
Group’s market capitalisation post year end.
Recoverability of deferred tax assets ($32,573,000)
Refer to Note 4 and 19 to the Financial Report
The key audit matter
How the matter was addressed in our audit
The Group has recognised deferred tax assets of
$32.573 million as at 30 June 2019, which
includes tax losses carried forward in Australia.
Accounting standards state deferred tax assets
are only recognised if certain conditions under
Australian tax law are satisfied and if it is
probable that sufficient taxable profits will be
generated in the future in order for the benefits
of the deferred tax assets to be realised.
The recoverability of deferred tax assets was a
key audit matter due to:
•
•
The significant judgement required by us to
assess the probability the Group can
generate sufficient taxable profits in light of
the tax losses recorded in the current and
previous financial years.
As described in the value of property, plant
and equipment and mine properties key
audit matter above, the Group having not
met its budget during the current year,
raising our focus on the reliability of
forecasts and increasing the possibility that
deferred tax assets are not recoverable.
Working with our tax specialists, our procedures
included:
• We examined the documentation prepared
by the Group underlying the availability of
tax losses and annual utilisation allowances
for consistency with Australian tax law.
• We assessed the factors that led to the
Group incurring tax losses in the current
year and previous years, which included the
progression of the commissioning of the Mt
Morgans Gold Operation, and challenged
the Group’s assessment of future taxable
profits.
• We compared the forecasts included in the
Group’s estimate of future taxable profits
used in their deferred tax asset
recoverability assessment to those used in
the Group’s assessment of the value of
property, plant and equipment and mine
properties. Our approach to testing these
forecasts was consistent with the approach
detailed above in relation to the value of
property, plant and equipment and mine
properties. We challenged the differences
64 DAC I A N G O L D | ANNUAL REPORT 2019
INDEPENDENT AUDITOR’S REPORT
•
The risk of the Group incorrectly applying the
requirements of the accounting standards
and Australian tax law to recognise deferred
tax assets for tax losses, which could result
in a substantial effect on the Group’s
statement of profit or loss and other
comprehensive income.
We involved tax specialists to supplement our
senior team members in assessing this key audit
matter.
between forecast cash flows and taxable
profits by evaluating the adjustment of cash
flows, for differences between accounting
profits, as presented in the Group’s
forecasts, to taxable profits, against
Australian tax law.
• Understanding the timing of future taxable
profits and considering the consistency of
the timeframes of expected recovery to our
knowledge of the business and its plans.
We placed increased scepticism where
there was a longer timeframe of expected
recovery.
• We assessed the disclosures in the
financial report using the results from our
testing and against the requirements of the
accounting standards.
Going concern basis of accounting
Refer to the Going Concern Basis for Preparation of Financial Statements Note to the Financial
Report
The key audit matter
How the matter was addressed in our audit
The Group’s use of the going concern basis of
accounting and the associated extent of
uncertainty is a key audit matter due to the high
level of judgement required by us in evaluating
the Group’s assessment of going concern and
the events or conditions that may cast significant
doubt on their ability to continue as a going
concern. These are outlined in Going Concern
Basis for Preparation of Financial Statements
Note.
The Directors have determined that the use of
the going concern basis of accounting is
appropriate in preparing the financial report.
Their assessment of going concern was based
on cash flow projections. The preparation of
these projections incorporated a number of
assumptions and significant judgements.
We critically assessed the levels of uncertainty,
as it related to the Group’s ability to continue as
a going concern, within these assumptions and
judgements, focusing on the following:
•
•
Impact of forecast sales and production
output and future commodity prices to cash
inflows projected.
The Group’s planned levels of operational
and capital expenditures, and the ability of
the Group to manage cash outflows within
available funding.
Our procedures included:
• We analysed the cash flow projections by:
–
–
Evaluating the underlying data used to
generate the projections. We
specifically looked for their consistency,
including forecast sales and production
output and commodity prices, with
those used by the Directors, and tested
by us, as set out in the value of
property, plant and equipment and
mine properties Key Audit Matter, their
consistency with the Group’s
intentions, as outlined in the Group’s
operational plan, and their comparability
to historical performance.
Analysing the impact of reasonably
possible changes in projected cash
flows and their timing, to the projected
periodic cash positions. Assessing the
resultant impact to the ability of the
Group to pay debts as and when they
fall due and continue as a going
concern. The specific areas we focused
on were informed from our comparison
of actual results against previous Group
cash flow projections and sensitivity
analysis on key cash flow projection
assumptions.
DAC I A N G O L D | ANNUAL REPORT 2019 65
INDEPENDENT AUDITOR’S REPORT
•
The Group’s ability to meet financing
commitments and covenants. This included
nature of planned methods to achieve this,
feasibility and status/progress of those plans.
–
In assessing this key audit matter, we involved
senior audit team members who understand the
Group’s business, industry and the economic
environment it operates in.
Assessing the planned levels of
operating and capital expenditures for
consistency of relationships and trends
to the Group’s historical results,
performance since year end, and our
understanding of the business, industry
and economic conditions of the Group.
• We read correspondence with existing
financiers and other potential funding
sources to assess the options available to
the Group including renegotiation of
existing debt facilities, waivers in meeting
financial loan covenants and negotiation of
additional/revised funding arrangements
should cash flow forecasts not be met.
• We evaluated the Group’s going concern
disclosures in the financial report by
comparing them to our understanding of
the matter, the events or conditions
incorporated into the cash flow projection
assessment, the Group’s plans to address
those events or conditions, and accounting
standard requirements.
Other Information
Other Information is financial and non-financial information in Dacian Gold Limited’s annual reporting
which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are
responsible for the Other Information.
The Other Information we obtained prior to the date of this Auditor’s Report was the Director’s
Report. The Chairman’s Letter to Shareholders, Review of Operations, ASX Additional Information
and Tenement Schedule are expected to be made available to us after the date of the Auditor’s
Report.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
and will not express an audit opinion or any form of assurance conclusion thereon, with the exception
of the Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other
Information. In doing so, we 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.
We are required to report if we conclude that there is a material misstatement of this Other
Information, and based on the work we have performed on the Other Information that we obtained
prior to the date of this Auditor’s Report we have nothing to report.
66 DAC I A N G O L D | ANNUAL REPORT 2019
INDEPENDENT AUDITOR’S REPORT
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
•
•
•
Preparing the Financial Report that gives a true and fair view in accordance with Australian
Accounting Standards and the Corporations Act 2001.
Implementing necessary internal control to enable the preparation of a Financial Report that gives
a true and fair view and is free from material misstatement, whether due to fraud or error.
Assessing the Group’s ability to continue as a going concern and whether the use of the going
concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless they either intend to
liquidate the Group and Company or to cease operations, or have no realistic alternative but to do
so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
•
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 Australian Auditing Standards will always detect a material misstatement when it
exists.
Misstatements can arise from fraud or error. They 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 the 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.
DAC I A N G O L D | ANNUAL REPORT 2019 67
INDEPENDENT AUDITOR’S REPORT
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report of
Dacian Gold Limited for the year ended
30 June 2019, complies with Section 300A of the
Corporations Act 2001.
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 responsibilities
We have audited the Remuneration Report
included in pages 11 to 18 of the Directors’
report for the year ended 30 June 2019.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit
conducted in accordance with Australian Auditing
Standards.
KPMG
Graham Hogg
Partner
Perth
13 September 2019
68 DAC I A N G O L D | ANNUAL REPORT 2019
ASX Additional Information
Pursuant to the Listing Requirements of the Australian Securities Exchange, the shareholder
information set out below was applicable as at 30 September 2019.
Number of Shareholders
Securities Held
There are 322 shareholders holding less than a marketable parcel of ordinary shares.
An extract of the Company’s Register of Substantial Shareholders (who hold 5% or more of the issued
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
1,072
1,819
815
1,272
159
5,137
B. Substantial Shareholders
capital) is set out below:
INVESCO AUSTRALIA LIMITED
C. Twenty Largest Shareholders
Shareholder Name
1
2
3
4
5
6
7
8
9
Shareholder Name
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
POLLY PTY LTD
VITESSE PTY LTD
TODTONA PTY LTD
KINGARTH PTY LTD
SANPOINT PTY LTD
SGJ INVESTMENTS PTY LTD
10 ARIKI INVESTMENTS PTY LIMITED
11 DALRAN PTY LTD
12 REDASO PTY LTD
612,858
5,240,796
6,538,853
37,977,540
175,905,181
226,275,228
Number of
Shares
11,340,000
% of
Shares
5.02%
Number of
Shares
35,689,949
25,021,242
14,223,223
% of
Shares
15.77
11.06
8,954,987
7,527,659
6,887,374
5,280,682
4,800,000
4,750,000
4,610,051
4,445,000
3,163,180
2,811,021
2,730,555
1,881,362
1,792,782
1,739,834
1,595,000
1,055,000
1,000,000
6.29
3.96
3.33
3.04
2.33
2.12
2.10
2.04
1.96
1.40
1.24
1.21
0.83
0.79
0.77
0.70
0.47
0.44
13 CS THIRD NOMINEES PTY LTD
14 ROGO INVESTMENTS PTY LIMITED
15 GARY JOHNSON SUPER MANAGEMENT PTY LTD
16 BNP PARIBAS NOMS PTY LTD
17 MR KENNETH JOSEPH HALL
18 CAUTIOUS PTY LTD
19 MRS TANIA BALDWIN
20 BREMERTON PTY LTD
TOTALS
139,958,901
61.85
ASX ADDITIONAL INFORMATION
ASX Additional Information
Pursuant to the Listing Requirements of the Australian Securities Exchange, the shareholder
information set out below was applicable as at 30 September 2019.
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
1,072
1,819
815
1,272
159
5,137
Securities Held
612,858
5,240,796
6,538,853
37,977,540
175,905,181
226,275,228
There are 322 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
INVESCO AUSTRALIA LIMITED
C. Twenty Largest Shareholders
Shareholder Name
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
1
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
2
CITICORP NOMINEES PTY LIMITED
3
POLLY PTY LTD
4
VITESSE PTY LTD
5
TODTONA PTY LTD
6
KINGARTH PTY LTD
7
SANPOINT PTY LTD
8
9
SGJ INVESTMENTS PTY LTD
10 ARIKI INVESTMENTS PTY LIMITED
11 DALRAN PTY LTD
12 REDASO PTY LTD
13 CS THIRD NOMINEES PTY LTD
14 ROGO INVESTMENTS PTY LIMITED
15 GARY JOHNSON SUPER MANAGEMENT PTY LTD
16 BNP PARIBAS NOMS PTY LTD
17 MR KENNETH JOSEPH HALL
18 CAUTIOUS PTY LTD
19 MRS TANIA BALDWIN
20 BREMERTON PTY LTD
TOTALS
Number of
Shares
11,340,000
% of
Shares
5.02%
Number of
Shares
35,689,949
25,021,242
14,223,223
8,954,987
7,527,659
6,887,374
5,280,682
4,800,000
4,750,000
4,610,051
4,445,000
3,163,180
2,811,021
2,730,555
1,881,362
1,792,782
1,739,834
1,595,000
1,055,000
1,000,000
139,958,901
% of
Shares
15.77
11.06
6.29
3.96
3.33
3.04
2.33
2.12
2.10
2.04
1.96
1.40
1.24
1.21
0.83
0.79
0.77
0.70
0.47
0.44
61.85
DAC I A N G O L D | ANNUAL REPORT 2019 69
ASX ADDITIONAL INFORMATION
D. Unquoted Securities
Options:
Number of Options
2,000,000
400,000
1,550,000
300,000
500,000
Exercise Price
$0.39
$1.15
$1.16
$1.99
$3.66
Expiry Date
17 November 2019
30 September 2020
31 January 2021
28 February 2021
30 June 2021
Number of Holders
1
2
4
1
1
Performance Rights:
Number of Performance Rights
69,701
1,601,019
Expiry Date
2 July 2020
1 July 2021
Number of Holders
8
136
E. Voting Rights
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.
70 DAC I A N G O L D | ANNUAL REPORT 2019
D. Unquoted Securities
Options:
Performance Rights:
69,701
1,601,019
E. Voting Rights
Number of Options
Exercise Price
Expiry Date
Number of Holders
2,000,000
400,000
1,550,000
300,000
500,000
$0.39
$1.15
$1.16
$1.99
$3.66
17 November 2019
30 September 2020
31 January 2021
28 February 2021
30 June 2021
Number of Performance Rights
Number of Holders
Expiry Date
2 July 2020
1 July 2021
1
2
4
1
1
8
136
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.
TENEMENT SCHEDULE
AS AT 30 JUNE 2019
Tenement
Type
Tenement
Status
Location
Ownership
E
E
E
E
P
E
E
E
E
E
E
E
E
E
E
M
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
39/1950
39/1951
39/1967
39/2002
Granted
Granted
Granted
Granted
Lake Carey
Lake Carey
Lake Carey
Lake Carey
38/4486
Application
Mt Jumbo
38/2951
39/1310
39/1713
39/1787
39/2004
39/2017
39/2020
39/2038
38/3211
38/3272
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
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 (90%) & Jindalee Resources Ltd (10%)
Dacian Gold Ltd (90%) & Jindalee Resources Ltd (10%)
39/1135
Application
Mt Morgans
Dacian Gold Ltd (90%) & Jindalee Resources Ltd (10%)
39/0057
39/0244
39/0246
Granted
Granted
Granted
Mt Morgans
Mt Morgans
Mt Morgans
39/0283
Application
Mt Morgans
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
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
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans WA Mining Pty Ltd (100%)
Mt Morgans WA Mining Pty Ltd (100%)
Mt Morgans WA Mining Pty 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 Mining Pty Ltd (100%)
Mt Morgans WA Mining Pty Ltd (100%)
Mt Morgans WA Mining Pty Ltd (100%)
Mt Morgans WA Mining Pty Ltd (100%)
Mt Morgans WA Mining Pty Ltd (100%)
Mt Morgans WA Mining Pty Ltd (100%)
Mt Morgans WA Mining Pty Ltd (100%)
Mt Morgans WA Mining Pty Ltd (100%)
Mt Morgans WA Mining Pty Ltd (100%)
Mt Morgans WA Mining Pty Ltd (100%)
Mt Morgans WA Mining Pty Ltd (100%)
Mt Morgans WA Mining Pty Ltd (100%)
Mt Morgans WA Mining Pty Ltd (100%)
Mt Morgans WA Mining Pty Ltd (100%)
Dacian Gold Ltd (100%)
Dacian Gold Ltd (100%)
Mt Morgans WA Mining Pty Ltd (100%)
Mt Morgans WA Mining Pty Ltd (100%)
Dacian Gold Ltd (100%)
Dacian Gold Ltd (100%)
Dacian Gold Ltd (100%)
Mt Morgans WA Mining Pty Ltd (100%)
DAC I A N G O L D | ANNUAL REPORT 2019 71
TENEMENT SCHEDULE
AS AT 30 JUNE 2019
Tenement
Type
Tenement
Status
Location
Ownership
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
39/0391
39/0392
39/0393
39/0394
39/0395
39/0403
39/0441
39/0442
39/0443
39/0444
39/0497
39/0501
39/0502
39/0503
39/0504
39/0513
39/0745
39/0746
39/0747
39/0799
39/0937
39/0938
39/0993
39/1107
39/1120
39/1122
39/1129
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
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
39/1133
Application
Mt Morgans
39/1137
Application
Mt Morgans
39/5377
39/5469
39/5498
39/5823
39/5825
39/5826
39/5827
39/5828
39/5829
39/5830
39/5865
39/6060
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
Mt Morgans
39/6121
Application
Mt Morgans
39/6122
Application
Mt Morgans
39/6123
Application
Mt Morgans
38/4466
Granted
Nicholson Well
Dacian Gold Ltd (100%)
Dacian Gold Ltd (100%)
Dacian Gold Ltd (100%)
Dacian Gold Ltd (100%)
Mt Morgans WA Mining Pty Ltd (100%)
Mt Morgans WA Mining Pty Ltd (100%)
Mt Morgans WA Mining Pty Ltd (100%)
Mt Morgans WA Mining Pty 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 Mining Pty Ltd (100%)
Mt Morgans WA Mining Pty Ltd (100%)
Mt Morgans WA Mining Pty 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 Mining Pty 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%)
72 DAC I A N G O L D | ANNUAL REPORT 2019
u
a
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m
o
c
.
d
l
o
g
n
a
.
i
c
a
d
w
w
w