2021
ANNUAL REPORT
CORPORATE DIRECTORY
Directors
Robert Reynolds
Leigh Junk
Eduard Eshuys
Mick Wilkes
Non-Executive Chairman
Managing Director
Non-Executive Director
Non-Executive Director
Company Secretary
Kevin Hart
Registered Office and Principal Place of Business
Alluvion
Level 19
58 Mounts Bay Road
Perth WA 6000 Australia
Telephone:
Facsimile:
Website:
Email:
08 6323 9000
08 6323 9099
www.daciangold.com.au
info@daciangold.com.au
Auditor
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco WA 6008 Australia
Share Registry
Computershare Investor Services Pty Ltd
Level 11
172 St Georges Terrace
Perth WA 6000
Australia
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
Domicile and Country of Incorporation
Australia
ACN
154 262 978
ANNUAL REPORT 2021
CONTENTS
CORPORATE DIRECTORY
COMPANY HIGHLIGHTS
CHAIRMAN’S LETTER
BOARD AND GOVERNANCE
OUR SUSTAINABILITY FOOTPRINT
REVIEW OF OPERATIONS
EXPLORATION AND GROWTH
MINERAL RESOURCES AND ORE RESERVES
ANNUAL FINANCIAL STATEMENTS
DIRECTOR’S REPORT
REMUNERATION REPORT (AUDITED)
AUDITOR’S INDEPENDENCE DECLARATION
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
ASX ADDITIONAL INFORMATION
INSIDE COVER
2
3
4
7
10
16
23
28
31
40
50
51
52
53
54
55
87
88
93
1
COMPANY HIGHLIGHTS FY2021
Consolidation of the operation and our financial position
through an updated mine plan and significant debt and
hedge reduction.
Operational
Financial
GOLD PRODUCTION
CASH FLOW FROM OPERATIONS
106,919 ounces
$55.5M
AISC
REPAID DEBT DURING THE YEAR
$1,556 per ounce
ORE RESERVES AND MINERAL
RESOURCES UNDERPINNING THE
COMPANY’S FIVE YEAR MINE PLAN
Ore Reserves
0.4Moz
Mineral Resources
2.5Moz
$47.9M
ABSORBED SIGNIFICANT MARK-TO-MARKET
COST OF HEDGE BOOK
$29.4M
CASH AND GOLD ON HAND
$41.8M
REMAINING DEBT
$16.2M
2 ANNUAL REPORT 2021
CHAIRMAN’S LETTER TO SHAREHOLDERS
Dear Fellow Shareholders
On behalf of your Board of Directors I am pleased
to present to you Dacian Gold Limited’s 2021 Annual Report.
The 2021 financial year has been a challenging one with
COVID-19 and significant changes to the Board. Foundation
directors, Ian Cochrane and Barry Patterson, both stepped
down during the year due to health issues. Sadly, both Ian
and Barry passed away shortly after retirement from the
Dacian Board and our deepest sympathies are with Ian’s
and Barry’s families.
Work continued during the 2021 financial year to
strengthen the Company’s position as a gold producer
in the north-eastern goldfields of Western Australia.
A substantial investment in drilling programs and technical
personnel was dedicated to our Mineral Resources,
culminating in our 30 June 2021 Mineral Resource and
Ore Reserve estimates, that provided the foundation for our
expanded five-year mine plan.
includes
the planned
This updated mine plan
recommencement of underground mining at Mt Morgans,
complemented by exploration success in the extension of the
Mt Marven open pit, as well as the March 2021 acquisition
of the nearby Redcliffe Gold Project via a merger with NTM
Gold Limited.
In the 2021 financial year the Company produced 106,919
ounces of gold at an AISC of $1,556 per ounce, generating
$55.5 million in operating cash flow, up from $23.0 million
in the previous year. This positive result is after accounting
for $29.4 million in forgone revenue from the delivery of
57,265 ounces of gold hedging related to the original
project finance debt facility.
In addition to extinguishing 68% of the hedge position
during the year, the Company also repaid $47.9 million
of debt to significantly improve the Company’s financial
position.
During the year the Company ramped up its exploration
activities as it looks to discover the next generation of
deposits at Mt Morgans and Redcliffe. Dacian looks
forward to building on its foundations as an established
gold producer with a large processing facility and major
land holding in the Leonora-Laverton gold district.
On behalf of the Board I would like to thank our executive
management team and all our employees and contractors
for their tremendous effort during 2021. I would also like to
thank all our stakeholders, and in particular our shareholders,
for their support throughout the year. We are confident that
the effort put into the business in 2021 provides the platform
to realise the full potential of Dacian’s assets.
Following the merger with NTM the Company welcomed
Eduard Eshuys to the Board, and in September 2021 also
welcomed Mick Wilkes to the Board.
Robert Reynolds
Non-Executive Chairman
3
Board of Directors
Robert Reynolds
Non-Executive Chairman
Leigh Junk
Managing Director
Eduard Eshuys
Non-Executive Director
Mick Wilkes
Non-Executive Director
Corporate Governance
The Board of Dacian Gold Limited (Dacian or the Company) is responsible for the overall corporate governance of the
Company, including the establishing and monitoring of key performance goals. It is committed to maintaining standards of
corporate governance that are commensurate with the Company’s size and scope of activities. In this regard, the Board has
created a framework for managing the Company, including internal controls and a business risk management process. This
framework is reflected, in part, in the policies and charters described below.
The Board has adopted and endorses The ASX Corporate Governance Council Principles and Recommendations
(4th Edition), as amended from time to time (ASX Recommendations) and has adopted the ASX Recommendations that are
considered appropriate for the Company.
Given the Company’s current stage of growth, the Board considers that its current composition is appropriate. As the
Company’s activities change in nature and scope, the size of the Board and the implementation of additional corporate
governance policies and structures will be reviewed and may change.
The 2021 Corporate Governance Statement, Corporate Governance Plan and policies are available on the
Company’s website.
Board Charter
The Board guides and monitors the business and management of the Company. Under its Charter, the Board is responsible
for, amongst other things:
1.
corporate governance and the strategic direction of
the Company;
6. approving the annual budget and statutory reports;
7. developing and implementing the Company’s policies
2. protecting and enhancing Shareholder value;
and procedures and assessing their adequacy;
3.
4.
supervising the Company’s framework of control and
accountability systems;
8. monitoring and ensuring compliance with
Company’s continuous disclosure obligations;
the
reviewing performance and responsibilities within
the Company to ensure division of functions are
appropriate to the Company’s needs and that the
Company is properly managed;
5. monitoring and managing the financial performance
of the Company;
9.
convening and attending general meetings of
Shareholders; and
10. assessing and approving all transactions which would
impact on Shareholder value and, where relevant,
make recommendations to shareholders.
The Company is committed to the circulation of relevant materials to Directors in a timely manner to facilitate Directors’
participation in Board discussions on a fully informed basis.
4 ANNUAL REPORT 2021
BOARD AND GOVERNANCE Audit Committee Charter
The Board has adopted an Audit Committee Charter which outlines the composition of the committee, its purpose, its
responsibilities and requirements of its meetings. In summary the Audit Committee is responsible for ensuring the integrity of
the Company’s financial statements, the effectiveness of financial reporting and liaison with the Company’s auditor.
Remuneration Committee Charter
The Board has adopted a Remuneration Committee Charter which outlines the composition of the committee, its role, its
responsibilities, its authority, and requirements of its meetings. In summary, the Remuneration Committee is responsible for
preparing and reviewing the Company’s strategy with regard to remunerating, recruiting, incentivising, retaining and, where
appropriate, terminating the Company’s executives, Non-Executive Directors and employees.
Nomination Committee Charter
The Board has adopted a Nomination Committee Charter which outlines the composition of the committee, its role, its
responsibilities, its authority, and requirements of its meetings. In summary, the Nomination Committee is responsible for
ensuring that the Board, and its various Committees, are comprised of the required skills, experience and competencies, to
induct and educate new Directors, and the evaluation of the performance of the Board and its Committees.
Code of Conduct for Directors, Senior Executives and Employees
The Board has adopted a Code of Conduct for Directors, senior executives and employees to promote ethical and responsible
decision making and execution of their roles and responsibilities. The code is based on a code of conduct prepared by the
Australian Institute of Company Directors.
Continuous Disclosure Policy
The Company is, subject to the exceptions contained in the Listing Rules, required to disclose to ASX any information
concerning the Company which is not generally available and which a reasonable person would expect to have a material
impact on the price or value of Shares.
The Company is committed to observing its disclosure obligations under the Corporations Act and the Listing Rules. The
policy encourages a culture of openness which is conducive to fulfilment of the Company’s disclosure obligations and creates
clear lines of communication and authority with regard to the dissemination of information and continuous disclosure issues.
In accordance with this policy, all information provided to ASX is made available on the Company’s website.
Share Trading Policy
The Company has adopted a Share Trading Policy to maintain investor confidence in the integrity of Company’s internal
controls and procedures, and to provide guidance on avoiding any breach of insider trading laws.
Under the policy, all employees and Directors are prohibited from trading in the Company’s securities, except during a 10
day trading window that opens 24 hours after the Company makes a public announcement on ASX, including, but not limited
to, after a general meeting, and on disclosure of half year, full year and quarterly results.
An employee or Director who is in possession of price sensitive information which is not generally available to the market must
not deal in the Company’s securities at any time, or if the Chairman directs, even if a trading window is open.
In addition, a Director who wishes to trade in the Company’s securities must first obtain the consent of the Chairman.
Directors’ Disclosure Obligations
This policy provides that, in addition to Corporations Act disclosures, any change in a Director’s direct or indirect interest in
Company securities must be disclosed to the Company so that appropriate disclosure can be made by the Company to ASX
in accordance with the Listing Rules.
5
BOARD AND GOVERNANCE Shareholder Communications Policy
This policy details how the Company is committed to keeping Shareholders appraised of the Company’s activities, including
by providing regular communications that are balanced and understandable, ensuring information is easily accessible, and
facilitating Shareholder participation in the Company’s general meetings.
Risk Management Policy
The Chief Executive Officer is primarily responsible for administering this policy, which sets out the way in which various types
of risk are to be managed, including by reviews of internal controls, financial reporting, operational activities, investment
proposals, environmental and safety risks and continuous improvement.
Environment Policy
The Company recognises that it has a fundamental requirement to conduct its proposed activities in an environmentally
responsible manner. Under this policy, the Company maintains an environmental management system to ensure legislative
compliance, high levels of employee awareness, stakeholder participation when developing project systems, best practice
performance by contractors and continual improvement in respect of environmental protection issues and hazard minimisation.
Diversity policy
The Board has adopted a diversity policy which provides a framework for the Company to achieve, amongst other things,
a diverse and skilled board and workforce, a workplace culture characterised by inclusive practices and behaviours for the
benefit of all staff, and a work environment that values and utilises the contributions of all employees, irrespective of gender,
culture, disability, age or religion.
The Company employs new employees and promotes current employees on the basis of performance, ability and attitude.
The Board is continually reviewing its practices with a focus on ensuring that the selection process at all levels within the
organisation is formal and transparent and that the workplace environment is open, fair and respectful.
The Company is a “relevant employer” for the purposes of the Workplace Gender Equality Act. Our recent Workplace Gender
Equality Agency Report for 2021 which includes the “Gender Equality Indicators” is available on the Company’s website.
6 ANNUAL REPORT 2021
BOARD AND GOVERNANCE OUR SUSTAINABILITY FOOTPRINT
Economic Benefit
to the Community
STATE GOVERNMENT ROYALTIES
$6.6M
PAYROLL TAX
$1.1M
MINING TENEMENT RENTS AND TAXES
$1.2M
MINE SAFETY LEVY
$0.2M
Impact on Environment
WATER USED
2.5GL
Safety
EMERGENCY RESPONSE TRAINING EXERCISES
46
LOST TIME FREQUENCY RATE
4.0 (2020: 1.6)
TOTAL RECORDABLE INJURY
FREQUENCY RATE (TRIFR)
17.0 (2020: 23.3)
People and Diversity
TOTAL EMPLOYEES
141
SITE BASED RESIDENTIAL EMPLOYEES
4%
REHABILITATION COMPLETED
APPLICATIONS ADVERTISED POSITIONS
380Ha
ENERGY USED
Dacian sought to minimise diesel use at MMGO
from inception by installing a natural gas fired power
station for the processing facility
GAS
847Tj
DIESEL
20ML
30% female
APPOINTMENTS
30% female
EMPLOYEES AGED OVER 55
16%
7
Safety
Safety of our employees, contractors, and anybody entering Dacian working locations is of the utmost importance. Prevention
of injuries through improvements in workplace culture, training and supervision together with learning from incidents to
prevent reoccurrence is a key consideration for the Company. We expect on-going improvement in safety performance as
the business grows and matures.
The Company’s rolling Total Recordable Injury Frequency Rate (TRIFR) calculated as 12 month rolling average at 30 June
2021 was 17.0 (2020: 23.3). Recordable injuries include those that result in any days lost from work or where an employee
or contractor can only perform part of their normal work, as well as any injury that requires medical treatment.
COVID-19
Western Australia has largely been insulated from the health related impacts of the COVID-19 pandemic and the Company
has been proactive in its response by implementing a range of measures in accordance with its COVID-19 management
plan to limit exposure of personnel to potential transmission sources of the COVID-19 virus. The pandemic has, however,
presented a number of challenges to the Company and the Western Australian mining industry generally, as the labour
market has tightened significantly as a result of border closures that have restricted interstate travel. This has been particularly
relevant to mining equipment operator and maintenance personnel.
A number of changes have been made at the operations such that site-based personnel have reduced exposure to COVID-19.
In addition to social distancing requirements and improved hygiene standards, during state government enforced lockdowns
site personnel have worked extended rosters. The Company is appreciative of the cooperation and manner in which its
workforce has adapted and responded to these changes.
The Company has established contingency plans and in a worst-case event requiring a scaling-back of the operation, Dacian
has multiple strategies that it can initiate including the processing of stockpile material totalling 5.2Mt @ 0.5g/t for 91,000
ounces (over 20 months of processing) which would provide a level of insulation for the business.
Community Engagement
Dacian’s aim is to build on its engagement and develop long lasting and meaningful relationships with its local communities,
respecting their culture, and collaborating in various initiatives and activities.
The development of relationships with our local communities has focused on providing employment opportunities, funding
assistance and supporting school, sporting, and community events, including:
• Working
collaboratively with
the National
Indigenous Australians Agency and the Community
Development Program (CDP) provider, Wirrpanda
Foundation, to provide employment opportunities
for members of the Yaaliku region (incorporating
Laverton and Leonora) through the Australian
Government Regional Australia 1,000
Jobs
Package Wage Subsidy (1,000 Jobs Package). The
1,000 Jobs Package initiative has been introduced
to increase employment opportunities in remote
Australia for CDP participants.
•
Sponsorship of sporting and community events
through the Mt Margaret Community School,
Laverton School, Laverton Sports Club and Laverton-
Leonora Cross Cultural Association.
• Christmas gift giving by Dacian employees to
children who reside at the Mt Margaret community.
8 ANNUAL REPORT 2021
OUR SUSTAINABILITY FOOTPRINT People
Dacian currently employs 141 direct employees across corporate, mining operations, exploration, project development and
support services. In addition to the direct employees, the Company engages 365 contractors to perform specialist services,
mining operations and exploration and grade control drilling. We value communication, ownership and trust, planning for
and performing every job safely, and working collaboratively as part of a team.
Our recruitment, selection and engagement strategy is based on identifying, selecting and retaining the best person for the
role, irrespective of age, sex and cultural background. The strong employment growth in the Western Australian resources
sector has put pressure on employment conditions, and the number of qualified applicants who are seeking employment in
the mining industry. This is further challenged by the lack of mining and technical graduates who are entering the workforce.
The Company has taken a proactive approach by continuing to provide opportunities for current employees to develop skills
which will advance their career.
We have a commitment to the development of leaders for the future which is evidenced by our leadership and supervisory
development programs and future planning through the employment of graduates, internships (for university and other
training institution students) and apprentices. Employment opportunities continue to be offered to people in local and
regional communities, including our participation in the 1,000 Jobs Package.
9 9
OUR SUSTAINABILITY FOOTPRINT Overview
Dacian’s Mt Morgans Gold Operation (MMGO) is located 25km west of Laverton and approximately 750km north-east of
Perth in Western Australia (see Figure 1). The Company maintains significant infrastructure at MMGO through its large open
pit, extensive underground investment and 2.5Mtpa processing plant.
In March 2021, the Company acquired the neighbouring Redcliffe Gold Project via a merger with NTM Gold Limited. Since
acquisition, the Company has commenced project preparation works towards first production from Redcliffe, expected in
mid-2022.
The Company holds a 1,300km² tenement package comprising predominantly granted mining leases within the Leonora-
Laverton gold district.
Figure 1: Location of Dacian Gold’s Operations in Western Australia
10 ANNUAL REPORT 2021
REVIEW OF OPERATIONS Five Year Mine Plan Provides Solid Platform
Dacian’s five-year mine plan for its Mt Morgans operation is underpinned by a production base from the operating Jupiter
open pits and development of open pits at Redcliffe, complemented by production from underground mines at the Greater
Westralia Area, (see ASX announcement 31 August 2021).
The updated mine plan targets average annual gold production of 115,000oz, maintaining 115,000-125,000oz from
FY2024 to FY2026. The All in Sustaining Cost (AISC) is expected to average $1,550/oz with both AISC and capital spend
declining over the five-year plan.
The Company continues to pursue opportunities to extend and grow the mine plan beyond the current profile with a number
of development projects and exploration programs being advanced.
125
120
115
z
o
K
110
105
100
95
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
FY2021
FY2022
FY2023
FY2024
FY2025
FY2026
Figure 2: Five year mine plan production (midpoint)
Table 1: Summary of mine plan for Leonora-Laverton operations
Guidance Range
Production
AISC
Koz
A$/oz
FY2022
100-110
FY2023
110-120
FY2024
115-125
FY2025
115-125
FY2026
115-125
Total
Midpoint /
Avg
580/115
1,550-1,700 1,550-1,700 1,500-1,650 1,525-1,675 1,275-1,425
1,550
Growth Capital
A$M
66
40
20
15
-
141
11
REVIEW OF OPERATIONS Figure 4 shows the mining sequence over the Company’s five year mine plan.
Figure 3: Five-year mine plan deposits
FY2022 FY2023 FY2024 FY2025 FY2026
Mt Morgans Open Pit
Heffernans
Doublejay
Ganymede
Mt Marven
Underground Beresford
Redcliffe
Open Pit
Allanson
Craic
Transvaal
Phoenix Ridge
Hub
GTS
Nambi
Figure 4: Mining sequence for the five year mine plan
Cautionary Statement: The mine plan is a Production Target that contains approximately 75% of Ore Reserves and Indicated
Resources with the remainder in the Inferred Mineral Resource classification. There is a low level of geological confidence
associated with Inferred Mineral Resource and there is no certainty that further exploration work will result in the conversion to
Indicated Mineral Resource or that the Production Target itself will be realised.
12 ANNUAL REPORT 2021
REVIEW OF OPERATIONS Financial Year 2021 Overview
Table 2: Gold Recovery and Sales
Gold Recovered
Gold Sales
Realised Average Price
Gold Revenue
Gold on Hand
Unit
oz
oz
A$/oz
A$M
Oz
Sept Qtr
Dec Qtr
Mar Qtr
Jun Qtr
32,799
34,017
2,142
72.9
1,108
27,162
25,169
2,417
60.8
3,935
21,400
24,542
2,197
53.9
1,798
25,558
24,542
2,177
53.5
2,507
FY2021
106,919
108,270
2,226
241.1
2,507
Full year production for FY2021 totalled 106,919 ounces (2020: 138,814 ounces) at an AISC of $1,556/oz (2020: $1,619/oz), just
below the bottom end of the 110,000-120,000 ounces production guidance and just above the top end of the $1,400 - $1,550/
oz AISC guidance.
During the financial year, the Company reduced its original project finance debt related out of the money hedging commitments
by 68%. At 30 June 2021 the remaining hedge position was 27,324 ounces (2020: 84,589 ounces) at an average price of
$2,238/oz (2020: $2,055/oz).
13
REVIEW OF OPERATIONS Mining
Table 3: Mining
Open Pit Mining
Ore Mined to ROM
Mined Ore Grade
Contained Gold Mined
Ore Mined to Low Grade Stockpile
Mined Ore Grade
Contained Gold Mined
Total Ore Mined
Mined Ore Grade
Contained Gold Mined
Waste Mined
Total Material Mined
Underground Mining
Ore Mined to ROM
Mined Ore Grade
Contained Gold Mined
Unit
Sept Qtr
Dec Qtr Mar Qtr
Jun Qtr
FY2021
t
g/t
oz
t
g/t
oz
t
g/t
oz
t
692,848
758,444
597,705
588,511
2,637,508
1.4
1.2
1.0
1.2
1.2
31,821
30,077
18,983
22,478
103,359
327,150
230,721
265,394
393,790
1,217,055
0.6
6,247
0.6
4,322
0.5
4,533
0.5
6,698
0.6
21,800
1,019,998
989,165
863,099
982,301
3,854,563
1.2
1.1
0.8
0.9
1.0
38,068
34,399
23,516
29,176
125,159
6,179,341 6,079,505 5,812,812 4,996,239
23,067,897
bcm 2,794,195 2,682,595 2,495,071 2,314,120
10,285,981
t
g/t
oz
60,317
4.5
8,782
-
-
-
-
-
-
2,436
5.1
400
62,753
4.6
9,182
14 ANNUAL REPORT 2021
REVIEW OF OPERATIONS
A total of 3,854,563t @ 1.0g/t containing 125,159 ounces of gold was mined from the Jupiter open pits (Heffernans,
Doublejay, Ganymede) and the Mt Marven open pit during the financial year. Underground mining at Westralia contributed
62,753 tonnes at 4.6 g/t for 9,182 contained ounces of gold prior to being placed on care and maintenance in August 2020.
Following completion of mining, a technical review commenced which included additional drilling to inform an updated
Mineral Resource estimate for the Greater Westralia area. Subsequent mining studies have resulted in the recommencement
of underground mining in the first half of financial year 2022.
Mining of the Doublejay pit focussed on ore production from an initial stage located at the southern end of the pit, as well
as pre-stripping of the two subsequent stages, one of which targets the high-grade Cornwall Shear Zone and will be a
substantial ore source in the second half of financial year 2022. Preparations for mining of the final stage commenced late
in the financial year.
Processing
The processing plant continued to perform consistently above nameplate capacity of 2.5Mtpa, with a total of 2.95 million
tonnes of ore milled for the year, producing 106,919 ounces at a recovery of 91.5%. Gold sales totalling 108,270 ounces
realised gold revenue of $241 million for the year.
The MMGO processing plant is a key piece of infrastructure in the region. The recommencement of underground mining at
the Greater Westralia Area along with the near-term development of open pits at Redcliffe, will provide future diversification in
the Company’s ore blend, complementing that mined from the Jupiter open pits.
Table 4: Processing
Ore Milled
Processed Grade
Contained Gold
Gold Recovery
Gold Recovered
Unit
t
g/t
oz
%
oz
Sept Qtr
707,041
1.6
35,582
92.2%
32,799
Dec Qtr
719,733
1.3
29,402
92.4%
27,162
Mar Qtr
755,970
1.0
23,761
90.1%
21,400
Jun Qtr
764,480
1.1
28,085
91.0%
25,558
FY2021
2,947,224
1.2
116,830
91.5%
106,919
15
REVIEW OF OPERATIONS Processed Grade
Contained Gold
Gold Recovery
Gold Recovered
g/t
oz
%
oz
1.6
35,582
92.2%
32,799
1.3
29,402
92.4%
27,162
1.0
23,761
90.1%
21,400
1.1
28,085
91.0%
25,558
1.2
116,830
91.5%
106,919
EXPLORATION AND GROWTH
GREATER WESTRALIA MINING AREA
Greater Westralia Mining Area
During the 2021 financial year, the Company released a technical and Mineral Resources update for the Greater
Westralia Mining Area (GWMA). A total of 12 deposits were re-evaluated across the GWMA, with seven deposits
During the 2021 financial year, the Company released a technical and Mineral Resource update for the Greater Westralia
contributing to a total Mineral Resource estimate of 6.8Mt @ 4.3g/t Au for 935,000oz. Beresford, Allanson, Transvaal,
Area. A total of 12 deposits were re-evaluated with seven deposits contributing to a total Mineral Resource estimate of 6.8Mt
Craic and Phoenix Ridge were the initial deposits included within the Company’s updated mine plan.
@ 4.3g/t Au for 935,000 ounces (see ASX announcement 11 May 2021). Beresford, Allanson, Transvaal, Craic and Phoenix
Ridge were the initial deposits included within the Company’s updated mine plan.
Figure 5: Greater Westralia Mining Area
Figure 5: Greater Westralia Area
16 ANNUAL REPORT 2021
15
EXPLORATION AND GROWTH
Mt Marven Extension
Successful extensional and resource definition drilling programs were completed along the southern strike of the Mt Marven
open pit during FY2021, resulting in a Mineral Resource upgrade to 1.86Mt at 1.26g/t for 75,600 ounces of gold after
depletion (see ASX announcement 31 August 2021). Additional drilling programs are planned during FY22 to also test the
northern strike extent at Mt Marven.
Figure 6: Mt Marven area showing the infill RC holes along strike to the south of the open pit
17
EXPLORATION AND GROWTH Redcliffe Mine Development
The Redcliffe Project was targeted for Mineral Resource development opportunities during FY2021, with drilling programs
designed to improve geological confidence and advance deposits through to mining studies with the Hub, GTS and Nambi
deposits subsequently included in the updated mine plan. Infill drilling at Hub during the financial year returned exceptional
grades and continuity.
Figure 7: Cross Section of Hub Deposit facing North at 6851020mN
18 ANNUAL REPORT 2021
EXPLORATION AND GROWTH Resource definition, geotechnical, hydrological and sterilisation drilling programs are planned during FY2022 to advance
open pit development of the Hub, GTS and Nambi deposits and assess the potential for underground extraction at Hub and
Nambi. These advanced stage projects have strong potential to develop into underground mines with continued systematic
drilling, resource growth and further mining studies.
Figure 8: Long Section of the Hub Deposits Mineral Resource Block Model coloured by grade (g/t)
Future resource definition drilling programs at Bindy and Kelly will be aimed at improving definition of the existing Mineral
Resource and potential expansion of the deposits.
19
EXPLORATION AND GROWTH Cameron Well
Targeting and generative studies over the Cameron Well Area continued, and included
geochronological age dating, geophysical data reprocessing, and structural and geomechanical
Cameron Well
modelling. Data interrogated and interpretation resulted in a refined suite of targets in the Cameron
Well area, planned to be drill tested during FY2022.
Targeting and generative studies over the Cameron Well Area continued, and included geochronological age dating,
geophysical data reprocessing, and structural and geomechanical modelling. Data interrogated and interpretation resulted
in a refined suite of targets in the Cameron Well area, planned to be drill tested during FY2022.
Figure 9: Cameron Well Project Area
Figure xx: Cameron Well Project Area
20 ANNUAL REPORT 2021
EXPLORATION AND GROWTH
Brownfield Exploration Leveraging Updated Geophysical Surveys
The Company has applied a Mineral Systems approach to base load production targeting, underpinned by updated higher
resolution aeromagnetic surveys conducted during the year as well as geomechanical modelling, UltraFine soil surveys
and geochronological age dating. Drilling of highly ranked and previously untested base load targets are set to commence
during FY2022.
Figure 10: Geophysics of regional targets
21
EXPLORATION AND GROWTH Resource Conversion and Brownfield Exploration Key Pillars to Growth
The Company has planned an aggressive exploration program for FY2022 to further bolster and extend its mine plan
through ongoing Mineral Resource estimate upgrades, extensional drilling programs and exploration campaigns across its
large, underexplored tenement package.
Specifically, the Company is focussed on the following opportunities:
• Extensional Programs: Existing mine operations such as at Greater Westralia, Jupiter and Mt Marven, will be
targeted for extensions
• Mine Development: Continue to progress the pipeline from development to production, with initial opportunities
including:
• Hub and Nambi underground deposits
•
•
Bindi, Mesa West, Redcliffe and Kelly open pit deposits
Ramornie, McKenzie Well and Maxwell Bore open pit deposits
• Exploration: Disciplined exploration across large tenement package with aircore, reverse circulation and diamond
drilling programs planned:
• Drill testing known Syenites at Cameron Well and Cedar Island following renewed Mineral Systems approach to
these targets
• Aircore coverage over large, regional shear zones across the Mt Morgans tenements that include the Transvaal-
Ramornie, Marven, Calisto and Chatterbox shear zones, and coverage over the Southern Tenements where recent
aeromagnetic data has been acquired
22 ANNUAL REPORT 2021
EXPLORATION AND GROWTH i
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23
MINERAL RESOURCES AND ORE RESERVES
Key changes in the updated Mineral Resource estimate compared to the December 2019 Mineral Resource is detailed below:
• Updated geological interpretation, estimation parameters, classification, and reporting constraints have been applied to
all updated Mineral Resources with the exception of Cameron Well
Total Mineral Resources increased from 2.1Moz to 2.5Moz
Total Measured and Indicated (M&I) Mineral Resources reduced from 1.5Moz to 1.3Moz
Total Inferred Mineral Resources increased from 0.6Moz to 1.2Moz
•
•
•
• Mining depletion of 304Koz
3,000,000
2,500,000
)
.
z
O
(
l
a
t
o
T
e
c
r
u
o
s
e
R
2,000,000
1,500,000
1,000,000
500,000
0
2019 Total Mineral
Resources
Mining Depletion
to 30 June 2021
Greater
Westralia Area
Jupiter
Mining Area
Redcliffe
Project Area
2021 Total
Mineral Resources
Figure 11: Waterfall chart of variances in Mineral Resources from 31 December 2019 to 30 June 2021
24 ANNUAL REPORT 2021
MINERAL RESOURCES AND ORE RESERVES
Ore Reserves
The Company’s total Ore Reserve estimate as at 30 June 2021, after mining depletion is shown in Table 6 below.
Table 6: Total Ore Reserve estimate as at 30 June 2021
Cut-off
Grade
Au
g/t
0.5
*0.4/2.4
0.5
0.5
Deposit
Jupiter OP
Westralia UG
Mine Stockpiles
LG Stockpiles
TOTAL ORE RESERVE
Proved
Probable
Total
Tonnes
t
Au
g/t
2,710,000 1.4
40,000 5.8
107,000 1.0
5,173,000 0.5
8,030,000 0.9
Au
oz
Tonnes
t
124,000 2,848,000
453,000
-
-
226,000 3,301,000
7,000
4,000
91,000
Au
g/t
1.0
4.6
-
-
1.5
Tonnes
t
Au
oz
92,000
66,000
-
-
Au
g/t
5,558,000 1.2
492,000 4.7
107,000 1.0
5,173,000 0.5
158,000 11,330,000 1.1
*Development and stoping grades respectively. Rounding errors will occur
Key changes in the updated Ore Reserve estimate compared to the January 2020 Ore Reserve is detailed below:
• Mining depletion from January 2020 to June 2021 totals 208,000oz
•
•
Reduction in Ore Reserves for the Westralia underground totalling 91,000oz
Removal of Transvaal underground from the Ore Reserve estimate totals 65,000oz
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
)
.
z
O
(
l
a
t
o
T
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c
r
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s
e
R
2020 Ore Reserve
Mining Depletion
Westralia UG
Reserve Reduction
Transvaal UG
Reclassification
2021 Ore Reserve
Figure 12: Key variances between 1 January 2020 and 30 June 2021 Ore Reserve estimate
Au
oz
216,000
74,000
4,000
91,000
385,000
25
MINERAL RESOURCES AND ORE RESERVES
Governance
Dacian maintains strong governance and internal controls in respect of its estimates of Mineral Resources and Ore Reserves
and the estimation process.
Dacian ensures its sampling techniques, data collection, data veracity and the application of the collected data is at a high
level of industry standard. Contract RC and diamond drilling with QA/QC controls approved by Dacian, are used routinely.
All completed holes are subject to downhole gyro or EMS surveys and collar coordinates surveyed with DGPS. All drill holes
are logged by Dacian geologists. Diamond core is oriented and photographed. Dacian employs field QC procedures,
including addition of standards, blanks and duplicates ahead of assaying which is undertaken using industry standards
including fire assay at accredited laboratories.
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 in-house geologists and reported in accordance with 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.
Competent person statement
Mineral Resources
The information in this report that relates to Mineral Resources is based on information compiled by Mr Alex Whishaw,
a Competent Person who is a member of the Australasian Institute of Mining and Metallurgy. Mr Whishaw is a full-time
employee of Dacian Gold Ltd. Mr Whishaw has sufficient experience that is relevant to the style of mineralisation and type
of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012
edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code
2012). Mr Whishaw 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 including Cameron Well dated 27 February 2020 and Hub dated 21 July 2021), 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 the Mineral Resources and Ore Reserves were prepared and disclosed under the JORC
Code 2012.
26 ANNUAL REPORT 2021
MINERAL RESOURCES AND ORE RESERVES Ore Reserves
The information in this report that relates to the Jupiter open pit Ore Reserve is based on information compiled or reviewed
by Mr Ross Cheyne. Mr Cheyne 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 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. Mr Cheyne is a Fellow of the Australasian Institute of Mining and Metallurgy and an employee of Orelogy
Consulting Pty Ltd. He consents to the inclusion in the report of the matters based on their information in the form and context
in which it appears.
The information in this report that relates to the Westralia underground Ore Reserve is based on information compiled or
reviewed by Mr Andrew Cooper. Mr Cooper 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 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. Mr Cooper is a Member of the Australasian Institute of Mining and Metallurgy and an employee of
Orelogy Consulting Pty Ltd. He consents to the inclusion in the report of the matters based on their information in the form
and context in which it appears.
27
MINERAL RESOURCES AND ORE RESERVES DACIAN GOLD LIMITED
ABN 61 154 262 978
Annual Financial Statements
for the
Year Ended 30 June 2021
28 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
DACIAN GOLD LIMITED
ABN 61 154 262 978
FINANCIAL REPORT
FOR THE YEAR ENDED 30 JUNE 2021
CONTENTS
CORPORATE DIRECTORY .................................................................................................................................. 1
DIRECTORS’ REPORT ........................................................................................................................................ 2
AUDITOR’S INDEPENDENCE DECLARATION................................................................................................... 21
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ........................ 22
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ................................................................................ 23
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ................................................................................. 24
CONSOLIDATED STATEMENT OF CASH FLOWS ............................................................................................. 25
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ............................................................................ 26
DIRECTORS’ DECLARATION……………………………………………………………………………………………………………............58
INDEPENDENT AUDITOR’S REPORT…………………………………………………………………………………………………………..59
29
ANNUAL FINANCIAL STATEMENTS
CORPORATE DIRECTORY
Directors
Robert Reynolds (Non-Executive Chairman)
(Managing Director & CEO)
Leigh Junk
(Non-Executive Director)
Eduard Eshuys
Company Secretary
Kevin Hart
Registered Office and Principal Place of Business
Level 2, 1 Preston Street
Como WA 6152
Telephone: 08 6323 9000
Web site: www.daciangold.com.au
Email: info@daciangold.com.au
Auditor
BDO Audit (WA) Pty Ltd
38 Station Street
SUBIACO WA 6008
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.
Corporate Governance
The Company’s corporate governance statement may be accessed on the Company’s website at
www.daciangold.com.au.
Dacian Gold Limited 2021 Annual Report
1 | P a g e
30 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
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 2021. 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 2020 and up to the date of this report are:
Robert Reynolds MAusIMM
(Non-Executive Chairman – previously a Non-Executive Director until his appointment as Chairman on 10 May 2021)
Mr Reynolds was the Non-Executive Chairman of Avoca Resources Ltd from 2002 until it merged with Anatolia Minerals
to form Alacer Gold Corp in 2011. Mr Reynolds was Non-Executive Chairman of Alacer Gold Corp until 23 August 2011.
With over 40 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.
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 2021 financial year.
Leigh Junk Dip Surv, GDip MinEng, Msc MinEcon, GAICD
(Managing Director & CEO)
Mr Junk is a Mining Engineer with over 25 years of operational and executive management experience in numerous
Australian mining companies across multiple commodities including gold, nickel and manganese.
Mr Junk has been a Director of several public companies in the mining and financial sectors in Australia and Canada,
and most recently was the CEO and Managing Director of Doray Minerals Ltd until its merger with Silver Lake Resources
in 2019.
Mr Junk was a co-founder of Donegal Resources Pty Ltd which was successful in purchasing and recommissioning
several Nickel operations around Kambalda WA until it was sold to Canadian miner Brilliant Mining Corp.
In 2003, Mr Junk was the recipient of the Ernst & Young WA “Young Entrepreneur of the Year Award” and in 2007 was
a winner in the WA Business News “40 Under 40 Award”.
Other than as stated above, Mr Junk has not served as a Director of any other listed companies in the three years
immediately before the end of the 2021 financial year.
Eduard Eshuys
(Non-Executive Director – appointed 16 March 2021)
Mr Eshuys is a geologist with several decades of exploration experience in Western Australia. His successes as Director
of Resources for the Great Central Mines Group are well known. In the late 1980s and 1990s he led the teams that
discovered the Plutonic, Bronzewing and Jundee gold deposits, and the Cawse Laterite Nickel Deposit. He led the
subsequent development and gold production at Bronzewing and Jundee and nickel at Cawse. He has also led the
discovery of nickel sulphides at Maggie Hays south of Southern Cross and Mariners nickel at Widgiemooltha WA in the
1970s. Mr Eshuys was Managing Director and CEO of St Barbara Mines Limited, from July 2004 to March 2009. He
developed St Barbara into a substantial gold producer with the redevelopment of the Sons of Gwalia underground
mine which subsequently produced in excess of 2 million ounces. On 15 July 2010, Mr Eshuys joined DGO Gold Limited
as Executive Chairman with responsibility for corporate governance, discovery and investments focused on gold and
copper, administration, board conduct and leadership.
Mr Eshuys was Non-Executive Director of NTM Gold Limited which merged with the Company in March 2021, at which
time Mr Eshuys joined the Dacian Board.
Dacian Gold Limited 2021 Annual Report
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31
ANNUAL FINANCIAL STATEMENTS
DIRECTORS’ REPORT
During the past three years, Mr Eshuys has served as a Director of the following listed companies:
•
•
•
DGO Gold Limited from 15 July 2010 to current date;
De Grey Mining Limited from 23 July 2019 to current date; and
NTM Gold Limited from 26 March 2019 to 15 March 2021 when NTM Gold Limited merged with the Company.
Other than as stated above, Mr Eshuys has not served as a Director of any other listed companies in the three years
immediately before the end of the 2021 financial year.
Ian Cochrane BCom LLB
(Non-Executive Chairman – resigned 10 May 2021)
Mr Cochrane was 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 was the Chairman of diversified ASX-listed mining services group Perenti Global Limited (ASX: PRN) until
his retirement on 8 May 2021.
Other than as stated above, Mr Cochrane has not served as a Director of any other listed companies in the three years
immediately before his retirement from the Board.
Barry Patterson ASMM, MAusIMM, FAICD
(Non-Executive Director – resigned 30 November 2020)
Mr Patterson was a mining engineer with over 50 years of experience in the mining industry and was 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 Director of Sonic Healthcare Limited for 8 years and Chairman 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 his retirement from the Board.
Kevin Hart B.Comm, FCA
Company Secretary
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.
Dacian Gold Limited 2021 Annual Report
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32 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
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 2021, and the number of meetings attended by each Director were:
Director
Board Meetings
Remuneration &
Nomination Committee
Audit Committee
Robert Reynolds
Leigh Junk
Eduard Eshuys(i)
Ian Cochrane(ii)
Barry Patterson(iii)
A
15
15
5
13
7
B
14
15
5
13
3
A
1
-
-
1
1
B
1
-
-
1
-
A
2
-
-
2
2
B
2
-
-
2
-
A = the number of meetings the Director was entitled to attend
B = the number of meetings the Director attended
(i) Mr Eshuys was appointed Non-Executive Director with effect from 16 March 2021
(ii) Mr Cochrane resigned with effect from 10 May 2021
(iii) Mr Patterson resigned with effect from 30 November 2020
Directors’ interests
The following relevant interests in shares, options and performance rights of the Company were held by the Directors
as at the date of this report:
Director
Robert Reynolds
Leigh Junk
Eduard Eshuys(i)
(i) Mr Eshuys is Executive Chairman of public company DGO Gold Limited, which holds 64,058,548 shares and 22,222,222 options
Number of options vested
and exercisable
-
-
-
Number of rights over
ordinary shares
-
8,333,334
-
Number of fully paid
ordinary shares
3,063,888
2,066,219
-
expiring 31 March 2022, exercisable into shares in the Company at $0.27 per option
Securities
Options
At the date of this report, unissued ordinary shares of the Company under option are:
Number of options
22,222,222
Exercise price
$0.27
Expiry date
31 March 2022
During or since the end of the financial year, the Company has not issued any ordinary shares as a result of the exercise
of options. 1,250,000 options expired during the year.
Dacian Gold Limited 2021 Annual Report
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33
ANNUAL FINANCIAL STATEMENTS
DIRECTORS’ REPORT
Performance Rights
On 2 November 2020 the Company issued 5,325,482 performance rights to two groups of employees. These
performance rights are subject to performance conditions. One group of employees received a total of 2,457,612
performance rights with a performance date of 30 June 2022 and the second group of employees received 2,867,870
performance rights with a performance date of 30 June 2023.
Shares issued on exercise of performance rights during the year are detailed in the following table:
Date performance rights granted
20 April 2018
Performance rights value
$152,648
Number of shares issued(i)
51,921
(i) At 30 June 2021 there were no rights that had vested during the year and were unissued at year end.
A reconciliation of performance rights outstanding at the date of this report appears below.
Rights outstanding at 30 June 2020
Rights issued during the year
Rights vested during the year
Rights forfeited during the year
Rights outstanding at 30 June 2021 and at the date of this report
Dividends
Number of
Rights
9,548,346
5,325,482
(51,921)
(2,239,322)
12,582,585
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 gold producer with its corporate office in Perth, Western Australia. The Company
operates the Mt Morgans Gold Operation (“MMGO”) near Laverton, Western Australia. The operation comprises a
2.5Mtpa CIL treatment plant, the Jupiter open pits and Westralia underground mining areas.
The principal activities of the Group during the period were gold mining, processing and exploration at its 100% owned
MMGO. During the year, Dacian merged with ASX listed NTM Gold Limited to expand the Company’s area of operations
in the Leonora-Laverton region. This transaction introduced the Redcliffe Gold Project to the Company’s development
pipeline of projects to be incorporated into the updated life of mine plan.
Dacian Gold Limited 2021 Annual Report
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34 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
DIRECTORS’ REPORT
Operating and Financial Review
Consolidated net loss after tax for the year was $7.5 million (30 June 2020: Net loss $116.5 million).
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)
2021
$’000
2020
$’000
Change
$’000
Change
%
241,623
270,047
(28,424)
(153,006)
(210,785)
57,779
Exploration costs expensed and written off
(19,381)
(9,148)
(10,233)
Corporate, admin and other costs
Adjusted EBITDA(i)
Impairment losses on assets
Losses on derivative instruments
Depreciation & amortisation (D&A)
Net interest expense
Loss before tax
Income tax (expense)
Reported (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)
(10,387)
(11,346)
58,849
38,768
-
(68,537)
(45)
(6,808)
(64,373)
(54,646)
(1,932)
(7,501)
(4,864)
(96,087)
-
(20,377)
959
20,081
68,537
6,763
(9,727)
2,932
88,586
20,377
(7,501)
(116,464)
108,963
55,479
22,959
(46,669)
(46,033)
35,942
51,976
277,037
162,642
(1.2)
(1.2)
(40.6)
(40.6)
32,520
(636)
(16,034)
114,395
39.4
39.4
(11)
27
(112)
8
52
100
99
(18)
60
92
100
94
142
(1)
(31)
70
97
97
(i) Adjusted EBITDA is a measure of earnings before interest, losses on derivative financial instruments, 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
Dacian Gold Limited 2021 Annual Report
6 | P a g e
35
ANNUAL FINANCIAL STATEMENTS
DIRECTORS’ REPORT
Operating and Financial Review (continued)
Mt Morgans Gold Operation (MMGO)
The MMGO achieved full year production of 106,919 ounces of gold at an All-In Sustaining Cost (“AISC”) of $1,556 per
ounce (30 June 2020: 138,814 ounces of gold produced at an MMGO AISC of $1,619 per ounce). The processing plant
milled 2.95 million tonnes for the year at a head grade of 1.2 g/t Au and recovery of 91.5% (30 June 2020: 2.96 million
tonnes for the year at a head grade of 1.6 g/t Au and recovery of 92.7%).
Gold sales revenue of $241.1 million (30 June 2020: $269.5 million) was generated from the sale of 108,270 ounces of
gold at an average price of $2,226 per ounce (30 June 2020: 140,946 ounces at an average price of $1,912 per ounce).
Total cost of goods sold inclusive of amortisation and depreciation was $216.9 million (30 June 2020: $265.0 million).
The dominant source of ore feed to the processing plant during the year was from the Heffernans pit at Jupiter and
the Mt Marven pit. Pre-commercial stripping development at Doublejay pit continued throughout the year. An
opportunity was taken to undertake a cutback on the historic Jenny pit in the Doublejay mine area to secure early
access to the ore body. This cut back designated “DBJ15” produced ore in the final quarter of the financial year and
associated costs charged to operating expense rather than to pre-production capital. “DBJ15” will continue to produce
ore during the early months in financial year 2022, to be complemented by the recommencement of underground ore
sources. A second Doublejay cutback, designated “DBJ7” will transition into commercial production in the second half
of the financial year producing the main ore source for the processing plant. Preparations for mining of the final
“DBJ14” stage commenced late in the financial year and is expected to commence commercial production in financial
year 2023.
Underground production at Westralia was suspended in the first quarter, with some remnant mining completed in the
year, in total contributing 62,753 tonnes at 4.6 g/t for 9,182 contained ounces of gold. Drilling and technical studies
were advanced to optimise Westralia underground resources along with the Greater Westralia Mining Area with plans
progressed towards recommencing underground mining in the first half of financial year 2022.
The following table summarises the production results for the year ended 30 June 2021.
Open Pit Operations
Ore Mined
Mined Ore Grade
Contained Gold
Waste Mined
Underground Operations
Stope Ore Mined
Development Ore Mined
Mined Ore Grade
Contained Gold
Processing
Ore Milled
Head Grade
Recovery(i)
Gold recovered
Gold Sold
Realised average gold price
Gold on Hand
MMGO AISC(ii)
UOM
Kt
g/t
oz
Kbcm
Kt
Kt
g/t
oz
Kt
g/t
%
oz
oz
A$/oz
oz
A$/oz
2021
2020
Change
Change %
3,855
1.0
125,159
8,757
63
-
4.6
9,182
2,947
1.2
91.5%
106,919
108,270
2,226
2,507
1,556
2,060
1.1
71,937
6,708
499
258
2.8
68,758
2,964
1.6
92.7%
138,814
140,946
1,912
2,980
1,619
1,795
(0.1)
53,222
2,049
(436)
(258)
1.8
(59,576)
(17)
(0.4)
(1.2)
(31,895)
(32,676)
314
(473)
(63)
87
(9)
74
31
(87)
(100)
64
(87)
(1)
(25)
(1)
(23)
(23)
16
(16)
(4)
Dacian Gold Limited 2021 Annual Report
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36 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
DIRECTORS’ REPORT
Operating and Financial Review (continued)
Mt Morgans Gold Operation (MMGO) (continued)
COVID-19 Response
The COVID-19 pandemic has presented a number of challenges to the industry and the Company has been proactive
in its response by implementing a range of protective and preventative measures. MMGO, through its COVID-19
management plan is continuing to operate unimpeded by the pandemic, however, a number of changes have been
made at the operations such that persons employed at the site have reduced exposure to potential sources of COVID-
19, are able to abide by social distancing requirements and improved hygiene standards. During lockdowns
experienced during the year, site personnel have been required to extend rosters to remain at site until flights re-
commenced to facilitate normal workforce roster rotation.
The Company has established contingency plans and in a worst-case event, requiring a scaling-back of the operation,
Dacian has multiple strategies that it can initiate including the processing of stockpile material totalling 5.2Mt @ 0.5g/t
for 91,000 ounces (over 20 months of processing material) which would provide a level of insulation for the business.
Exploration
During the year, the Group’s exploration program was focussed on Mineral Resource replenishment and growth
opportunities. Three priorities were established as follows:
• Mineral Resource replenishment focussed on potential targets around existing open pits with a focus on
advancing near term production targets;
•
•
Greater Westralia mining area exploration and technical studies to provide potential additional ore source
from both existing underground and open pit methods; and
Greenfields exploration programs to identify potential large base load opportunities to extend mine life.
With the first two objectives above substantially complete, the Exploration team’s focus during financial year 2022,
has been directed towards identifying longer term, base load opportunities to further extend MMGO mine life.
In addition, the completion of the merger with NTM Gold Limited during the year expanded the exploration portfolio
as well as the pipeline of development projects for potential inclusion into the Group’s mine plan as technical work
streams are advanced.
Financial Position
The Group held cash on hand as at 30 June 2021 of $35.9 million (30 June 2020: $52.0 million). As at 30 June 2021,
the Group has a working capital surplus of $13.0 million (30 June 2020: $18.3 million surplus).
At 30 June 2021, the Group’s net asset position increased to $277.0 million (30 June 2020: $162.6 million), reflecting
the acquisition in March 2021 of the Redcliffe Gold Project.
During the year the operation delivered 57,265 ounces of gold production into project finance related hedging realising
a hedge decrement of $29.4 million. This significantly reduced the out of the money hedge position from $44.4 million
at 30 June 2020 down to $2.7 million at 30 June 2021, but weighed on the full year operating result. At 30 June 2021,
committed remaining hedging totalled 27,324 ounces at a weighted average delivery price of A$2,238 per ounce on
hedge contracts for delivery over the period to 31 December 2021 (30 June 2020: 84,589 ounces at a weighted average
delivery price of A$2,055 per ounce).
In addition, the Group made $47.9 million in Project Debt Facility repayments during the year reducing these
borrowings at 30 June 2021 to $16.2 million (30 June 2020: $64.1 million).
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ANNUAL FINANCIAL STATEMENTS
DIRECTORS’ REPORT
Operating and Financial Review (continued)
Corporate
On 5 March 2021, the Supreme Court of Western Australia approved the proposed acquisition by Dacian of NTM Gold
Limited (NTM now named Redcliffe Project Pty Ltd). NTM Non-Executive Director Mr Eduard Eshuys was welcomed to
the Dacian Board, and the Redcliffe Gold Project has been integrated into Dacian’s operations. The Redcliffe Gold
Project expands the Group’s compelling pipeline of exploration and development projects offering the potential to
extend the Group’s mine life, diversify production sources and bolster future annual production.
On 26 May 2021, the Company announced a $40M two-tranche placement and $3.7M share purchase plan with the
proceeds from the placement to be used to:
•
•
•
•
Accelerate a significant drill program across Mt Morgans and Redcliffe, predominantly targeting new, base load
opportunities
Advance the high-grade Redcliffe deposits into production
Re-starting underground production from the Greater Westralia Mining Area
Fund general working capital
The second tranche was approved by shareholders at an extraordinary general meeting on 9 July 2021 with proceeds
from the second tranche now received.
Significant Changes in the State of Affairs
There were no other significant changes in the state of affairs of the Group during the financial year, not otherwise
disclosed in this report.
Events Subsequent to the Reporting Date
Subsequent to year end, in July 2021 the Company completed and received funds from the $3.7 million Share Purchase
Plan and the second tranche of the share placement $12.2M (before costs). In August 2021, the Company released its
2021 Mineral Resources and Reserve update and Five year mine plan.
Other than the items noted above, there has not arisen in the interval between the end of the reporting period and
the date of this report, any item, transaction or event of a material and unusual nature likely, in the opinion of the
Directors of the Company, to affect substantially the operations of the Group, the results of those operations or the
state of affairs of the Group, in subsequent financial years.
Likely Developments and Expected Results
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.
Dacian Gold Limited 2021 Annual Report
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38 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
DIRECTORS’ REPORT
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Group is a party, for the purpose of taking
responsibility on behalf of the Group for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Group with leave of the Court under section 237
of the Corporations Act 2001.
Non-audit services
During the year BDO (WA) Pty Ltd, the Group auditor, provided no non-audit services. Where non-audit services are
sought from the Group auditor the directors seek assurance that the provision of non-audit services is compatible with
the general standard of independence for auditors imposed by the Corporations Act 2001. During the prior year ended
30 June 2020 previous auditor (KPMG) provided non-audit services relating to Investigating Accountant services for
the capital raising in May 2020.
A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act is attached
to the Directors’ Report.
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.
Dacian Gold Limited 2021 Annual Report
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39
ANNUAL FINANCIAL STATEMENTS
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
Details of the Key Management Personnel (“KMP”) of the Company and their movements during the year ended 30
June 2021 are set out below:
Mr Robert Reynolds
Mr Leigh Junk
Mr Eduard Eshuys
Mr James Howard(i)
Mr Derek Humphry
Mr Ian Cochrane(ii)
Mr Barry Patterson
Mr Grant Dyker
Non-Executive Director – appointed Non-Executive Chairman 10 May 2021
Managing Director & CEO
Non-Executive Director – appointed 16 March 2021
Chief Operating Officer
Chief Financial Officer – appointed 12 October 2020
Non-Executive Chairman – resigned 10 May 2021
Non-Executive Director – resigned 30 November 2020
Chief Financial Officer – resigned 15 July 2020
(i)
(ii)
James Howard was appointed Chief Operating Officer from 1 March 2020 coinciding with his appointment as KMP. Mr Howard
previously held the role of Project Manager
Ian Cochrane was a Non-Executive Director until his appointment as Chairman on 6 January 2020, and resigned 10 May 2021
Remuneration and Nomination Committee
The Board has adopted a formal Remuneration and Nomination Committee Charter which provides a framework for
the consideration of remuneration matters.
The Remuneration and 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 KMP; 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.
2.
3.
Fees payable to Non-Executive Directors are set within the aggregate amount approved by shareholders at the
Company’s Annual General Meeting;
Non-Executive Directors’ fees are payable in the form of cash and superannuation; and
Non-Executive superannuation contributions are limited to statutory superannuation entitlements.
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.
Dacian Gold Limited 2021 Annual Report
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40 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
DIRECTORS’ REPORT
Remuneration Report Audited (Continued)
Executive Director and Other Key Management Personnel Remuneration
Executive remuneration consists of base salary, superannuation, plus other performance incentives to ensure that:
1.
2.
3.
The Company can attract and retain Directors and Executives;
Remuneration aligns the Executive team to pursue long term growth and success of the Company;
Remuneration packages incorporate a balance between fixed and variable remuneration, reflecting short and
long-term performance objectives appropriate to the Company’s circumstances and objectives; and
4.
A proportion of remuneration is structured in a manner to link reward to corporate and individual performances.
Executives are offered a competitive level of base salary at market rates (based on comparable ASX listed companies)
and are reviewed regularly to ensure market competitiveness.
Use of Remuneration Consultants
To date the Company has not engaged external remuneration consultants to advise the Board on remuneration
matters.
Incentive Plans
The Board, acting in remuneration matters:
1.
2.
3.
4.
Approves Executive Remuneration;
Ensures that incentive plans are designed around appropriate and realistic performance targets and provide
rewards when those targets are achieved;
Reviews and improves existing incentive plans established for employees; and
Approves the administration of the incentive plans, including receiving recommendations for, and the
consideration and approval of grants pursuant to such incentive plans.
The Company provides long-term incentives to Directors and Employees which are pursuant to the Employee
Securities Incentive Plan which was approved by shareholders on 30 November 2020 (AGM). Short term incentives
are also awarded to Employees to align remuneration with the strategy and performance of the Company.
Engagement of Non-Executive Directors
Non-Executive Directors conduct their duties under the following terms:
1.
2.
A Non-Executive Director may resign from his/her position and terminate their contract on written notice to the
Company; and
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 as Non-Executive Directors, the Company will pay the Director $85,000 plus
statutory superannuation per annum.
In consideration of the services provided by the Non-Executive Chairman, the Company will pay $150,000 plus
statutory superannuation per annum.
Additional fees will be paid to Non-Executive Board members who are appointed to the Chair role of a Board
subcommittee.
Non-Executive Directors 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 2021, the Company incurred no additional fees in respect of additional services
provided by Non-Executive Directors.
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41
ANNUAL FINANCIAL STATEMENTS
DIRECTORS’ REPORT
Remuneration Report Audited (continued)
Shareholding Qualifications
The Directors are not required to hold any shares in Dacian Gold Limited under the terms of the Company’s
constitution.
Engagement of Executive Directors
Mr Leigh Junk
The terms of Mr Leigh Junk’s Executive Services Agreement governing his role as Managing Director and CEO are
summarised below.
In respect of his engagement as Managing Director and CEO, Mr Junk will receive a salary of $583,000 per annum plus
10% superannuation (Total Fixed Remuneration). Any increase in salary is subject to the discretion of the Board.
Mr Junk is eligible to participate in the Company’s short-term incentive program, with the reward in the form of a cash
bonus up to 40% of Base Salary. The reward of short-term incentives is associated with operational key performance
indicators (KPIs) as determined by the Board. Accordingly, 100% of the short-term incentive is at risk.
Mr Junk may participate in the Company’s long-term incentive program. To align Mr Junk’s interest with the Company
and Shareholders, Mr Junk was granted Performance Rights in the prior year, issued over three tranches. The
performance period for the three tranches are Tranche 1: 2020-2023, Tranche 2: 2020-2024 and Tranche 3: 2020-
2025. Shareholder approval was granted for the award of the Performance Rights at the Extraordinary General
Meeting held on 16 June 2020. Performance Rights issued are subject to measurement against performance criteria.
Accordingly, 100% of the long-term incentive is at risk.
Mr Junk’s Executive Services Agreement included an issue of 191,856 shares contingent to his continuing employment
6 months after his commencement date, these shares were issued on 1 September 2020.
The Company or Mr Junk 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. Mr Junk may be required to
serve out all or part of this notice period or be paid in lieu of notice at the Board’s election.
Engagement of Executives
Mr James Howard
In respect of his engagement as Chief Operating Officer, Mr Howard will receive a salary of $378,000 per annum plus
10% superannuation (Total Fixed Remuneration).
The Company or Mr Howard may terminate the contract at any time by the giving of three 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 Howard in lieu of part or all of the notice period specified in the contract.
Mr Howard 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 Derek Humphry
The terms of Mr Humphry’s employment contract governing his role as Chief Financial Officer, are summarised below.
In respect of his engagement as Chief Financial Officer, Mr Humphry will receive a salary of $378,000 per annum plus
10% superannuation (Total Fixed Remuneration).
The Company or Mr Humphry may terminate the contract at any time by the giving of three 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 Humphry in lieu of part or all of the notice period specified in the contract.
Mr Humphry 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.
Dacian Gold Limited 2021 Annual Report
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42 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
DIRECTORS’ REPORT
Remuneration Report Audited (continued)
Voting and comments made at the Company’s 2020 Annual General Meeting (“AGM”)
At the last Annual General Meeting 83.5% of the shareholders voted to adopt the remuneration report for the year
ended 30 June 2020. 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
Net profit/(loss) after tax
Net assets
Market Capitalisation
Share Price
2021
$’000
241,623
(7,501)
277,037
236,763
2021
$/share
0.26
2020
$’000
270,047
(116,464)
162,642
244,756
2020
$/share
0.44
2019
$’000
132,821
3,018
184,875
119,628
2019
$/share
0.53
2018
$’000
-
(5,402)
132,866
586,658
2018
$/share
2.85
2017
$’000
-
(18,858)
134,313
399,430
2017
$/share
1.98
These indicators are not always consistent with those used to determine variable amounts of remuneration awarded
to KMP, 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 KMP.
In accordance with the Company’s objective to ensure that executive remuneration is competitive and performance
focused, a portion of Executives’ remuneration is placed “at risk”. The relative proportion of target FY21 and actual
FY21 total remuneration packages split between fixed and variable remuneration is shown below.
Target Remuneration Mix
Leigh Junk
35%
13%
52%
Other KMPs
58%
16%
26%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Fixed Remuneration
STI (Variable)
LTI ( variable non cash)
The allocation of shares on commencement of employment which were awarded to Leigh Junk have been excluded
from the remuneration analysis above.
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43
ANNUAL FINANCIAL STATEMENTS
DIRECTORS’ REPORT
Remuneration Report Audited (continued)
Short-Term Incentives
The Remuneration and 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. The KPIs, 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 by the Board that the individual performance standard has fallen below the minimum requirement.
The Short-Term Incentive (“STI”) scheme provides eligible employees with the opportunity to earn a cash bonus if
certain financial hurdles and other KPIs are achieved. The Board has determined that the Company will not pay an STI
if there is a fatality within the business.
All Executive KMP are eligible to participate in the STI plan. Awards are capped at 100% of the target opportunity. The
target opportunity for the Managing Director is 40% of base salary and 30% of base salary for other Executive KMP. A
summary of the KPI targets which are assessed on an annual basis for FY21 and their respective weightings is as follows:
STI FY2021
KPI
1. Safety &
Environment
Weighting
20%
2. Production
40%
3. Costs
40%
Measure
Safety indicators targets are to reduce Total Recordable Injury Rate (TRIFR)
below FY21 levels and no Environment regulatory non-compliance
Gold Production for the Performance Period is within (or exceeds) the Gold
Production Target Range established in market guidance
AISC for the Performance Period is within (or is less than) the AISC Target Range
established in market guidance
Based on an assessment, STI payments for financial year 2021 to Executives were as follows:
Name
Position
Leigh Junk
James Howard
Derek Humphry(i)
Grant Dyker(ii)
Managing Director & CEO
Chief Operating Officer
Chief Financial Officer
Chief Financial Officer
(i) Mr Humphry was appointed 12 October 2020
(ii) Mr Dyker resigned 15 July 2020
Options over Unissued Shares
Maximum STI
opportunity
40% of Base Salary
30% of Base Salary
30% of Base Salary
30% of Base Salary
% of STI
Achieved
50%
50%
50%
N/A
Awarded
STI
$110,000
$52,500
$35,000
Nil
No remuneration related options were granted during the 2020 or 2021 financial years. 1,250,000 options lapsed
during the 2021 financial year. The table below outlines movements in options during 2021 and the balance held by
each KMP at 30 June 2021.
The options were 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.
Number
of
options
held at
1 July
2020
Fair
value of
options
Grant date
Exercise
price
Vesting
date
Expiry date
Number
expired
unexercised
during the
year
Balance
at the
end of
the year
Number
vested &
Exercisable
26/02/2016
300,000
$173,695
$1.44
26/02/2016
28/02/2021
300,000
(300,000)
300,000
300,000
(300,000)
-
-
Name
Ian
Cochrane(i)
Total
(i) Mr Cochrane resigned 10 May 2021
All options were granted for nil consideration. Options lapse if the KMP 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 2021 Annual Report
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44 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
DIRECTORS’ REPORT
Remuneration Report Audited (continued)
Exercise of Options Granted as Compensation
During the year, no shares were issued on cashless exercise of options previously granted as compensation, pursuant
to the cashless exercise provision of the Dacian Gold Limited Employee Option Plan.
Long-Term Incentives
Under the Dacian Gold Limited Employee Securities Incentive Plan, performance rights are offered to executives to
align remuneration with the creation of shareholder wealth. Historically options were also issued to KMP under the
same plan.
Performance Rights Granted under the Long-Term Incentive Scheme
Performance rights were issued to KMP during the 2021 financial years pursuant to the Dacian Gold Limited Employee
Securities Incentive Plan.
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.
During the year the Company issued 977,273 Performance Rights (2020: 8,428,962) to KMP in respect of the LTI
component of their financial year 2021 remuneration.
Name
James Howard
Derek Humphry
Maximum LTI
Opportunity
50% of Base Salary
50% of Base Salary
Number of Performance Rights
granted during FY21
553,600
423,673
Fair Value of
Performance Rights
$0.26
$0.26
During the year the Company issued 5,325,482 Performance Rights (FY20: 9,934,353) to employees (including 977,273
Performance Rights to KMP) in respect of the LTI component of their FY21 remuneration. During the year 51,921
performance rights vested (30,958 relating to KMP). The table below outlines the movements in performance rights
during the 2021 financial year and the balance held by each Executive at 30 June 2021.
Name
Leigh Junk
James Howard
Derek Humphry
Grant Dyker(i)
Total
Balance at
1 July 2020
Granted in
FY21
8,333,334
111,107
-
111,107
8,555,548
-
553,600
423,673
-
977,273
Vested
-
(15,479)
-
(15,479)
(30,958)
Lapsed
-
(95,628)
-
(95,628)
Balance at
30 June 2021
8,333,334
553,600
423,673
-
Maximum
value to
expense
2,161,613
108,007
82,659
-
(191,256)
9,310,607
2,352,279
(i) Mr Dyker resigned effective 15 July 2020
(ii)
The balance of performance rights at 30 June 2021 have not yet vested. The accounting expense is spread over life of the
right. The maximum remaining value of the unvested deferred shares has been determined as the amount of the grant date
fair value of the rights that is yet to be expensed. The minimum value of deferred shares yet to vest is nil, as the shares will
be forfeited if the vesting conditions are not met.
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.
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45
ANNUAL FINANCIAL STATEMENTS
DIRECTORS’ REPORT
Remuneration Report Audited (continued)
The tables below detail the terms and conditions of the grant and the assumptions used in estimating fair value for
performance rights issued to KMP during the 2021 financial year.
Item
Grant date
KMP
Number of rights
Value of underlying security at grant date
Fair value
Dividend yield
Risk free rate
Volatility
Performance period (years)
Assessment date
Remaining performance period (years)
30 October 2020
J Howard
553,600
$0.355
$0.26
0%
0.13%
60%
3
30 June 2023
2
30 October 2020
D Humphry
423,673
$0.355
$0.26
0%
0.13%
60%
3
30 June 2023
2
The performance rights granted to Mr Howard and Mr Humphry are subject to certain operational and market
performance conditions being met and vest on 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.
Tranche Amount Weighting
369,067
67% of the Performance Rights
James
Howard
Derek
Humphry
184,533
33% of the Performance Rights
282,449
67% of the Performance Rights
141,224
33% of the Performance Rights
Performance Conditions
TSR performance to peers(i) above 50th percentile (measured over a 3 year
period 1 July 20 to 30 June 23)
Reserve Growth(ii) (measured over a 3 year period 1 July 20 to 30 June 23)
TSR performance to peers(i) above 50th percentile (measured over a 3 year
period 1 July 20 to 30 June 23)
Reserve Growth(ii) (measured over a 3 year period 1 July 20 to 30 June 20)
(i) Peers selected for the measure are Red 5 Ltd, Gold Road Resources Ltd, Capricorn Metals Ltd, Ora Banda Mining,
Westgold Resources Ltd, Ramelius Resources Ltd, Wiluna Gold Mines and Focus Minerals Ltd. The performance of
the Peer Companies will be adjusted/normalised by the Board in circumstances where one or more of those
comparator companies cease to be listed on the ASX, or at the Board’s discretion may change from time to time.
Total Shareholder Return (“TSR”) performance to peers measured over the performance period which is applicable
to each tranche.
TSR Vesting conditions
•
Below 50th percentile TSR – Nil vest
•
•
•
At 50th percentile TSR – 50% vest
50th – 75th percentile TSR – pro-rata vest
Above 75th percentile – 100% vest
(ii) Reserve Growth (Ore Reserve change) is measured through comparison of the Annual JORC compliant Reserves &
Resource Statement and assessed over the Performance Period applicable to each Tranche.
Reserve Growth (Ore Reserve change) is measured tthrough comparison of the Annual JORC compliant Reserves &
Resource Statement and assessed over the Performance Period applicable to each Tranche. Reserve growth can
be derived from organic growth or through acquisition.
•
Negative Ore Reserve Growth – Nil vest
• Mined depletion replaced – 50% vest
•
Depletion replacement to 25% increase – pro-rata between 50% and 100% vest
•
25% increase in Ore Reserves or greater – 100% vest
Shares Granted as Remuneration
During the financial year the Company issued Mr Junk 191,856 shares following employment of 6 months after
commencement date, as disclosed and recorded in the 30 June 2020 financial report. The terms of the share issue
and fair value were as follows, 191,856 shares (fair value of $314,417 using a 5-day VWAP prior to the date of award),
issued on 1 September 2020.
Dacian Gold Limited 2021 Annual Report
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46 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
DIRECTORS’ REPORT
Remuneration Report Audited (continued)
Remuneration Disclosures
The details of the remuneration of each Director and member of KMP of the Company for the years ending 30 June
2021 and 2020 are as follows:
2021
Short-term
Post
employment
Termination
benefits
Long-term
Share-based
payment
Cash
Salary (i)
$
88,402
Cash
Bonus
(ii)
$
-
Super-
annuation
$
8,398
R Reynolds(iv)
L Junk
558,472
110,000
52,250
E Eshuys(v)
23,334
I Cochrane(vi)
117,316
B Patterson(vii)
33,333
-
-
-
2,217
11,145
3,167
J Howard
361,439
52,500
25,000
D Humphry(viii)
274,328
35,000
18,830
-
-
-
-
-
-
-
Long
Service
Leave
$
-
Share rights
(iii)
Total
Performance
Related
$
-
$
96,800
%
-
1,832
922,750
1,645,304
62.8
-
-
-
-
-
-
11,733
206
54,159
27,553
25,551
128,461
36,500
504,831
355,917
-
-
-
21.1
17.6
N/A(ix)
G Dyker(ix)
6,590
-
5,424
196,965
(18,312)
(93,622)
97,045
Total
1,463,214
197,500
126,431
196,965
(4,541)
910,840
2,890,409
40.1
(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. Short term bonus paid in July 2021 relating to the June 2021 financial year are
included
(iii) Share based payment expense is non-cash and represents an estimate of potential value if vesting were to occur in future. The
fair value of performance rights is calculated at the date of grant using a Monte Carlo simulation, a review of historical share
price volatility and correlation of the share price of the Company to its peer group. The fair value is allocated to each reporting
period evenly over the period from grant date to vesting date. The value disclosed in the above table is the portion of the fair
value of the performance rights recognised in the reporting period.
(iv) Mr Reynolds was a Non-Executive Director until his appointment as Chairman on 10 May 2021
(v) Mr Eshuys was appointed Non-Executive Director on 16 March 2021
(vi) Mr Cochrane resigned 10 May 2021
(vii) Mr Patterson resigned 30 November 2020
(viii) Mr Humphry was appointed 12 October 2020
(ix) Mr Dyker resigned 15 July 2020
2020
Short-term
Post
employment
Termination
benefits
Long-term
Share-based
payment
Cash
Salary
Cash
Bonus
Super-
annuation
L Junk(i)
$
295,492
$
-
R Williams(ii)
311,712
57,500
I Cochrane
110,981
B Patterson
R Reynolds
80,000
80,000
-
-
-
$
25,790
13,340
6,981
7,600
7,600
G Dyker
377,894
201,250
18,523
J Howard (iii)
134,949
-
3,124
Long
Service
Leave
$
246
-
314,813
(63,973)
Share rights
(iii)
Total
Performance
Related
$
1,060,277
$
1,381,805
-
-
-
-
-
-
-
8,749
4,049
84,466
29,052
633,392
117,962
87,600
87,600
690,882
171,174
%
76.7%
9.1%
-
-
-
41.4%
17.0%
-
-
-
-
-
Total
1,391,028
258,750
82,958
314,813
(50,929)
1,173,795
3,170,415
45.2%
(i) Mr Junk was appointed Managing Director and CEO on 6 January 2020
(ii) Mr Williams was the CEO and Executive Chairman until his retirement on 6 January 2020
(iii) Mr Howard was appointed Chief Operating Officer on 1 March 2020
Dacian Gold Limited 2021 Annual Report
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47
ANNUAL FINANCIAL STATEMENTS
DIRECTORS’ REPORT
Remuneration Report Audited (continued)
Shareholdings
The number of shares in the Company held during the financial year by KMP of the Company, including their related
parties, are set out below.
Name
Robert Reynolds
Leigh Junk
Eduard Eshuys(i)
Ian Cochrane
Barry Patterson
James Howard
Derek Humphry
Balance at start of
the year
3,063,888
Vested and issued
as remuneration
-
On Market
purchases/(sales)
-
Balance at the end
of the year
3,063,888
191,856
1,000,000
1,959,076
767,220
-
530,590
19,915,307
-
-
-
-
-
15,479
-
-
139,900
-
100,000
200,000
-
N/A(ii)
N/A(iii)
115,479
200,000
N/A(iv)
Grant Dyker
15,479
(i) Mr Eshuys is Executive Chairman of public company DGO Gold Limited, which holds 64,058,548 shares and 22,222,222 options
460,298
-
expiring 31 March 2022, exercisable into shares in the Company at $0.27 per option
(ii) Mr Cochrane resigned 10 May 2021
(iii) Mr Patterson resigned 30 November 2020
(iv) Mr Dyker resigned 15 July 2020
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 2021, services totalling $1,783,030 (30 June 2020: $74,523) were provided on normal
commercial terms to the Group by Perenti Global and its subsidiaries, of which Mr Cochrane was 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 KMP.
End of Remuneration Report
Dacian Gold Limited 2021 Annual Report
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48 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
DIRECTORS’ REPORT
Auditor’s Independence Declaration
A copy of the Auditor’s Independence Declaration as required under Section 307C of the Corporations Act is set out
on the following page.
This report is made in accordance with a resolution of the Directors.
DATED at Perth this 31st day of August 2021
Leigh Junk
Managing Director & CEO
Dacian Gold Limited 2021 Annual Report
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49
ANNUAL FINANCIAL STATEMENTS
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY GLYN O'BRIEN TO THE DIRECTORS OF DACIAN GOLD LIMITED
As lead auditor of Dacian Gold Limited for the year ended 30 June 2021, I declare that, to the best of
my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Dacian Gold Limited and the entities it controlled during the period.
Glyn O'Brien
Director
BDO Audit (WA) Pty Ltd
Perth, 31 August 2021
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
50 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
FOR THE YEAR ENDED 30 JUNE 2021
Revenue
Cost of goods sold
Gross Profit
Corporate employee expenses
Share-based employee expense
Borrowing and finance costs
Exploration costs expensed and written off
Losses on derivative instruments
Other expenses
Impairment loss on assets
(Loss) before income tax
Income tax (expense)
Net (loss) for the year attributable to the members of
the parent entity
Note
2
3
3
20
3
11
3
4
Consolidated
30 June
2021
$’000
241,623
(216,920)
24,703
(3,880)
(1,294)
(2,575)
(20,318)
(45)
(4,092)
30 June
2020
$’000
270,047
(264,996)
5,051
(3,985)
(1,712)
(6,644)
(9,148)
(6,808)
(4,304)
-
(68,537)
(7,501)
-
(7,501)
(96,087)
(20,377)
(116,464)
Other comprehensive income for the year, net of tax
-
-
Total comprehensive (loss) for the year attributable to
the members of the parent entity
18
(7,501)
(116,464)
(Loss) per share
Basic (loss) per share attributable to ordinary equity
holders of the parent (cents per share)
Diluted (loss) per share attributable to ordinary equity
holders of the parent (cents per share)
5
5
(1.2)
(1.2)
(40.6)
(40.6)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with
the accompanying notes
Dacian Gold Limited 2021 Annual Report
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51
ANNUAL FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2021
Consolidated
Current assets
Cash and cash equivalents
Receivables
Inventories
Derivative financial instruments
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
Other financial liabilities
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
2021
$’000
35,942
3,906
19,431
-
59,279
89,544
103,504
95,606
13,070
301,724
361,003
26,228
1,343
18,713
-
46,284
28,771
8,911
37,682
83,966
277,037
30 June
2020
$’000
51,976
3,179
20,382
45
75,582
107,205
4,072
84,486
13,374
209,137
284,719
21,016
1,420
34,585
261
57,282
21,195
43,600
64,795
122,077
162,642
457,099
5,346
(185,408)
277,037
338,904
2,250
(178,512)
162,642
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
Dacian Gold Limited 2021 Annual Report
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52 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2021
Note
Issued
capital
Share reserve
Accumulated
losses
Consolidated
$’000
$’000
$’000
Attributable to
owners of the
parent
$’000
Balance at 1 July 2019
244,513
3,007
(62,645)
184,875
Reported profit for the year
Other comprehensive income
Total comprehensive profit for the year
Shares issued
Share issue transaction costs
Deferred tax on share issue costs
Options exercised (non-cash)
Performance rights exercised
Performance rights forfeited
Share-based payments expense
-
-
-
98,351
(7,011)
1,179
761
796
-
315
Balance at 30 June 2020
18
338,904
Reported loss for the year
Other comprehensive income
Total comprehensive profit for the year
Shares issued
Share issue transaction costs
Deferred tax on share issue costs
Performance rights exercised
Performance rights forfeited
Options issued
Share-based payments expense
-
-
-
119,543
(1,510)
(304)
153
-
-
313
-
-
-
-
-
-
(761)
(796)
(597)
1,397
2,250
-
-
-
-
-
-
(153)
(605)
2,873
981
(116,464)
(116,464)
-
-
(116,464)
(116,464)
-
-
-
-
-
597
-
98,351
(7,011)
1,179
-
-
-
1,712
(178,512)
162,642
(7,501)
(7,501)
-
(7,501)
-
-
-
-
605
-
-
(7,501)
119,543
(1,510)
(304)
-
-
2,873
1,294
Balance at 30 June 2021
18
457,099
5,346
(185,408)
277,037
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
Dacian Gold Limited 2021 Annual Report
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53
ANNUAL FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2021
Cash flows from operating activities
Gold sales
Interest received
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
Payments for plant and equipment
Payments to acquire exploration assets
Proceeds from sale of assets
Consolidated
30 June
2021
$’000
30 June
2020
$’000
Note
241,053
269,489
143
570
(1,643)
(19,622)
(165,022)
55,479
(42,654)
(3,595)
(420)
-
330
557
(5,263)
(8,820)
(233,334)
22,959
(43,085)
(2,993)
-
45
Net cash used in investing activities
(46,669)
(46,033)
Cash flows from financing activities
Proceeds from issue of share capital
Share issue transaction costs
Repayment of borrowings
Transaction costs associated with borrowings
Repayment of lease liabilities
Premiums paid on put options
Net cash from / (used in) financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
7
7
27,793
(1,536)
(47,904)
(519)
(2,413)
(265)
(24,844)
(16,034)
51,976
35,942
98,351
(6,954)
(41,400)
(1,269)
(2,481)
(6,712)
39,535
16,461
35,515
51,976
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
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54 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Basis of Preparation ............................................................................................................................... 27
Performance for the Year ...................................................................................................................... 30
Segment Information ........................................................................................................ 30
Note 1
Revenue ............................................................................................................................ 30
Note 2
Expenses ........................................................................................................................... 31
Note 3
Income Tax ........................................................................................................................ 33
Note 4
Earnings per Share ............................................................................................................ 34
Note 5
Note 6
Dividends........................................................................................................................... 34
Operating Assets and Liabilities............................................................................................................. 35
Cash and Cash Equivalents ................................................................................................ 35
Note 7
Receivables ....................................................................................................................... 36
Note 8
Inventories ........................................................................................................................ 36
Note 9
Note 10
Property, Plant and Equipment ........................................................................................ 37
Exploration and Evaluation Assets .................................................................................... 38
Note 11
Note 12 Mine Properties ................................................................................................................ 39
Asset Acquisition ............................................................................................................... 41
Note 13
Trade and Other Payables ................................................................................................. 42
Note 14
Provisions .......................................................................................................................... 42
Note 15
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 .............................................................................................. 48
Other Disclosures .................................................................................................................................. 49
Deferred Tax ..................................................................................................................... 49
Note 19
Share-Based Payments ..................................................................................................... 51
Note 20
Contingencies .................................................................................................................... 54
Note 21
Related Party Disclosures.................................................................................................. 54
Note 22
Key Management Personnel ............................................................................................. 56
Note 23
Auditors Remuneration .................................................................................................... 56
Note 24
Events Subsequent to the Reporting Date ........................................................................ 57
Note 25
Dacian Gold Limited 2021 Annual Report
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55
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
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 31 August
2021.
The principal accounting policies adopted in the preparation of the financial statements are set out in the notes below.
These policies have been consistently applied to all the years presented, unless otherwise stated.
These general-purpose financial statements have been prepared in accordance with Australian Accounting Standards
and Interpretations issued by the Australian Accounting Standards Board (“AASB”) and the Corporations Act 2001, as
appropriate for for-profit oriented entities. These financial statements also comply with International Financial
Reporting Standards as issued by the International Accounting Standards Board (“IASB”).
Historical cost convention
These financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of financial assets and liabilities at fair value through profit or loss, financial assets at fair value through
other comprehensive income, investment properties, certain classes of property, plant and equipment and derivative
financial instruments.
Critical accounting estimates
The preparation of these financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The
areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant
to the financial statements, are disclosed in notes.
Currency
The financial statements are presented in Australian dollars, which is Dacian’s functional and presentation currency.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with
that Corporations Instrument to the nearest thousand dollars ($’000) unless otherwise stated.
Goods and Services Tax (“GST”) and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as
part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement
of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax
authority.
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56 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by
the Australian Accounting Standards Board (“AASB”) that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
The following Accounting Standards and Interpretations are most relevant to the consolidated entity:
Conceptual Framework for Financial Reporting (Conceptual Framework)
The consolidated entity has adopted the revised Conceptual Framework from 1 July 2020. The Conceptual Framework
contains new definition and recognition criteria as well as new guidance on measurement that affects several
Accounting Standards, but it has not had a material impact on the consolidated entity's financial statements.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30 June
2021. The consolidated entity has not yet assessed the impact of these new or amended Accounting Standards and
Interpretations.
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 going concern basis of preparation is considered to be appropriate based on forecast cash flows. The cash flow
forecast is dependent on the operations achieving forecast targets for gold production, gold revenue, mining
operations and processing activities that are in accordance with schedules, budgets, and forecast gold price
assumptions to enable the cash flow forecast to be achieved.
Should the Group not successfully achieve some or all of these forecast targets and assumptions, the Group may
require funding support which may include 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 22.
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.
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.
Coronavirus (COVID-19) pandemic
As the COVID-19 pandemic continues to impact Australia and the World, the Group’s focus remains on keeping its
people well, and maintaining safe and reliable operations. The Group has considered the impact of COVID-19 on
each of its significant accounting judgements and estimates, particularly with respect to assumptions used in
determining receivables, impairment of non-current assets and going concern. At this stage, no further significant
estimates have been identified as a result of COVID-19, however, management is monitoring the increased level of
uncertainty in all future cash flow forecasts used in asset valuation and financial viability.
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57
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
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.
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58 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
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 one operating segment. The Group’s sole activity is mineral production,
exploration and development of mineral interests through the gold processing facility 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
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 forward contracts delivery commitments
30 June
2021
$’000
241,053
570
241,623
30 June
2020
$’000
269,489
558
270,047
The Group enters into gold forward sale contracts and put options to manage the gold price of a proportion of gold
sales. At 30 June 2021 there were no put options in place. The treatment of forward sale contracts is discussed further
below.
The forward sale contracts are settled by the physical delivery of gold as per the contract terms. The gold forward sale
contracts are accounted for as gold sales contracts with revenue recognised once the gold has been delivered to the
counterparties. Consistent with the gold sales revenue recognition policy, the physical gold delivery contracts are
considered to sell a non-financial item and therefore do not fall within the scope of AASB 9: Financial Instruments.
Gold forward contracts outstanding at 30 June 2021 are summarised in the table below.
Due within 1 year
Due after 1 year but not more than 5 years
Gold for physical
delivery
oz
27,324
-
Average contract
sale price
A$/oz
2,238
-
Value of
committed sales
$’000
61,152
-
27,324
2,238
61,152
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ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Note 3 Expenses
Accounting Policies
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
2021
$’000
146,369
6,637
21,032
42,882
216,920
30 June
2020
$’000
202,646
8,139
19,239
34,972
264,996
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 reserve of the relevant mining area. The unit
of account is tonnes of ore mined.
Depreciation and Amortisation
Depreciation expense – recognised in cost of goods sold
Depreciation expense – other
Amortisation expense
30 June
2021
$’000
21,032
459
42,882
64,373
30 June
2020
$’000
19,239
435
34,972
54,646
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 reserve of the mine property at which it is located.
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60 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
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. In the prior year, 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.
Unwind of rehabilitation and restoration provision
Transaction costs
Interest expense on lease liabilities
Interest expense on borrowings
Interest (income)
Employee expenses
Corporate Employee expenses
Salaries and wages
Director fees and consulting expenses
Defined contribution superannuation
Other employment expenses
Other expenses
Other expenses
Administration & corporate
Non-production depreciation
30 June
2021
$’000
78
641
479
1,520
(143)
2,575
30 June
2021
$’000
3,017
263
288
312
3,880
30 June
2021
$’000
3,633
459
4,092
30 June
2020
$’000
248
1,780
578
4,346
(308)
6,644
30 June
2020
$’000
3,113
271
317
284
3,985
30 June
2020
$’000
3,869
435
4,304
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ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Note 4
Income Tax
Accounting Policy
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 benefit
Deferred income tax:
Tax losses brought to account for the first time
Relating to origination and reversal of timing differences
Tax losses derecognised
Adjustment in respect of prior years
Income tax expense / (benefit) reported in the Statement
of Profit or Loss and Other Comprehensive Income
30 June
2021
$’000
-
-
57
-
(57)
-
30 June
2020
$’000
-
-
(14,477)
34,138
716
20,377
At 30 June 2021 the value of tax losses (on a gross basis not tax effected) was made up of unrecognised operating tax losses of
$196.3 million and recognised tax losses of $65.0 million (30 June 2020: $163.0 million and $58.9 million that was recognised as a
deferred tax asset), and unrecognised capital tax losses totalling $1.5 million (30 June 2020: $nil). Utilisation will be subject to
relevant tax legislation associated with recoupment including the same business test and continuity of ownership test. The Group
has a reasonable expectation that these losses can be carried forward to future years for income tax purposes.
(b)
Statement of Changes in Equity
Deferred income tax:
Capital Raising Costs
30 June
2021
$’000
30 June
2020
$’000
304
(1,179)
(c) Reconciliation of consolidated income tax expense to prima facie tax payable
Accounting profit/(loss) from continuing operations before
income tax expense
Tax at the Australian rate of 30% (2020: 30%)
Non-deductible expenses
Capital raising costs claimed
Temporary differences brought to account
Tax losses derecognised as deferred tax assets
Recognition of prior year tax losses
Current year tax losses not recognised
Adjustment in respect of previous year(i)
30 June
2021
$’000
30 June
2020
$’000
(7,501)
(96,087)
(2,250)
399
(964)
3,132
-
(260)
-
(57)
(28,826)
516
(924)
-
34,138
-
14,757
716
Income tax expense / (benefit) reported in Profit or Loss and
Other Comprehensive Income
-
20,377
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62 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
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.
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
30 June
2021
Cents
(1.2)
(1.2)
$’000
30 June
2020
Cents
(40.6)
(40.6)
$’000
(Loss) / profit after tax from continuing operations
(7,501)
(116,464)
d) Weighted average number of shares
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
No.
No.
556,264,777
225,713,403
81,989,477
60,920,249
638,254,254
286,633,652
-
-
-
-
638,254,254
286,633,652
(i) Share options and performance rights have been excluded from the 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 2021 (30 June 2020: nil).
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ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
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 (refer to note 16).
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.
Cash at bank
Reconciliation of profit / (loss) after tax to net cash flow from operating activities:
(Loss) / profit from ordinary activities after income tax
Depreciation and amortisation
Net gain on sale of assets
Impairment losses on assets
Bank facility fees
Premiums on put options
Share-based payments expense
Derivative financial instruments mark to market
Unwind of rehabilitation interest
Inventory NRV adjustment
Movement in assets and liabilities:
(Increase)/decrease in receivables
(Increase)/decrease in inventories
(Increase)/decrease in deferred tax assets
Increase/(decrease) in employee leave provisions
Increase/(decrease) in trade and other payables
Net cash flow from operating activities
Non-Cash investing and financing activities
30 June
2021
$’000
35,942
35,942
30 June
2021
$’000
(7,501)
64,373
-
-
519
265
1,294
(216)
78
88
(489)
807
-
(63)
(3,676)
55,479
30 June
2020
$’000
51,976
51,976
30 June
2020
$’000
(116,464)
54,646
(28)
68,537
1,269
6,712
1,712
216
248
3,902
1,996
(3,612)
20,377
350
(16,902)
22,959
During the year ended 30 June 2021 the Company completed the acquisition of Redcliffe Gold Project (refer note 13).
The transaction included the issue of securities. The $94,621,000 non-cash component was charged to exploration
and evaluation assets (refer note 11) and is not reflected in investment activities in the cash flow statement.
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64 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
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. Prepayments relate to annual insurance payments.
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.
Current receivables
GST receivable
Prepayments
Other receivables
Note 9
Inventories
Accounting Policy
30 June
2021
$’000
2,059
787
1,060
3,906
30 June
2020
$’000
1,837
622
720
3,179
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 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 (“NRV”) is the estimated selling price in the ordinary course of
business (including delivery into scheduled hedges), less estimated costs of completion, depreciation, amortisation
and the 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 30 June 2021 balance sheet date are classified as current assets, all other inventories are classified as non-current.
ROM inventory
Crushed ore
Gold in circuit
Gold dore
Mine spares and stores – at cost
30 June
2021
$’000
3,277
1,471
5,332
5,557
3,794
19,431
30 June
2020
$’000
3,780
1,824
5,773
5,295
3,710
20,382
(i)
(ii)
At 30 June 2021 gold in circuit is carried at NRV hedged price, all other inventory is carried at cost
At 30 June 2020 ROM inventory, crushed ore, gold in circuit and gold dore were valued at NRV
Key Estimates and Assumptions
Inventories
Net realisable value tests are performed at each reporting date and represent the estimated future sales price of the
product based on the lower of the prevailing spot metals price or anticipated gold price realised from delivery into
forward gold sales contracts at the reporting date, less estimated costs to complete production and bring the product
to sale, including depreciation and amortisation.
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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65
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
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.
Derecognition and Disposal
An item 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 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.
Right-of-use assets
The Group has lease contracts for various items of laboratory equipment and power infrastructure used in its
operations as well as the corporate head office premises. These leases have lease terms up to 5 years. The net book
value of leased assets at 30 June 2021 is $10.5 million (30 June 2020: $13.1 million). Further information about the
leases for which the Group is a lessee is presented in the table below.
The Group also has certain leases of assets with lease terms of 12 months or less for equipment for which the assets
are of low value and applies the short-term lease and lease of low-value assets recognition exemptions.
Office
Equip &
Fixtures
$’000
Computer
Equip. &
Software
$’000
Motor
Vehicles
$’000
Plant &
Equipment
$’000
Leased
Equipment
$’000
Capital
WIP
$’000
Total
$’000
Year ended 30 June 2021
Cost
Accumulated depreciation
Net Book Value
Movements
Opening net book value
Additions
Disposals
Transfers
Depreciation expense
Closing net book value
Year ended 30 June 2020
Cost
Accumulated depreciation
Net Book Value
Movements
Opening net book value
Additions
Disposals
Impairment
Transfers
Depreciation expense
Closing net book value
407
(252)
155
93
111
-
2
(51)
155
284
(191)
93
114
21
-
-
-
(42)
93
2,063
(1,682)
2,450
(2,287)
381
163
301
294
-
11
(225)
381
446
83
-
-
(365)
163
1,757
(1,456)
2,326
(1,880)
301
446
659
177
(1)
(6)
-
(528)
301
1,020
142
(16)
(30)
-
(670)
446
128,488
(50,808)
77,680
93,033
2,732
-
228
(18,313)
77,680
125,439
(32,406)
93,033
113,734
1,447
-
(6,311)
71
(15,908)
93,033
18,625
(8,103)
10,522
13,090
82
(117)
-
(2,534)
10,522
18,644
(5,554)
13,090
15,145
471
-
-
-
(2,526)
13,090
643
-
643
152,676
(63,132)
89,544
242
642
-
(241)
-
643
107,205
3,944
(117)
-
(21,488)
89,544
242
-
242
148,692
(41,487)
107,205
186
766
-
(639)
(71)
-
130,858
3,024
(17)
(6,986)
-
(19,674)
242
107,205
Dacian Gold Limited 2021 Annual Report
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66 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Note 11 Exploration and Evaluation Assets
Accounting Policy
Exploration and evaluation costs are expensed in the year they are incurred, apart from acquisition.
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)
the exploration and evaluation expenditures are expected to be recouped through successful development
and exploration of the area of interest, or alternatively, by its sale; or
(b) exploration and evaluation activities in the area of interest have not at the reporting date reached a stage
which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves,
and active and significant operations in, or in relation to, the area of interest are continuing.
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
Redcliffe Project acquisition (see note 13)
Exploration and evaluation costs incurred
Exploration and evaluation costs expensed and written off
30 June
2021
$’000
4,072
99,432
20,318
(20,318)
103,504
30 June
2020
$’000
4,072
-
9,148
(9,148)
4,072
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 (or 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.
No impairment loss (30 June 2020: $nil) in relation to exploration and evaluation assets have been recognised during
the period.
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.
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67
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Note 11 Exploration and Evaluation Assets (continued)
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 normal 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 reserve 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 reserve of the
mine concerned. The unit of account is tonnes of ore mined. From 1 January 2020 amortisation has been calculated
based on the published Reserve which forms the basis of the current 3 year mine plan.
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.
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.
Impairment
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.
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68 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Note 12 Mine Properties (continued)
Impairment (continued)
In assessing the fair value less cost of disposal, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific
to the cash generating unit.
It is reasonably possible that the underlying metal price assumption may change which may then impact the estimated
life of mine determinant and may then require a material adjustment to the carrying value of mining plant and
equipment, mining infrastructure and mining development assets. Furthermore, the expected future cash flows used
to determine the fair value less cost of disposal of these assets are inherently uncertain and could materially change
over time. They are significantly affected by a number of factors including reserves and production estimates, together
with economic factors such as metal spot prices, discount rates, estimates of costs to produce reserves and future
capital expenditure.
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.
At 30 June 2021 the market capitalisation of the Company was less than the Net Assets reported on the Consolidated
Statement of Financial Position for the Group. Consequently, the Group undertook an impairment test utilising the
update life of mine plan for Mt Morgans existing and planned mine developments. The spot gold price prevailing at
30 June 2021 of $2,345/ounce was employed in the assessment. The assessment concluded no impairment was
required.
Mine Properties
Cost
Accumulated amortisation
Net book value
Movements
Opening carrying amount
Additions
Impairment
Change in rehabilitation provision
Amortisation expense
Closing net book value
30 June
2021
$’000
184,105
(88,499)
95,606
30 June
2020
$’000
130,103
(45,617)
84,486
84,486
142,763
46,420
-
7,582
(42,882)
95,606
35,921
(61,551)
2,325
(34,972)
84,486
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ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Note 12 Mine Properties (continued)
Key Estimates and Assumptions
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.
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 13 Asset Acquisition
On 16 November 2020 Dacian announced a merger by way of Scheme of Arrangement, with ASX listed gold explorer,
NTM Gold Limited (NTM) which holds the Redcliffe gold project exploration interest. On 5 March 2021 following
NTM shareholder approval, the Supreme Court of Western Australia made orders approving the Scheme and Dacian
acquired all the issued capital of NTM and its wholly owned subsidiaries.
In accordance with accounting standards the Company has treated the acquisition of NTM as an asset acquisition.
Following the merger, the name of NTM was changed to Redcliffe Project Pty Ltd.
Where an acquisition does not meet the definition of a business combination the transaction is accounted for as an
asset acquisition. The consideration for the acquisition of an asset has been recorded based on accounting standards
and acquisition related cost are also capitalized. Assets acquired and liabilities assumed in the acquisition are
measured at their relative fair value at the acquisition date.
NTM shareholders received 1 Dacian share for each 2.7 NTM shares held. NTM options outstanding were, subject to
an ASX waiver, exchanged for approximately 22.2 million new Dacian options at the 2.7 exchange ratio and on
equivalent terms including an exercise price of $0.27 per share and the same maturity date of March 2022.
The total cost of the asset acquisition was $100.7 million and comprised an issue of equity instruments and costs
directly attributable to the combination, as follows:
Description
254,855,297 ordinary shares
22,222,222 new Dacian options
Transaction costs(i)
Total costs
$’000
91,748
2,873
6,066
100,687
(i) Transaction costs include costs directly attributable to the transaction including a provision for WA stamp duty
(ii) Net cash outflow to 30 June 2021 in relation to the transaction was $1,533,000 and is included in investing activities
in the 30 June 2021 cashflow statement offset by acquired cash
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70 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Note 13 Asset Acquisition (continued)
Net assets acquired
Cash
Receivables
Plant and equipment
Exploration & Evaluation Asset(i)
Creditors
Provisions
Other financial liabilities
Total Net Assets
$’000
1,113
121
354
99,432
(214)
(36)
(83)
100,687
(i)
includes transaction and other costs associated with the acquisition
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
Note 15 Provisions
Accounting Policy
Rehabilitation and Restoration
30 June
2021
$’000
4,643
21,585
26,228
30 June
2020
$’000
4,012
17,004
21,016
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.
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ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Note 15 Provisions (continued)
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
Rehabilitation costs incurred during the year
Provisions recognised during the year
Unwinding of discount
Balance at the end of the financial year
Key Estimates and Assumptions
Rehabilitation Obligations
30 June
2021
$’000
1,343
1,343
308
28,463
28,771
20,901
(98)
7,582
78
28,463
30 June
2020
$’000
1,420
1,420
294
20,901
21,195
18,395
(67)
2,325
248
20,901
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, cost 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.
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72 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
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 drawdown occurs
and amortised over the period of the remaining facility.
Finance Leases
From 1 July 2019 the Group has applied the new AASB 16 Leases accounting standard.
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.
Current
Insurance premium funding liability
Lease Liabilities
Bank Loans
Non-Current
Lease Liabilities
Bank Loans
30 June
2021
$’000
172
2,345
16,196
18,713
8,911
-
8,911
30 June
2020
$’000
373
2,412
31,800
34,585
11,300
32,300
43,600
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ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Note 16 Borrowings and Financing Costs (continued)
Project Debt Facility
At 30 June 2021 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, had an outstanding balance of $16.2
million (30 June 2020: $64.1 million).
During the year, debt repayments were made totalling $47.9 million (30 June 2020: $41.4 million). As a result, and in
accordance with the loan agreement, the available debt limit was reduced by the same amount.
Repayments under the Project Debt Facility are classified as current or non-current in the financial statements with
reference to the fixed repayment schedule. Fixed repayments are scheduled over the period to 31 December 2021.
The information in the following table has been prepared on this basis and reflects the agreed fixed repayment
schedule as at 30 June 2021.
Bank Loan
6 months or
less
$’000
16,196
6-12 months
1-2 years
$’000
-
$’000
-
The key terms of the Facility as at 30 June 2021 are:
•
•
•
Fixed schedule of quarterly repayments;
Security is provided by a general security agreement over all of assets of Dacian’s operating subsidiaries,
Dacian Gold Mining Pty Ltd and Mt Morgans WA Mining Pty Ltd, a specific security agreement over Dacian’s
bank accounts and a featherweight security agreement over all of the other assets of Dacian capped (the
maximum amount recoverable under the featherweight security is $5,000); and
The Facility Agreement contains a number of typical financial covenants that are assessed and reported to
Financiers on a quarterly basis.
The effective interest rate on the facility at 30 June 2021 is 4.1% (30 June 2020: 4.1%).
During the financial year, the Group incurred costs of $0.4 million (30 June 2020: $1.2 million) with respect to the
various changes made to the debt repayment schedule of the Facilities Agreement.
Financing facilities
Total Facilities
Project Debt Facility
Bank Guarantee Facility
Facilities used at reporting date
Project Debt Facility
Bank Guarantee Facility
Facilities unused at reporting date
Project Debt Facility
Bank Guarantee Facility
30 June
2021
$’000
16,196
856
17,052
16,196
856
17,052
-
-
-
30 June
2020
$’000
64,100
950
65,050
64,100
674
64,774
-
276
276
Dacian Gold Limited 2021 Annual Report
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74 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Note 17 Financial Instruments
The Group has exposure to a variety of risks arising from its use of financial instruments. This note presents
information about the Group’s exposure to the specific risks, and the policies and processes for measuring and
managing those risks. The Board of Directors has the overall responsibility for the risk management framework and
has adopted a Risk Management Policy.
(a) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet
its contractual obligations, and arises principally from transactions with customers and investments.
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.
(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.
Liquidity risk is managed 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:
2021
Trade & other payables
Insurance premium
funding liability
Lease liabilities
Bank Loan(i)
Derivative instruments
2020
Trade & other payables
Insurance premium
funding liability
Lease liabilities
Bank Loan(i)
Derivative instruments
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
26,228
26,228
21,696
4,532
-
-
172
11,255
16,196
-
53,851
172
12,280
16,509
-
55,189
172
1,404
16,509
-
39,781
-
1,350
-
-
5,882
-
2,678
-
-
2,678
-
6,848
-
-
6,848
21,016
21,016
21,016
-
-
-
-
-
-
-
-
-
-
373
13,712
64,100
261
99,462
373
15,095
66,788
265
103,537
373
1,444
26,961
265
50,059
-
1,445
6,762
-
8,207
-
2,728
33,065
-
35,793
-
7,734
-
-
7,734
-
1,744
-
-
1,744
(i) 2021 Bank loan repayments are presented as per the Project Debt Facility repayment schedule presented in note 16
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ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Note 17 Financial Instruments (continued)
(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.
Interest rate risk
The Group’s exposure to interest rate risk mainly arises from borrowings which are held at variable 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
2021
$’000
35,942
(16,196)
19,746
30 June
2020
$’000
51,976
(64,100)
(12,124)
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%
Decrease 1.0%
Interest Expense
Increase 1.0%
Decrease 1.0%
(d) Fair values
30 June
2020
$’000
359
(359)
(162)
162
30 June
2019
$’000
520
(520)
(641)
641
Fair values versus carrying amounts
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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76 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
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
2021
No.
30 June
2020
No.
30 June
2021
$’000
30 June
2020
$’000
Issued share capital
910,625,572
556,264,777
457,000
338,904
Share movements during the year
Balance at the start of the financial year
Share issue(i)
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
Share-based payments for the year
556,264,777
354,117,018
-
-
51,921
225,713,403
328,029,358
-
2,227,482
294,534
-
-
191,856
-
-
-
338,904
119,543
-
-
153
(1,510)
(304)
313
244,513
98,626
-
761
796
(7,011)
1,179
40
Balance at the end of the financial year
910,625,572
556,264,777
457,099
338,904
30 June 2021
30 June 2020
Balance at the beginning of the year
Profit / (Loss) profit for the year
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
Options issued in relation to asset
Share-based payments for the year
Accumulated
losses
$’000
(178,512)
(7,501)
-
-
605
-
-
Balance at the end of the year
(185,408)
Share-based
payments
reserve (ii)
$’000
2,250
-
-
(153)
(605)
2,873
981
5,346
Accumulated
losses
$’000
(62,645)
(116,464)
-
-
597
-
-
(178,512)
Share-based
payments
reserve (i)
$’000
3,007
-
(761)
(796)
(597)
-
1,397
2,250
(i) 254,855,297 ordinary shares were issued in March 2021 in connection with the asset acquisition (note 13). In addition, 99,261,721
ordinary shares were issued in June 2021 in connection with a share placement
(ii)The share-based payments reserve recognises the fair value of options over unissued shares and performance rights issued in
connection with an acquisition (see note 13) or provided to employees and Key Management Personnel
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ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
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.
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.
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78 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
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
Other financial liabilities
Capital raising costs – equity
Tax Losses
Deferred tax liabilities
Trade & other receivables
Inventories
Derivative financial instruments
Property, plant and equipment
Exploration and evaluation assets
Mine properties
Net deferred tax assets
Movement in temporary differences during the year:
30 June
2021
$’000
178
9,063
3,377
234
1,442
-
2,030
19,501
(251)
(249)
-
(10,804)
(4,833)
(6,618)
13,070
Trade and other receivables
Inventories
Derivative financial instruments
Property, plant & equipment
Exploration & evaluation
Mine properties in development
Trade & other payables
Provisions
Other financial liabilities
Borrowings
Borrowing costs
Business related costs – profit & loss
Capital raising costs – equity
Tax losses
Balance
30 June
2020
$’000
(235)
(230)
(13)
(10,033)
(985)
(8,430)
17
6,783
78
4,114
191
2,114
2,334
17,669
13,374
Recognised in
income
$’000
(16)
(19)
13
(771)
(3,848)
1,812
161
2,280
(78)
(737)
43
(672)
-
1,832
-
Recognised in
Equity
$’000
-
-
-
-
-
-
-
-
-
-
-
-
(304)
-
(304)
30 June
2020
$’000
17
6,783
4,114
191
2,114
78
2,334
17,669
(235)
(230)
(13)
(10,033)
(985)
(8,430)
13,374
Balance
30 June
2021
$’000
(251)
(249)
-
(10,804)
(4,833)
(6,618)
178
9,063
-
3,377
234
1,442
2,030
19,501
13,070
Dacian Gold Limited 2021 Annual Report
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ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Note 19 Deferred Tax (continued)
The value of tax losses (gross basis not tax effected) available to the Group at 30 June 2021 for income tax purposes is
$262.8 million, which comprises (for accounting) $65.0 million recognised operating tax losses and unrecognised
operating tax losses totalling $196.3 million and unrecognised capital tax losses totalling $1.5 million (30 June 2020:
operating tax losses $221.9 million, $58.9 million recognised, $163.0 million unrecognised, and $nil capital losses).
Utilisation will be subject to relevant tax legislation associated with recoupment including the same business test and
continuity of ownership test. The Group has a reasonable expectation that these losses can be carried forward to
future years for income tax purposes.
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:
(i)
(ii)
the extent to which the vesting period has expired; and
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.
Dacian Gold Limited 2021 Annual Report
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80 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Note 20 Share-Based Payments (continued)
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
2021
$’000
314
980
1,294
30 June
2020
$’000
638
1,074
1,712
The Dacian Gold Limited Employee Option Plan (“the Plan”) was last approved by a resolution of the shareholders of
the Company on 30 November 2020. All eligible Directors, executive officers and employees of Dacian Gold Limited
and its subsidiaries, 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 Option
Plan (30 June 2020: nil). Options issued have been valued and included in the financial statements over the periods
that they vest.
During the year 22,222,222 options with an exercise price of $0.27 and expiry date of 31 March 2022 were issued in
connection with the merger with NTM Gold Limited (now Redcliffe Project Pty Ltd) (see note 13).
a) Reconciliation of movement of options over unissued shares during the period including weighted average exercise
price (“WAEP”)
Options outstanding at the start of the year
Options expired during the year
Options exercised during the year
Options issued during the year
Options outstanding at the end of the year
30 June 2021
No.
1,250,000
(1,250,000)
-
22,222,222(i)
22,222,222
WAEP
$1.81
$1.81
-
$0.27
$0.27
30 June 2020
No.
5,250,000
-
(4,000,000)
-
1,250,000
WAEP
$0.96
-
$0.70
-
$1.81
(i)
22,222,222 options with an exercise price of $0.27 and expiry date of 31 March 2022 were issued in connection with the
merger with NTM Gold Limited (see note 13)
The terms of the unissued ordinary options at 30 June 2021 are as follows
Number of options
Exercise price
22,222,222
$0.27
Expiry date
31 March 2022
b) Subsequent to the reporting date
No options have been granted subsequent to the reporting date and to the date of signing this report.
Dacian Gold Limited 2021 Annual Report
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81
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Note 20 Share-Based Payments (continued)
Options over Unissued Shares (continued)
c) Weighted average contract life
The weighted average contractual life for vested and un-exercised options is 9 months (30 June 2020: 8 months).
Performance Rights
During the financial year ended 30 June 2021, 5,325,482 performance rights (30 June 2020: 1,601,019) were issued to
employees, pursuant to the terms of the Plan. These rights were issued in two tranches to two separate groups of
employees as set out in the table below.
The performance conditions that the Board has determined will apply to the Performance Rights are summarised
below:
Tranche
1
Measurement
Date
30 June 2022
Date of
vesting
30 June 2022
Number of
rights
2,457,612
2
30 June 2023
30 June 2023
2,867,870
Total
5,325,482
Metric
67% - TSR performance to peers above 50th
percentile (measured over the 2 year period 1
July 2020 to 30 June 2022)
33% - Reserve Growth (measured over the 2 year
period 1 July 2020 to 30 June 2022)
67% - TSR performance to peers above 50th
percentile (measured over the 3 year period 1
July 2020 to 30 June 2023)
33% - Reserve Growth (measured over the 3 year
period 1 July 2020 to 30 June 2023)
Achieved
LTI
-
-
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 table below details the
terms and conditions of the grant and the assumptions used in estimating fair value:
Tranche Date of grant
Measurement
date
30 October 2020 30 June 2022
30 October 2020 30 June 2023
1
2
Total
Number of
rights
2,457,612
2,867,870
5,325,482
Date of vesting
30 June 2022
30 June 2023
Share price
on grant
date
$0.355
$0.355
Fair value
at grant
date
$0.24
$0.26
Expected
share price
volatility
60%
60%
Expected
dividend
yield
0%
0%
Expected
risk free
rate
0.11%
0.13%
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 forfeited during the year
Rights outstanding at the end of the year
30 June 2021
30 June 2020
No.
9,548,346
5,325,482
(51,921)
(2,239,322)
12,582,585
WAFV
$0.51
$0.25
$2.94
$1.04
$0.36
No.
299,893
9,934,353
(129,534)
(556,366)
9,548,346
WAFV
$2.24
$0.52
$1.95
$1.30
$0.51
(i) At 30 June 2021 there were no rights that had vested during the year and were unissued at year end (30 June
2020: nil)
Dacian Gold Limited 2021 Annual Report
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82 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Note 20 Share-Based Payments (continued)
Shares
During the financial year, Mr Leigh Junk was issued the second and final tranche of the one-off on-boarding share
issue as part of his Executive Services Agreement. The terms of the share issues were as follows, 191,856 shares (fair
value of $314,417 using a 5-day VWAP prior to the date of award), issued on 1 September 2020.
Key Estimates and Assumptions
Share-Based Payments
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.
Note 21 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 22 Related Party Disclosures
(a) Controlled Entities
Ownership Interest
2021
%
2020
%
Parent Entity
Dacian Gold Limited
Subsidiaries
Dacian Gold Mining Pty Ltd
Mt Morgans WA Mining Pty Ltd
Redcliffe Project Pty Ltd(i)
Reflective Resources Limited(ii)
(i) Redcliffe Project Pty Ltd (previously NTM Gold Limited) - the name NTM Gold Limited (NTM) was changed to Redcliffe Project
100
100
100
100
100
100
-
-
Pty Ltd following the merger and the wholly owned dormant Australian subsidiaries of NTM were wound up
(ii) Reflective Resources Limited is a company incorporated in Papua New Guinea, and a wholly owned subsidiary of Redcliffe
Project Pty Ltd. The Company is dormant, final accounts and tax returns have been lodged and a request for tax clearance has
been made ahead of an application to wind up this entity
Dacian Gold Limited 2021 Annual Report
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83
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Note 22 Related Party Disclosures (continued)
(b) Parent Entity
Financial statements and notes for Dacian Gold Limited, the legal parent entity, are provided below:
Financial position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Shareholders’ equity
Issued capital
Share-based payments reserve
Accumulated losses
Total equity
Financial performance
Loss for the year
Other comprehensive (loss) / income
Total comprehensive loss
Commitments
Parent
30 June
2021
$’000
25,947
185,305
244,584
5,873
151
6,024
457,099
5,346
(257,217)
205,228
(142,025)
-
(142,025)
30 June
2020
$’000
44,025
183,109
227,134
945
227
1,172
338,904
2,250
(115,192)
225,962
(110,289)
-
(110,289)
The parent entity had lease commitments of $0.1 million at 30 June 2021 (30 June 2020: $0.3 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 project debt facility Financiers. The transaction banking
accounts for the Parent Entity are secured assets. This security supports the guarantee provided by the Parent Entity
to Mt Morgans WA Mining Pty Ltd.
(c)
Transactions with related parties
For the year ended 30 June 2021, services totalling $1,783,030 (30 June 2020: $74,523) 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
ended 30 June 2021.
Dacian Gold Limited 2021 Annual Report
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84 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Note 23 Key Management Personnel
(a) Directors and Key Management Personnel
The following persons were Directors or Key Management Personnel of the Company during the current and prior
financial year:
Leigh Junk
Robert Reynolds
Eduard Eshuys
James Howard(i)
Derek Humphry
Ian Cochrane(ii)
Barry Patterson
Grant Dyker
Managing Director & CEO
Non-Executive Director
Non-Executive Director
Chief Operating Officer
Chief Financial Officer
Non-Executive Chairman
Non-Executive Director
Chief Financial Officer
appointed Non-Executive Chairman 10 May 2021
appointed 16 March 2021
appointed 12 October 2020
resigned 10 May 2021
resigned 30 November 2020
resigned 15 July 2020
(i)
(ii)
James Howard was appointed Chief Operating Officer from 1 March 2020 coinciding with his appointment as KMP. Mr Howard
previously held the role of Project Manager
Ian Cochrane was a Non-Executive Director until his appointment as Chairman on 6 January 2020, and resigned 10 May 2021
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
Termination benefits
Post-employment benefits
Total Key Management Personnel remuneration
Note 24 Auditors Remuneration
BDO Audit (WA) Pty Ltd
Audit and review of financial statements FY21
Other Services
BDO – other non-audit services
KPMG
Fees in respect of prior year
Audit and review of financial statements FY20
Other Services
KPMG – other non-audit services
Total
30 June
2021
$
1,660,714
910,840
(4,541)
196,965
126,431
2,890,409
30 June
2021
$
106,773
-
48,198
-
-
154,970
30 June
2020
$
1,649,778
1,173,795
(50,929)
314,813
82,958
3,170,415
30 June
2020
$
-
-
45,000
177,000
93,150
315,150
Dacian Gold Limited 2021 Annual Report
56 | P a g e
85
ANNUAL FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
Note 25 Events Subsequent to the Reporting Date
Subsequent to year end, in July 2021 the Company completed and received funds from the $3.7 million Share Purchase
Plan and the second tranche of the share placement $12.2M (before costs). In August 2021, the Company released its
2021 Mineral Resources and Reserve update and Five year mine plan.
Other than the items noted above, there have 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.
Dacian Gold Limited 2021 Annual Report
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86 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
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 2021 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.
c.
There are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
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 2021.
This declaration is signed in accordance with a resolution of the Board of Directors.
DATED at Perth this 31st day of August 2021.
Leigh Junk
Managing Director & CEO
Dacian Gold Limited 2021 Annual Report
58 | P a g e
87
ANNUAL FINANCIAL STATEMENTS
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Dacian Gold Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Dacian Gold Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2021, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
88 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
Acquisition accounting – NTM Gold Limited
Key audit matter
How the matter was addressed in our audit
As disclosed in note 13 of the financial report, the
Our audit procedures included, but were not limited
group completed the acquisition of 100% of the issued
to:
capital in NTM Gold Limited during the year.
The Group accounted for the transition as an asset
acquisition, after consideration and assessment of
AASB 3 Business Combinations (“AASB 3”).
The accounting for this acquisition is a key audit
matter due to the significant value of the acquisition
and the significant judgements and assumptions made
by management, including:
Determination of the purchase consideration
for the acquisition;
Assessment of the fair value of the assets
acquired and liabilities assumed; and
Determination that the acquisition did not
meeting the definition of a business
combination in accordance with AASB 3 and
therefore constituted an asset acquisition.
Refer to note 13 of the financial report.
reviewing key executed transaction
documents to understand the key terms and
conditions of the acquisition;
evaluating management’s determination of
the accounting acquirer and whether the
transaction constituted a business or asset
acquisition;
assessing the identification of assets and
liabilities acquired for completeness;
verifying the transaction settlement date to
supporting documentation;
verifying the transaction consideration to
supporting documentation; and
assessing the appropriateness of the related
disclosures in note 13 to the financial report.
89
ANNUAL FINANCIAL STATEMENTS
Carrying value of Mount Morgans mining operation (CGU)
Key audit matter
How the matter was addressed in our audit
The Group’s carrying value of its MMGO mining
We evaluated management’s impairment model for the
operations (CGU) is included in property, plant and
Mount Morgans mining operations (CGU) by challenging
equipment (note 10) and mine properties (note 12).
the key estimates and assumptions used by
The Group is required to assess the carrying value of
the CGU for indicators of impairment at each
reporting period. The assessment of impairment
indicators requires management to make significant
accounting judgements and estimates which includes
discount rates, commodity price, mining cost estim
ates and ore reserve estimates.
This is a key audit matter due to the quantum of the
asset and the significant judgement involved in
management’s assessment of the carrying value of
the CGU.
management. Our work included but was not limited to
the following:
•
•
•
•
•
•
considering expected forecast gold prices to
published views by market commentators on
future prices;
assessing the scope, competency and
objectivity of the Group’s internal and
external experts involved in the estimation
process of mineral reserves;
evaluating the key assumptions underlying the
discounted cash flow forecasts including
forecast sales, production outputs, production
costs and capital expenditure using our
knowledge of the Group, their past
performance and our industry experience;
challenging the appropriateness of
management’s discount rate used in the
impairment model in conjunction with our
internal valuation experts;
challenging management’s sensitivity
assessment by performing our own sensitivity
analysis in respect of the key assumptions to
indicate if there would be a significant change
to the value of the CGU; and
assessing the adequacy of the related
disclosures in the financial report.
90 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
Other Matter
The financial report of Dacian Gold Limited, for the year ended 30 June 2020 was audited by another
auditor who expressed an unmodified opinion on that report on 30 September 2020.
Other information
The directors are responsible for the other information. The other information comprises the
information contained in the Directors’ Report for the year ended 30 June 2021, but does not include
the financial report and our auditor’s report thereon, which we obtained prior to the date of this
auditor’s report, and the Annual Report to Shareholders, which is expected to be made available to us
after that date.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent
with the financial report or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
If, based on the work we have performed on the other information that we obtained prior to the date
of this auditor’s report, we conclude that there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report in this regard.
When we read the Annual Report to Shareholders, if we conclude that there is a material misstatement
therein, we are required to communicate the matter to the directors and will request that it is
corrected. If it is not corrected, we will seek to have the matter appropriately brought to the
attention of users for whom our report is prepared.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
91
ANNUAL FINANCIAL STATEMENTS
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2021.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 11 to 19 of the directors’ report for the
year ended 30 June 2021.
In our opinion, the Remuneration Report of Dacian Gold Limited, for the year ended 30 June 2021,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Glyn O’Brien
Director
Perth, 31 August 2021
92 ANNUAL REPORT 2021
ANNUAL FINANCIAL STATEMENTS
Pursuant to the Listing Requirements of the Australian Securities Exchange, the shareholder information set out below was
applicable as at 30 September 2021.
Distribution of Shareholders
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
1,079
2,483
1,327
2,993
651
8,533
Shares Held
485,133
6,984,622
10,453,994
105,891,532
843,614,723
967,430,004
There are 2,301 shareholders holding less than a marketable parcel of ordinary shares.
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
DGO Gold Limited
Perennial Value Management Limited
Franklin Resources Inc and its Affiliates
Twenty Largest Shareholders
Number of Shares
% of Shares
64,058,548
59,694,591
43,119,173
6.62
6.17
5.33
Shareholder Name
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
DGO GOLD LIMITED
NATIONAL NOMINEES LIMITED
BRISPOT NOMINEES PTY LTD
POLLY PTY LTD
BNP PARIBAS NOMS PTY LTD
BNP PARIBAS NOMINEES PTY LTD
1
2
3
4
5
6
7
8
9
10 UBS NOMINEES PTY LTD
11 MR EDWARD VAN HEEMST + MRS MARILYN ELAINE VAN HEEMST
KESLI CHEMICALS PTY LTD
BNP PARIBAS NOMINEES PTY LTD
TODTONA PTY LTD
VITESSE PTY LTD
12
13
14
15
16 MR CARL ERIC HOLT + MRS LORRAINE HOLT
17
18
19
20
TYSON RESOURCES PTY LTD
SGJ INVESTMENTS PTY LTD
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
KINGARTH PTY LTD
Number of
Shares
%
of Shares
187,438,264
19.37
80,912,835
72,031,858
64,058,548
20,976,522
20,838,724
19,915,307
16,124,430
13,489,340
10,402,188
10,000,000
9,235,574
7,566,039
6,887,374
6,786,384
6,775,000
6,587,384
6,250,000
5,735,887
5,280,682
8.36
7.45
6.62
2.17
2.15
2.06
1.67
1.39
1.08
1.03
0.95
0.78
0.71
0.70
0.70
0.68
0.65
0.59
0.55
577,292,340
59.66
93
ASX ADDITIONAL INFORMATION Unquoted Securities
Options:
Number of Options
Exercise Price
Expiry Date
Number of Holders
300,000
22,222,222
$0.28
$0.27
10 September 2026
31 March 2022
1
1
Performance Rights:
Number of Performance Rights
Expiry Date
Number of Holders
1,933,173
2,316,079
2,777,778
2,777,778
2,777,778
Voting Rights
1 July 2022
1 July 2023
30 June 2023
30 June 2024
30 June 2025
71
6
1
1
1
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. Unlisted
options and performance rights do not have voting rights.
Restricted Securities
The Company has no restricted securities.
On-Market Buy Back
There is no current on-market buy back in place.
94 ANNUAL REPORT 2021
ASX ADDITIONAL INFORMATION
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