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2023 ReportPeers and competitors of Dacian Gold Limited:
Agnico Eagle Mines2023
ANNUAL
REPORT
ACN 154 262 978
Corporate Directory
Directors
Craig McGown
Sue-Ann Higgins
Morgan Ball
William Troy Irvin
Gerard Kaczmarek
Independent Non-Executive Chair
Independent Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Company Secretary
Sonia Hamilton-Browne
Registered Office and Principal Place of Business
Level 7, 40 The Esplanade
Perth WA 6000
Australia
Telephone:
Website:
Email:
+61 8 6323 9000
www.daciangold.com.au
info@daciangold.com.au
Auditor
BDO Audit (WA) Pty Ltd
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth WA 6000
Share Registry
Computershare Investor Services
Level 11, 172 St Georges Terrace
Perth WA 6000
Stock Exchange Listing
The Company's shares are quoted on the Australian Securities Exchange
ASX Code
DCN
ACN
154 262 978
2
Contents
Chairman's Letter to Shareholders
Company Highlights FY23
Our Sustainability Footprint
Health and Safety
People
Current Projects
Community Engagement
Corporate Governance
Review of Operations
Exploration and Growth
Mineral Resources and Ore Reserves Statement
Annual Financial Statements
Additional Information
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Letter to Shareholders
Dear Shareholders,
On behalf of your Board of Directors I present to you Dacian Gold Limited’s (the Company) Annual
Report for 2023, a year of significant change for your company.
As with the previous financial year, the 2023 financial year has been quite challenging. Following
the decision to discontinue underground and open pit mining operations and pivot to exploration,
the Company continued processing of run of mine stocks and low-grade stockpiles through 2022.
With the exhaustion of those stockpiles, the Company moved to processing of historical dump leach
material, however, like all industry participants continued to face high inflation, supply chain
challenges and risk. These challenges, combined with uncertainty regarding the stockpile grade and
water security issues resulted in your Board taking a decision in January 2023 to place the Mt
Morgans processing plant on care and maintenance, with the operations being suspended on 3
April, 2023.
This decision was not taken lightly, with a broad range of redundancies of long term committed
employees and termination of contracting relationships, as the Company pivoted its focus to
resetting its Resource base, in particular expansion of the Jupiter Resource beneath the existing open
pits, and to development of a mine plan to support a future restart of operations.
As reflected by the financial report the Company produced 42,761 ounces (2022 – 90,809
ounces) of gold in 2023 at an all in-sustaining-cost (AISC) of $2,032/oz (2022 – 1,955/oz)
generating $4.9 million in operating cash flow, down from $31.8 million in 2022 with an average
price of gold sold being $2,651 (2022 - $2,439).
The EBITDA for the year was $6.1 million (2022- $30.3million). As a result of the application of
purchase price accounting on consolidation with its parent company, Genesis Mining Limited,
impairment charges on exploration and evaluation assets of $28.1million and mine properties of
$11.1million have resulted in a loss for the year of $62.7million (2022 - $198.4 million) and
resulted in a reduction in the net assets to $60.4 million as at 30 June 2023 ($110.0 million as at
30 June, 2022).
The Company continued pursuing the Jupiter resource extension drilling program and in March,
2023 an updated Mineral Resource estimate was reported with the MRE of 830,00 ozs, up 133%
from the June, 2022 MRE. In July 2023 the Company announced an overall mineral resource
increase of 23% and a significant reserve increase of 171%.
With mineralisation continuing below the Jupiter MRE, an Exploration Target was also announced in
March 2023, which is now the subject of desktop evaulation for bulk underground mining potential.
4
Additional greenfields exploration programs focused on the search for additional baseload
deposits at Mt Morgans. A number of soil sampling programs over the project were conducted
during 2022 and 2023, with the Southern Tenements prospect identified as worthy of increased
geological attention. In May 2023 a first pass exploration program was conducted over the
prospect.
The Company’s focus continues on exploration, including the expansion of its resource base at
Jupiter, and on developing a plan for restart of mining and processing operations, including third
party ore arrangements to supplement the Jupiter ore feed, water supply and tailings storage
solutions.
As part of the change in strategic direction, Derek Humphry was appointed Interim CEO in March
2023 when Dale Richards stepped down to focus on exploration targeting for the Genesis Group
and Lee Stephens was appointed COO in May, 2023. I would like to thank both Derek and Dale
for their significant efforts over several months until they ceased with the Company in May and
June, respectively.
There have been some Board changes since the last annual report was released with Gerry
Kazmarek and Troy Irvin joining the Board as representatives of Genesis and Tony Kiernan and Lee
Stephens leaving the Board. I would like to thank all the departing Board members for their
contribution to your Company’s activities.
On 20 February 2023, the Genesis takeover offer (Offer) for your Company, which was
unanimously recommended by the independent Directors in December, 2022 in the absence of a
superior proposal, closed with Genesis holding 80.08%.
The Genesis strategy is based on the belief that consolidation of the Leonora-Laverton region is
logical and provides an opportunity to combine two highly complementary businesses to create a
company with significant Mineral Resources, established infrastructure and exploration upside in
the Leonora-Laverton region. This strategy has been further augmented by the acquisition of the
Gwalia mine, associated infrastructure and personnel from St Barbara Limited, which is likely to
result in the Tower Hill high grade pit being advanced through the Mt Morgans plant.
On behalf of the Board, I would also like to thank our executive management team and all our
employees and contractors for their concerted efforts during a difficult 2023. I would also like to
thank all our stakeholders, and in particular our shareholders and our traditional owners, for their
ongoing support throughout the year.
Craig McGown
Non-Executive Chair
Dacian Gold Limited
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Company Highlights FY23
Operational
Financial
Gold Production
42,761oz
AISC
$2,032
Cash and gold on hand
$25.4M
Remaining debt
Nil
Ore Reserves and Mineral Resources
At 30 June 2023:
Ore Reserves - 274,000oz
Mineral Resources - 2.7Moz
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Our Sustainability Footprint
Health and Safety
Safety at Dacian’s projects 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.
Care and Maintenance activities from March 2023 have resulted in a significant reduction in
total man hours, resulting in the increased TRIFR despite the reduction in overall reportable
injuries. The Company’s rolling Total Recordable Injury Frequency Rate (TRIFR) calculated as 12
month rolling average at 30 June 2023 was 18.9 (2022: 5.4). 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.
Figure 1: 12-month rolling average TRIFR for MMGO
The Company continues to monitor the COVID-19 outbreaks in the broader community and
remains proactive with the range of protective and preventative measures in accordance with its
COVID-19 Management Plan.
People
At 30 June 2023, the Company employs a Board of Directors and a part-time independent
Board Advisor. All operational activities are completed by Genesis Minerals employees under a
Management Services Agreement. In addition, the Company engages appropriate contractors to
perform specialist services.
Current Projects
Project study work associated with the restart of the Mt Morgan processing plant is ongoing with
the main focus on surety and longevity of Process water supply and Tailing storage capacity.
Environmental approvals are being progressed to enable a low risk commencement of mining
and processing operations.
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Care and Maintenance activities are focused on maintaining the plant in a powered-up ready
state. Scheduled rotation of major processing equipment is being conducted on a regular basis
with all non-critical items secured to prevent deterioration during this period. In addition,
exploration continues (refer Exploration and Growth section of this report).
Community Engagement
Dacian Gold is committed to building and maintaining mutually beneficial relationships with
community and government, and we believe that these relationships are key to successfully
operating the Mt Morgans Gold Operation. We were pleased to be able to make a donation to
the Mt Margaret community of perishable items during the preparation for care and
maintenance closure period.
We embrace our social responsibility obligations and aspire to be a valued and supportive
member of the communities in which we operate.
Corporate Governance
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 its
size and the scope of its activities.
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Review of Operations
Mt Morgans Gold Operation
Dacian Gold Limited’s (Dacian) Mt Morgans Gold Operation (MMGO) is located
25km west of Laverton and approximately 750km north-east of Perth in Western
Australia.
Figure 2: Location of Dacian Gold’s Operations in Western Australia
On 17 June 2022 the Company announced a review of the operating strategy. This
strategy was executed and in January the Company announced that the processing
plant would be placed into Care and Maintenance during H2 of FY23. Below is the
summary of activities during FY23:
Underground operations were suspended in Q1
Processing of existing stockpiles continued until the end of Q3 where the
processing plant was placed in Care and Maintenance
Drill testing at Jupiter continued following encouraging results
Exploration activities
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Financial Year 2023
Overview Table 1: Gold Recovery and Sales
Unit
SQ
DQ
MQ
JQ
FY2023
Gold Recovered
oz
21,525
12,040
9,197
0
42,761
Gold Sales
oz
22,224
12,889
9,727
2,039
46,879
Realised Average
Price
A$/oz
2,561
2,667
2,763
2,990
2,651
Gold Revenue
A$M
56.9
34.4
Gold on Hand
oz
1,854
1,170
26.9
959
6.1
124.3
0
0
Full year production for the 2023 financial year totalled 42,761 ounces (2022:
190,809 ounces) at an AISC of $2,032/oz (2022: $1,955/oz).
All hedge positions have been closed at 30 June 2023.
Mining
Open Pit
Nil activities.
Underground
The Westralia complex produced 48kt at 4.65g/t Au containing 7,158 ounces.
The processing plant continued to perform consistently above nameplate capacity of
2.5mtpa, milling a total throughput of 2.07 million tonnes of ore for FY2023 (2022:
2.91 Mt), producing 42,761 ounces (2022: 90,809 ounces) at a recovery of 87.5%
(2022: 91.7%).
Gold sales totalling 46,879 ounces (2022: 91,495 ounces) realised gold revenue of
$124.3 million for the year (2022: $223 million).
The March 23 announcement of the decision to place the processing plant into care
and maintenance resulted in a program of works to preserve the plant in an suitable
condition. This included:
Termination of supply and services contracts
Preservation of all mechanical and electrical equipment in an operational ready
state
Securing all remote infrastructure
Securing of all administration and non-essential facilities
Redundancy package for the impacted workforce
Care and Maintenance team appointed to provide ongoing works at the site
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Exploration and Growth
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During the year, the Group's growth and exploration program was dually focused on
defining future base load exploration targets and testing and expanding upon current
resources. Exploration systems applied have included the use of geophysical surveys,
geochemical
selected
geochronological analysis, petrography and exploration and resource definition
drilling.
target profiling,
sampling,
structural
studies,
soil
Jupiter Extension Project
Phase 2 of the Jupiter Extension Project continued as the primary strategic growth and
exploration focus until it was completed in early Q3 FY23. The target complex
consists of an extensive syenite system, intruded into a well-defined structural setting,
within basaltic country rock. The Jupiter complex spans approximately 2km with
variable widths ranging between 50m and 300m, with several identified syenite
pipes and linking dykes within the extensive structural zone between the Heffernans,
Doublejay and Ganymede syenite stocks and open pits. The Jupiter syenite intrusive
system is interpreted to be associated with the main Kurnalpi gold mineralisation
event in published literature.
Phase 1, completed in FY22, demonstrated Dacian’s syenite systems are suitable
hosts for deposits of significant scale. FY23 saw the next two stages of target
development completed:
Phase 2: Drilling program to target potential bulk extractable mineralisation to
approximately 400m from surface across the entire length of the Jupiter complex.
Phase 3: Mineral Resource estimation and conceptual mining studies for potential
expansion of large-scale mining operations.
Phase 2 drilling results confirmed the mineralisation of significant width and scale
associated with the syenite intrusive system over the strike extent of approximately
2km and to a depth of approximately 400m below surface, continuing to 650m
below surface and remaining open at depth, though the mineralisation of the syenites
is weaker with depth.
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Phase 3, comprising mineral resource estimation and order of magnitude studies for
potential expansion of large-scale mining operations, with updated geological
interpretation and modelling of the system was completed in Q3 FY23 and Mineral
Resource and Reserves updated in Q4. Mining studies were based on conventional
open pit mining methods. The MRE for Jupiter increased to 24MT at 1.1 g/t Au for
830 koz, and Reserves were reinstated for Jupiter at 133 koz. A desktop bulk
underground mining study is in progress for mineralisation continuing below the
Jupiter MRE open pit optimisation.
Figure 3: Plan view of the syenite complex with the new hole collars (excluding
RC intercepts) and final pit design.
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Figure 4: Long section view facing west of the Jupiter syenite complex with the current final pit design
Jupiter Mineral Resource Definition and Extension
In addition to the Phase 2 Jupiter program, an RC drill program to infill the resource
beneath the DoubleJay pit before dewatering ceased at the completion of mining
operations. Drilling targeted the Jenny and Joanne syenites where they would
otherwise be unable to be drilled outside of the pit in Phase 1 and 2 programs,
infilling the drill spacing to 20x20m to provide increased confidence in the mineral
resource below the current pit design.
Results from the drilling demonstrated continuity of mineralisation from the existing
Jupiter Mineral Resource (released 27 July 22), through to the Jupiter Exploration
Target.
Greater Westralia Mining Area
Mt Marven
Resource definition drilling was completed at the Mt Marven deposit, aimed at
providing improved geological control on the mineralised lodes within the existing
Mineral Resource estimate. Any gaps in the resource were infilled to 20x20m spacing
and drilling was added at the base of the modelled pit design to increase confidence
in the resource model where required.
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Figure 5: Oblique view –30° to NE showing the Mt Marven July 2022 EOM pit (gold), RPEEE pit shell (dark grey),
mineralisation blocks coloured by estimated by gold grade, and drillholes by gold grades.
Water Exploration
Exploration was utilised to run a regional water exploration programme in Q1 FY23,
drilling prospective targets identified through geophysical surveys conducted in FY22.
Additional holes were drilled in Q2 after some high flows were encountered in the
FY22 Red Knob drilling.
Southern Tenements
Exploration in E39/2002 continued this year, with a broader exploration focus
across the tenement leading to the addition of several new targets. Geochemical soil
sampling was completed in target zones requiring closer spaced data, in particular
surrounding the Habibi target. Geomechanical modelling was utilised to interpret
areas of potential failure and fluid flow within the tenement which resulted in a
number of new structural targets, several of which were included in the regional
aircore drilling program completed across the tenement during the year. Drilling
provided improved geological and structural understanding of the prospects.
The RC stratigraphic drilling program from FY22 was concluded at the start of FY23.
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Mineral Resources and Ore Reserves
Statement
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Dacian released its annual update of Mineral Resource and Ore Reserve estimates on
the ASX on 3 July 2023. Shareholders should refer to that announcement for full
details including JORC 2012 appendices.
Mineral Resources
The total Mineral Resources estimate for the Mt Morgans Gold Operation (Mt
Morgans) and Redcliffe Project (Redcliffe) as at 30 June 2023 is shown below.
Total Mineral Resource estimate as at 30 June 2023
(after mining depletion)
Mineral Resources are inclusive of the Ore Reserves
* Reported above a reasonable prospect for eventual economic extraction (RPEEE) pit shell;
** reported below a RPEEE pit shell;
# reported >330 m RL if not updated Ramornie pit lodes;
## reported <330 m RL if not updated Ramornie pit lodes;
^ OP reported >300 m RL; UG reported <300 m RL.
Key Changes for Mineral Resources
Key changes from the 2022 Mineral Resource estimate (MRE) are:
Updated geological interpretation, estimation parameters, classification, and
reporting constraints have been applied to selected Mineral Resource estimates.
Total Mineral Resources increased from 2.2 Moz to 2.7 Moz.
Total Measured and Indicated (M&I) Mineral Resources increased from 1.1 Moz
to 1.2 Moz.
Total Inferred Mineral Resources increased from 1.1 Moz to 1.5 Moz.
Beresford open pit MRE of 0.8 Mt @ 1.9 g/t for 50 koz now established based
on review of all data and technical studies.
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Transvaal open pit MRE of 0.9 Mt @ 3.0 g/t for 86 koz now established based
on review of all data and technical studies.
The significant changes in the estimated Mineral Resources compared with the
Company’s 2022 Mineral Resource estimates are shown below.
Figure 6: Waterfall chart of variances in estimated Mineral Resources from 30 June 2022 to 30 June 2023
Ore Reserves
The total Ore Reserve estimate (ORE) for Mt Morgans and Redcliffe as at 30 June
2023 is shown below.
Total Ore Reserve estimate as at 30 June 2023
Key Changes for Ore Reserves – Jupiter
The change in the updated Ore Reserve estimate compared to the June 2022 Ore
Reserve is illustrated by Figure 5 and detailed below:
Reinstatement of an open pit ORE for Jupiter based on reduced operating cost
and a gold price of A$2,300/oz. The 2023 Jupiter Ore Reserve Estimate
comprises approximately 133 koz.
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Figure 7: Key variances between 30 June 2022 and 30 June 2023 Ore Reserve estimate
Key Changes for Ore Reserves – Redcliffe
The change in the updated Ore Reserve estimate compared to the June 2022 Ore
Reserve is illustrated by Figure 8 and detailed below:
The June 2023 Redcliffe Ore Reserves is estimated using gold price of
A$2,300/oz.
Redcliffe Ore Reserve estimate totalling 141,000oz, an increase of 72,000oz
compared to 2022 Ore Reserve estimates.
Increase in the Hub Ore Reserve estimate of an additional 30,000oz for a total
Ore Reserve estimate for Hub of 64,000oz.
Increase in the GTS Ore Reserve estimate of an additional 11,000oz for a total
Ore Reserve estimate of 46,000oz.
Additionally, maiden Ore Reserve of 31,000oz declared for Nambi open pit in
the June 2023 Ore Reserve estimates.
Figure 8: Key variances between 30 June 2022 and 30 June 2023 Ore Reserve estimate
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Competent Person's Statement
All information relating to the Mineral Resources and Ore Reserves were prepared and disclosed under the
JORC Code 2012.
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 was 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 in this report (referencing previous releases made to the
ASX including Morgans North – Phoenix Ridge, Craic, McKenzie Well, Jupiter open pit (Doublejay,
Heffernans, Ganymede), Maxwells, GTS, Bindy, Kelly, Nambi, Redcliffe deposit, and Mesa – Westlode), 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 estimates 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.
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 Redcliffe open pit Ore Reserve is based on information
compiled or reviewed by Mr Hemal Patel. Mr Patel has confirmed that he has read and understood the
requirements of the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves (JORC Code 2012 Edition). He is a Competent Person as defined by the JORC
Code 2012 Edition, having more than five years’ experience which is relevant to the style of mineralisation
and type of deposit under consideration and to the activity for which they are accepting responsibility. Mr
Patel is a Member of the Australasian Institute of Mining and Metallurgy and an employee of Mining Plus
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.
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Annual Financial Statements
For the year ended 30 June 2023
Contents
Directors Report
Remuneration Report
Auditor's Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors' Declaration
Independent Auditor's Report
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42
43
44
45
46
47
72
73
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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 2023. 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 2022 and up to the date of this report are:
Craig McGown BCom, FCA
(Independent Non-Executive Chair – appointed 28 September 2022)
Mr McGown is an investment banker with over 40 years of experience advising companies in Australia and internationally,
particularly in debt and equity financing in the natural resources sector.
He holds a Bachelor of Commerce degree, has been admitted as a Fellow of the Institute of Chartered Accountants and as an
Affiliate of the Financial Services Institute of Australasia.
Mr McGown is an Executive Director of the corporate advisory business New Holland Capital Pty Ltd (part of the Taurus Funds
Management group) and was previously the Executive Chairman of stockbroker, DJ Carmichael Pty Limited and an Executive
Director of Resource Finance Corporation Ltd (now RFC Ambrian Ltd).
Other than as stated above, Mr McGown has served as a Director of the following listed companies in the three years immediately
before the end of the 2023 financial year:
Essential Metals Limited (ASX: ESS)
•
• Develop Global Limited (then called Venturex Resources Limited, ASX:DVP)
•
Sipa Resources Limited (ASX:SRI)
Sue-Ann Higgins BA LLB (Hons), ACIS, GAICD
(Independent Non-Executive Director)
Ms Higgins is an experienced legal practitioner, company secretary and director with diversified skills and over 25 years of
experience in senior legal, commercial, and executive roles in the resources sector, including with ARCO Coal Australia Inc, WMC
Resources Ltd, Oxiana Limited and Citadel Resource Group Limited.
With a focus on providing legal and commercial consulting services to mineral resources companies, Ms Higgins has extensive
experience in governance and compliance, mergers and acquisitions, joint ventures, equity capital markets and mineral
exploration, development and operations.
Ms Higgins holds Bachelor of Laws (Hons) and Bachelor of Arts degrees from the University of Queensland and Graduate Diplomas
in Applied Finance and Investment and Company Secretarial Practice. She is a member of the Australian Institute of Company
Directors, the Governance Institute of Australia and the Energy and Resources Law Association.
Other than as stated above, Ms Higgins has served as a Director of the following listed companies in the three years immediately
before the end of the 2023 financial year:
• Metal Bank Limited (ASX: MBK) – Executive Director and Company Secretary
Morgan Ball BCom, CA, FFin
(Non-Executive Director – appointed 28 September 2022)
Mr Ball has more than 30 years of Australian and international experience in the resources, logistics and finance industries and is
currently the Chief Financial Officer for Genesis Minerals Limited (ASX: GMD).
Mr Ball was formerly the Chief Financial Officer of ASX 50 gold producer, Northern Star Resources Limited (ASX: NST) and before
that was the Chief Financial Officer of Saracen Mineral Holdings Limited (ASX: SAR), prior to its merger with Northern Star.
From 2013 to 2016, Mr Ball was Managing Director of BCI Minerals Ltd (ASX: BCI) and has held senior financial and commercial
roles with WMC Resources, Brambles and P&O.
Mr Ball holds a Bachelor of Commerce degree from the University of Western Australia and is a member of the Institute of
Chartered Accountants and a Fellow of FINSA (formerly the Securities Institute of Australia).
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Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
DIRECTORS’ REPORT
Other than as stated above, Mr Ball has served as a Director of the following listed companies in the three years immediately
before the end of the 2023 financial year:
•
Chalice Mining Limited (ASX: CHN)
Gerard Kaczmarek B.Ec (Acc), CPA, AICD
(Non-Executive Director – appointed 28 February 2023)
Mr Kaczmarek has almost 40 years’ experience predominantly in the resource sector, specialising in finance and company
management with several emerging and leading mid-tier Australian gold companies.
Mr Kaczmarek was Chief Financial Officer and Company Secretary for Saracen Mineral Holdings (ASX:SAR) from 2012 to 2016. He
served as Chief Financial Officer and Company Secretary at Troy Resources (ASX:TRY) from 1998 to 2008 and from 2017 to 2019.
Earlier in his career, he held a range of positions with the CRA / Rio Tinto group and was Chief Financial Officer and Company
Secretary for a number of other mid-tier and junior mining companies.
Mr Kaczmarek holds a Bachelor of Economics (specialising in Accounting) degree from the Australian National University and is a
member of CPA Australia and the AICD.
Other than as stated above, Mr Kaczmarek has served as a Director of the following listed companies in the three years
immediately before the end of the 2023 financial year:
• Genesis Minerals Limited (ASX: GMD)
William Troy Irvin
(Non-Executive Director – appointed 2 May 2023)
Mr Irvin is a proven mining executive, specialising in business development, investor relations and corporate strategy.
Mr Irvin is currently Corporate Development Officer at Genesis Minerals. From 2015 to 2021 he was Corporate Development
Officer at Saracen Mineral Holdings. Mr Irvin also spent a decade working in institutional sales and research at a leading
stockbroking firm.
He brings deep relationships in the global capital markets, particularly with funds investing in natural resources.
Mr Irvin has tertiary qualifications in Mining Engineering (WA School of Mines in Kalgoorlie) and Applied Finance and Investment.
Other than as stated above, Mr Irvin has not served as a Director of any other listed companies in the three years immediately
before the end of the 2023 financial year.
Lee Stephens
(Non-Executive Director – appointed 28 September 2022, resigned 2 May 2023)
Mr Stephens has over 30 years of technical and operational experience within the mining industry including both open pit and
underground operations.
He held several senior management roles with Saracen Minerals including the General Manager of Operations role for both
Thunderbox and Carosue Dam Gold Mines. In 2020 Mr Stephens managed the Saracen Minerals transition of ownership at KCGM.
Mr Stephens previously held management positions with several mining companies and contractors throughout Western
Australia. Mr Stephens is the holder of a Western Australia Quarry Managers Certificate of Competency and holds a Grade 1
Authorised Mine Surveyors Certificate of Competency.
Anthony Kiernan AM
(Non-Executive Director - appointed 28 September 2022, resigned 28 February 2023)
Mr Kiernan is a former solicitor and consultant with extensive experience in the management and operation of listed public
companies.
He is Non-Executive Chair of Genesis Minerals Limited (ASX: GMD), Pilbara Minerals Limited (ASX: PLS) and Chair of the Fiona
Wood Foundation which focuses on research into burns injuries and a member of the Order of Australia.
He was formerly Non-Executive Chair of Saracen Minerals (ASX: SAR) (2018 to February 2021) and a Non-Executive Director of
Northern Star Resources (ASX: NST) (February 2021 to November 2021).
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
23
Michael Wilkes BE Mining, MBA
(Non-Executive Director - resigned 28 September 2022)
Mr Wilkes is a seasoned mining professional with over 35 years’ experience, principally in gold and base metals. He has specialised
in project development, construction and operations throughout his career.
In the past 20 years he has been responsible for the successful greenfield development of four major gold and copper mines, each
creating substantial value for shareholders, local communities and Governments with aggregate annual production of over 600koz
of gold and 200kt of copper.
Most recently Mr Wilkes was the President and CEO of Canadian and Australian listed OceanaGold Corporation (ASX:OGC). He
was recently a member of the Board Administration Committee for the World Gold Council and is currently a member of the
Advisory Board for the Sustainable Minerals Institute at the University of Queensland. He is currently the Non-Executive Chairman
of Kingston Resources Limited (ASX:KSN) and Andromeda Metals Limited (ASX:ADN) and Non-Executive Director of Genesis
Minerals Limited (ASX: GMD).
Eduard Eshuys
(Non-Executive Director - resigned 28 September 2022)
Mr Eshuys is a geologist with several decades of exploration experience in Western Australia. 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 was also involved in the
discovery of nickel sulphides at Maggie Hays and Mariners nickel at Widgiemooltha WA in the 1970’s. Mr Eshuys was the Managing
Director and CEO of St Barbara Limited from July 2004 to March 2009.
He was Executive Chairman of DGO Gold Limited (July 2010 to June 2022) and has served as a Director of De Grey Limited (July
2019 to September 2022) and NTM Gold Limited (March 2019 to March 2021). Mr Eshuys was a member of the Remuneration
and Nomination Committee.
Sonia Hamilton-Browne CA
(Company Secretary – appointed 30 March 2023)
Ms Hamilton-Browne is a Chartered Accountant with over 15 years’ experience in the resources industry. She was Dacian’s
Financial Controller prior to her promotion to Chief Financial Officer on 2 May 2023 and on 1 July 2023 joined Genesis Minerals
Limited as Finance Manager. She has a strong background in the financial management of resource companies from feasibility,
through to financing, development and operation.
Prior to joining Dacian, Ms Hamilton-Browne was Senior Financial Accountant at Westgold Resources Ltd with her career including
roles at Alacer Gold Corporation and Consolidated Minerals Pty Ltd.
Derek Humphry CA
(Company Secretary – resigned 10 May 2023)
Mr Humphry is a Chartered Accountant with over 20 years of experience in the resources industry.
Prior to joining Dacian Gold, Mr Humphry was Chief Financial Officer and Company Secretary of Nusantara Resources Limited
which was pursuing the development of its 2.0M ounce gold project.
Mr Humphry’s career has included senior management roles at dual ASX and HKex listed iron ore development company,
Brockman Mining Limited, dual ASX and TSX listed gold mining company, Intrepid Mines Limited and gold and nickel miner, LionOre
Mining Limited.
24
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
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
2023, and the number of meetings attended by each Director were:
Director
Craig McGown
Sue-Ann Higgins
Morgan Ball
Lee Stephens
Gerard Kaczmarek1
William Troy Irvin2
Anthony Kiernan3
Michael Wilkes4
Eduard Eshuys5
Board Meetings
B
A
11
11
17
17
11
11
10
10
3
3
-
1
7
8
7
7
6
7
Remuneration & Nomination
Committee
A
-
1
-
-
-
-
-
1
1
B
-
1
-
-
-
-
-
1
1
Audit Committee
B
A
-
-
2
2
1
1
-
-
-
-
-
-
-
-
1
1
1
1
1 – Mr Kaczmarek was appointed 28 February 2023
2 – Mr Irvin was appointed on 2 May 2023
3 – Mr Kiernan was appointed 28 September 2022 and resigned 28 February 2023
4 – Mr Wilkes resigned 28 September 2022
5 – Mr Eshuys resigned 28 September 2022
A = the number of meetings the Director was entitled to attend
B = the number of meetings the Director attended
Directors’ Interests
The following relevant interests of each Director in the share capital of the Company and its related body corporates as at the date
of this report are shown below:
Director
Craig McGown
Morgan Ball(i)
Sue-Ann Higgins
William Troy Irvin(i)
Gerard Kaczmarek(i)
Dacian Gold Limited Ordinary
Shares
-
-
-
-
-
Genesis Minerals Limited
Ordinary Shares
-
2,548,007
-
2,610,247
430,468
Number of options over
ordinary shares
-
841,390
-
841,390
122,943
(i) Genesis is a related body corporate and therefore interests held by Mr Ball, Mr Irvin and Mr Kaczmarek are disclosed in accordance with Section 300 (11)(a) of
the Corporations Act
Securities
Options
At the date of this report, there are nil unissued ordinary shares of the Company under option.
During and since the end of the financial year, the Company has not issued any ordinary shares as a result of the exercise of
options.
During the year 300,000 options were purchased and terminated in conjunction with the Genesis Minerals Limited takeover offer.
Performance Rights
No performance rights were issued during the financial year.
There were nil shares issued on exercise of performance rights during the year.
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
25
A reconciliation of performance rights outstanding at the date of this report appears below.
Rights outstanding at 30 June 2022
Rights issued during the year
Rights vested during the year
Rights forfeited during the year
Rights outstanding at 30 June 2023 and at the date of this report
Dividends
Number of
Rights
10,189,570
-
7,813,434
(2,376,136)
-
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 is an Australian ASX-listed gold exploration and development company which owns the Mt Morgans Gold Operation
including a 2.5Mtpa CIL treatment plant, and the Redcliffe Gold Project, with ~1,500km² tenement package comprising
predominantly granted mining leases, within the Leonora-Laverton gold district of Western Australia.
The principal activities of the Group during the period were gold mining, processing, and exploration. In April 2023, Dacian
suspended the Mt Morgans operation placing it into care and maintenance to refocus on exploration and development.
During the year Genesis Minerals Limited (ASX:GMD) acquired an 80.1% interest in Dacian and became the ultimate controlling
entity of the group.
Operating and Financial Review
Consolidated net loss after tax for the year was $62.7 million (30 June 2022: Net loss $198.4 million).
Genesis Minerals Limited (Genesis) acquired a controlling interest in Dacian in September 2022. In accordance with the
requirements of the Australian Accounting Standards, Genesis was required to assess its accounting treatment for the transaction
and advised Dacian that it would be accounting for the transaction as a business combination in accordance with AASB 3 Business
Combinations. This required Genesis to undertake a fair value assessment of the assets and liabilities of Dacian at the date of
control.
Genesis advised the Dacian Board that the Purchase Price Accounting assessment of fair value of the Dacian plant and equipment
was materially higher than the Dacian carrying value. Dacian, in accordance with accounting principles, carries plant and
equipment assets at the lower of cost and written down value.
Genesis also advised the Dacian Board that its fair value assessment of the Dacian exploration and evaluation assets and mine
properties resulted in a materially lower value than the Dacian carrying value of these assets.
The Dacian Board has reviewed the fair value assessment and in accordance with Australian Accounting Standards, Dacian, as an
entity which will be consolidated with Genesis as the parent company, is required to impair the carrying value of the exploration
and evaluation assets and the mine properties assets to their fair value where that fair value is lower than their carrying value.
Consequently, in December 2022, Dacian booked an impairment of $37.6 million in relation to the exploration and evaluation
assets and the mine properties assets.
26
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
DIRECTORS’ REPORT
A summary of the operating result for the Group is set out below:
Key Financial Data
2023
$’000
2022
$’000
Change
$’000
Change
%
Financial Performance
Sales revenue
Costs of sales (excluding D&A)(i)
Exploration
Corporate, admin and other costs
Adjusted EBITDA(i)
Impairment losses on assets
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)
124,626
(96,382)
(16,603)
(5,511)
6,130
(39,156)
(29,030)
(606)
223,665
(162,819)
(24,157)
(6,373)
30,316
(125,395)
(91,080)
(1,234)
(62,662)
(187,393)
-
(11,040)
(62,662)
(198,433)
4,900
(4,564)
25,381
60,417
(5.2)
(5.2)
31,819
(67,358)
17,464
110,000
(19.3)
(19.1)
(99,039)
66,437
7,554
862
(24,186)
86,239
62,050
628
124,731
11,040
135,771
(26,919)
62,794
7,917
(49,583)
(14.1)
(13.9)
(44)
(41)
(31)
(14)
(80)
(69)
(68)
(51)
67
(100)
68
(85)
(93)
45
(45)
(73)
(73)
(i) Adjusted EBITDA is a measure of earnings before interest, losses on derivative financial instruments, taxes, depreciation, amortisation and
impairment loss on assets. 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
Mt Morgans Gold Operation
Full year production was 42,761 ounces of gold at an All-In Sustaining Cost (“AISC”) of $2,032 per ounce (30 June 2022: 90,809
ounces of gold produced at an AISC of $1,955 per ounce). The processing plant milled 2.07 million tonnes for the year at a head
grade of 0.73 g/t Au and recovery of 87.5% (30 June 2022: 2.91 million tonnes for the year at a head grade of 1.1 g/t Au and
recovery of 91.7%).
Gold sales revenue of $124.3 million (30 June 2022: $223.1 million) was generated from the sale of 46,879 ounces of gold at an
average price of $2,651 per ounce (30 June 2022: 91,495 ounces at an average price of $2,439 per ounce). Total costs inclusive of
amortisation and depreciation was $124.9 million (30 June 2022: $253.4 million).
The dominant source of ore feed to the processing plant during the year was from low grade stockpiles with additional feed being
sourced from the final harvesting of ore from Westralia underground mines.
In March 2023 the Company announced completion of the transition from operations to explorer/developer with the processing
plant and surrounding infrastructure placed on care and maintenance.
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
27
The following table summarises the production results for the year ended 30 June 2023
Open Pit Operations
Ore Mined
Mined Ore Grade
Contained Gold
Waste Mined
Underground Operations
Stope Ore Mined
Development Ore Mined
Mined Ore Grade
Contained Gold
Processing
Ore Milled
Head Grade
Recovery
Gold recovered
Gold Sold
Realised average gold price
Gold on Hand
AISC
UOM
2023
2022
Change
Change %
Kt
g/t
oz
Kbcm
Kt
Kt
g/t
oz
Kt
g/t
%
oz
oz
A$/oz
oz
A$/oz
-
-
-
-
47
1
4.7
7,158
2,070
0.7
87.5%
42,761
46,879
2,651
-
2,032
2,674
1.0
86,537
5,553
36
65
3.4
10,887
2,910
1.1
91.7%
90,809
91,495
2,439
1,577
1,955
(2,674)
(1.0)
(86,537)
(5,553)
11
(64)
1.3
(3,729)
(840)
(0.4)
(4.2)
(48,048)
(44,616)
212
(1,577)
77
(100)
(100)
(100)
(100)
31
(98)
38
(34)
(29)
(36)
(5)
(53)
(49)
9
(100)
4
COVID-19 Response
The COVID-19 pandemic continued to present challenges to the industry and the Company maintained a range of protective and
preventative measures. Mt Morgans Gold Operation, through its COVID-19 management plan, operated with changes made such
that persons at site had reduced exposure to potential sources of COVID-19 and were able to abide by social distancing
requirements and hygiene standards.
Redcliffe Project
The Redcliffe Gold Project is located 45-60km northeast of Leonora in the Eastern Goldfields Region of Western Australia. The
Redcliffe Gold Project area comprises over ~890km2 and overlies Archean-aged greenstones. The primary focus of exploration
within the tenements is the Mertondale Shear Zone (MSZ), a regional structure with demonstrated gold mineralisation.
The Redcliffe Project includes the Redcliffe, Hub, GTS, Nambi, Kelly, Bindy and Mesa Westlode deposits.
Activities at the Redcliffe Project during the year have focussed on securing Government approvals and access arrangements for
the mining proposal.
Dacian is re-assessing future production options at Hub and GTS which align with the strategy for the Mt Morgans operations.
Exploration & Growth
During the year, the Company’s exploration program was focussed on completing the Jupiter extension program and identifying
additional base load exploration targets over Dacian tenure using a mineral systems approach. Geophysical data reprocessing and
interpretation, geochemical soil sampling, structural and geomechanical investigation, selected geochronological analysis,
petrography and exploration and resource drilling were conducted across Dacian’s various targets and tenements.
The Jupiter extension program was completed in early January 2023. This project resulted in an updated Jupiter mineral resource
to 830,000 ounces.
Resource drilling was completed at the Mt Marven deposit, where some potential remained to add additional ounces to the
mineral resource between the existing Mt Marven pit and the newly discovered Mt Marven South mineral resource due to
previous restrictions on drill access to the southern crest area of the pit.
Exploration activities at the southern tenement area, identified three priority targets along the granite-greenstone contact at
Robinta, Habibi, and Liberte/Ambassador. Anomalism over all three targets was determined through results of ultra-fine soil
sampling over coincident geophysical target definition. An aircore drilling program was completed over the area during Q4 which
provided valuable geological information for future exploration programs.
28
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
DIRECTORS’ REPORT
On 3 July 2023 Dacian released its 2023 Mineral Resource and Ore Reserve Update, with Total Mineral Resources of 53Mt @ 1.6
g/t for 2.7 Moz, including the Jupiter open pit MRE, and Total Ore Reserves of 5.6 Mt @ 1.5 g/t for 274 Koz.
With the 2.9 Mtpa Mt Morgans processing plant currently on care and maintenance, Dacian remains focused on developing a low
risk, sustainable mine plan to enable the resumption of production.
Financial Position
The Group held cash on hand as at 30 June 2023 of $25.4 million (30 June 2022: $17.5 million). As at 30 June 2023, the Group has
a working capital surplus of $16.6 million (30 June 2022: $7.7 million surplus).
At 30 June 2023, the Group’s net asset position, following impairment, decreased to $60.4 million (30 June 2022: $110.0 million).
During the year the Company repaid its debt facility in full.
Material Business Risk
This section outlines the key risks and uncertainties that could impact the Company and its ability to achieve its operating and
financial objectives.
Exploration
While the Board is of the view that the Company’s projects have the potential to provide significant mineralisation capable of
supporting future large-scale mining operations, there is no guarantee that further significant mineralisation will be identified and
even if identified, that such mineralisation can be successfully developed and economically mined. Exploration and drilling
programs are designed to discover new exploration targets for development, as well as improve confidence in existing targets
throughout the development stages of exploration projects to feasibility study level.
Exploration results that include drill results on wide spacings may not be indicative of the occurrence of a mineral deposit. Such
results do not provide assurance that further work will establish sufficient grade, continuity, metallurgical characteristics, and
economic potential to be classed as a category of mineral resource. The potential quantities and grades of drilling targets are
conceptual in nature and, there has been insufficient exploration to define a mineral resource, and it is uncertain if further
exploration will result in the targets being delineated as mineral resources.
Development
In the event significant mineralisation is identified, and proceeds to mineral development, the Company’s financial performance
will substantially depend on the accuracy of the cost estimates for the proposed development, other current and future expansion,
development, and infrastructure plans, working capital requirements, the duration of relevant works program, government
approvals, heritage approvals and clearances and personnel and equipment availability. The cost and time forecast estimates are
based on assumptions including those in relation to study costs, scope and duration, the approvals process and timeline estimated,
and operational issues, which are subject to uncertainty.
Any increase in capital/operating costs, study or development timelines, delays in obtaining any necessary approvals, supply chain
disruptions, sourcing of equipment and personnel could have an adverse impact on the Company’s performance. The Company
intends to develop a new operating regime for any future return to production, which reduces costs and maximises future cash
flows, however, there can be no guarantee that it will be successful in doing so and escalating costs and other factors such as
technical difficulties, geological conditions, adverse changes in government policy or legislation, or lack of access to sufficient
funding may mean that identified resources are not economically recoverable or may otherwise preclude the Company from
successfully exploiting the resources.
Water Supply and Management
The Company’s water supply is sourced from a borefield managed under the tenement conditions imposed by DMIRS. Due to the
presence of stygofauna in the borefield, trigger and action limits were imposed on the borefield which, if reached, necessitate the
implementation of the stygofauna action plan which requires supplementary water sources, reduced borefield drawdown, and
active exploration for a replacement borefield, which will require significant additional capital funding. Adequate alternate water
of a suitable quality is required to underpin future processing and there is no guarantee that such alternate water supply will be
found. Trigger and action levels have been reached at the borefield, with the appropriate measures being undertaken to source
alternative water of suitable quality.
Tailings storage facility (TSF)
The Company’s current TSF design requires lifts on a 15 to 18 month basis using dried tails as the construction material, with the
size of the cells resulting in a very tight turnaround time between construction and deposition commencement. Any delays with
commitment of capital and to construction may put production from the Mt Morgans’ Processing Facility at risk. A new TSF site is
likely to be required within 2 to 3 years which will require a suitable site to be identified, approvals, capital funding and
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
29
development. Any delays in development of a new TSF when required may lead to delays or cessation of production from the Mt
Morgans’ Processing Facility.
Mineral Resources and Ore Reserve Estimates
The estimation of Mineral Resources and Ore Reserves are expressions of judgement based on knowledge, experience and
industry practice. The reported estimates, which were valid when originally estimated, may alter significantly when new
information or techniques become available. As new information is obtained through additional drilling and analysis, Mineral
Resources and Ore Reserve estimates are likely to change. This may result in alterations to exploration, development and
production plans which may, in turn, positively or negatively affect the Company’s operations and financial position. In addition,
by their very nature, Mineral Resources and Ore Reserves estimates are imprecise and depend to some extent on interpretations,
which may prove to be inaccurate. Resource and Reserve estimates may also be impacted by material changes in the gold price,
in costs and changes to operations
The Company has estimated exploration targets for some of its exploration projects. Exploration targets are conceptual in nature
and there is insufficient information to establish whether further exploration will result in the determination of Mineral Resources
under the JORC Code. An exploration target is a statement or estimate of the exploration potential of a mineral deposit in a defined
geological setting where the statement or estimate, quoted as a range of tonnes and a range of grade, relates to mineralization
where there has been insufficient exploration to estimate a Mineral Resource under the JORC Code. Failure to convert exploration
targets into Mineral Resources or Ore Reserves may adversely affect the operations, financial position and/or performance of the
Company and the market price of its Shares.
Native Title
In areas where native title exists or may exist, the ability of the Company to acquire a valid mining lease may also be subject to
compliance with the ‘right to negotiate’ process under the Native Title Act. Compliance with this process can cause delays in
obtaining the grant of a mining lease and does not ultimately guarantee that a mining lease will be granted. Attaining a negotiated
agreement with native title claimants or holders to facilitate the grant of a valid mining lease can add significantly to the costs of
any development or mining operation.
Aboriginal Heritage
The ability of the Company to conduct activities on exploration or mining tenements is subject to compliance with laws protecting
Aboriginal heritage. Conduct of site surveys to ensure compliance can be expensive and subject to delays. If any Aboriginal sites
are located within areas of proposed exploration, mining or other activities, the Company’s ability to conduct those activities may
be dependent on obtaining further regulatory consents or approvals.
Tenement obligations
Tenements in Western Australia are governed by the Mining Act 1978 (WA). Each licence or lease is for a specific term and carries
with it annual expenditure and reporting commitments, as well as other conditions requiring compliance. Failure to meet these
expenditure, work and reporting commitments may render the tenements subject to forfeiture or result in the tenement holders
being liable for penalties or fees. Further, if any contractual obligations are not complied with when due, in addition to any other
remedies that may be available to other parties, this could result in dilution or forfeiture of Dacian’s interest in the projects.
Climate change and social risks
There are a number of climate-related factors that may affect the Company’s operations and proposed activities, including:
•
the emergence of new or expanded regulations associated with the transitioning to a lower-carbon economy and market
changes related to climate change mitigation. The Company may be impacted by changes to local or international compliance
regulations related to climate change mitigation efforts, or by specific taxation or penalties for carbon emissions or environmental
damage. These examples sit amongst an array of possible restraints on industry that may further impact the Company and its
profitability. While Dacian will endeavour to manage these risks and limit any consequential impacts, there can be no guarantee
that the Company will not be impacted by these occurrences; and
•
climate change may cause certain physical and environmental risks that cannot be predicted, including events such as
increased severity of weather patterns and incidence of extreme weather events and longer-term physical risks such as shifting
climate patterns. All these risks associated with climate change may significantly change the industry in which the Company
operates.
Establishment of strong relationships with the community and other stakeholders is fundamental to the long term success of the
business. Although the Company endeavours to conduct its business in a manner which respects those communities and ensures
mutually beneficial outcomes, its activities may have or be perceived to have an adverse impact on local communities, cultural
heritage, the environment, or other matters which may result in community concern, adverse publicity, activism, litigation or
other adverse actions taken by community, environmental or other action groups. Failure to maintain and build strong
relationships and such adverse actions could affect the Company’s social licence to operate, its reputation and lead to delays and
increase costs which may adversely impact on operations, financial position and/or performance and the market price of its
Shares.
30
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
DIRECTORS’ REPORT
Access and third-party interests
The Company may be required to obtain the consent from the holders of third-party interests which overlay areas within its
tenements, prior to accessing or commencing any exploration or mining activities on the affected areas. No assurance can be
given that necessary access will be obtained when required or on acceptable terms.
Environmental liabilities and Occupational Health and Safety risk
The Company’s activities are subject to potential risks and liabilities associated with the potential pollution of the environment
and the necessary disposal of mining waste products resulting from mineral exploration. Insurance against environmental risk
(including potential liability for pollution or other hazards as a result of the disposal of waste products occurring from exploration)
is not generally available to Dacian (or to other companies in the minerals industry) at a reasonable price. To the extent that the
Company becomes subject to environmental liabilities, the satisfaction of any such liabilities would reduce funds otherwise
available and could have a material adverse effect on the Company. Laws and regulations intended to ensure the protection of
the environment are constantly changing and are generally becoming more restrictive.
The mining industry has become subject to increasing occupational health and safety responsibility and liability. The potential for
liability is a constant risk. If the Company fails to comply with necessary OH&S legislative requirements, it could result in fines,
penalties and compensation for damages as well as reputational damage. Safety legislation may also change in a manner that may
include requirements, in addition to those now in effect, and a heightened degree of responsibility for companies and their
Directors and employees.
Economic risks
The operating and financial performance of the Company will be influenced by a variety of general economic and business
conditions, including levels of consumer spending, oil prices, inflation, interest rates and exchange rates, supply and demand,
industrial disruption, access to debt and capital markets and government fiscal, monetary and regulatory policies. More generally,
changes in general economic conditions may result from many factors including government policy, international economic
conditions, significant acts of terrorism, hostilities, war, pandemics or natural disasters. A prolonged deterioration in general
economic conditions, including an increase in interest rates or a decrease in consumer and business demand, could be expected
to have an adverse impact on the Company’s operating and financial performance and financial position.
Cyber risks
As with all organisations, the Company is reliant on information technology for the effective operation of its business. Any failure,
unauthorised or erroneous use of the Company’s information and/or information systems may result in financial loss, disruption
or damage to its reputation.
Significant Changes in the State of Affairs
During the 30 June 2023 financial year Genesis secured an 80.1% interest in Dacian and became Dacian’s ultimate controlling
entity. In March 2023 the Company announced completion of the transition from operations to explorer/developer with the
indefinite suspension of the Mt Morgans gold operations which have been placed into care and maintenance.
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
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.
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
31
Officer’s Indemnities and Insurance
During the year the Company has paid an insurance premium to insure certain officers including those of the Company. The
officers of the Company covered by the insurance policy include the Directors named in this report.
The Directors and Officers Liability insurance provides cover against all costs and expenses that may be incurred in defending civil
or criminal proceedings that fall within the scope of the indemnity and that may be brought against the officers in their capacity
as officers of the Company. The insurance policy does not contain details of the premium paid in respect of individual officers of
the Company. Disclosure of the nature of the liability cover and the amount of the premium is subject to a confidentiality clause
under the insurance policy.
The Company has not provided any insurance for an auditor of the Company.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the
Company, or to intervene in any proceedings to which the Group is a party, for the purpose of taking responsibility on behalf of
the Group for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Group with leave of the Court under section 237 of the
Corporations Act 2001.
Non-audit services
During the year 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.
A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act is attached to the
Directors’ Report.
Related Parties
On 21 September 2022, Genesis Minerals Limited secured a controlling interest in the Company and appointed three
representative directors to the Dacian Board. As announced on 15 November 2022 the two companies entered into a secondment
agreement and a management services agreement designed to leverage off each other’s resources to secure synergies across the
group. Any proposed arrangements with Genesis are completed on an “arm’s length basis” and on reasonable commercial terms
with protocols in place to manage conflicts of interest.
Rounding off
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.
32
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
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 this Remuneration Report.
Key Management Personnel
Details of the Key Management Personnel (“KMP”) of the Company and their movements during the year ended 30 June 2023 are
set out below:
Craig McGown
Sue-Ann Higgins
Morgan Ball
Gerard Kaczmarek
William Troy Irvin
Lee Stephens
Non-Executive Chairman – appointed 28 September 2022
Non-Executive Director
Non-Executive Director – appointed 28 September 2022
Non-Executive Director – appointed 28 February 2023
Non-Executive Director – appointed 2 May 2023
Non-Executive Director – appointed 28 September 2022, resigned 2 May 2023, and was appointed Chief
Operating Officer
Non-Executive Director – appointed 28 September 2022, resigned 28 February 2023
Non-Executive Director – resigned 28 September 2022
Non-Executive Director – resigned 28 September 2022
Anthony Kiernan
Michael Wilkes
Eduard Eshuys
Sonia Hamilton-Browne Chief Financial Officer and Company Secretary – appointed Company Secretary 30 March 2023 and Chief
Andrew Doe
Dale Richards
Derek Humphry
Financial Officer on 2 May 2023
Advisor to the Independent Directors – appointed 2 May 2023
General Manager, Geology and Exploration – Chief Executive Officer returned to General Manager,
Geology and Exploration 28 February 2023, ceased 30 June 2023
Interim Chief Executive Officer and Company Secretary - Chief Financial Officer and Company Secretary
appointed Interim Chief Executive Officer 28 February 2023, ceased 10 May 2023
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.
Fees payable to Non-Executive Directors are set by the Board 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.
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 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
33
Additional fees may be paid to Non-Executive Board members who are appointed to the Chair role of a Board subcommittee,
although this practice was suspended following the suspension of open pit mining activities and the pivot to exploration.
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.
Shareholding Qualifications
The Directors are not required to hold any shares in Dacian Gold Limited under the terms of the Company’s constitution.
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 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.
From 1 July 2023, following the transition and integration of employees to Genesis, the Company employs 5 Non-Executive
Directors and one part time employee in the role of advisor to the Independent Directors. Executive services are provided to the
Company by Genesis employees under a management services agreement.
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. Approves Executive Remuneration;
2.
Ensures that incentive plans are designed around appropriate and realistic performance targets and provide rewards when
those targets are achieved;
3.
Reviews and improves existing incentive plans established for employees; and
4. 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 has suspended its long-term and short-term incentive plans for Directors and Employees following the transition of
employees to Genesis.
Engagement of Executives
Lee Stephens – Chief Operating Officer
Mr Stephens is a full time executive of the ultimate controlling entity Genesis and provides services to the Company through a
management services agreement on an hours worked basis. Mr Stephens’ short term KPI’s are directly linked to a successful
restart of Mt Morgans Gold Operations, with his short-term and long-term incentive schemes the responsibility of the ultimate
controlling entity.
Andrew Doe –Advisor to the Independent Directors
Mr Doe is an experienced mining engineer who was appointed by the Independent Directors to advise on business matters where
conflicts of interest could be perceived to exist between Genesis and minority shareholder interests. Mr Doe has previously
worked for the Company and has a thorough understanding of the Company’s priorities.
Sonia Hamilton-Browne – Chief Financial Officer and Company Secretary
Ms Hamilton-Browne is a long-standing employee of the Company and an experienced Finance professional. She was promoted
to Chief Financial Officer on 2 May 2023 and Company Secretary on 30 March 2023 and received a salary of $242,000 per annum
plus 10.5% superannuation (Total Fixed Remuneration). From 1 July 2023 Ms Hamilton-Browne is a full-time employee of the
ultimate controlling entity Genesis and provides services to the Company through a management services agreement on an hours
worked basis.
34
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
DIRECTORS’ REPORT
Dale Richards – General Manager Geology and Exploration
Mr Richards was engaged as Chief Executive Officer until 28 February 2023 and received a salary of $462,545 per annum plus
10.5% superannuation (Total Fixed Remuneration). From 1 March 2023 Mr Richards resumed his position as General Manager
Geology and Exploration and received a salary of $370,000 per annum plus 10.5% superannuation (Total Fixed Remuneration).
Mr Richards employment was terminated by way of redundancy effective 30 June 2023, with his termination payment of eight
weeks’ notice, legislative redundancy provisions and accrued leave entitlements payable to Mr Richards in July 2023.
Derek Humphry – Interim Chief Executive Officer and Company Secretary
Mr Humphry was engaged as Chief Financial Officer until 28 February 2023 and received a salary of $400,200 per annum plus
10.5% superannuation (Total Fixed Remuneration). From 1 March 2023 Mr Humphry assumed the position of Interim Chief
Executive Officer with no adjustment to his salary.
Mr Humphry’s employment was terminated by way of redundancy effective 10 May 2023.
Voting and comments made at the Company’s 2022 Annual General Meeting (“AGM”)
At the last Annual General Meeting 99.75% of the shareholders voted to adopt the remuneration report for the year ended 30
June 2022. 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
2023
$’000
124,626
(62,662)
60,417
96,127
2022
$’000
223,665
(198,433)
110,000
88,976
2021
$’000
241,623
(7,501)
277,037
236,763
2020
$’000
270,047
(116,464)
162,642
244,756
2019
$’000
132,821
3,018
184,875
119,628
2023
$/share
2022
$/share
2021
$/share
2020
$/share
2019
$/share
Share Price
0.08
0.08
0.26
0.44
0.53
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.
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. The target opportunity for the Chief Executive Officer is 40% of base
salary and 30% of base salary for other Executive KMP. A summary of the KPI targets which were assessed on an annual basis for
FY23 and their respective weightings is as follows:
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
35
STI FY2023
KPI
1. ESG
2. Tonnage/
Throughput
3. Exploration
and Growth
Description of the
Objective
• There is a
reduction to the
rolling Total
Recordable Injury
Rate (TRIFR)
• There are no
material
environmental
regulatory non-
compliances
recorded or
reputational
damage.
• An Indigenous
training plan is
developed and
implemented;
employment is
maintained /
grown.
• 2.9mt of mill feed
is processed for
FY23 at target
recovery.
• Complete Jupiter
Drilling Program
within approved
budget and
schedule.
• Complete Jupiter
MRE (JORC 2012)
• Target delineation
of significant
greenfields targets
through field
geochem programs
%
30
Threshold (min) 50%
• TRIFR: <6.00
• Any recorded
environmental
incident is managed
and does not result
in in actions taken by
regulatory bodies or
reputational damage.
• An Indigenous
training plan is
developed.
Target
100%
• TRIFR: < 4.0
• Compliance with
environmental
license conditions
and there is no
reputational
damage.
An Indigenous
training plan is
developed and
implemented.
Outstanding (max)
150%
• TRIFR: < 3.0
• Compliance with
environmental license
conditions and there is
no reputational
damage.
• An Indigenous training
plan is developed and
implemented; and
indigenous
employment increases
by more than 2.
35
• 2.7mt at target
• 2.9mt at target
• 3.1mt at target
recovery (less 5%)
recovery
(budget)30%
recovery (plus 5%)
35
• 80*80 m RC 1,365m;
DD 4,030m,
completed by 1
November 2022
• 80*40m RC 3,450m;
DD 7,640m,
completed by 1 Feb
2023
• Complete Jupiter
MRE (JORC 2012) 30
March 2023
1 Geochem Anomaly
Target Defined
• 80*80m RC
1,365m; DD
4,030m, completed
by 1 October 2022
• 80*40m RC
3,450m; DD
7,640m, completed
by 20 December
2022
• Complete Jupiter
MRE (JORC 2012)
30 January 2023
2 Geochem Anomaly
Targets Defined
• 80*80m RC 1,365m;
DD 4,030m, completed
by 1 September 2022
• 80*40m RC 3,450m;
DD 7,640m, completed
by 20 November 2022
• Complete Jupiter MRE
(JORC 2012) 31 Dec
2022; Mineral
Resource estimate for
Jupiter open pit of
2.0moz
3 Geochem Anomaly
Targets Defined
Maximum Potential
100
Based on an assessment, STI payments for financial year 2023 to Executives were as follows:
Name
Dale Richards(i)
Dale Richards(ii)
Derek Humphry(iii)
Sonia Hamilton-Browne
Position
Chief Executive Officer
General Manager Geology and Exploration
Chief Financial Officer
Chief Financial Officer
Maximum STI
opportunity
40% of Base Salary
30% of Base Salary
30% of Base Salary
20% of Base Salary
% of STI
Achieved
75%
75%
75%
75%
Awarded
STI
$90,909
$27,750
$75,673
$24,875
(i) Dale Richards was Chief Executive Officer from 1 July 2022 to 28 February 2023
(ii) Dale Richards returned to the role of General Manager Geology and Exploration from 1 March 2023 to 30 June 2023
(iii) Derek Humphry was Chief Financial Officer until his appointment as Interim Chief Executive Officer from 28 February 2023 to 10 May 2023
36
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
DIRECTORS’ REPORT
Options over Unissued Shares
Nil options were granted during the 2023 financial year (2022: 300,000). 300,000 options lapsed during the 2023 financial year
(30 June 2022: 22,222,222). Dacian, Genesis, and the option holder executed an option cancellation deed under which Genesis
agreed to pay the option holder, a cash amount of $17,190 reflecting a Black & Scholes valuation of the options. The cancellation
of the options occurred in September 2022 upon Genesis securing 50% of Dacian shares and the offer being made unconditional.
The table below outlines movements in options during 2023. There were no options held by KMP at 30 June 2023.
The options were granted free of charge and were 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.
Name
Michael Wilkes
Total
Grant date
13/09/2021
Number of options held at
1 July 2022
300,000
300,000
Number Expired during the
year
(300,000)
(300,000)
Balance at the end of the
year
-
-
Exercise of Options Granted as Compensation
During the year, no shares were issued on cashless exercise of options previously granted as compensation.
Long-Term Incentives
Under the Dacian Gold Limited Employee Securities Incentive Plan, performance rights may be offered to executives to align
remuneration with the creation of shareholder wealth.
Performance Rights Granted under the Long-Term Incentive Scheme
No performance rights were issued to KMP during the 2023 financial year under the Dacian Gold Limited Employee Securities
Incentive Plan.
All Dacian Performance Rights vested and were exercised on the date that Genesis acquired a Relevant Interest in more than 50%
of Dacian Shares and the Offer was declared unconditional, subject to the holder remaining a Dacian employee at that time.
The table below outlines the movements in performance rights during the 2023 financial year and the balance held by each KMP
at 30 June 2023.
Name
Dale Richards
Derek Humphry
Total
Balance at
1 July 2022
1,017,426
1,111,073
2,128,499
Granted in
FY23
-
-
-
Vested and
Exercised
(1,017,426)
(1,111,073)
(2,128,499)
Lapsed
-
-
-
Balance at 30
June 2023
-
-
-
Maximum
value to
expense
-
-
-
Shares Granted as Remuneration
No shares were issued as remuneration during the financial year.
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
37
Remuneration Disclosures
The details of the remuneration of each Director and member of KMP of the Company for the years ending 30 June 2023 and 2022
are as follows:
Termination
benefits
Long-term
Share-based
payment
Options
/Rights (iii)
Total
Performance
Related
2023
Short-term
Cash
Salary (i)
Cash
Bonus (ii)
$
103,423
117,000
30,462
24,103
13,487
6,666
17,128
37,500
21,250
$
-
-
-
-
-
-
-
-
-
C McGown(iv)
S Higgins (v)
M Ball(vi)
L Stephens(vii)
G Kaczmarek(viii)
WT Irvin(ix)
A Kiernan(x)
M Wilkes(xi)
E Eshuys(xi)
Post
employment
Super-
annuation
$
6,397
8,925
3,198
2,531
1,416
700
1,799
3,750
2,231
D Richards(xii)
472,999
131,118
45,608
S Hamilton-Browne(xiii)
86,249
27,487
20,434
-
7,989
2,146
A Doe(xiv)
D Humphry(xv)
-
-
-
-
-
-
-
-
-
-
-
-
376,635
177,201
21,283
251,584
Long
Service
Leave
$
-
-
-
-
-
-
-
-
-
-
8,653
-
-
$
-
-
-
-
-
-
-
-
112,531
-
-
$
109,820
125,925
33,660
26,634
14,903
7,366
18,927
41,250
23,481
762,256
130,378
22,580
122,425
949,128
%
-
-
-
-
-
-
-
-
-
32.0
21.1
-
31.6
25.3
Total
1,327,336
335,806
107,973
251,584
8,653
234,956
2,266,308
(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
(iii) Share based payment expense is non-cash and represents an estimate of potential value. The fair value is allocated to each reporting period evenly over the
period from grant date to vesting date
(iv) Mr McGown was appointed Non-Executive Chairman on 28 September 2022 and received additional compensation for establishing independence protocols
and guiding the Company through the independence challenges in the first six months following Genesis securing control
(v) Ms Higgins received additional remuneration for the increased involvement in the Target Statement preparation
(vi) Mr Ball was appointed Non-Executive Director on 28 September 2022
(vii) Mr Stephens was appointed Non-Executive Director on 28 September 2022 and resigned on 2 May 2023 at which point he was appointed Chief Operating
Officer
(viii) Mr Kaczmarek was appointed Non-Executive Director on 28 February 2023
(ix) Mr Irvin was appointed Non-Executive Director on 2 May 2023
(x) Mr Kiernan was appointed Non-Executive Director on 28 September 2022 and resigned on 28 February 2023
(xi) Mr Wilkes and Mr Eshuys ceased 28 September 2022
(xii) Mr Richards left the Chief Executive Officer role on 28 February 2022 to focus on General Manager Geology and Exploration
(xiii) Ms Hamilton-Browne was appointed Company Secretary on 30 March 2023 and was promoted to Chief Financial Officer on 2 May 2023
(xiv) Mr Doe was appointed advisor to the Independent Directors on 2 May 2023
(xv) Mr Humphry was Chief Financial Officer and Company Secretary until 28 February 2023, when he assumed the role of Interim CEO with no salary adjustment.
He ceased employment 10 May 2023
38
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
DIRECTORS’ REPORT
2022
Short-term
Post
employment
Termination
benefits
Long-term
Cash Salary
(i)
$
93,818
100,000
10,679
109,807
561,621
Cash
Bonus
(ii)
$
-
-
-
-
-
M Wilkes (iv)
E Eshuys
S Higgins (vi)
R Reynolds(v)
L Junk(viii)
D Richards(vii)
396,140
35,524
D Humphry
J Howard(ix)
420,013
36,797
213,966
-
Super-
annuation
$
8,750
10,000
1,068
10,981
84,912
36,189
26,784
15,885
-
-
-
-
425,663
-
-
7,604
Long
Service
Leave
$
-
-
-
-
-
2,330
1,609
45,311
Share-based
payment
Options
/Rights (iii)
$
23,280
-
-
-
- (viii)
61,390
68,361
- (ix)
Total
Performance
Related
$
125,848
110,000
11,747
120,788
1,072,196
531,573
553,564
282,766
%
18.5
-
-
-
-
18.2
19.0
-
8.0
Total
1,906,044
72,321
194,569
433,267
49,250
153,031
2,808,482
(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 2022 relating to the June 2022 financial year are included
(iii) Share based payment expense is non-cash and represents an estimate of potential value. The fair value is allocated to each reporting period evenly over the
period from grant date to vesting date
(iv) Mr Wilkes was appointed Non-Executive Director on 10 September 2021 until his appointment as Non-Executive Chair on 23 March 2022
(v) Mr Reynolds resigned 23 March 2022
(vi) Ms Higgins was appointed Non-Executive Director on 17 May 2022
(vii) Mr Richards was appointed Chief Executive Officer on 16 June 2022
(viii) Mr Junk resigned 16 June 2022. Due to his resignation, there was a net credit balance of ($1,354,193) as a result of the reversal of previously expensed share
based payments expense from grant date to resignation date
(ix) Mr Howard resigned 21 January 2022. Due to his resignation, there was a net credit balance of ($36,002) as a result of the reversal of previously expensed
share based payments expense from grant date to resignation date
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
39
Shareholdings
No Directors hold shares in the Company. The number of shares in Genesis held during the financial year by KMP of the Company,
including their related parties, are set out below.
Name
Craig McGown
Sue-Ann Higgins
Morgan Ball(i)
Lee Stephens(i)
Gerry Kaczmarek(i)
William Troy Irvin(i)
Anthony Kiernan(i)
Michael Wilkes(i)
Dale Richards
Derek Humphry
Sonia Hamilton-Browne
Balance at start of
the year
-
Vested and issued as
remuneration
-
Purchases/(sales)
-
Balance at the end of
the year
-
-
748,007(ii)
263,031(iii)
430,468(iv)
1,410,247(v)
82,987(vi)
-
-
-
-
-
600,000
400,000
-
-
-
-
-
-
-
-
-
-
-
-
75,000
-
-
-
-
-
1,348,007
663,031
430,468
1,410,247
157,987(vii)
-(viii)
-
-
-
Andrew Doe
-
(i) Mr Ball, Mr Stephens and Mr Irvin are Executives of the ultimate controlling entity Genesis. Mr Kaczmarek, Mr Kiernan and Mr Wilkes are Non-Executive
-
-
-
Directors of the ultimate controlling entity.
(ii) Mr Ball – balance held at date of appointment as Non-Executive Director on 28 September 2022.
(iii) Mr Stephens – balance held at date of appointment as Non-Executive Director on 28 September 2022.
(iv) Mr Kaczmarek – balance held at date of appointment as Non-Executive Director on 28 February 2023.
(v) Mr Irvin - balance held at date of appointment as Non-Executive Director on 2 May 2023.
(vi) Mr Kiernan – balance held at date of appointment as Non-Executive Director on 28 September 2022.
(vii) Mr Kiernan – balance held at date of resignation as Non-Executive Director on 28 February 2023.
(viii) Mr Wilkes - balance held at date of resignation as Non-Executive Director on 28 September 2022.
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 2023, there have been no other transactions with, and no amounts are owing to or owed by KMP.
End of Remuneration Report
40
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
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 2023
Craig McGown
Independent Non-Executive Chair
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
41
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth, WA 6000
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 2023, 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 2023
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.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
Consolidated
30 June
2023
30 June
2022
Note
$’000
$’000
Revenue
Cost of goods sold
Gross (Loss)
Corporate employee expenses
Share-based employee expense
Borrowing and finance costs
Exploration
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
Total comprehensive (loss) for the year attributable to the
members of the parent entity
(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)
2
3
3
19
3
11
3
3
4
17
5
5
124,626
(124,874)
(248)
(2,623)
(515)
(644)
(16,603)
(2,873)
(39,156)
(62,662)
-
(62,662)
223,665
(253,377)
(29,712)
(3,963)
751
(1,694)
(24,157)
(3,223)
(125,395)
(187,393)
(11,040)
(198,433)
(62,662)
(198,433)
(5.2)
(5.2)
(19.3)
(19.1)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
43
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
Consolidated
30 June
2023
30 June
2022
Current assets
Cash and cash equivalents
Receivables
Inventories
Total current assets
Non-current assets
Property, plant and equipment
Exploration and evaluation assets
Mine properties
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Provisions
Borrowings
Total current liabilities
Non-current liabilities
Provisions
Borrowings
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Share-based payments reserve
Accumulated losses
Total equity
Note
7
8
9
10
11
12
13
14
15
14
15
17
17
17
$’000
25,381
1,386
29
26,796
55,592
26,384
6,216
88,192
114,988
7,314
260
2,618
10,192
39,750
4,629
44,379
54,571
60,417
503,201
3,679
(446,463)
60,417
$’000
17,464
3,797
21,391
42,652
72,786
54,454
11,805
139,045
181,697
28,490
1,559
4,944
34,993
29,216
7,488
36,704
71,697
110,000
489,247
4,594
(383,841)
110,000
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
44
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
Consolidated
Issued capital
$’000
Share reserve
$’000
Note
Accumulated
losses
$’000
Attributable to
owners of the
parent
$’000
457,099
5,346
(185,408)
277,037
Balance at 1 July 2021
Reported loss for the year
Total comprehensive loss for the year
Shares issued
Share issue transaction costs
Deferred tax on share issue costs
Performance rights forfeited
Options issued
Share-based payments expense
-
-
35,905
(1,728)
(2,029)
-
-
-
Balance at 30 June 2022
17
489,247
Reported loss for the year
Total comprehensive loss for the year
Shares issued
Share issue transaction costs
Performance rights exercised
Performance rights forfeited
Share-based payments expense
-
-
12,589
(25)
1,390
-
-
-
-
-
-
-
(2,273)
23
1,498
4,594
-
-
-
-
(1,390)
(40)
515
(198,433)
(198,433)
(198,433)
(198,433)
-
-
-
-
-
35,905
(1,728)
(2,029)
(2,273)
23
1,498
(383,841)
110,000
(62,662)
(62,662)
-
-
40
-
(62,662)
(62,662)
12,589
(25)
-
-
515
60,417
Balance at 30 June 2023
17
503,201
3,679
(446,463)
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
45
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
Consolidated
30 June
2023
30 June
2022
Note
$’000
$’000
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
Proceeds from sale of assets
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of share capital
Share issue transaction costs
Repayment of borrowings
Proceeds from borrowings
Transaction costs associated with borrowings
Repayment of lease liabilities
Net cash from 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
124,266
1,000
360
(75)
(16,664)
(103,987)
4,900
(4,721)
(1,923)
2,080
(4,564)
12,589
(25)
(2,000)
-
(8)
(2,975)
7,581
7,917
17,464
25,381
223,126
40
538
(738)
(17,056)
(174,091)
31,819
(64,748)
(2,619)
9
(67,358)
35,905
(1,776)
(30,196)
16,000
(280)
(2,592)
17,061
(18,478)
35,942
17,464
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
46
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Contents
Basis of Preparation ................................................................................................................................................... 48
Performance for the Year .......................................................................................................................................... 50
Segment Information ............................................................................................................................ 50
Note 1
Revenue ................................................................................................................................................. 50
Note 2
Expenses ................................................................................................................................................ 50
Note 3
Income Tax ............................................................................................................................................ 53
Note 4
Earnings per Share ................................................................................................................................. 54
Note 5
Dividends ............................................................................................................................................... 54
Note 6
Operating Assets and Liabilities ................................................................................................................................. 54
Cash and Cash Equivalents .................................................................................................................... 54
Note 7
Receivables ............................................................................................................................................ 55
Note 8
Inventories ............................................................................................................................................. 55
Note 9
Property, Plant and Equipment ............................................................................................................. 56
Note 10
Note 11
Exploration and Evaluation Assets ........................................................................................................ 57
Note 12 Mine Properties ..................................................................................................................................... 58
Trade and Other Payables ..................................................................................................................... 60
Note 13
Note 14
Provisions .............................................................................................................................................. 60
Capital Structure, Financial Instruments and Risk ..................................................................................................... 62
Borrowings and Finance Costs............................................................................................................... 62
Note 15
Financial Instruments ............................................................................................................................ 62
Note 16
Note 17
Issued Capital and Reserves .................................................................................................................. 65
Other Disclosures ....................................................................................................................................................... 65
Deferred Tax .......................................................................................................................................... 65
Note 18
Share-Based Payments .......................................................................................................................... 67
Note 19
Contingencies ........................................................................................................................................ 69
Note 20
Related Party Disclosures ...................................................................................................................... 69
Note 21
Key Management Personnel ................................................................................................................. 70
Note 22
Auditor’s Remuneration ........................................................................................................................ 71
Note 23
Events Subsequent to the Reporting Date ............................................................................................ 71
Note 24
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
47
Basis of Preparation
Dacian Gold Limited (“Dacian” or the “Company”) is a 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 2023.
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.
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.
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 2023. The consolidated entity
has not yet assessed the impact of these new or amended Accounting Standards and Interpretations.
48
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Going Concern
These financial statements have been prepared on the basis, that the entity is a going concern, which contemplates the continuity
of normal business activities and the realisation of assets and discharge of liabilities in the normal course of business.
At 30 June 2023, the Company has completed its transition from operations to explorer/developer and the Group had a cash
balance of $25.4 (2022: $17.5M), had a net working capital balance of $20.7M (2022: $7.7M) and incurred a net loss of $62.7M
(2022: $187.4M).
While no assurances can be given about the future ability to finance the Group’s activities, the Directors believe, given the quality
of the Groups assets, and with the support of its major shareholder Genesis, the Company can, if required, raise future funds to
pursue its business strategy and meet its obligations as and when they fall due.
Should the Company not be able to raise funds to pursue its business strategy, it may be required to reduce or curtail its work
programs, realise assets and discharge liabilities other than in the ordinary course of business, and at amounts that differ from
those stated in the financial statements and that the financial report does not included any adjustment relating to the
recoverability and classification of recorded asset amounts or liabilities that might be necessary should the entity not continue as
a going concern.
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 21.
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.
The Notes to the Financial Statements
The notes include information which is required to understand the financial statements and is material and relevant to the
operations and the financial position and performance of the Group. Information is considered relevant and material if, for
example:
•
•
•
•
the amount is significant due to its size or nature;
the amount is important for understanding the results of the Group;
it helps to explain the impact of significant changes in the Group’s business; or
it relates to an aspect of the Group’s operations that is important to its future performance.
The notes are organised into the following sections:
•
•
•
•
Performance for the year;
Operating assets and liabilities;
Capital structure and risk;
Other disclosures.
A brief explanation is included under each section.
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
49
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 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
2023
30 June
2022
$’000
124,266
360
124,626
$’000
223,126
539
223,665
The Group enters into gold forward sale contracts and put options to manage the gold price of a proportion of gold sales. As at 30
June 2023 there were no gold forward sale contracts and put options in place.
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
30 June
2023
30 June
2022
$’000
93,480
2,902
22,518
5,974
124,874
$’000
157,263
5,555
22,011
68,548
253,377
Depreciation & Amortisation
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
Useful Life
3 - 4 years
50
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Computer equipment & software
Motor Vehicles
Plant and equipment
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
Key estimates and assumptions
Unit-of-production method of depreciation/amortisation
30 June
2023
30 June
2022
$’000
22,518
538
5,974
29,030
$’000
22,011
521
68,548
91,080
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.
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.
Unwind of rehabilitation and restoration provision
Transaction costs
Interest expense on lease liabilities
Interest expense on borrowings
Interest (income)
30 June
2023
30 June
2022
$’000
1,210
37
383
14
(1,000)
644
$’000
290
461
457
526
(40)
1,694
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
51
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
Profit on Sale of Assets
Impairment loss on assets
30 June
2023
30 June
2022
$’000
1,912
339
167
205
2,623
4,146
538
(1,811)
2,873
$’000
2,978
333
283
369
3,963
2,702
521
-
3,223
Genesis Minerals Limited (Genesis) acquired a controlling interest in Dacian in September 2022. Genesis accounted for the
transaction as a business combination in accordance with AASB 3 Business Combinations. This required Genesis to undertake a
fair value assessment of the assets and liabilities of Dacian at the date of control.
Genesis advised the Dacian Board that the Purchase Price Accounting assessment of fair value of the Dacian plant and equipment
was materially higher than the Dacian carrying value. Dacian, in accordance with accounting principles, carries plant and
equipment assets at the lower of cost and written down value. As a standalone reporting entity Dacian cannot, under the current
Australian Accounting Standards, recognise the uplift attributed by Genesis to the Mt Morgans plant and equipment.
Genesis advised the Dacian Board that its fair value assessment of the Dacian exploration and evaluation assets and mine
properties resulted in a materially lower value than the Dacian carrying value of these assets. The Dacian Board reviewed the fair
value assessment and in accordance with Australian Accounting Standards, Dacian, as an entity which will be consolidated with
Genesis as the parent company, is required to impair the carrying value of the exploration and evaluation assets and the mine
properties assets to their fair value where that fair value is lower than their carrying value.
Consequently in December 2022, Dacian booked an impairment of the carrying value of exploration and evaluation assets by $28.1
million (refer note 11) and impairment of mine properties of $11.1 million (refer note 12).
Impairment loss on assets
Exploration and evaluation assets
Mine properties
Note
11
12
30 June
2023
30 June
2022
$’000
28,070
11,086
39,156
$’000
49,050
76,345
125,395
52
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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:
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
Note
3
30 June
2023
$’000
30 June
2022
$’000
(8,697)
-
8,697
-
-
-
(1,933)
13,070
(97)
11,040
At 30 June 2023 the value of tax losses (on a gross basis not tax effected) was made up of unrecognised operating tax losses of $388 million (30
June 2022: $359 million), and unrecognised capital tax losses totalling $1.5 million (30 June 2022: $1.5 million). 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
(c) Reconciliation of consolidated income tax expense to prima facie tax payable
30 June
2023
$’000
30 June
2022
$’000
-
2,029
30 June
2023
$’000
30 June
2022
$’000
Accounting profit/(loss) from continuing operations before income tax
expense
(62,662)
(187,393)
Tax at the Australian rate of 30% (2022: 30%)
Non-deductible expenses
Capital raising costs claimed
Temporary differences brought to account
Tax losses derecognised as deferred tax assets
Current year tax losses not recognised
Adjustment in respect of previous year(i)
Income tax expense / (benefit) reported in Profit or Loss and Other
Comprehensive Income
(18,798)
157
(771)
10,715
8,697
-
-
-
(56,218)
(218)
(769)
44,872
13,070
10,400
(97)
11,040
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
53
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
2023
30 June
2022
Cents
(5.2)
(5.2)
$’000
Cents
(19.3)
(19.1)
$’000
(Loss) / profit after tax from continuing operations
(62,662)
(198,433)
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
Weighted average number of ordinary shares adjusted for the effect of
dilution
No.
No.
1,085,077,063
125,830,540
910,625,572
119,118,471
1,210,907,603
1,029,744,043
1,210,907,603
1,029,744,043
Note 6 Dividends
No dividends were paid or proposed during the financial year ended 30 June 2023 (30 June 2022: nil).
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 15).
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
30 June
2023
30 June
2022
$’000
25,381
25,381
$’000
17,464
17,464
At 30 June 2023, $199,888 (30 June 2022: nil) was reserved on deposit as Restricted Cash with Australia and New Zealand Banking
Group Limited in respect of a cash backed bank guarantee. There were no other amounts included in cash and cash equivalents
that are held in reserve as at 30 June 2023.
54
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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 (profit)/loss on sale of assets
Impairment losses on assets
Bank facility fees
Share-based payments expense
Unwind of rehabilitation interest
Inventory NRV adjustment
Movement in assets and liabilities:
(Increase)/decrease in receivables
(Increase)/decrease in inventories
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
2023
30 June
2022
$’000
(62,662)
29,030
(1,768)
39,156
8
515
1,210
-
2,224
17,045
-
(1,604)
(18,254)
4,900
$’000
(198,433)
91,080
25
125,395
280
(751)
290
52
336
(2,029)
11,040
286
4,248
31,819
During the year ended 30 June 2023 there were nil non-cash transactions (30 June 2022: nil).
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
2023
30 June
2022
$’000
208
544
634
1,386
$’000
2,723
787
287
3,797
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.
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
55
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 2023
balance sheet date are classified as current assets, all other inventories are classified as non-current.
In line with the suspension of mining and transition to explorer, all ore had been processed and there were no inventory balances
at 30 June 2023.
ROM inventory (i)
Crushed ore
Gold in circuit
Gold dore
Mine spares and stores – at cost(ii)
30 June
2023
30 June
2022
$’000
-
-
-
-
29
29
$’000
5,752
1,114
6,189
3,673
4,663
21,391
(i)
(ii)
At 30 June 2023 the Mt Morgans operations were in care and maintenance. Remaining low grade stocks at the site have no attributed accounting value.
$4.3 million balance of spare parts associated with the processing plant was transferred to Plant and Equipment at 30 June 2023.
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.
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 a lease contract for 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 2023 is $6.5 million (30 June 2022: $8.9
million). Further information about the leases for which the Group is a lessee is presented in the table below.
56
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Office
Equip &
Fixtures
$’000
Computer
Equip. &
Software
$’000
Motor
Vehicles
$’000
Plant &
Equipment
$’000
Leased
Equipment
$’000
Capital
WIP
$’000
Total
$’000
293
(202)
91
137
-
-
-
-
(46)
91
293
(156)
137
155
-
(30)
70
(58)
137
2,678
(2,156)
522
2,521
(1,974)
547
788
-
(12)
61
-
(315)
522
654
-
(78)
220
-
(249)
547
2,631
(1,843)
788
3,048
(2,394)
654
381
-
(3)
658
(248)
788
163
-
-
660
(170)
654
134,570
(87,501)
47,069
59,660
-
(222)
3,195
4,320
(19,885)
47,069
129,966
(70,306)
59,660
77,680
-
(1)
1,489
(19,508)
59,660
19,221
(12,742)
6,479
884
-
884
160,167
(104,575)
55,592
8,902
138
-
-
-
(2,561)
6,479
2,645
1,715
-
(3,476)
-
-
884
72,786
1,853
(312)
-
4,320
(23,056)
55,592
19,084
(10,182)
8,902
2,645
-
2,645
157,667
(84,881)
72,786
10,522
930
-
-
(2,549)
8,902
643
4,879
-
(2,877)
-
2,645
89,544
5,809
(34)
-
(22,533)
72,786
Year ended 30 June 2023
Cost
Accumulated depreciation
Net Book Value
Movements
Opening net book value
Additions
Disposals
Transfers
Transfers from Stores
Depreciation expense
Closing net book value
Year ended 30 June 2022
Cost
Accumulated depreciation
Net Book Value
Movements
Opening net book value
Additions
Disposals
Transfers
Depreciation expense
Closing net book value
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.
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
57
Deferred exploration costs at the start of the financial year
Impairment
30 June
2023
30 June
2022
$’000
54,454
(28,070)
26,384
$’000
103,504
(49,050)
54,454
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.
The recoverable amount of the exploration and evaluation assets was determined based on fair value assessment completed by
controlling shareholder Genesis in its purchase price accounting assessment at the time Genesis secured a controlling interest in
Dacian being September 2022. The assessment of fair value was determined based on a market approach using comparable
trading resource multiples for listed ASX junior explorers implied from trading market caps as at the acquisition date, and by
reference to comparable transaction resource multiples for similar exploration assets with uncertain timing of access to
infrastructure. In December 2022, an impairment of $28.1 million was recognised against the exploration asset.
Key Estimates and Assumptions
Impairment of exploration and evaluation assets
The future recoverability of capitalised exploration and evaluation expenditure is dependent upon a number of factors, including
whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration
and evaluation asset through sale.
Factors that could impact future recoverability include the level of reserves and resources, future technological changes which
could impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and changes to
commodity prices.
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future, profits
and net assets will be reduced in the period in which the determination is made.
Exploration commitments
The Group has certain obligations for payment of tenement rent, shire rates and to perform minimum exploration work on mineral
leases held. These obligations may vary over time, depending on the Group’s exploration programmes and priorities.
Note 12 Mine Properties
Accounting Policies
Mine Properties Under Development
Mine properties under development represents the costs incurred in preparing mines for production and includes plant and
equipment under construction and operating costs incurred before 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.
58
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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.
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
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.
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
59
Mine Properties
Cost
Impairment
Accumulated amortisation
Net book value
Movements
Opening carrying amount
Additions
Impairment
Change in rehabilitation provision
Amortisation expense
Closing net book value
30 June
2023
30 June
2022
$’000
$’000
173,562
(87,431)
(79,915)
6,216
11,805
1,843
(11,086)
9,628
(5,974)
6,216
162,091
(76,345)
(73,941)
11,805
95,606
61,006
(76,345)
86
(68,548)
11,805
Key Estimates and Assumptions
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 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 14 Provisions
Accounting Policy
Rehabilitation and Restoration
30 June
2023
30 June
2022
$’000
299
7,015
7,314
$’000
4,170
24,320
28,490
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
60
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
other circumstances. Cost estimates are not reduced by the potential proceeds from the sale of assets or from plant clear-up
closure.
Employee Benefits
The provision for employee benefits represents annual leave and long service leave entitlements accrued by employees.
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits and accumulating sick leave that are expected to be settled
wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect
of the employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the
liabilities are settled.
Long service leave
The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned
in return for their service up to reporting date, plus related on costs. The benefit is discounted to determine its present value and
the discount rate is the yield at the reporting date on high-quality corporate bonds that have maturity dates approximating the
terms of the Group’s obligations.
Current:
Employee leave liabilities
Non-current:
Employee leave liabilities
Rehabilitation provision
Provision for rehabilitation
Balance at the start of the financial year
Rehabilitation costs incurred during the year
Provisions recognised during the year
Unwinding of discount
Balance at the end of the financial year
30 June
2023
$’000
260
260
73
39,677
39,750
28,838
-
9,628
1,211
39,677
30 June
2022
$’000
1,559
1,559
378
28,838
29,216
28,463
(112)
197
290
28,838
Dacian’s rehabilitation and closure cost estimate was prepared by an independent third party in June 2021. Given the ongoing
industry cost inflation and in conjunction with Genesis’ purchase price allocation work, the Group considers it prudent to recognise
an increase in contingency on total closure cost estimate to reflect uncertainties and cost volatility.
Key Estimates and Assumptions
Rehabilitation Obligations
The provision for rehabilitation and restoration costs is based on the net present value of the estimated cost of restoring the
environmental disturbance that has occurred up to the reporting date. Significant estimates and assumptions are made in
determining the provision for mine rehabilitation as there are numerous factors that will affect the ultimate liability payable.
These factors include an estimate of the extent and costs of rehabilitation activities, technological changes, regulatory changes,
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.
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
61
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 15 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 14.
Current
Insurance premium funding liability
Lease Liabilities
Bank Loan
Non-Current
Lease Liabilities
Bank loan
30 June
2023
30 June
2022
$’000
-
2,618
-
2,618
4,629
4,629
$’000
185
2,759
2,000
4,944
7,488
7,488
During the year ended 30 June 2023 the debt facility held with Australia and New Zealand Banking Group Limited was fully repaid
and the security released.
Note 16 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.
62
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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:
2023
Trade & other payables
Lease liabilities
2022
Trade & other payables
Insurance premium funding liability
Lease liabilities
Bank Loan(ii)
Carrying
amount
$’000
7,314
7,247
Contractual
cash flows
$’000
6 months
or less
6-12
months
1-2
years
2-4
years(i)
$’000
$’000
$’000
$’000
7,314
7,658
14,561
14,972
28,491
185
10,247
2,000
40,923
28,491
185
11,053
2,039
41,768
7,314
1,435
8,749
23,959
185
1,612
2,039
27,795
-
1,431
1,431
4,532
-
1,529
-
6,061
-
4,792
4,792
-
-
3,063
-
3,063
-
-
-
-
-
4,849
-
4,849
(i) There are no amounts currently maturing beyond 30 June 2026
(ii) Bank loan fully repaid during the current financial year
(c) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, commodity prices and equity
prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management
is to manage and control market risk exposures within acceptable parameters, while optimising any return.
Commodity Price Risk
The Group’s exposure to commodity price risk arises largely from Australian dollar gold price fluctuations. The Group’s exposure
to movements in the gold price is managed through the use of Australian dollar gold forward contracts. The gold forward sale
contracts do not meet the criteria of financial instruments for accounting purposes on the basis that they meet the normal
purchase/sale exemption because physical gold will be delivered into the contract. Further information relating to these forward
sale contracts is included in note 2. No sensitivity analysis is provided for these contracts as they are outside the scope of AASB 9
Financial Instruments.
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
63
Interest rate risk
The Group’s exposure to interest rate risk mainly arises from borrowings which are held at variable rates. At the reporting date,
the Group had the following exposure to interest rate risk on financial instruments.
Variable rate instruments
Cash and cash equivalents
Borrowings
Foreign Currency/Equity risk
Carrying amount ($)
30 June
2023
30 June
2022
$’000
25,381
-
25,381
$’000
17,464
(2,000)
15,464
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
2023
30 June
2022
$’000
254
(254)
-
-
$’000
175
(175)
(20)
20
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.
64
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
Note 17 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
2023
30 June
2022
30 June
2023
30 June
2022
Issued share capital
1,216,800,938
1,085,077,063
503,201
No.
No.
$’000
Share movements during the year
Balance at the start of the financial year
Share issue(i)
Exercise of performance rights (non-cash)
Less share issue costs
Deferred tax on share issue costs
1,085,077,063
123,910,441
910,625,572
174,451,491
489,247
12,589
7,813,434
-
-
-
-
-
1,390
(25)
-
Balance at the end of the financial year
1,216,800,938
1,085,077,063
503,201
$’000
489,247
457,099
35,905
-
(1,728)
(2,029)
489,247
30 June 2023
30 June 2022
issued capital on exercise of
Balance at the beginning of the year
Profit / (Loss) profit for the year
Transfer to
performance rights
Transfer to accumulated losses due to market
conditions not met
Options issued during the year
Share-based payments for the year
Accumulated
losses
$’000
(383,841)
(62,662)
-
40
-
-
Share-based
payments
reserve (i)
$’000
4,594
-
(1,390)
(40)
-
515
Accumulated
losses
$’000
(185,408)
(198,433)
-
-
-
-
Balance at the end of the year
(446,463)
3,679
(383,841)
Share-based
payments
reserve
$’000
5,346
-
-
-
23
(775)
4,594
(i) The share-based payments reserve recognises the fair value of options over unissued shares and performance rights provided to employees and Key
Management Personnel
Other Disclosures
This section provides information on items which require disclosure to comply with Australian Accounting Standards and other
regulatory pronouncements.
Note 18 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.
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
65
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.
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
Deferred tax liabilities
Trade & other receivables
Inventories
Property, plant and equipment
Net deferred tax assets
Movement in temporary differences during the year:
30 June
2023
30 June
2022
$’000
67
1,669
2,171
(46)
(4)
(3,857)
-
$’000
198
6,650
2,898
(141)
(329)
(9,276)
-
Trade and other receivables
Inventories
Property, plant & equipment
Trade & other payables
Provisions
Borrowings
Balance
30 June 2022
$’000
Recognised in
income
$’000
Recognised in
Equity
$’000
Balance
30 June 2023
$’000
(141)
(329)
(9,276)
198
6,650
2,898
-
95
325
5,419
(131)
(4,981)
(727)
-
-
-
-
-
-
-
-
(46)
(4)
(3,857)
67
1,669
2,171
-
The value of tax losses (gross basis not tax effected) available to the Group at 30 June 2023 for income tax purposes is $389.5
million, which comprises (for accounting) unrecognised operating tax losses totalling $388 million and unrecognised capital tax
losses totalling $1.5 million (30 June 2022: operating tax losses $358.9 million and $1.5 million 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.
66
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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 19 Share-Based Payments
Accounting Policy
The Group has provided benefits to employees (including senior executives) of the Group in the form of share-based incentives,
whereby employees render services in exchange for options and shares (equity-settled transactions).
There is currently a plan in place to provide these benefits, the Dacian Gold Limited Employee Option Plan, which provides benefits
to Executive Directors and other employees.
The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments
at the date at which they are granted. The fair value is determined by using an appropriate valuation model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price
of the underlying Shares to which the equity instrument relates (market and non-vesting conditions) if applicable. The cost of
equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the
performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to
the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects:
the extent to which the vesting period has expired; and
(i)
(ii) the Group’s best estimate of the number of equity instruments that will ultimately vest.
No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included
in the determination of fair value at grant date. The statement of profit or loss charge or credit for a period represents the
movement in cumulative expense recognised as at the beginning and end of that period.
No expense is recognised for share-based incentives that do not ultimately vest, except for incentives where vesting is only
conditional upon market and non-vesting conditions.
If the terms of a share-based incentive are modified, as a minimum, an expense is recognised as if the terms had not been modified.
In addition, an expense is recognised for any modification that increases the total fair value of the incentive, or is otherwise
beneficial to the employee, as measured at the date of modification.
If a share-based incentive is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet
recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled incentive and
designated as a replacement award on the date that it is granted, the cancelled incentive and new awards are treated as if they
were a modification of the incentive, as described in the previous paragraph.
The Group provides benefits to employees (including Executive Directors) of the Group through share-based incentives.
Information relating to these schemes is set out below.
Recognised share-based payments expense
Share based payment expense(i)
Total share-based payments expense
30 June
2023
30 June
2022
$’000
515
515
(i) During the year $164,000 of performance rights expense was reversed as a result of forfeiture of the underlying rights
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
$’000
(751)
(751)
67
Dacian Gold Limited Employee Securities Incentive Plan
The Dacian Gold Limited Employee Securities Incentive 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 nil options over unissued shares were issued pursuant to the Company’s Employee Option Plan (30 June
2022: 300,000).
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 cancelled during the year(i)
Options issued during the year
Options outstanding at the end of the year
30 June 2023
30 June 2022
No.
WAEP
No.
WAEP
300,000
-
(300,000)
-
-
$0.28
-
$0.28
-
-
22,222,222
(22,222,222)
-
300,000
300,000
$0.27
$0.27
-
$0.28
$0.28
(i) – Dacian, Genesis and Mr Wilkes executed an option cancellation deed under which Genesis agreed to pay Mr Wilkes, a cash amount of $17,190 reflecting a
Black & Scholes valuation of the options. The cancellation of the options was to occur subject to Genesis securing 50% of Dacian shares and the offer being made
unconditional. These conditions were met in September 2022 and the options cancelled.
b) Subsequent to the reporting date
No options have been granted subsequent to the reporting date and to the date of signing this report.
c) Weighted average contract life
The weighted average contractual life for vested and un-exercised options is nil months (30 June 2022: 50.5 months).
Performance Rights
During the financial year ended 30 June 2023, nil performance rights (30 June 2022: 10,617,758) were issued to employees,
pursuant to the terms of the Plan.
The movement in weighted average fair value (“WAFV”) appears in the table below:
30 June 2023
30 June 2022
No.
WAFV
No.
WAFV
Rights outstanding at the start of the year
Rights issued during the year
Rights vested during the year(i)
Rights forfeited during the year
10,189,570
-
(7,813,434)
(2,376,136)
$0.52
-
$0.18
$0.17
12,582,585
10,617,758
-
(13,010,773)
Rights outstanding at the end of the year
-
-
10,189,570
$0.36
$0.15
-
$0.07
$0.52
(i) During the year 7,813,434 rights vested as a result of the Genesis Minerals Limited takeover offer and converted to ordinary shares in the company (30 June
2022: nil)
68
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
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 20 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 21 Related Party Disclosures
(a) Controlled Entities
Parent Entity
Dacian Gold Limited
Subsidiaries
Dacian Gold Mining Pty Ltd
Mt Morgans WA Mining Pty Ltd
Redcliffe Project Pty Ltd
(b) Parent Entity
Ownership Interest
2023
%
2022
%
100
100
100
100
100
100
Financial statements and notes for Dacian Gold Limited, the legal parent entity, are provided below:
Financial position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Shareholders’ equity
Issued capital
Share-based payments reserve
Accumulated losses
Total equity
Financial performance
Loss for the year
Other comprehensive (loss) / income
Total comprehensive loss
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
Parent
30 June 2023
$’000
30 June 2022
$’000
16,157
50,165
66,322
5,905
-
5,905
503,201
3,679
(446,463)
60,417
(62,622)
-
(62,622)
12,364
106,674
119,038
8,716
322
9,038
489,247
4,594
(383,841)
110,000
(126,625)
-
(126,625)
69
Commitments
The parent entity had lease commitments of $0.3 million at 30 June 2023 (30 June 2022: $0.5 million) relating to the lease of the
Group’s Perth office. The Company has established a $150,000 cash backed bank guarantee for security.
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries.
Pursuant to ASIC Corporations (Wholly owned Companies) Instrument 2016/785, Dacian and its wholly owned subsidiaries
entered into a deed of cross guarantee on 23 May 2022 (the Guarantee). The effect of the Guarantee is that Dacian has guaranteed
to pay any deficiency in the event of winding up of any controlled entity which is a party to the Guarantee or if they do not meet
their obligations under the terms of any debt subject to the Guarantee. The controlled entities which are parties to the Guarantee
have given a similar guarantee in the event that Dacian is wound up or if it does not meet its obligations under the terms of any
debt subject to the Guarantee.
(c) Transactions with related parties
In September 2022 Genesis secured a controlling interest in Dacian and appointed three representative directors on the Dacian
Board. As announced on 15 November 2022 the two companies entered a secondment agreement and a management services
agreement designed to leverage off each other’s resources to secure synergies from the group. During the year ended 30 June
2023 Dacian invoiced Genesis $1,514,000 under these arrangements and Genesis invoiced Dacian $454,000 under these
arrangements. In addition, during April 2023 Dacian completed closure of the Westralia underground operations and engaged an
independent valuer/auctioneer to complete an inventory of surplus Westralia underground assets. This independent party was
engaged to negotiate the sale of these surplus assets for fair value to Genesis realising $2.1 million.
Note 22 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:
Non-Executive Chairman
Craig Mc Gown
Non-Executive Director
Sue-Ann Higgins
Non-Executive Director
Morgan Ball
Non-Executive Director
Gerard Kaczmarek
Non-Executive Director
William Troy Irvin
Lee Stephens(i)
Non-Executive Director
Non-Executive Director
Anthony Kiernan
Non-Executive Director
Michael Wilkes
Non-Executive Director
Eduard Eshuys
Dale Richards(ii)
Chief Executive Officer
Sonia Hamilton-Browne Chief Financial Officer
Andrew Doe
Derek Humphry(iii)
Leigh Junk
Robert Reynolds
James Howard
Advisor to the Independent Directors
Chief Executive Officer
Managing Director & CEO
Non-Executive Director
Chief Operating Officer
appointed 28 September 2022
appointed 28 September 2022
appointed 28 February 2023
appointed 2 May 2023
appointed 28 September 2022, resigned 2 May 2023
appointed 28 September 2022, resigned 28 February 2023
resigned 28 September 2022
resigned 28 September 2022
appointed 16 June 2022, ceased 28 February 2023
appointed 2 May 2023
appointed 2 May 2023
appointed 28 February 2023, ceased 10 May 2023
resigned 16 June 2022
resigned 23 March 2022
resigned 21 January 2022
(i)
(ii)
Lee Stephens was appointed Chief Operating Officer on 2 May 2023
Dale Richards was appointed Chief Executive Officer on 16 June 2022. He subsequently returned to his former role of General Manager Geology and
Exploration on 28 February 2023 until his employment was terminated by way of redundancy on 30 June 2023
(iii) Derek Humphry was Chief Financial Officer until his appointment as Interim Chief Executive Officer on 28 February 2023 and ceased on 10 May 2023
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.
70
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
(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 23 Auditor’s Remuneration
BDO Audit (WA) Pty Ltd
Audit and review of financial statements
Total
Note 24 Events Subsequent to the Reporting Date
30 June
2023
$
1,663,142
234,956
8,653
251,584
107,973
2,266,308
30 June
2022
$
1,978,365
153,031
49,250
433,267
194,569
2,808,482
175,515
175,515
101,119
101,119
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 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
71
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 2023 and of its performance
for the year then ended; and
complying with Australian Accounting Standards, the Corporations Regulations 2001, professional reporting
requirements and other mandatory requirements.
b. There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
c. The financial statements and notes thereto are in accordance with International Financial Reporting Standards issued by
the International Accounting Standards Board.
This declaration has been made after receiving the declarations required to be made to the Directors in accordance with Section
295A of the Corporations Act 2001 for the financial year ended 30 June 2023.
This declaration is signed in accordance with a resolution of the Board of Directors.
DATED at Perth this 31st day of August 2023
Craig McGown
Independent Non-Executive Chair
72
Dacian Gold Limited 2 0 2 3 A n n u a l F i n a n c i a l R e p o r t
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth, WA 6000
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 2023, 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 2023 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 (including Independence Standards) (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. We have determined the matters described below to be the key
audit matters to be communicated in our report.
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.
Accounting for Property, Plant and Equipment
Key audit matter
How the matter was addressed in our audit
The Group’s carrying value of property, plant and
Our audit procedures included, but were not limited
equipment, as disclosed in Note 10 to the financial
to:
report was a key audit matter as the carrying value of
property, plant and equipment is impacted by various
estimates and judgements, in particular the following:
• Useful lives;
•
Evaluating the Group’s depreciation policy in
accordance with Australian Accounting
Standards and relevant accounting
interpretations;
Fair value assessments; and
•
Agreeing the inputs that were used in the
•
•
Depreciation rates.
Furthermore, as the carrying value of property, plant
and equipment represents a significant asset of the
Group, we considered it necessary to assess whether
any facts or circumstances exit to suggest that the
carrying amount of these assets exceed their
recoverable amounts.
calculation of the depreciation rates to
supporting documentation;
•
Testing the mathematical accuracy and
application of the depreciation rates applied
to the carrying values of plant and
equipment by recalculating depreciation for
the year;
•
Assessing the competency and objectivity of
the experts used by management to
determine fair value assessments of the
plant and equipment;
•
Evaluating whether there were any indicators
of impairment under the Australian
Accounting Standards; and
•
Assessing the adequacy of the related
disclosures in Note 10 to the financial report.
Recoverability of Exploration and Evaluation Assets
Key audit matter
How the matter was addressed in our audit
As disclosed in Note 11 to the financial report, the
Our procedures included but were not limited to:
carrying value of capitalised exploration and evaluation
expenditure represents a significant asset of the
Group. Further, the group recorded an impairment
charge of $28.1m at 30 June 2023 against exploration
& evaluation expenditure.
The impairment of the Group’s exploration &
evaluation expenditure required management to make
significant accounting judgements and estimates
including the future recoverability of capitalised
exploration and evaluation expenditure.
In accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources (AASB 6), the
recoverability of exploration and evaluation
expenditure requires significant judgment by
management in determining whether there are any
facts or circumstances that exist to suggest that the
carrying amount of this asset may exceed its
•
Obtaining a schedule of the areas of interest
held by the Group and assessing whether the
rights to tenure of those areas of interest
remained current at balance date;
•
Considering the status of the ongoing
exploration programmes in the respective
areas of interest by holding discussions with
management, and reviewing the Group’s
exploration budgets, ASX announcements and
directors’ minutes;
•
Considering whether any such areas of
interest had reached a stage where a
reasonable assessment of economically
recoverable reserves existed;
•
Considering whether any facts or
circumstances existed to suggest impairment
recoverable amount. As a result, this is considered a
testing was required;
key audit matter.
•
Reviewing publicly available market reports
against managements impairment assessment
for exploration and evaluation asset; and
•
Assessing the adequacy of the related
disclosures in Note 3 and Note 11 to the
Financial Report.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2023, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the 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.
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 at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.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 33 to 40 of the directors’ report for the
year ended 30 June 2023.
In our opinion, the Remuneration Report of Dacian Gold Limited, for the year ended 30 June 2023,
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 2023
Additional Information
As at 29 August 2023
Twenty Largest Shareholders
Name
GENESIS MINERALS LIMITED
GENESIS MINERALS LIMITED
ARGONAUT SECURITIES (NOMINEES) PTY LTD
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