DGO Gold Limited
ABN 96 124 562 849
Annual Report for the financial year ended 30 June 2016
1
TABLE OF CONTENTS
Corporate Directory
Directors’ report
Remuneration report
Auditor’s independence declaration
Consolidated statement of profit and loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the financial statements
Directors’ declaration
Independent auditors’ report
Unaudited additional ASX and other information as at 15 August 2016
Tenements held
3
4
13
18
19
20
21
22
23
44
45
47
48
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Corporate Directory
Directors:
Mr. E. Eshuys (Executive Chairman)
Mr. M. J. Ilett (Director)
Mr. R. C. Hutton (Non-Executive Director)
Company secretary and chief
financial officer
Mr. M. J. Ilett
Registered office and
principal administrative office:
27 General Macarthur Place
Redbank Qld 4301
Share registry:
Auditors:
Lawyers:
P.O. Box 294
Carole Park Qld 4300
Telephone: + 61 7 3381 5368
Facsimile: + 61 7 3381 5365
Link Market Services Limited
Level 15, ANZ Building
324 Queen Street
BRISBANE QLD 4000
Postal Address:
GPO Box 2537
BRISBANE QLD 4001
Telephone: 1300 554 474
Telephone: + 61 2 8280 7454 (overseas)
Facsimile: + 61 2 8280 0303
BDO Audit Pty Ltd
Level 10
12 Creek Street
BRISBANE QLD 4000
Telephone: + 61 7 3237 5999
Facsimile: + 61 7 3221 9227
McCullough Robertson Lawyers
Level 11, Central Plaza Two
66 Eagle Street
BRISBANE QLD 4000
Telephone: + 61 7 3233 8888
Facsimile: + 61 7 3229 9949
Stock exchange listings:
DGO Gold Limited shares are quoted on ASX Limited (ASX Code: DGO).
Website:
ABN:
www.dgogold.com.au
96 124 562 849
3
Directors’ report
The Directors of DGO Gold Limited (“the Company”, “DGO”) submit herewith the annual report of DGO Gold Limited
and its subsidiary Yandan Gold Mines Pty Ltd (“Consolidated Entity” or “Group”) for the financial year ended 30 June
2016. In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows:
Information about Directors and the Company Secretary
The names and particulars of the Directors and the Company Secretary of the Company during or since the end of the
financial year are:
Mr. Eduard Eshuys BSc, FAusIMM, FAICD (Executive Chairman)
Eduard, aged 71 is a geologist with several decades of exploration experience in Australia. His successes as Joseph
Gutnick’s exploration director are well known. In the late 1980s and early 1990s he led the teams that discovered the
Plutonic, Bronzewing and Jundee gold deposits, and the Cawse Nickel Deposit. He has also had involvement in the
Maggie Hays and Mariners nickel discoveries in the 1970’s. More recently he was the Managing Director and CEO of St
Barbara Limited from July 2004 to March 2009. During this time St Barbara Limited grew substantially as a gold
producer.
During the past three years Mr. Eduard Eshuys has also served as director of Apex Minerals NL (Receivers and
Managers Appointed)(In Liquidation) from 19 April 2012 to date.
Mr. Eduard Eshuys joined the Company on 15 July 2010 as Executive Chairman with responsibility for the corporate
governance, exploration activities, administration, board conduct and leadership. As Chairman he will ensure that the
Company maintains a well-balanced, suitably qualified, focused and motivated management team working for the
benefit of all shareholders. Mr. Eduard Eshuys is a member of the Remuneration and Nomination Committee.
Mr. Brice K. Mutton BSc (Appl Geology) UNSW, FAusIMM, FAIG, MSEG (Former Non-Executive Director resigned
20 July 2015)
Brice, aged 65, is a geologist with over 30 years’ experience in the resources industry, from exploration to mining and
corporate management. Brice gained 20 years’ experience in a range of positions with MIM Group Holdings. He was
Chief Geologist at Hilton and Mount Isa Mines from 1988 to 1992. He was Executive Assistant to the CEO, MIM
Holdings from 1992 to 1994, Deputy General Manager, MIM Petroleum Exploration 1995 to 1996 and General Manager
Exploration Support MIM Exploration from 1996 to 1998. During this time he represented MIM and industry
associations nationally and internationally. In between periods with MIM from 1979 to 1983 he worked on major mining
and civil engineering projects in Australasia with Snowy Mountains Engineering Corporation and Golder Associates. He
was Managing Director of Giants Reef Mining from 1998 to 2000. More recently he has consulted to the resources
industry through Brice Mutton & Associates. During the past three years Mr. Brice Mutton has also served as Non-
Executive Director Cusesta Coal Limited (27 September 2003 to date) and Non-Executive Director Apex Minerals
Limited (Receivers and Managers Appointed)(In Liquidation) from 19 April 2012 to 30 April 2014.
Mr. Brice K. Mutton was appointed as Executive Director Exploration from 5 April 2007 until 31 May 2008. He provided
consulting services as Exploration Manager from 1 June 2008 to 12 September 2008, becoming a Non-Executive
Director on the 13 September 2008. Mr. B. K. Mutton from 1 August 2014 is the registered Senior Site Executive (SSE)
for the company’s Mining Leases and exploration tenements, and responsible for the management of the field
operations at its Mt Coolon base. Brice was a member of the Remuneration and Nomination Committee and Audit
Committees and a non-executive director until 20 July 2015.
Mr. Ross C. Hutton B. Eng (Min), MAusIMM (Non-Executive Director)
Ross, aged 68, is a Mining Engineer with over 45 years’ experience in the minerals industry ranging from mining to
project management in technical and executive management roles. He has worked in corporate and consultative roles
managing activities from feasibility studies to operations both in Australia and internationally. He was appointed Non-
Executive Director on 5 April 2007. Hutton is the Chairman of the Audit Committee and Remuneration and Nomination
Committee.
During the past three years Mr. Ross C. Hutton has also served as Non-Executive Director Kagara Limited (in
Liquidation) from 2003 to date, Non-Executive Director Apex Minerals Limited (Receivers and Managers Appointed)(In
Liquidation) (in Liquidation) from 19 April 2012 to 3 December 2012 and Non-Executive Director Mungana Goldmines
Limited from 17 July 2009 to 24 October 2014.
4
Mr. Michael J. Ilett BBus(Accy), GradDipAdvAcctg, GradDipCorpGov, MBA, ACIS, CPA, CA (Director, Company
Secretary and Chief Financial Officer)
Michael, aged 50, is a Chartered Accountant and a member of Chartered Institute of Company Secretaries in Australia.
In 2003, Mr. Michael J. Ilett was awarded the MBA Medallion from the Queensland University of Technology and in
2004 was awarded the J. S. Goffage Prize from Chartered Secretaries Australia Limited. Michael has over 25 years’
commercial experience and was the former Company Secretary and Chief Financial Officer for Gold Aura Limited and
Union Resources Limited. He has provided a key role in the listing of exploration companies on the ASX, capital
raisings, corporate governance, administration and the duel listing of an Australian public company on the Alternative
Investment Market (AIM). Michael Ilett was appointed as a Director and a member of the Remuneration and Nomination
Committee and Audit Committees on 20 July 2015.
The above named directors held office during the whole of the financial year and since the end of the financial year
except for:-
• Mr. Brice K. Mutton – resigned on 20 July 2015
• Mr. Michael J. Ilett – appointed on 20 July 2015
Principal activities
The Consolidated Entity’s principal activities in the course of the financial year were to consider a number of
opportunities to acquire or joint venture exploration tenements with particular emphasis on gold, copper and zinc
exploration.
The Group made tenement applications for gold located in Sediment Hosted Gold Deposits (SHGD) based on research
undertaken by the Company with CODES at the University of Tasmania. The research has focused on identifying
districts in which SHGD’s could occur in rocks in Australia that are of comparable geologic age to those of SHGD
elsewhere in the world.
Operating Results
The net loss from operations of the Consolidated Entity for the year ended 30 June 2016 was $871,690 (2015: net loss
$977,306).
Review of Operations
The Group has continued to implement the strategy of greenfield exploration for sediment hosted gold deposits in
Australia utilising research having been undertaken by CODES at the University of Tasmania over the past decade in
conjunction with the analysis of the geological databases of federal and state government agencies.
The pyrite database developed by CODES over the past 10 years has identified the geologic times when the world’s
oceans were enriched in gold and other metals. Furthermore, gold in sediment-hosted deposits is considered to be
sourced from the sediments of the sedimentary basins. The key initial step is the identification of gold enriched
sedimentary basins. Identifying structural settings conducive to the development of ore deposits, such as deep-seated
structures and anticlines within sedimentary basins then become the target.
DGO has secured promising land holdings in key target areas in Western Australia and South Australia. The Company
now holds tenure (under joint venture, application or grant) covering 3,175 km2 across Western Australia, in the Eastern
Goldfields, Yerrida Basin and the Pilbara, and in South Australia at Mt Barker, Dawson and Yerelina.
Sediment Hosted Gold and Base Metals, Yerrida Basin
The Exploration Licence applications are located approximately 100km north of Meekatharra in Western Australia and
cover the highly prospective Proterozoic Yerrida Basin Juderina, Johnson Cairn and Maraloou Formations.
The Juderina Formation consists of sandstone, shale, siltstone, conglomerate and chert and is overlain by the shale and
siltstone of the Johnson Cairn Formation. The Geological Survey of Western Australia (GSWA) estimate that the
geological age of these formations range from 1600 to 2500Ma, the “right“ age for the occurrence of sediment hosted
gold mineralisation as indicated by the research by CODES at the University of Tasmania.
The Juderina Formation overlies the basement Archaean granites to the west and south west of the tenements. The
Narracoota Volcanics, part of the Bryah sedimentary basin separated from the Yerrida Basin Juderina and Johnson
Cairn Formations by the deep seated Goodin Fault, occur to the east and north of the tenements. The Narracoota
Volcanics host Sandfire Resources’ DeGrussa Copper Gold Mine and Sandfire Resources/Talisman Mining’s recent
Monty copper gold discovery
DGO’s holding have been divided in to the Johnson Cairn Target, consisting of the granted TasEx joint venture
tenement and three wholly owned exploration licence applications, and the Maraloou Target, consisting of five wholly
owned exploration licence applications. See Figure 1 below.
5
Figure 1: Yerrida / Bryah Basin Geology with DGO’s Holdings
Johnson Cairn Target for Sediment Hosted Gold
The Johnson Cairn Target holdings consist of the granted TasEx joint venture tenement and three wholly owned
exploration licence applications. These tenements predominantly cover Johnson Cairn and Juderina Formation
sediments in the western portion of the Yerrida Basin, proximal to the northern margin of the Archaean Yilgarn Craton.
Particular focus is the contact between the pyritic black shales and siltstone of the Johnson Cairn Formation and the
basal Juderina Formation sediments.
Drill targets have been identified within the TasEx joint venture based on the identification of anomalous gold values
from previous surface sampling which are coincident with gold nugget occurrences proximal to the highly prospective
contact between the Johnson Cairn and Juderina Formations. Multiple targets have been identified adjacent to this
contact, including a strike length of 2.5km within the center of the tenement. These targets have been defined in
Formations which have been identified by the research at CODES to be of the “right” age for sediment hosted gold
mineralisation
The Johnson Cairn Formation, as outlined in figure 2 below, consisting of pyritic black shales and siltstone overlies the
basal Juderina Formation which consists of sandstone, shale, siltstone, conglomerate and chert and overlies the
Archaean granites.
6
The abundance of pyrite mineralisation in the carbonaceous shales of the Johnson Cairn Formation as intersected by
Enterprise Metals Limited drilling to the north east of the TasEx joint venture (as reported to the ASX in October 2013) is
regarded by DGO as an important indicator of the prospectivity of the Johnson Cairn Formation.
Figure 2: Johnson Cairn Target, Mineral Occurrences, Gold-in-soil Anomalism
Maraloou Target for Sediment Hosted Gold
The Company has applied for a further six full sized exploration licences covering approximately 1,294 km2 in the
Proterozoic Yerrida Basin, an area that is highly prospective for sediment hosted gold and base metal mineralization
(Juderina, Johnson Cairn and Maraloou Formations). These applications increase the Company’s holdings in the
Yerrida Basin, located approximately 100km north and east of Meekatharra in Western Australia, to 1,550km2.
The Maraloou Target holdings consist of five exploration licence applications that cover the prospective contact between
the Juderina and Maraloou Formations, formations which are of the “right” age for the occurrence of sediment hosted
gold mineralisation as indicated by the research by CODES. The stratigraphic and lithological similarity between the
Maraloou Formation and the host sequence of the high grade copper mineralisation at the Monty and Degrussa
deposits, as described by Sandfire Resources Limited, also identifies the gold base of the Maraloou Formation as a high
priority target which has been highlighted in a research report by Dr. Stuart Bull commissioned by the Company.
7
The Maraloou Formation, which overlies the Juderina Formation and is estimated to be about 1800Ma by GSWA,
consists of siltstone, ferruginous shale (in part calcareous) with basal intercalated tholeiitic basalt pillow lava and
dolerite sills.
The exploration licence applications as outlined in figure 3 below are proximal to the Yerrida Basin margins, within 10km
of the northern margin of the Archaean Yilgarn Craton and adjacent to the Goodin Dome basement high, highlighting
the potential for buried basement highs beneath the sedimentary basin which are considered to be an important factor
in the development of sediment hosted gold deposits.
Base metal occurrences, including Cu, Pb, Zn, Co, Ni, plus minor precious metal occurrences have been recorded
within the Maraloou Formation. The Magellan Lead deposit is located about 50km east of DGO’s southern exploration
licence applications. Lead occurrences in the Magellan region are located proximal to the contact between the Juderina
and Maraloou Formations
The compilation and review of all past exploration data across DGO’s Maraloou Target holdings identified that a number
of major companies considered that the Maraloou and Juderina Formations were prospective for gold and base metal
mineralisation. However past exploration, consisting of geophysical surveys, regional to prospect scale surface
sampling and limited predominantly shallow drilling, is considered inadequate in terms of testing the potential, largely
due to the alluvium obscuring the prospective sediments of the “right” geological age.
DGO has commenced a comprehensive review of all available geophysical data across the Maraloou Target to assist in
identifying basin highs and deep seated structures within the basin. In addition DGO is compiling past surface sampling
data to assist in identifying discrete geochemical anomalism adjacent to the basal contact of the Maraloou Formation
and integrating this data with the interpretation of the past geophysical exploration data.
Figure 3: Yerrida / Bryah Basin with DGO’s Holdings Relative to all Tenure
Sediment Hosted Gold in the Black Flag Group of the Eastern Goldfields WA
The discovery of Invincible by Gold Fields Australia in 2012 on the edge of Lake Lefroy at Kambalda, St Ives and Baloo
by Sirius Resources NL in 2015 has confirmed the prospectivity of the Black Flag Group (BFG) sediments, which have
largely been ignored in the past, due to the focus of exploration on the mafic rocks, basalts and dolerites.
8
DGO has established land holdings at Mt Edwards, Ora Banda and Black Flag (refer figure 4 below), with application for
tenements in areas where BFG sediments are largely covered by overburden or transported younger sediments and
consequently remain to be effectively explored. The Ora Banda tenements, consisting of 11 Prospecting Licenses,
have been granted and an additional Exploration Licence application was lodged adjacent to the regionally significant
Zuleika Shear at Mt Edwards.
Aphrodite
Ora Banda
Paradigm
Black Flag
Invincible
Mt. Edwards
20 km N
DGO Gold Tenements
Baloo
Figure 4 Eastern Goldfields Western Australia
Review of open file data over the applications at Black Flag has identified an anomalous gold zone, defined from broad
spaced lines of predominantly shallow aircore drilling, that extends to the NNW for over 3.0km of strike, with limited
follow up aircore / RC / diamond drilling having been completed. The majority of intersections occur in saprolite above
black flag bed sediments, with zones of up to 60m of clay / saprolite cover. Previous exploration and drilling targets are
outlined in figure 5 below.
9
Figure 5: Black Flag, Previous exploration and drill target
South Australian Sukhoi Log Analogue Targets
Exploration Licence applications at Mt Barker (refer figure 6 below) and Dawson (refer figure 7 below) in South
Australia, which cover a combined area of 331km2, have been recommended for grant. These applications now cover
entirely the sediment hosted gold deposit targets identified by CODES in South Australia consisting of anticlinal
structures within geological sequences which are age analogues of the giant Sukhoi Log deposit in eastern Russia and
are paralleling a gold mineraliaation structure to the south.
10
Figure 6: Mt Barker South Australia (the tenements outlined in red covers the CODES target)
f
Mt Grainger
Goldfield
Figure 7: The Dawson CODES Target (DGO tenements marked red)
11
There is known gold mineralisation in the vicinity of both Mt Barker and Dawson. Compilation and review of available
past exploration data within the target areas has commenced
Future Activities
Drill targets have been identified at Johnson Cairn Target in the Yerrida Basin and Black Flag in the Eastern Goldfields
of WA. Drilling in the December Quarter 2016 will follow obtaining the necessary regulatory approvals.
Gold and copper geochemistry targets have been identified adjacent to the basal contact of the Maraloou Formation
within the Yerrida Basin. These targets have not been adequately tested in the past.
DGO’s greenfield exploration strategy is based on the research by CODES at UTAS and using sediment hosted gold
deposit analogues to target Australian sedimentary basins within the peak gold geologic times, in conjunction with the
analysis of the geological data bases of the federal and state government agencies. In the past Australian gold
exploration has not focused on sediment hosted gold
Changes in state of affairs
During the financial year, the Company disposed of 50 million quoted shares in GBM Resources Limited for a total cash
consideration of $600,000.
On 17 September 2015, the Company completed a share placement of a total of 64,500 fully paid ordinary shares at an
issue price of $0.30 (30 cents) per share to the directors or their nominees as approved by shareholders at general
meeting of the Company.
On 13 November 2015, the Company issued 392,000 fully paid ordinary shares at an issue price of $0.25 (25 cents) per
share pursuant to a Share Purchase Plan.
Other than above there was no significant change in the state of the affairs of the consolidated entity during the financial
year.
Subsequent Events
On 25 July 2016 Yandan Gold Mines Pty Ltd received $28,382 from the Australian Taxation Office representing interest
income of $113 and the income tax refund of $28,269 relating to the research and development activities for the 2015
financial year.
On 27 July 2016 the Company received $235,524 from the Australian Taxation Office representing interest income of
$3,364 and the income tax refund of $232,160 relating to the research and development activities for the 2015 financial
year.
Other than the above, there has been not been any mater or circumstance occurring subsequent to the end of the
financial year that has significantly affected or may significantly affect the operations of the consolidated entity, the
results of those operations, or the state of affairs of the consolidated entity in future financial year.
Health and Safety Policy
The Company is committed to developing a culture which supports the health and safety of all employees, contractors,
customers and communities associated with its business and operations.
Environmental regulations
The Company is subject to the particular and significant environmental regulation under the law of the Commonwealth
or of a state or Territory relating to the tenements that are granted. So far as the Directors are aware, there have been
no material breaches of the Group’s licenses and all exploration activities have been undertaken in compliance with the
relevant environmental regulations.
Dividends
No dividends have been paid or proposed since the start of the financial year, and the Directors do not recommend the
payment of a dividend in respect of the financial year.
Shares under option or issued on exercise of options
There were no options on issue at the date of this report.
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Indemnification of Directors and Officers
During the financial year, the Company paid a premium in respect of Directors’ and Officers’ Insurance insuring the
Directors and Officers of the Company against a liability incurred as a Director and Officer to the extent permitted by the
Corporations Act 2001.
The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. The
Company has not otherwise, during or since the end of the financial year, except to the extent permitted by law,
indemnified or agreed to indemnify an Officer or auditor of the Company or of any related body corporate against a
liability incurred by such an Officer or auditor.
Directors’ meetings
The following table sets out the number of Board of Directors’ Meetings (including Directors’ approvals requiring
circulating resolutions), Remuneration & Nomination Committee Meetings and Audit Committee Meetings held during
the financial year and attendance at such meeting by each Director and member of the committee.
Directors
Mr. E. Eshuys (i)
Mr. B. K. Mutton (ii)
Mr. R. C. Hutton
Mr. M. J. Ilett (ii)
Board of Directors
Held
17
1
17
17
Attended
17
1
17
17
Remuneration
& Nomination
Committee
Held
1
-
1
1
Attended
1
-
1
1
Audit Committee
Held
2
-
2
2
Attended
2
-
2
2
(i) Mr. E. Eshuys is not a member of the Audit Committee.
(ii) Mr. B. K. Mutton resigned as a director on 20 July 2015 and Mr. M. J. Ilett was appointed on the same date.
Directors’ shareholdings
The following table sets out each Director’s direct and indirect interest and relevant interest in fully paid ordinary shares
in the Company as at the date of this report:
Directors
Mr. E. Eshuys
Mr. R. C. Hutton (i)
Mr. M. J. Ilett
Fully paid
ordinary shares
Number (i)
863,284
449,673
32,847
Mt Coolon Mines
Trust holding (ii)
Total shares held
(beneficial interest)
Relevant
Interest
-
69,753
-
863,284
470,599
32,847
863,284
519,426
32,847
Fully ordinary shares held excluding those held in in the Mt Coolon Gold Mines Trust (MCGMT)
(i)
(ii) The MCGMT holds 69,753 fully paid ordinary shares in the Company. Mr. R. C. Hutton holds a beneficial interest of approximately of 30%
in the MCGMT and a relevant interest in all the shares in MCGMT.
Remuneration report
The Remuneration Report, which forms part of the Directors’ Report, sets out the information about the remuneration of
the Group’s key management personnel and relevant Group executives for the financial year ended 30 June 2016. The
term key management personnel relates to those persons having the authority and responsibility for planning, directing
and controlling the activities of the consolidated entity directly or indirectly including any director (whether executive or
otherwise) of the consolidated entity. The prescribed details for each person covered by this remuneration report are
detailed below under the following headings:-
A. Key management personnel and relevant group executives’ details
B. Remuneration policy for key management personnel
C. Relationship between remuneration policy and company performance
D. Remuneration of the key management personnel and relevant group executives
E. Key terms of employment contracts
13
A.
Key management and relevant group executives’ details
The following persons acted as directors of the Company during or since the end of the financial year:
• Mr. E. Eshuys (Executive Chairman) appointed on 15 July 2010;
• Mr. R. C. Hutton (Non-Executive Director) appointed on 5 April 2007;
• Mr. B. K. Mutton (Non-Executive Director) appointed on 5 April 2007 and was Exploration Manager until 12
September 2008. He became a Non-Executive Director on 13 September 2008 and resigned on 20 July 2015.
• Mr. M. J. Ilett (Executive Director, Company Secretary and Chief Financial Officer) who was appointed on 5
April 2007 and was appointed as an Executive Director on 20 July 2015.
Mr. M. J. Ilett who retires by rotation will be eligible to be re-elected as a Director at the next Annual General Meeting.
B.
Remuneration policy for key management personnel
The Board of Directors is responsible for determining and reviewing compensation arrangements for key management
personnel. The Remuneration and Nomination Committee makes recommendations to the Board on performance and
remuneration of the key management personnel.
Executive Remuneration
Contracts for services for the executive members of the key management personnel are reviewed on a regular basis to
ensure that they properly reflect the duties and responsibilities of the individuals concerned. The executive
remuneration is based on a number of factors including length of service, relevant market conditions, knowledge and
industry experience, organisational experience, performance of the Company and competitive factors within the
industry. There is no guaranteed pay increases included in senior executives' contracts. The executives are not
entitled to any retirement benefits other than those provided for under the key terms of the employment contracts as
outlined below.
The Company has formulated a set of criteria for the performance review of the key executives. During the financial
year, the Remuneration and Nomination Committee held a performance review for the Chairman, Non-Executive
Directors and key executives and recommendations were made to and adopted by the Board. The senior executive
consisting of Mr. E. Eshuys and Mr. M. J. Ilett have the opportunity to participate in executive decision making and make
regular reports to the Board. The senior executives have an understanding of the Company’s financial position,
strategies, operations and risk management policies and an undertaking of their respective rights, duties,
responsibilities, and the roles of board and senior executives.
Directors
The Directors’ Fees are reviewed on a regular basis against industry benchmarks. The Directors received no equity-
based payments during the year. Other than compulsory payments made under the superannuation guarantee
legislation there have been no retirement benefits provided to the Directors.
C. Relationship between remuneration policy and company performance
The performance of the Company is considered in setting remuneration policy. DGO Gold Limited’s performance in the
exploration industry will be dependent upon the Company meeting the following corporate objectives:-
•
•
•
conducting exploration that discovers major gold and base metal deposits;
seeking long term cash flow and profitability through the development of its tenements; and
actively pursuing acquisition opportunities in the Drummond Basin and elsewhere.
The table below sets out summary information about the Consolidated Entity’s earning and movements in shareholders
wealth for the five years to 30 June 2016:
Description
30 June 2016
30 June 2015
30 June 2014
30 June 2013
30 June 2012
Interest revenue and other income
Loss for the year from continuing
operations
Loss for the year from
discontinued operations
Net loss before tax
Net (loss)/profit after tax
Share price at start of year (i)
Share price at end of year (i)
Share-based payments
Return of capital
Basic profit/(loss) per share (i)
Diluted profit/(loss) per share (i)
261,995
3,299
4,346
358,973
1,061,452
(871,690)
(741,521)
(346,363)
-
(871,690)
(871,690)
20 cents
20 cents
-
-
(15 cents)
(15 cents)
(235,785)
(977,306)
(977,306)
20 cents
20 cents
-
-
(20 cents)
(20 cents)
(4,286,147)
(4,636,316)
(4,632,510)
30 cents
20 cents
100,000
-
(122 cents)
(122 cents)
(5,581,860)
(5,103,895)
80 cents
30 cents
-
-
(217 cents)
(217 cents)
-
(261,783)
1,454,859
55 cents
80 cents
34,070
-
62 cents
62 cents
The calculation of the basic loss per share and share price has been made on the basis of the 100:1 share consolidation that was approved
by shareholders on 17 September 2015 applied to all the financial years in the comparison table.
(i)
(ii)
14
D. Remuneration of directors and senior management
The following table provides information about the remuneration of the Consolidated Entity’s directors and senior
management during the 30 June 2016 year:
Short-term employee benefits
Salary
& fees
$
Bonus
$
Non-
monetary
$
Other
$
Post-
employment
benefits
Super-
annuation
$
Other long-
term
employee
benefits
Share-
based
payment
Total
$
$
$
100,000
45,000
2,250
123,213
270,463
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,500
4,275
214
4,097
18,086
-
-
-
-
-
-
-
-
109,500
49,275
2,464
127,310
288,549
2016
Executive chairman
Mr. E. Eshuys
Non-executive directors
Mr. R. C. Hutton
Mr. B. K. Mutton (i)
Executive director and
Company Secretary
Mr. M. J. Ilett (ii), (iii)
Total
(i) Mr. B. K. Mutton resigned as a non-executive director on 20 July 2015.
(ii) Mr. M. J. Ilett was appointed a director on 20 July 2015.
(iii) Salary & fees includes $80,088 representing consulting fees (net of Goods and Services Tax) paid to Kaus Australis Pty Ltd a related party
of Mr. M. J. Ilett.
The following table provides information about the remuneration of the Consolidated Entity’s directors and senior
management during the 30 June 2015 year:
2015
Executive chairman
Mr. E. Eshuys (i),
Non-executive directors
Mr. R. C. Hutton (i)
Mr. B. K. Mutton (i), (ii)
Company secretary
Mr. M. J. Ilett (iii)
Short-term employee benefits
Salary
& fees
$
Bonus
$
Non-
monetary
$
Other
$
Post-
employment
benefits
Super-
annuation
$
Other long-
term
employee
benefits
Share-
based
payment
Total
$
$
$
137,500
45,000
49,024
107,800
339,324
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12,350
5,275
5,344
-
22,969
-
-
-
-
-
-
-
-
-
-
149,850
50,275
54,368
107,800
362,293
(i)
The amount described in “Salary and fees” includes Directors’ Fees and Salary excludes a total of $160,000 owing to Mr. E. Eshuys, Mr. B.
K. Mutton and Mr. R. C. Hutton from the previous financial year which was paid during the year ended 30 June 2016.
(ii) The amount disclosed in “Short term employee benefits – other” for Mr. B. K. Mutton of $4,024 Mr B. K. Mutton’s consulting fees were paid
to his company Brice Mutton & Associates Pty Ltd.
(iii) Salary & fees includes $107,800 representing consulting fees (net of Goods and Services Tax) paid to Kaus Australis Pty Ltd a related party
of Mr. M. J. Ilett.
Bonus and share-based payments granted as compensation for the current financial year
There were no bonuses or share based payments granted a compensation for the current financial year.
Key management personnel equity holdings
Fully paid ordinary shares of DGO Gold Limited held directly or indirectly at end of financial year:
Balance
at
beginning
of year
No.
Result of
100:1
consolidation
Granted as
compensation
(iii)
No.
No.
Received
on
exercise
of options
No.
Net other
change
Balance
at the end
of the year
Relevant
interest
Balance
held
nominally
No.
No.
No.
No.
2016
Mr. E. Eshuys (i), (ii)
Mr. R. C. Hutton (i),
(ii), (iii)
Mr. M. J. Ilett (ii)
2015
Mr. E. Eshuys
Mr. B. K. Mutton (iv)
Mr. R. C. Hutton (iii)
Mr. M. J. Ilett
66,327,322
663,284
33,565,339
1,284,627
335,599
12,847
-
-
-
-
-
-
200,000
863,284
863,284
135,000
20,000
470,599
32,847
519,426
32,847
-
-
-
-
(i) On 14 October 2015 the Company made a placement of 140,000 fully paid ordinary shares (on a post consolidation basis) at an issue price
of $0.30 per share to Resource Surveys Pty, a related party of Mr. E. Eshuys and 75,000 fully paid ordinary shares (on a post consolidation
basis) at an issue price of $0.30 per share to Sheratan Pty Ltd, a related party of Mr. R. C. Hutton.
66,327,322
20,138,947
38,442,420
1,284,627
35,000,000
10,000,000
15,000,000
-
66,327,322
21,185,217
33,565,339
1,284,627
31,327,322
11,185,217
18,565,339
1,284,627
-
-
-
-
-
-
-
-
(ii) On 13 November 2015 the Company issued a total of 60,000 fully paid ordinary shares at an issue price of $0.25 per share to Resource
Surveys Pty, a related party of Mr. E. Eshuys, 60,000 fully paid ordinary shares (on a post consolidation basis) at an issue price of $0.25 per
share to Sheratan Pty Ltd, a related party of Mr. R. C. Hutton and 20,000 fully paid ordinary shares (on a post consolidation basis) at an
issue price of $0.25 per share to Rincewind Pty Ltd, a related party of Mr. Michael Ilett as part of a share purchase plan.
(iii) The balance of Mr. R. Hutton holds a 30 per cent beneficial interest in the MCGMT being 20,926 fully paid ordinary shares. The relevant
interest for Mr. R. C. Hutton includes the total of 69,753 shares (2015: 6,975,215) held indirectly through the MCGMT.
(iv) Mr. B. K. Mutton resigned on 20 July 2015 and the balance at 30 June 2015 reflects the number held of shares held on resignation.
15
-
-
-
-
-
-
-
E. Key terms of employment contracts
Contracts for services of key management personnel and relevant executives
Remuneration and other terms of employment for the Directors and other key management personnel are formalised in
service agreements. The contractual arrangements contain certain provisions typically found in contracts of this nature.
Mr. E. Eshuys
The Company has entered into an agreement with Mr. E. Eshuys pursuant to which Mr. E. Eshuys has agreed to act in
the capacity as an Executive Chairman and provided geological services to the Company. The key terms of the
agreement are as follows:-
•
•
•
•
•
•
Annual Fee of $100,000 per annum plus superannuation obligations under the superannuation guarantee.
Term of the Agreement: One (1) year renewed on an annual basis by mutual consent.
Entitled to any accrued long service leave on retirement or termination.
Termination due to resignation: Mr. E. Eshuys is required to provide one (1) months’ notice and be paid the
equivalent of one (1) month’s fees for the provision of geological services together with accrued long service
leave;
Termination due to company notice: The Company is required to provide three (3) months’ notice and make a
payment equivalent of three (3) month’s fee for the provision of geological services in lieu of notice together
with accrued long service leave; and
Termination due to change in control: In the event that a party acquires more than 50% of the Company and
Mr. E. Eshuys is terminated, he shall be entitled total remuneration payable in respect of the equivalent of one
(1) month’s fees for the provision of geological services together with any accrued long service leave.
Mr. R. C. Hutton
The Company has entered into an agreement with Mr. R. C. Hutton pursuant to which Mr. R. C. Hutton has agreed to
act in the capacity as a Non-Executive Director of the Company. The key terms of the agreement are as follows:-
•
•
Annual Director’s Fees: $45,000 per annum plus superannuation obligations under the superannuation
guarantee payable on a monthly basis for the provision of services as a Non-Executive Director.
Term of the Agreement: One (1) year renewed on an annual basis by mutual consent;
•
• Consulting Fees: $175 per hour (exclusive of GST) for each hour worked and invoiced on projects approved by
the Board, other than for work that forms part of his Director’s duty, to a maximum amount of $5,000 per month
(excluding GST) unless otherwise agreed by the Company;
Termination due to resignation: Mr. R. C. Hutton is required to provide one (1) months’ notice and be paid one
(1) month’s Director’s Fees during this notice period;
Termination due to company notice: The Company is required to provide three (3) months’ notice and make a
payment of four (4) month’s Director’s Fees in lieu of notice; and
Termination due to change in control: In the event that a party acquires more than 50% of the Company and
Mr. R. C. Hutton is terminated, he shall be entitled total remuneration payable in respect of four (4) months’
Directors’ fees.
•
•
Mr. M. J. Ilett
The Company has entered into an agreement with Kaus Australis Pty Ltd dated 1 July 2010 pursuant to which Mr. M. J.
Ilett has agreed to provide certain consultancy services to the Company and be appointed as the Company Secretary.
The key terms of the agreement are as follows:-
• Annual Director’s Fees: $45,000 per annum plus superannuation obligations under the superannuation guarantee
payable on a monthly basis for the provision of services as a Director.
• Consulting fee for Chief Financial Officer and Company Secretarial services charged at rate of $175 per hour
(exclusive of GST);
• Outgoings: Provision to reimburse Kaus Australis Pty Ltd for all reasonable and necessary expenses incurred by
it or Mr. M. J. Ilett in the performance of the services under the agreement;
• Term of the Agreement: One (1) year renewed on an annual basis by mutual consent;
• No annual leave or long service leave accrued;
• Termination due to Company notice: The Company is required to provide three (3) months’ notice and make a
payment equal to the invoices for services provided in the preceding three (3) months prior to the date of the
company notice event; and
• Termination due to change in control: In the event that a party acquires more than 50% of the Company and the
services of Kaus Australis Pty Ltd is terminated, Kaus Australis Pty Ltd shall be entitled total remuneration
payable in respect of three (3) months’ invoice equal to the invoices for services provided in the preceding three
(3) months prior to the date of the change in control event.
End of audited remuneration report
16
Non-audit services
Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are
outlined in note 29 to the financial statements.
The Directors are satisfied that the provision of non-audit services, during the year, by the auditor (or by another person
or firm on the auditor’s behalf) is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001.
The Directors are of the opinion that the services as disclosed in note 28 to the financial statements do not compromise
the external auditor’s independence, based on advice received from the Audit Committee, for the following reasons:
•
•
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor, and
none of the services undermine the general principles relating to auditor independence as set out in Code of
Conduct APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional &
Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting in a management or
decision-making capacity for the company, acting as advocate for the company or jointly sharing economic
risks and rewards.
Auditor’s independence declaration
The auditor’s independence declaration is included on page 18 of the Annual Report.
The directors’ report is signed in accordance with a resolution of Directors made pursuant to s.298 (2) of the
Corporations Act 2001.
Proceedings on behalf of the company
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purposes of taking responsibility on behalf of the Company for all
or any part of those proceedings. The Company was not a party to any such proceedings during the year.
Share options
As at the date of this report there are no ordinary shares of DGO Gold Limited under option.
On behalf of the Directors
Eduard Eshuys
Executive Chairman
Brisbane, 22 September 2016
17
Auditor's Independence Declaration
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
DECLARATION OF INDEPENDENCE BY T R MANN TO THE DIRECTORS OF DGO GOLD LIMITED
As lead auditor for the review of DGO Gold Limited for the year ended 30 June 2016, 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 review; and
2. No contraventions of any applicable code of professional conduct in relation to the review.
This declaration is in respect of DGO Gold Limited and the entities it controlled during the year.
T R Mann
Director
BDO Audit Pty Ltd
Brisbane, 22 September 2016
BDO Audit Pty Ltd ABN 33 134 022 870 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 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, other than for the acts or omissions of financial services licensees.
18
Consolidated statement of profit and loss and other comprehensive income
for the financial year ended 30 June 2016
Continuing operations
Interest income
Other income – government grant
Occupancy cost
Depreciation expenses
Employee benefit expenses
Directors’ fees
Consultants and contractor expenses
Administration expenses
Finance cost
Loss on sale of fixed assets
Impairment of consideration receivable
Impairment of available for sale financial assets
Exploration and evaluation expenditure
Loss before tax from continuing operations
Income tax (expense)/benefit
Loss for the year from continuing operations
Discontinued operations
Loss for the year from discontinued operations
LOSS FOR THE YEAR
Other comprehensive income
Items that may be reclassified as profit and loss
Change in fair value of available for sale financial assets
Reclassification adjustments – impairment of available-for-sale financial assets
Income tax on other items of other comprehensive income
Other comprehensive income for the year net of tax
Total comprehensive loss for the year
From continuing and discontinued operations
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
From continuing operations
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
Notes to the financial statements are included on pages 23 to 43.
Note
9
11
22(a)
Year ended
30/06/16
$
Year ended
30/06/15
$
1,566
260,429
3,299
-
(19,527)
(6,694)
(34,752)
(78,443)
(92,828)
(169,536)
(11)
(4,730)
-
(569,149)
(158,015)
(19,201)
(19,009)
(109,500)
(140,969)
(208,173)
(197,968)
-
-
(50,000)
-
-
(871,690)
(741,521)
-
-
(871,690)
(741,521)
7
-
(235,785)
(871,690)
(977,306)
(269,149)
569,149
-
300,000
(300,000)
-
-
(300,000)
(571,690)
(1,277,306)
18
18
18
18
(15)
(15)
(15)
(15)
(20)
(20)
(15)
(15)
19
Consolidated statement of financial position
as at 30 June 2016
Current assets
Cash and cash equivalents
Trade and other receivables
Assets classified as held for sale
Total current assets
Non-current assets
Property, plant and equipment
Exploration and evaluation expenditure
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Provisions –pertains to annual leave
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Notes to the financial statements are included on pages 23 to 43.
Note
Year ended
30/06/16
$
Year ended
30/06/15
$
8
9
10
11
12
13
14
15
16
17
365,668
279,567
80,851
726,086
18,805
151,393
170,198
457,246
25,027
850,000
1,332,273
62,047
-
62,047
896,284
1,394,320
91,923
7,877
99,800
164,794
7,877
172,671
99,800
172,671
796,484
1,221,649
20,350,768
300,652
(19,854,936)
796,484
20,204,243
652
(18,983,246)
1,221,649
20
Consolidated statement of changes in equity
for the financial year ended 30 June 2016
Issued
capital
Accumulated
losses
Consolidated
Balance at 1 July 2014
$
20,026,223
$
(18,005,940)
Loss for the year
Other comprehensive income
Total comprehensive income
-
-
-
(977,306)
-
(977,306)
Issue of shares
Share issue costs
180,000
(1,980)
178,020
-
-
-
Option
premium
reserve
$
300,652
Share
revaluation
reserve
Total
$
-
$
2,320,935
-
-
-
-
-
-
-
(300,000)
(300,000)
(977,306)
(300,000)
(1,277,306)
-
-
-
180,000
(1,980)
178,020
Balance at 30 June 2015
20,204,243
(18,983,246)
300,652
(300,000)
1,221,649
Balance at 1 July 2015
20,204,243
(18,983,246)
300,652
(300,000)
1,221,649
Loss for the year
Other comprehensive income
Total comprehensive income
-
-
-
(871,690)
-
(871,690)
Issue of shares
Share issue costs
162,500
(15,975)
146,525
-
-
-
-
-
-
-
-
-
Balance at 30 June 2016
20,350,768
(19,854,936)
300,652
-
300,000
300,000
-
-
-
-
(871,690)
300,000
(571,690)
162,500
(15,975)
146,525
796,484
Notes to the financial statements are included on pages 23 to 43.
21
Year ended
30/06/16
$
Year ended
30/06/15
$
Note
23
(471,253)
(11)
(158,015)
-
(629,279)
1,566
31,818
-
600,000
(100,000)
(142,208)
391,176
(780,342)
(201)
-
268,770
(511,773)
3,299
-
800,000
-
(254,000)
549,299
162,500
(15,975)
180,000
(1,980)
146,525
178,020
(91,578)
215,546
457,246
241,700
365,668
457,246
Consolidated statement of cash flows
for the financial year ended 30 June 2016
Cash flows from operating activities
Payments to suppliers and employees
Interest and other costs of finance paid
Payments for exploration and evaluation activities
Government grants in relation to exploration assets
Net cash (used)/generated by operating activities
Cash flows from investing activities
Interest received
Proceeds from sale of property, plant and equipment
Proceeds on disposal of subsidiary
Proceeds from sale of shares
Payment for acquisition of shares
Payments for exploration and evaluation activities
Net cash generated/(used) by investing activities
Cash flows from financing activities
Proceeds from issues of equity securities
Payment for share issue costs
Net cash generated by financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
8, 23
8, 23
Notes to the financial statements are included on pages 23 to 43.
22
24
24
24
31
31
31
32
33
33
33
34
34
35
35
35
36
36
36
37
37
37
38
39
39
39
41
41
42
42
43
Notes to the financial statements
for the year ended 30 June 2016
Issued capital
Significant accounting policies
Critical accounting judgements and estimates
Business and geographical segments
Income taxes
1. General information
2. New accounting standards for application in future periods
3.
4.
5.
6.
7. Discontinued operation
8.
Cash and cash equivalents
9.
Trade and other receivables
10. Assets classified as held for sale
11. Property, plant and equipment
12. Exploration and evaluation expenditure
13. Trade and other payables
14. Provisions
15.
16. Reserves
17. Accumulated losses
18. Loss per share
19. Dividends
20.
21. Subsidiaries
22. Disposal of a subsidiary
23. Notes to the statement of cash flows
24. Contingent liabilities and contingent assets
25. Financial instruments
26. Key management personnel compensation
27. Related party transactions
28. Parent entity disclosures
29. Remuneration of auditors
30. Events after the reporting date
Information relating to mining tenements
23
1. General information
DGO Gold Limited (the Company) is a public company listed on the Australian Securities Exchange (trading under the
code DGO), incorporated in Australia and operating in Queensland. DGO Gold Limited’s registered office and its
principal place of business are as follows:
Registered office
27 General Macarthur Place
Redbank Qld 4301
Principal place of business
27 General Macarthur Place
Redbank Qld 4301
The Groups’ principal activity in the course of the financial year was to consider opportunities to acquire or joint venture
gold exploration tenements with particular emphasis on gold based on research undertaken with the University of
Tasmania on sediment hosted gold deposits in Australia.
2. New accounting standards for application in future periods
Accounting standards issued by the AASB that are not yet mandatorily applicable to the consolidated entity, together
with an assessment of the potential impact of such pronouncements on the consolidated entity when adopted in future
periods, are discussed below:
AASB 9: Financial Instruments and associated amending standards (applicable to annual reporting periods beginning
on or after 1 January 2018).
The Standard will be applicable retrospectively (subject to the provisions on hedge accounting outlined below) and
includes revised requirements for the classification and measurement of financial instruments, revised recognition and
de-recognition requirements for financial instruments and simplified requirements for hedge accounting. The key
changes that may affect the consolidated entity on initial application include certain simplifications to the classification of
financial assets, simplifications to the accounting of embedded derivatives and the irrevocable election to recognise
gains and losses on investment in equity instruments that are not held for trading in other comprehensive income. AASB
9 also introduces a new model for hedge accounting that will allow greater flexibility in the in the ability to hedge risk,
particularly with respect to hedges of non-financial items.
Although it is anticipated that the adoption of AASB 9 may have an impact of the consolidated entity’s financial
instruments, it is impracticable at this stage to provide a reasonable estimate of such impact.
There are no other standards that are not yet effective and that would be expected to have a material impact on the
group in the current or future reporting periods and on foreseeable future transactions.
3. Significant accounting policies
Statement of compliance
The financial report is a general purpose financial report which has been prepared in accordance with the Corporations
Act 2001, Australian Accounting Standards and Interpretations of the Australian Accounting Standards Board’s other
authoritative pronouncements.
The financial statements comprise the consolidated financial statements of the Group. For the purpose of preparing the
consolidated financial statements, the Company is a for-profit entity.
The financial statements and notes of the Group also comply with International Financial Reporting Standards (‘IFRS’)
as issued by the International Accounting Standards Board.
The financial statements were authorised for issue by the Directors on 22 September 2016.
New Accounting Standards and Interpretations
The Group adopted all new Accounting Standards and Interpretations effective for the year ended 30 June 2016. There
were no material impacts on the financial statements of the Group as a result of adopting these standards.
Basis of preparation
The financial report has been prepared on the basis of historical cost, except for assets classified as held for sale that
have been measured at fair value. Cost is based on the fair values of the consideration given in exchange for assets. All
amounts are presented in Australian dollars, unless otherwise noted.
The following significant accounting policies have been adopted in the preparation and presentation of the financial
report:
(a) Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and controlled by the
Company (its subsidiary) (referred to as ‘the Group’ in these financial statements). Control is based on whether
24
the investor has power over the investee, exposure, or rights, to variable returns from its involvement in the
investee, and the ability to use its power over the investee to affect the amount of the returns.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of
comprehensive income from the effective date of acquisition or up to the effective date of disposal, as
appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting
policies into line with those used by other members of the Group. All intra-group transactions, balances, income
and expenses are eliminated in full on consolidation.
(b) Going concern
The consolidated financial statements have been prepared on a going concern basis which contemplates that the
group will continue to meet its commitments and can therefore continue normal business activities and the
realisation of assets and settlement of liabilities in the ordinary course of business.
Because of the nature of the operations, exploration companies, such as DGO Gold Limited, find it necessary on
a regular basis to raise additional cash funds to fund future exploration activity and meet other necessary
corporate expenditure. At the date of this financial report, the ability of the group to execute its currently planned
exploration and evaluation activities requires the group to raise additional capital within the next 12 to 18 months.
Accordingly, the group is in the process of investigating various options for the raising of additional funds which
may include but is not limited to an issue of shares or the sale of exploration assets as and when required.
At the date of this financial report, none of the above fund raising options have been concluded and no guarantee
can be given that a successful outcome will eventuate. The directors have concluded that as a result of the
current circumstances there exists a material uncertainty that may cast significant doubt regarding the group's
and the company's ability to continue as a going concern and therefore, the group and company may be unable
to realise their assets and discharge their liabilities in the normal course of business. Nevertheless, after taking
into account the current status of the various funding options currently being investigated and making other
enquiries regarding other sources of funding, the directors have a reasonable expectation that the group and the
company will have adequate resources to fund its future operational requirements and for these reasons they
continue to adopt the going concern basis in preparing the financial report.
The financial report does not include adjustments relating to the recoverability or classification of recorded assets
amounts or to the amounts or classification of liabilities that might be necessary should the group not be able to
continue as a going concern.
(c) Business combinations
Under AASB3 Business Combinations, acquisitions of subsidiaries and businesses are accounted for using the
acquisition method. The consideration for each acquisition is measured at the aggregate of the fair values (at the
date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by Group in
exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred.
Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent
consideration arrangement, measured at its acquisition-date fair value. Subsequent changes in such fair values
are adjusted against the cost of acquisition where they qualify as measurement period adjustments (see below).
All other subsequent changes in the fair value of contingent consideration classified as an asset or liability are
accounted for in accordance with relevant Standards. Changes in the fair value of contingent consideration
classified as equity are not recognised.
Where a business combination is achieved in stages, the Group’s previously held interests in the acquired entity
are remeasured to fair value at the acquisition date (i.e. the date the Group attains control) and the resulting gain
or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition
date that have previously been recognised in other comprehensive income are reclassified to profit or loss, where
such treatment would be appropriate if that interest were disposed of.
The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition
under AASB 3(2008) are recognised at their fair value at the acquisition date, except that:
•
•
•
deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are
recognised and measured in accordance with AASB 112 Income Taxes and AASB 119 Employee
Benefits respectively;
liabilities or equity instruments related to the replacement by the Group of an acquiree’s share based
payment awards are measured in accordance with AASB 2 Share-based Payment; and
assets (or disposal groups) that are classified as held for sale in accordance with AASB 5 Noncurrent
Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete.
25
Those provisional amounts are adjusted during the measurement period (see below), or additional assets or
liabilities are recognised, to reflect new information obtained about facts and circumstances that existed as of the
acquisition date that, if known, would have affected the amounts recognised as of that date.
The measurement period is the period from the date of acquisition to the date the Group obtains complete
information about facts and circumstances that existed as of the acquisition date – and is subject to a maximum
of one year.
The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition
under AASB 3 ‘Business Combinations’ are recognised at their fair values at the acquisition date, except for non-
current assets (or disposal groups) that are classified as held for sale in accordance with AASB 5 ‘Non-current
Assets Held for Sale and Discontinued Operations’, which are recognised and measured at fair value less costs
to sell.
(d) Cash and cash equivalents
Cash comprises cash on hand and demand deposits. 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.
(e) Employee benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave, long
service leave, and sick leave when it is probable that settlement will be required and they are capable of being
measured reliably. Liabilities recognised in respect of short-term employee benefits are measured at their
nominal values using the remuneration rate expected to apply at the time of settlement.
Liabilities recognised in respect of long-term employee benefits are measured as the present value of the
estimated future cash outflows to be made by the Group in respect of services provided by employees up to
reporting date.
Defined contribution plans
Contributions to defined contribution superannuation plans are expensed when incurred.
(f) Financial assets
AFS financial assets
Listed shares and listed redeemable notes held by the Group that are traded in an active market are classified as
AFS and are stated at fair value. Investments in unlisted shares that are not traded in an active market but that
are also classified as AFS financial assets and stated at fair value (when the directors consider that fair value can
be reliably measured). Gains and losses arising from changes in fair value are recognised in other
comprehensive income and accumulated in the investments revaluation reserve, with the exception of
impairment losses, interest calculated using the effective interest method, and foreign exchange gains and losses
on monetary assets, which are recognised in profit or loss. Where the investment is disposed of or is determined
to be impaired, the cumulative gain or loss previously accumulated in the investments revaluation reserve is
reclassified to profit or loss.
Investments are recognised and derecognised on trade date where the purchase or sale of an investment is
under a contract whose terms require delivery of the investment within the timeframe established by the market
concerned, and are initially measured at fair value, net of transaction costs except for those financial assets
classified as at fair value through profit or loss which are initially measured at fair value.
Subsequent to initial recognition, investments in subsidiaries are measured at cost in the company financial
statements.
Other financial assets are classified into the following specified categories: financial assets ‘at fair value through
profit or loss’, ‘held-to-maturity investments’, ‘available-for-sale’ financial assets, and ‘loans and receivables’.
The classification depends on the nature and purpose of the financial assets and is determined at the time of
initial recognition.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating
interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated
future cash receipts through the expected life of the financial asset, or, where appropriate, a shorter period.
Income is recognised on an effective interest rate basis for debt instruments other than those financial assets ‘at
fair value through profit or loss’.
26
Financial assets at fair value through profit or loss
Financial assets are classified as financial assets at fair value through profit or loss where the financial asset:
•
•
•
has been acquired principally for the purpose of selling in the near future;
is a part of an identified portfolio of financial instruments that the Group manages together and has a
recent actual pattern of short-term profit-taking; or
is a derivative that is not designated and effective as a hedging instrument.
Financial assets at fair value through profit or loss are stated at fair value, with any resultant gain or loss
recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest
earned on the financial asset.
Loans and receivables
Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in
an active market are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost
using the effective interest method less impairment. Interest is recognised by applying the effective interest rate.
Impairment of financial assets
Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at
each balance sheet date. Financial assets are impaired where there is objective evidence that as a result of one
or more events that occurred after the initial recognition of the financial asset the estimated future cash flows of
the investment have been impacted.
For financial assets carried at amortised cost, the amount of the impairment is the difference between the assets
carrying amount and the present value of estimated future cash flows, discounted at the original effective interest
rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with
the exception of trade receivables where the carrying amount is reduced through the use of an allowance
account. When a trade receivable is uncollectable, it is written off against the allowance account. Subsequent
recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying
amount of the allowance account are recognised in profit or loss.
With the exception of available-for-sale equity instruments, if, in a subsequent period, the amount of the
impairment loss decreases and the decrease can be related objectively to an event occurring after the
impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the
extent the carrying amount of the investment at the date the impairment is reversed does not exceed what the
amortised cost would have been had the impairment not been recognised.
In respect of available-for-sale- equity instruments, any subsequent increase in fair value after an impairment
loss is recognised directly in equity.
Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flow from the asset expire,
or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another
entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and
continues to control the transferred asset, the Group recognises a retained interest in the asset and an
associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of
ownership of the transferred financial asset, the Group continues to recognise the financial asset and also
recognises a collateralised borrowing for the proceeds received.
(g)
Exploration and evaluation assets
An exploration and evaluation asset shall only be recognised in relation to an area of interest if the following
conditions are satisfied:
(i)
(ii)
the rights to tenure of the area of interest are current; and
at least one of the following conditions is also met:
•
•
the exploration and evaluation expenditures are expected to be recouped through successful
development and exploitation of the area of interest, or alternatively, by its sale; or
exploration and evaluation activities in the area of interest have not at the reporting date
reached a stage which permits a reasonable assessment of the existence or otherwise of
economically recoverable reserves, and active and significant operations in, or in relation to, the
areas of interest are continuing.
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable
area of interest. These costs are only carried forward to the extent that they are expected to be recouped
through the successful development of the area or where activities in the area have not yet reached a stage that
permits reasonable assessment of the existence of economically recoverable reserves. Accumulated costs in
relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the
area is made. Capitalised exploration and evaluation expenditure is also written off in circumstances where the
Board has made a determination in consideration of external indicators of impairment.
27
When production commences, the accumulated costs for the relevant area of interest are amortised over the life
of the area according to the rate of depletion of the economically recoverable reserves. A regular review is
undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in
relation to that area of interest.
(h)
Impairment of tangible and intangible assets
At each reporting date, the Group reviews the carrying amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Where the asset does not generate cash flows that are independent from other assets, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent
basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or
otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent
allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for
impairment annually and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, 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 asset for which the estimates
of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount,
the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognised in profit or loss immediately.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) 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 (cash-generating unit) in prior years. A reversal of an impairment loss is recognised in
profit or loss immediately.
Exploration and evaluation are assessed for impairment when facts and circumstances suggest that the carrying
value 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 value 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 in the previous years.
(i)
Income tax
Current tax
Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the
taxable profit or tax loss for the period. It is calculated using tax rates and tax laws that have been enacted or
substantively enacted by reporting date. Current tax for current and prior periods is recognised as a liability (or
asset) to the extent that it is unpaid (or refundable).
The current tax asset is calculated by reference to the estimated Research and Development tax refunds relating
to eligible research and development activities (R&D tax refunds) during the financial year. The Company and
the consolidated entity are expecting to receive research and development tax offset with respect to its research
and development activities.
Deferred tax
Deferred tax is accounted for using the balance sheet liability method. Temporary differences are differences
between the tax base of an asset or liability and its carrying amount in the balance sheet. The tax base of an
asset or liability is the amount attributed to that asset or liability for tax purposes.
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are
recognised to the extent that it is probable that sufficient taxable amounts will be available against which
deductible temporary differences or unused tax losses and tax offsets can be utilised. However, deferred tax
assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial
recognition of assets and liabilities (other than as a result of a business combination) which affects neither
taxable income nor accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in
subsidiaries, except where the Group is able to control the reversal of the temporary differences and it is
probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets arising
from deductible temporary differences associated with these investments and interests are only recognised to the
28
extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the
temporary differences and they are expected to reverse in the foreseeable future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when
the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting
date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation
authority and the company/Group intends to settle its current tax assets and liabilities on a net basis.
Current and deferred tax for the period
Current and deferred tax is recognised as an expense or income in the income statement, except when it relates
to items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity.
(j)
Leased assets
Leases are classified as finance leases when the terms of the lease transfer substantially all the risks and
rewards incidental to ownership of the leased asset to the lessee. All other leases are classified as operating
leases.
Group as lessee
Assets held under finance leases are initially recognised at their fair value or, if lower, at amounts equal to the
present value of the minimum lease payments, each determined at the inception of the lease. The corresponding
liability to the lessor is included in the balance sheet as a finance lease obligation.
Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve
a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against
income, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance
with the Group’s general policy on borrowing costs. Contingent rentals are recognised as expenses in the periods
in which they are incurred.
Finance leased assets are amortised on a straight line basis over the estimated useful life of the asset.
Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except
where another systematic basis is more representative of the time pattern in which economic benefits from the
leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in
the period in which they are incurred.
(k)
Property, plant and equipment
Land and buildings are measured at an historical cost basis. Depreciation on buildings is charged to profit or loss.
Plant and equipment, leasehold improvements and equipment under finance lease are stated at cost less
accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition
of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined
by discounting the amounts payable in the future to their present value as at the date of acquisition.
Depreciation is provided on property, plant and equipment, including freehold buildings but excluding land.
Depreciation is calculated on a straight line basis so as to write off the net cost or other revalued amount of each
asset over its expected useful life to its estimated residual value. Leasehold improvements are depreciated over
the period of the lease or estimated useful life, whichever is the shorter, using the straight line method. The
estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting
period, with the effect of any changes recognised on a prospective basis.
(l)
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made
of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a
provision is measured using the cashflows estimated to settle the present obligation, its carrying amount is the
present value of those cashflows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a
third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received
and the amount of the receivable can be measured reliably.
29
Onerous contracts
Present obligations arising under onerous contracts are recognised and measured as a provision. An onerous
contract is considered to exist where the Group has a contract under which the unavoidable costs of meeting the
obligations under the contract exceed the economic benefits expected to be received under it.
(m) Revenue
Revenue is recognised when it is probable that the economic benefit will flow to the consolidated entity and the
revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or
receivable.
Government grants
Grants from the government are recognised at their fair value where there is reasonable assurance that the grant
will be received and the consolidated entity will comply with all the attached conditions. Government grants
relating to costs are deferred and recognised in profit or loss over the period necessary to match them with the
costs they are intended to compensate. Government grants relating to the purchase or development of assets,
including exploration and evaluation activities, are deducted from the carrying value of the asset.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of
calculating the amortised cost of a financial asset and allocating the interest income over the relevant period
using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through
the expected life of the financial asset to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
(n)
Share-based payments
Equity-settled share-based payments with employees and others providing similar services are measured at the
fair value of the equity instrument at the grant date. Fair value is measured by use of the Black Scholes method.
The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of
non-transferability, exercise restrictions, and behavioural considerations.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-
line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest.
Equity-settled share-based payment transactions with other parties are measured at the fair value of the goods
and services received, except where the fair value cannot be estimated reliably, in which case they are measured
at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the
counterparty renders the service.
For cash-settled share-based payments, a liability equal to the portion of the goods or services received is
recognised at the current fair value determined at each reporting date.
(o) Goods and services tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:
(i) where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as
part of the cost of acquisition of an asset or as part of an item of expense; or
for receivables and payables which are recognised inclusive of GST.
(ii)
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables
or payables.
Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising
from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified
as operating cash flows.
(p)
Provision for restoration and rehabilitation
A provision for restoration and rehabilitation is recognised when there is a present obligation as a result of
exploration and development activities undertaken, it is probable that an outflow of benefits will be required to
settle the obligation and the provision can be measured reliably. The estimated future obligations include the
costs of restoring the affected exploration and evaluation areas contained in the Group’s tenements.
30
The provision for future restoration is the best estimate of the present value of the expenditure required to settle
the restoration obligation at the reporting date. Future restoration costs will be reviewed annually and any
changes in the estimate are reflected in the present value of the restoration provision at each reporting date.
The initial estimate of restoration and rehabilitation relating to exploration and evaluation assets is capitalised into
the cost of the related asset and is amortised on the same basis as the related asset. Changes in the estimate of
the provision for restoration and rehabilitation are treated in the same way, except that the unwinding of the effect
of discounting on the provision is recognised as a finance cost rather than being capitalised into the cost of the
related asset.
4. Critical accounting judgements and estimates
In the application of the Group’s accounting policies, which are described in note 3, management is required to make
judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from
other sources. The estimates and associated assumptions are based on historical experience and various other factors
that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgments.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the
revision and future periods if the revision affects both current and future periods.
The following are the critical judgements (apart from those involving estimations, which are dealt with below), that
management has made in the process of applying the Group’s accounting policies and that have the most significant
effect on the amounts recognised in the financial statements:
Impairment of assets and exploration and evaluation expenditure
The Company determines whether non-current assets should be assessed for impairment based on identified
impairment triggers. At each reporting date management assesses the impairment triggers based on their knowledge
and judgement.
5. Business and geographical segments
The Group operates predominately in one business segment being the evaluation and exploration of mineral deposits in
sediment hosted gold deposits in Australia.
6.
Income taxes
The prima facie income tax expense on pre-tax accounting profit from operations reconciles to the income tax expense
in the financial statements as follows:
Loss from continuing operations
Income tax benefit calculated at 30% (ii)
Tax effects of amounts which are not assessable/ (deductible) in calculating
taxable income
Deferred tax assets not brought to account
Total tax benefit
Year ended
30/06/16
$
(871,690)
261,507
Year ended
30/06/15
$
(741,521)
222,456
(233,929)
(27,578)
-
2,619,615
(2,842,071)
-
(i) The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate
entities on taxable profits under Australian tax law. There has been no change in the corporate tax rate when
compared with the previous reporting period.
Unrecognised deferred tax balances
The following deferred tax assets have not been brought to account:
-Share issue costs
-Tax losses revenue
Year ended
30/06/16
$
Year ended
30/06/15
$
7,963
6,482,545
6,490,508
6,816
5,759,829
5,766,645
31
Recognised deferred tax assets and liabilities
Deferred tax assets
Tax losses revenue
Accruals
Employee entitlements
Deferred tax liabilities:
Exploration and evaluation expenditure
Prepayments
Year ended
30/06/16
$
Year ended
30/06/15
$
27,862
18,332
2,363
(15,311)
16,899
2,363
(45,418)
(3,139)
-
-
(3,951)
-
No deferred tax asset has been recognised as it is not considered probable that there will be sufficient future taxable
profits available against which the unused tax losses can be utilised in the foreseeable future. The Company and
consolidated group are not in a tax consolidated group.
7. Discontinued operation
a) Disposal of Mount Coolon Tenements
On 10 April 2015, the Company disposed of Mt Coolon Gold Mines Pty Ltd. which carried out exploration activities on
the Mt Coolon Mines Pty Ltd’s tenements held in the Drummond Basin. The proceeds for the sale were greater than the
carrying value of the related net assets and accordingly a gain on disposal is included in the profit and loss for the year
from discontinued operations.
The disposal of the Mt Coolon Gold Mines Pty Ltd is consistent with the Group’s strategic direction to acquire new
tenements located in sediment hosted gold deposits in Australia. The disposal was completed on 10 April 2015, on
which date control of the Mt Coolon Tenements passed onto the acquirer. Details of the assets and liabilities disposed
of, and the calculation of the profit and loss on disposal are disclosed in note 22
b) Analysis of loss for the year from discontinued operation
The results of the discontinued operation included in the profit and loss for the year and the previous year are set out
below:-
Loss for the year from discontinued operation
Revenue
Impairment losses exploration and evaluation expenditure
Other expenses
Loss before tax
Attributable income tax expense/(benefit)
Less: Gain on disposal of operation (note 22)
Attributable income tax expense
Loss to the year from discontinued operations (attributable to owners of the
Company)
c) Cash flow from discontinued operation
Net cash inflow/(outflow) from operating activities
Net cash (outflow) from investing operations
Net cash (outflow)/inflow from financing activities
Net cash (outflows)/inflows
32
Year ended
30/06/16
$
Year ended
30/06/15
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
115
115
556,305
23,567
579,872
579,757
3,014
582,771
(346,986)
-
(346,986)
235,785
267,799
(254,001)
(15,580)
(1,782)
8. Cash and cash equivalents
Cash at Bank
9. Trade and other receivables
Current
Prepayments
Government Grants (i)
Goods and services tax receivable
Year ended
30/06/16
$
Year ended
30/06/15
$
365,668
457,246
Year ended
30/06/16
$
Year ended
30/06/15
$
10,463
260,429
8,675
279,567
13,169
-
11,858
25,027
(i) The Government Grant represents the expected income tax refund as the result of the Group’s research and
development activities for the 2015 financial year.
10. Assets classified as held for sale
Available for sale investments carried at fair value
Quoted shares - GBM Resources Limited (i)
Quotes shares – Talisman Mining Limited (ii)
Amounts recognised directly in equity associated with assets held for sale
Year ended
30/06/16
$
Year ended
30/06/15
$
-
80,851
80,851
850,000
-
850,000
(i) The Company originally acquired 50,000,000 quoted shares in GBM Resources Limited as part of their disposal of
Mt Coolon Gold Mines Pty Ltd in the previous financial year. During the current financial year the Company
disposed of these shares for the total cash consideration of $600,000. An impairment expense of $250,000 has
been recorded during the 2016 financial year representing the difference between the carrying value of $850,000
as at 30 June 2015 and the cash consideration of $600,000 received at the time of the sale.
(ii) During the year the Company acquired 212,766 quoted shares in Talisman Mining Limited for the consideration of
$100,000. The Directors have determined that the fair value of the shares in Talisman Mining Limited was $80,351
as at 30 June 2016 which has been based on the quoted price of the Talisman Mining Limited shares as at that
date. The resulting $19,149 difference between the consideration and fair value as on acquisition have been
recorded as an impairment expense.
The directors have made the decision to sell the available for sale investments and as a result of this decision the GBM
Resources Limited and Talisman Mining Limited shares have been classified as Assets classified as held for sale in
accordance with AASB 5 Non-current Assets Held for Sale and Discontinued Operations.
Impairment
During the period the directors have recorded an impairment expense of $550,000 for the decrease in the fair value
GBM Resources Limited being for the reclassification of the share revaluation reserve as at 30 June 2015 of $300,000
and for the impairment expense of $250,000 at the time of sale of these shares. A further impairment expense of
$19,149 has also been recorded for the decline of fair value of Talisman Mining Limited shares resulting in a total
impairment expense of $569,149 for the 2016 financial year. The Directors have determined that as there has been a
significant decline in the fair value of the shares below cost an impairment expense should be recognised in profit and
loss rather than a movement in the share revaluation reserve.
33
11. Property, plant and equipment
2016 Consolidated
Freehold
land
at cost
Motor
vehicles at
cost
$
$
Leasehold and
freehold
improvements
at cost
$
Furniture
at cost
Other plant and
equipment at
cost
Total
$
$
$
-
-
-
-
-
-
-
-
-
96,945
-
(58,377)
38,568
(43,910)
(4,025)
21,829
3,506
-
-
3,506
(2,683)
(327)
-
13,670
-
-
13,670
(7,680)
(994)
-
142,957
-
-
142,957
257,078
-
(58,377)
198,701
(140,758)
(1,348)
-
(195,031)
(6,694)
21,830
(26,106)
(3,010)
(8,674)
(142,106)
(179,896)
12,462
496
4,995
851
18,805
2015 Consolidated
Freehold
land
at cost
Motor
vehicles at
cost
$
$
Leasehold and
freehold
improvements
at cost
$
Furniture
at cost
Other plant and
equipment at
cost
Total
$
$
$
51,668
-
-
(51,668)
127,950
-
-
(31,005)
144,954
-
-
(141,448)
31,525
-
-
(17,855)
341,537
-
-
(198,580)
697,634
-
-
(440,556)
-
-
-
-
-
-
-
96,945
3,506
13,670
142,957
257,078
(63,144)
(10,649)
-
29,883
(43,910)
(94,787)
(9,216)
-
101,320
(2,683)
(16,717)
(2,047)
-
11,084
(7,680)
(277,079)
(19,573)
-
155,894
(140,758)
(451,727)
(41,485)
-
298,181
(195,031)
53,035
823
5,990
2,199
62,047
Balance at 1 July 2015
Additions
Disposals
Balance at 30 June 2016
Accumulated depreciation
Balance at 1 July 2015
Depreciation expense
Disposals
Elimination on disposal of a subsidiary
Balance at 30 June 2016
Net book value
As at 30 June 2016
Balance at 1 July 2014
Additions
Disposals
Derecognised on disposal of
subsidiary
Balance at 30 June 2015
Accumulated depreciation
Balance at 1 July 2014
Depreciation expense (i)
Disposals
Elimination on disposal of a subsidiary
Balance at 30 June 2015
Net book value
As at 30 June 2015
(i)
The deprecation expense is represented by $19,009 from the continuing operations and $22,476 from the discontinued operation.
The following useful lives are used in the calculation of depreciation:
Leasehold and freehold improvements
Motor vehicles
Furniture
Other plant and equipment
10 – 40 years
5 –12 years
10 – 20 years
3 – 25 years
12. Exploration and evaluation expenditure
Gross carrying amount balance:
Balance at beginning of financial year
Additions
Derecognised on disposal of subsidiary
Balance at end of the financial year
Accumulated write off/impairment:
Balance at beginning of financial year
Amounts written off/impaired
Elimination on disposal of subsidiary
Balance at end of financial year
Net book value at end of financial year (i)
Year ended
30/06/16
$
Year ended
30/06/15
$
-
151,393
-
151,393
16,199,441
165,303
(10,887,653)
5,477,091
-
-
-
-
151,393
(14,199,441)
-
8,722,350
(5,477,091)
-
(i) The exploration and evaluation expenditure for the Group represents capitalised costs of exploration areas of
interest carried forward as an asset in accordance with the accounting policy set out in note 3 (g). The ultimate
recoupment of the exploration and evaluation expenditure in respect of the areas of interest carried forward is
34
dependent upon the discovery of commercially viable reserves and the successful development and exploitation of
the respective areas or alternatively the sale of the underlying areas of interest for at least their carrying value.
Amortisation, in respect to each relevant area of interest is not charged to the income statement until a mining
operation is ready for commencement or when tenements are relinquished.
13. Trade and other payables
Trade payables (i)
Other – accrued expenses
Other – PAYG payable
Year ended
30/06/16
$
27,388
61,108
3,427
91,923
Year ended
30/06/15
$
55,181
56,329
53,284
164,794
(i) The average credit period on purchases of goods is 30 days. No interest is charged on the trade payables.
14. Provisions
Current
Employee benefits (i)
Provision for rehabilitation expenditure (ii)
Balance at beginning of financial year
Disposals of subsidiary during the year
Balance at end of financial year
Provision for landowner works (iii)
Balance at beginning of financial year
Disposal of subsidiary
Balance at end of financial year
Year ended
30/06/16
$
Year ended
30/06/15
$
7,877
7,877
7,877
7,877
Year ended
30/06/16
$
-
-
-
-
-
-
Year ended
30/06/15
$
396,054
(396,054)
-
75,000
(75,000)
-
(i) The Group’s current employee benefits are represented by provisions for annual leave totalling $7,877. The
average number of employees during the current financial year was 1 employee.
(ii) The non-current provision for rehabilitation expenditure represents the current value of the Directors’ best
estimates of the future sacrifice of economic benefits required to meet environmental liabilities on the Group’s
tenements based on work conducted by the Queensland Environmental Protection Agency and the Company’s
environmental consultants.
(iii) The non-current provision for landowner works represents the present value of the Directors’ best estimates of the
future sacrifice of economic benefits required to meet landowner works relating to the Group’s tenements.
15. Issued capital
Fully paid ordinary shares
2016: 5,797,268 (2015: 519,021,975)
Fully paid ordinary shares
Balance at beginning of financial year
Issue of shares under private placements
Issue of shares under share purchase plan
Share issue costs
Balance at end of financial year
Balance as at beginning of the year
Result of a 100:1 share consolidation
Issue shares under private placements
Issue of shares under a share purchase plan
Balance as at the end of the year
35
Year ended
30/06/16
$
Year ended
30/06/15
$
20,350,768
20,204,243
20,204,243
64,500
98,000
(15,975)
20,350,768
20,026,223
180,000
-
(1,980)
20,204,243
Number of
shares
519,021,975
(513,831,707)
215,000
392,000
5,797,268
Share
capital $
459,021,975
-
60,000,000
-
519,021,975
Other share options on issue as at 30 June 2016
There were no options on issue as at 30 June 2016.
Capital Management
Management controls the capital of the group in order to fund its operations and continue as a going concern. The
consolidated entity does not have any externally imposed capital requirements.
16. Reserves
Share valuation reserve (i)
Option premium reserve (ii)
Year ended
30/06/16
$
-
300,652
300,652
Year ended
30/06/15
$
(300,000)
300,652
652
(i) During the period the directors have determined that the decrease in the fair value decrease in the GBM Resources
Limited shares totaling $500,000 ($300,000 recognised at 30 June 2015 and $250,000 at the time of sale) and the
decrease in the fair value decrease in the Talisman Mining Limited shares totaling $19,149 represents a significant
decline in the fair value of the investment in an equity instrument below its cost and is therefore an impairment that
was recognised in profit or loss. As the result a total decrease in value of $519,149 including the $300,000 share
reserve as at 30 June 2015 had been recognised as an impairment expense in the profit and loss.
(ii) The option premium reserve is a result of options being provided to directors.
17. Accumulated losses
Balance at beginning of financial year
Net loss attributable to members of the parent entity
Balance at end of financial year
18. Loss per share
Basic (loss) per share from continuing and discontinued operations (i)
Total basic (loss) per share
Total diluted (loss)per share
Basic (loss) per share from continuing operations (i)
Total basic (loss) per share
Total diluted (loss)per share
Year ended
30/06/16
$
18,983,246
871,690
19,854,936
Year ended
30/06/15
$
18,005,940
977,306
18,983,246
Year ended
30/06/16
Cents
per share
Year ended
30/06/15
Cents
per share
(restated)
(15)
(15)
(15)
(15)
(20)
(20)
(15)
(15)
(i) The calculation of the basic loss per share from continuing and discontinued operations for the year ended 30 June
2016 has been made on the basis of the 100:1 share consolidation that was approved by shareholders on 17
September 2016 (note 30). The change has been applied retrospectively and accordingly, the loss per share for
the year ended 30 June 2014 has been restated.
Basic (loss) per share from continuing and discontinued operations
The net (loss) and weighted average number of ordinary shares used in the calculation of basic (loss) per share from
continuing and discontinued operations are as follows:
Net (loss)
(Loss) used in the calculation of basis (loss) per share from continuing operations and
discontinued operations
(871,690)
(871,690)
(997,306)
(997,306)
Year ended
30/06/16
$
Year ended
30/06/15
$
36
Weighted average number of ordinary shares used in the calculation of basic (loss)
per share
Year Ended
30/06/16
No.
Year Ended
30/06/15
No.
(restated)
5,625,668
4,907,480
Basic (loss) per share from continuing operations
The net (loss) and weighted average number of ordinary shares used in the calculation of diluted (loss) per share from
continuing operations are as follows:
Weighted average number of ordinary shares used in the calculation of diluted
(loss) per share
Year Ended
30/06/16
No.
Year Ended
30/06/15
No. (restated)
5,625,668
4,907,480
Year ended
30/06/16
$
Year ended
30/06/15
$
Net (loss)
(Loss) used in the calculation of diluted (loss) per share from continuing operations
(871,690)
(871,690)
(741,521)
(741,521)
19. Dividends
There were no dividends paid or proposed during the current or previous financial year.
20. Information relating to mining tenements
It is noted that the various state government departments require holdings of mining tenement to pay rent, rates and to
meet minimum exploration expenditures. It is noted that the Consolidated Entity can apply to relinquish its mining
tenements at any time thereby extinguishing its obligations to meet its rental obligations and minimum exploration
expenditure on the mining tenements. Moreover, variations to the terms of the current and future tenement holdings,
the granting of new tenements and changes at renewal or expiry, will change the minimum exploration expenditures
relating to the tenements.
The expected outlays which can be extinguished at any time which arise in relation to granted tenements inclusive are
as follows:-
Exploration and evaluation expenditure
No longer than 1 year
Longer than 1 year and not longer than 5 years
Longer than 5 years
21. Subsidiaries
Name of entity
Country of incorporation
Parent entity
DGO Gold Limited (i),(iii)
Subsidiaries
Mt Coolon Gold Mines Pty Ltd (ii)
Yandan Gold Mines Pty Ltd (i),(iii)
Australia
Australia
Australia
Year ended
30/06/16
$
Year ended
30/06/15
$
299,520
808,860
150,300
1,264,680
-
-
-
-
Ownership interest
2016
%
-
100
2015
%
-
100
(i) The parent and the subsidiaries are not within a tax consolidated group.
(ii) DGO Gold Limited disposed of its interest in Mt Coolon Gold Mines Pty Ltd on 10 April 2015.
(iii) There are no significant restrictions of the ability of the consolidated entity to use any of the consolidated entity’s
assets to settle the liabilities of the consolidated entity.
37
22. Disposal of a subsidiary
On 10 April 2015, the Group disposed of Mt Coolon Gold Mines Pty Ltd which carried out exploration of the tenement
held in the Drummond Basin.
(a) Consideration received
Year ended
30/06/15
$
Consideration received in cash and cash equivalents
Consideration received in quoted securities (refer note 10)
1,150,000
Settlement proceeds receivable (i)
50,000
Total consideration received
2,000,000
(i) GBM Resources Limited withheld $50,000 of the total cash consideration on settlement. This amount was
800,000
impaired by the Directors at 30 June 2016 as not deemed recoverable.
(b) Analysis of assets of liabilities over which control was lost
Financial position
Current assets
Trade and other receivables
Total current assets
Non-current assets
Trade and other receivables
Property plant and equipment
Exploration and evaluation expenditure
Total non-current assets
Non-current liabilities
Provisions
Total non-current liabilities
Net assets disposed of
Gain on disposal of subsidiary
Consideration received
Net assets disposed of
Gain on disposal
The gain on disposal is included in the loss for the year from discontinued operations (see note 7)
Net cash inflow on disposal of subsidiary
Consideration received in cash and cash equivalents
Less cash and cash equivalents balances disposed of
Total current assets
38
Year ended
30/06/15
$
553
553
372,141
142,376
1,608,998
2,123,515
Year ended
30/06/15
$
471,054
471,054
1,653,014
2,000,000
1,653,014
346,986
Year ended
30/06/15
$
800,000
-
800,000
23. Notes to the statement of cash flows
(a) Reconciliation of cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents includes cash on hand and in banks and
investments in money market instruments, net of outstanding bank overdrafts. Cash and cash equivalents at the end of
the financial year as shown in the cash flow statement is reconciled to the related items in the statement of financial
position as follows:
Cash and cash equivalents
Year ended
30/06/16
$
365,668
Year ended
30/06/15
$
457,246
Reconciliation of (loss)/profit for the period to net cash flows from operating activities
Net (loss) for the year
Interest income
Depreciation
Loss on sale of asset
Gain on disposal of subsidiary
Impairment quoted securities
Impairment consideration receivable GBM Resource Limited
Impairment and write off of non-current-assets
Decrease/(increase) in assets:
Trade and other receivables
Prepayments
Government grant receivable
(Decrease)/increase in liabilities:
Trade and other payables
Net cash from operating activities
Year ended
30/06/16
$
(871,690)
(1,566)
6,694
4,730
-
569,149
-
-
2,618
2,706
(260,429)
Year ended
30/06/15
$
(977,306)
(3,414)
41,485
-
(346,986)
-
50,000
556,306
(12,086)
(1,506)
271,784
(81,491)
(90,050)
(629,279)
(511,773)
(b) Non cash transactions
The previous financial year, the Company received 50,000,000 shares in GBM Resources Ltd at a fair value of 2.3
cents per share as part of the total consideration received for the sale of Mt Coolon Gold Mines Pty Ltd. These shares
were we disposed of in the 2016 financial year the cash consideration of $600,000.
24. Contingent liabilities and contingent assets
The Directors are not aware of any contingent liabilities or contingent assets that are likely to have a material effect on
the results of the Group as disclosed in these financial statements.
25. Financial instruments
(a) Financial risk management objectives
The Board monitors and manages the financial risk relating to the operations of the Group. The Group’s activities
include exposure to market risk, fair value interest rate risk, credit risk, liquidity risk and cash flow interest rate risk. The
overall risk management program focuses on the unpredictability of the finance markets and seeks to minimise the
potential adverse effects on the financial performance. Risk management is carried out under the direction of the Board
of Directors.
(b) Significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset,
financial liability and equity instrument are disclosed in note 3 to the financial statements.
(c) Market price risk
The Group is involved in the exploration and development of mining tenements for base metals including gold and
copper. Revenue associated with metal sales, and the ability to raise funds through equity and debt are dependent upon
the commodity price for resources.
39
(d) Interest rate risk
There is a limited amount of interest rate risk relating to the cash and cash equivalents that the company holds in
deposits. The Group will be exposed to further interest rate risk if it intends to borrow funds in the future for acquisition
and development.
(e) Credit risk management
The maximum credit risk equals the carrying amount of the financial assets as recognised in the Statement of Financial
Position.
(f) Fair value of financial instruments
The fair values of financial assets and financial liabilities are determined as follows:
•
•
•
the fair value of financial assets and financial liabilities with standard terms and conditions and traded on
active liquid markets are determined with reference to quoted market prices; and
the fair value of other financial assets and financial liabilities (excluding derivative instruments) are determined
in accordance with generally accepted pricing models based on discounted cash flow analysis; and
the Directors consider that the carrying amounts of financial assets and financial liabilities recorded at
amortised cost in the financial statements approximate their fair values.
The carrying amounts of financial assets and financial liabilities approximate the fair values.
(g) Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of Directors, who has built an appropriate
liquidity risk management framework for the management of the Group’s short, medium and long-term funding and
liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, and reserve
borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of
financial assets, expenditure commitments and liabilities.
(h) Cash flow and interest rate risk
The Group’s income and operating cash flows are not materially exposed to changes in market interest rates.
(i) Capital risk management
The Group manages its capital to ensure that it will be able to continue as a going concern. The capital structure of the
Group includes equity attributable to equity holders of the parent, comprising of issued capital, reserves and
accumulated losses as disclosed in notes 15, 16 and 17 respectively. The Group operates its exploration and
evaluation activities through its wholly owned subsidiary. None of the Group’s entities are subject to externally imposed
capital requirements. The Group intends to use a variety of capital market issues to meet anticipated funding
requirements. The Group currently has no short-term or long-term borrowings. The Group does not have any unused
credit facilities.
Fair value measurements recognised in the consolidated statement of financial position
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at
fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.
•
•
•
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for
identical assets or liabilities.
Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level
1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from
prices).
Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset
or liability that are not based on observable market data (unobservable inputs).
2016
Level 1
Level 2
Level 3
Total
Available held for sale
Quoted securities in Talisman Mining Limited
$
80,851
80,851
$
-
-
$
-
-
80,851
80,851
2015
Level 1
Level 2
Level 3
Total
Available-for-sale financial assets
Quoted securities in GBM Resources Limited
$
850,000
850,000
$
-
-
$
-
-
850,000
850,000
There were no transfers between level 1 and 2 in the period.
40
Liquidity and interest risk tables
The following tables detail the Group’s remaining contractual maturity for its non-derivative financial assets and
liabilities. The tables have been drawn up based on undiscounted cash flows and detail the Group’s exposure to liquidity
and interest rate risk as at 30 June 2015 and 30 June 2016:
2016
Weighted
average
effective
interest rate
%
Financial assets
Non-interest bearing
Variable interest rate instrument
-
0.94
Less than 1
month
1-3 months
3 months to
1 year
1-5 years
5 + years
Total
$
$
$
$
$
-
365,668
365,668
269,104
269,104
27,388
27,388
64,535
64,535
269,104
365,668
634,772
91,923
91,923
Financial liabilities
Non-interest bearing
2015
Financial assets
Non-interest bearing
Variable interest rate instrument
Financial liabilities
Non-interest bearing
Weighted
average
effective
interest rate
%
-
1.92
-
Less than 1
month
1-3 months
3 months to
1 year
1-5 years
5 + years
Total
$
$
-
457,246
457,246
11,858
-
11,858
55,181
55,181
109,613
109,613
$
-
-
-
-
-
$
850,000
-
850,000
-
-
$
-
-
-
-
-
861,856
457,246
1,319,104
164,794
164,794
26. Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payment
27. Related party transactions
Year ended
30/06/16
$
270,463
18,086
-
-
-
288,549
Year ended
30/06/15
$
339,324
22,969
-
-
-
362,293
(a) Equity interests in related parties
Equity interests in subsidiaries
Details of the percentage of ordinary shares held in the subsidiary are disclosed in note 21 to the financial statements.
(b) Transactions with key management personnel
Key management personnel compensation
The aggregate compensation made to key management personnel are disclosed in note 26 of the financial statements
and details of the compensation made to key management personal has been provided in the Remuneration Report
which forms part of the Directors’ Report. Included in the Remuneration Report includes is a payment of $80,088 (net
of GST) for CFO and Company Secretarial Services to Kaus Australis Pty Ltd a related party of Mr. Michael Ilett.
Other related party transactions
Exploration Drill Rigs Pty Ltd, a company related to Mr. Michael Ilett and Mr. Ross Hutton, provides the Company with a
registered office, outgoings, telephone, electricity and receptionist services for a total of $19,527 per annum excluding
goods and services tax.
41
28. Parent entity disclosures
The parent entity in the Group is DGO Gold Limited which was incorporated in Brisbane, Australia on 5 April 2007.
Year ended
30/06/16
$
697,273
18,817
Year ended
30/06/15
$
1,331,729
62,060
716,090
1,393,789
96,963
-
96,963
172,672
-
172,672
22,502,481
(22,184,006)
22,355,957
(21,135,492)
300,652
-
300,652
300,652
(300,000)
652
619,127
1,221,117
716,090
1,393,789
Year ended
30/06/16
$
Year ended
30/06/15
$
(1,048,514)
(372,473)
300,000
(748,514)
(300,000)
(672,473)
Year ended
30/06/16
$
Year ended
30/06/15
$
40,000
40,000
70,000
70,000
Year ended
30/06/16
$
Year ended
30/06/15
$
-
-
-
-
-
-
Financial position
Current assets
Non-current assets
Total assets
Current liabilities
Non-Current Liabilities
Total Liabilities
Issued capital
Accumulated losses
Option Premium Reserve
Share Valuation Reserve
Total equity
Total equity and liabilities
Financial performance
Loss for the year
Other comprehensive income
Total comprehensive (loss)
29. Remuneration of auditors
Auditor of the parent entity
Audit or review of the financial statements
Related practice of the parent entity auditor
Other non-audit services – tax advice
Other non-audit services – research and development tax related services
The auditor of DGO Gold Limited is BDO Audit Pty Ltd.
42
30. Events after the reporting date
On 25 July 2016 Yandan Gold Mines Pty Ltd received $28,382 from the Australian Taxation Office representing interest
income of $113 and the income tax refund of $28,269 relating to the research and development activities for the 2015
financial year.
On 27 July 2016 the Company received $235,524 from the Australian Taxation Office representing interest income of
$3,364 and the income tax refund of $232,160 relating to the research and development activities for the 2015 financial
year.
Other than the above, there has not been any matter or circumstance occurring subsequent to the end of the financial
year that has significantly affected, or may significantly affect, the operations of the consolidated entity, the results of
those operations, or the state of affairs of the consolidated entity in future financial years.
43
Directors’ declaration
The directors of the company declare that:
1.
2.
3.
4.
5.
The financial statements, comprising the consolidated statement of profit or loss and other comprehensive
income, consolidated statement of financial position, consolidated statement of cash flows, consolidated
statement of changes in equity and accompanying notes, are in accordance with the Corporations Act 2001
and:
a.
comply with Accounting Standards and the Corporations Regulations 2001; and
b.
give a true and fair view of the consolidated entity’s financial position as at 30 June 2016 and of its
performance for the year ended on that date.
The Company has included in the notes to the financial statements an explicit and unreserved statement of
compliance with International Financial Reporting Standards.
In the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts
as and when they become due and payable.
The remuneration disclosures included in pages 13 to 16 of the directors’ report (as part of audited
Remuneration Report), for the year ended 30 June 2016, comply with section 300A of the Corporations Act
2001.
The directors have been given the declarations by the chief executive officer and chief financial officer
required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the
directors by:
Eduard Eshuys
Executive Chairman
Brisbane, 22 September 2016
44
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
INDEPENDENT AUDITOR’S REPORT
To the members of DGO Gold Limited
Report on the Financial Report
We have audited the accompanying financial report of DGO Gold Limited, which comprises the
consolidated statement of financial position as at 30 June 2016, 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, notes comprising a summary of
significant accounting policies and other explanatory information, and the directors’ declaration of the
consolidated entity comprising the company and the entities it controlled at the year’s end or from
time to time during the financial year.
Directors’ Responsibility 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 Note 3, the directors also state, in accordance with Accounting Standard AASB 101
Presentation of Financial Statements, that the financial statements comply with International Financial
Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the company’s
preparation of the financial report that gives a true and fair view in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by the directors, as
well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
BDO Audit Pty Ltd ABN 33 134 022 870 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 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, other than for the acts or omissions of financial services licensees.
45
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which
has been given to the directors of DGO Gold Limited, would be in the same terms if given to the
directors as at the time of this auditor’s report.
Opinion
In our opinion:
(a) the financial report of DGO Gold Limited is in accordance with the Corporations Act 2001,
including:
i.
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2016
and of its performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in
ii.
Note 3.
Emphasis of matter
Without modifying our opinion, we draw attention to Note 3 (b) in the financial report, which indicates
that the ability of the consolidated entity to continue as a going concern is dependent upon the future
successful raising of necessary funding through equity, successful exploration and subsequent
exploitation of the consolidated entity’s tenements, and/or sale of non-core assets. These conditions,
along with other matters as set out in Note 3 (b), indicate the existence of a material uncertainty that
may cast significant doubt about the consolidated entity’s ability to continue as a going concern and
therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the
normal course of business.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 13 to 16 of the directors’ report for the
year ended 30 June 2016. 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.
Opinion
In our opinion, the Remuneration Report of DGO Gold Limited for the year ended 30 June 2016
complies with section 300A of the Corporations Act 2001.
BDO Audit Pty Ltd
T R Mann
Director
Brisbane, 22 September 2016
BDO Audit Pty Ltd ABN 33 134 022 870 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 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, other than for the acts or omissions of financial services licensees.
46
Unaudited additional ASX and other information as at 16 September 2016
Number of holders of equity securities
5,797,268 fully paid ordinary shares are held by 548 individual shareholders. All issued ordinary shares carry one vote
per share. There is not a market buyback occurring.
Distribution of holders of equity securities
100,001 and Over
50,001 to 100,000
10,001 to 50,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
Fully paid
Ordinary
Shares
3,975,262
720,759
627,543
160,780
207,434
105,490
%
68.57
12.43
10.82
2.77
3.58
1.82
5,797,268
100.00
Line
item
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
15
16
17
18
19
19
19
20
Holding less than a marketable parcel
442
Twenty largest shareholders of quoted equity securities
Ordinary shareholders
A/C Designation
Fully paid ordinary shares
Number
Percentage
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
RESOURCE SURVEYS PTY LTD
CAIRNGLEN INVESTMENTS PTY LTD
SCINTILLA STRATEGIC INVESTMENTS LIMITED
SHERATAN PTY LTD
R & M SUPERANNUATION FUND
MR BRICE KENNETH MUTTON & MRS GAI MUTTON
RESOURCE SURVEYS PTY LTD
RESOURCE SURVEYS S/F
MR TREVOR NEIL HAY
ROSS CLIVE HUTTON & MARIE JEAN HUTTON
R & M SUPERANNUATION
OCTIFIL PTY LTD
RESOURCE SURVEYS PTY LTD
RESOURCE SURVEYS S/F
SHERATAN PTY LTD
MT COOLON HOLDINGS PTY LTD
MT COOLON GOLD MINES
MR JOSEPH BANDIZIOL
BACTALL PTY LIMITED
DOUBLE JAY GROUP HOLDINGS PTY LTD
GEE NOMINEES PTY LTD
NATIONAL NOMINEES LIMITED
MR DAVID COURTNEY ROBINS
MRS CHLOE PODGORNIK
TESORO M B PTY LTD
DR PETER KENCH
CHRISTOPHER BRIAN MUIR
Total
Balance of register
Grand total
THE G & T TRUST
47
2,056,600
640,787
331,725
318,330
285,000
202,820
140,000
93,752
88,013
79,584
77,467
76,300
69,753
60,160
60,000
60,000
55,730
50,000
44,456
30,000
30,000
30,000
29,500
35.48
11.05
5.72
5.49
4.92
3.50
2.41
1.62
1.52
1.37
1.34
1.32
1.20
1.04
1.03
1.03
0.96
0.86
0.77
0.52
0.52
0.52
0.51
4,900,037
897,231
84.52
15.48
5,797,268
100.00
Fully Paid Shares
Number
2,056,000
863,284
519,426
331,725
318,330
4,088,765
Substantial shareholders
Ordinary shareholders
RESOURCE CAPITAL FUND V L. P.
EDUARD ESHUYS (i)
ROSS HUTTON (i)
CAIRNGLEN INVESTMENTS PTY LTD
SCINTILLA STRATEGIC INVESTMENTS LIMITED
TOTAL
(i)
These are shares in which the Director’s individually hold a relevant interest.
Tenements held
The following table details the list of mineral tenements granted and under application:
Tenements -
Granted
Tenements -
Applications
Area (km2)
Western Australia
Mt Edwards
E15/1465, 1488,
1514
Ora Banda
P24/4946 - 4956
Black Flag
P24/4986 - 4992,
E24/197
Mallina
E47/3328 - 3329
E47/3327
Yerrida Basin
E51/1590
E51/1729, 1730,
1748 - 1753
Sub-Total
South Australia
Mt Barker
EL5770, EL5812
E2016/00017
Dawson
EL5737
Yerelina
EL5813
E2016/00103,
ERA752
Sub-Total
TOTAL
81
22
32
245
1550
1930
328
772
145
1245
3175
48