DGO Gold Limited
ABN 96 124 562 849
Annual Report for the financial year ended 30 June 2019
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TABLE OF CONTENTS
Corporate Directory
Directors’ report
Remuneration report
Auditor’s independence declaration
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the financial statements
Directors’ declaration
Independent auditor’s report
Unaudited additional ASX and other information as at 12 September 2019
Tenements held
3
4
9
17
18
19
20
21
22
43
44
49
50
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Corporate Directory
Directors:
Mr. E. Eshuys (Executive Chairman)
Mr. M. J. Ilett (Non-Executive Director)
Mr. R. C. Hutton (Non-Executive Director)
Mr. J. B. Parncutt AO (Non-Executive Director)
Company secretary
Mr. Mark Licciardo
Chief Financial Officer
Ms. C. Jupp
Registered office and
principal administrative office:
Level 9
63 Exhibition St
Melbourne Vic 3000
Share registry:
Auditors:
Telephone: + 61 3 9133 6251
Link Market Services Limited
Level 21
10 Eagle Street
BRISBANE QLD 4000
Telephone: 1300 554 474
Telephone: + 61 7 3320 2200
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
Stock exchange listings:
DGO Gold Limited shares are quoted on ASX Limited (ASX Code: DGO).
Website:
www.dgogold.com.au
ABN:
Corporate Governance
Statement
96 124 562 849
https://www.dgogold.com.au/investorcentre_corporategovernance.html
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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 2019. 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 and until the date of this report are set out below:
Mr. Eduard Eshuys BSc, FAusIMM, FAICD (Executive Chairman)
Eduard, aged 74 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.
Eduard 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 ensures 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.
Directorships of other listed companies in the last 3 years:
Mr. Eduard Eshuys was appointed a director of NTM Gold Limited on 25 March 2019 and De Grey Mining Limited on 23
July 2019.
Mr. Ross C. Hutton B. Eng (Min), MAusIMM (Non-Executive Director)
Ross, aged 71, 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. Ross is the Chairman of the Audit Committee and Remuneration and Nomination Committee.
Directorships of other listed companies in the last 3 years:
Mr. Ross Hutton has not been a director of any other listed company in the last three years.
Mr Jeffrey (Bruce) Parncutt AO, BSc, MBA (Non-Executive Director)
Bruce, aged 68, is Chairman of investment banking group Lion Capital, a member of The Australian Ballet Board, The
University of Melbourne Centre for Positive Psychology Strategic Advisory Board, and a Trustee of the Helen Macpherson
Smith Trust. His career spans over 40 years in investment management, investment banking and stock broking.
Previous roles include: Managing Director of McIntosh Securities, Senior Vice President of Merrill Lynch, Director of
Australian Stock Exchange Ltd, President of the Council of Trustees of the National Gallery of Victoria, Board Member
and Chairman of the NGV Foundation, member of the Felton Bequest Committee, Council member of Melbourne
Grammar School, and Director of a number of listed public companies, including Acrux Ltd, Praemium Limited and Stuart
Petroleum Ltd.
Bruce was recognised as Officer in the Order of Australia in the 2016 Queen’s Birthday Honours List for distinguished
service to the community as a philanthropist (particularly in arts and education) and as an advocate and supporter of
charitable causes, and to business and commerce. Mr. Bruce Parncutt was appointed Non-Executive Director on 23 May
2018 and is a member of the Audit Committee and Remuneration and Nomination Committees.
Directorships of other listed companies in the last 3 years:
During the past three years Mr Bruce Parncutt has also served as a director of Acrux Limited from 1 May 2012 to 9
December 2016 and was appointed as a director of De Grey Mining Limited on 23 July 2019.
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Directors’ report
Information about Directors and the Company Secretary (continued)
Mr. Michael J. Ilett BBus(Accy), GradDipAdvAcctg, GradDipCorpGov, MBA, ACIS, CPA, CA (Non- Executive
Director)
Michael, aged 53, 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 dual 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. Michael was the Company Secretary of the Company from 5 April 2007 until his
resignation on 31 August 2018.
Directorships of other listed companies in the last 3 years:
Mr. Michael Ilett has not been a director of any other listed company in the last three years.
Dr. Darryl Clark
During the year Darryl was appointed as Managing Director on 15 October, 2018 and resigned on 29 January 2019. Darryl
is a highly experienced Geologist with a demonstrated track record of leading the exploration divisions of a number of
mining houses. He holds a PhD in Economic Geology from the Centre for Ore Deposit Excellence at the University of
Tasmania and a Bachelor of Science degree in Economic Geology from James Cook University.
Directorships of other listed companies in the last 3 years:
Dr. Darryl Clark has served as a director of Xanadu Mines Ltd in the last three years.
Company Secretary
Mr. Mark Licciardo B Bus(ACC), Grad Dip CSP, FGIA, FCIS, FAICD (Company Secretary)
Mark is the founder and Managing Director of Mertons Corporate Services. Mark has extensive experience working with
Boards of ASX listed companies in the areas of corporate governance, accounting and finance and company secretarial
practice. Mark is a director of various ASX listed public and private companies, a former Chairman of the Governance
Institute of Australia Victorian division LCI Melbourne and Melbourne Fringe Festival and former company secretary of
Top 50 ASX listed companies Transurban Group and Australian Foundation Investment Company Limited. Mark was
appointed Company Secretary on 31 August 2018.
Review of Operations
The Principal Activities of the year focused on participating in discovery/leveraged exposure to gold by investing in listed
brownfield explorers that satisfy key selection criteria and building strategic greenfields land positions. Concentrating on
building a portfolio of Western Australian brownfield discovery opportunities through strategic equity investment, tenement
acquisitions and joint ventures, activities focussed on:
Identifying and evaluating, ASX listed gold exploration companies with substantial land holdings and or
resources within established goldfields and or provinces, investing in NTM Gold Limited and De Grey Mining
Limited.
Evaluating the past exploration data, government and research data with the objective of enhancing the value
the Company’s extensive land holdings in the Pilbara, Yerrida Basin and Eastern Goldfields of Western
Australia, and the Adelaide Geosyncline and Stuart Shelf of South Australia.
Increased field activity on the six core sediment hosted gold and copper/gold exploration opportunities in
Western Australia at Mallina and Mount Tom Price in the Pilbara, Yerrida Basin, Murchison Region, Lake Randall
and Black Flag in the Eastern Goldfields and in South Australia at Pernatty Lagoon and Stuart Shelf. The field
activity will include geochemical soil surveys, airborne EM and surface gravity geophysical surveys and drilling.
Conducting and supporting research at CODES at University of Tasmania, particularly the gold, copper and
cobalt content of pyrites, that are associated with sediment hosted gold mineralisation in the Pilbara, Yerrida
Basin of Western Australia and the Tapley Hill formation in South Australia.
Investment Activities
The Company embarked on identifying and evaluating investment opportunities by researching 90 ASX listed Australian
gold explorers with a focus on Australia and particularly Western Australia.
Companies which had substantial land holdings in established gold fields or provinces, strong experienced management
and a stable shareholder base were prioritised for further study. This resulted in an investment in De Grey Mining Limited
and NTM Gold Limited.
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Directors’ report
Review of Operations (continued)
Sediment Hosted Gold Discovery
The Company completed comprehensive data compilation and evaluation of its extensive land holdings in Western
Australia and South Australia including reviews of past exploration data, interpretation of airborne magnetic/ radiometric
and gravity data, and research of academic literature applicable and government geological survey data. This research
work has generated substantial targets at this point in the Pilbara, Yerrida Basin, and the Murchison in Western Australia.
Work is ongoing in South Australia.
Research and Development
The Company has continued to conduct its research engagement with CODES at the University of Tasmania. The
objective of the research is to target the discovery of world class sediment hosted gold, copper and cobalt mineralisation
in the sedimentary basins of Australia. Detailed sampling of pyrite hosted by sediments is followed by laser ablation
analysis of the gold copper and cobalt contents of the pyrite. The geological age of the sediments/ basins is also an
important element in focusing the ongoing research.
In particular, extensive sampling of favourable sedimentary diamond core has occurred at the Western Australian and
South Australian central core libraries.
Operating Results
The total loss from operations of the Consolidated Entity for the year ended 30 June 2019 was $5,077,633 (2018: net loss
$611,890).
Changes in state of affairs
During the financial year, the Company and Yandan Gold Mines Pty Ltd received a total of $779,674 (before fees) in tax
refunds relating to the 2018 and 2019 research and development activities. The financial position and performance of
the Group was particularly affected by the following events and transactions during the year:
Acquisition of 25,000,000 shares with 25,000,000 options in De Grey Mining Limited for $5,000,000 cash
consideration;
Acquisition of 12,500,000 shares with 25,000,000 options in NTM Gold Limited for $500,000 cash
consideration
Non-cash share-based payments expense of $445,347 relating to performance rights granted to directors,
employees and consultants.
Net loss of $2,418,510 on the fair value of the equity investments and derivative options in DEG and NTM
which were classified as financial assets at fair value through profit or loss under AASB 9 Financial
Instruments.
The following share and option transactions occurred in the year.
On 6 July 2018 the Company issued 6,545,587 fully paid ordinary shares at an issue price of $0.75 and
6,545,587 free attaching options exercisable at $1 on or before 31 December 2021 pursuant to the non-
renounceable entitlement offer announced 13 June 2018.
On 4 October 2018 the Company issued 3,333,334 fully paid ordinary shares at an issue price of $0.75 and
3,333,334 free attaching options exercisable at $1 on or before 31 December 2021 pursuant to the placement
approved by shareholders on 27 September 2018.
On 23 October 2018 the Company issued 163,208 fully paid ordinary shares at an issue price of $0.75 and
163,208 free attaching options exercisable at $1 on or before 31 December 2021 pursuant to the placement
approved by shareholders on 27 September 2018.
On 5 March 2019 the Company issued 4,003,476 fully paid ordinary shares at an issue price of $0.60 pursuant
to the non-renounceable entitlement offer announced 5 February 2019.
On 29 March 2019 the Company issued 3,346,155 fully paid ordinary shares at an issue price of $0.65 pursuant
to the placement announced 5 February 2019.
During the year 38,520 $0.40 options were exercised, raising $15,178.
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Directors’ report
Subsequent Events
On July 2019, DGO agreed to support NTM Gold Limited with a further investment of approximately $469,000 via a
placement of shares.
On 11 July 2019, DGO announced an extension and consolidation of its gold exploration land near Mt Tom Price in the
Pilbara, Western Australia through a farm-in agreement to earn 80% in contiguous Exploration Licences.
On 18 July 2019, DGO announced its commitment to additional investment in De Grey Mining Limited by way of a
placement of 6 million shares at 5 cents per share, accepting its entitlement of the rights issue and sub-underwriting the
De Grey entitlements issue to the extent of 70 million shares at 5 cents per share. This was partially funded by loans of
$2.5 million repayable by 31 July 2020.
On 14 August 2019 DGO relocated its head office and Registered Office to Level 9, 63 Exhibition Street, Melbourne
Victoria 3000.
On 10 September 2019 DGO announced a successful placement of 2,666,667 shares at $0.75 raising $2 million for
working capital for further exploration and strategic investment.
Health and Safety Policy
The Company is committed to maintaining a culture which supports the health and safety of all employees, contractors,
customers and communities associated with its business and operations and has appropriate policies in place.
Environmental regulations
The Company is subject to 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 license conditions 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
Following the entitlement issue on 5 March 2019 the exercise price of the 40 cent options reduced from 40 cents to 39.36
cents.
At the date of this report, a total of 842,175 options exercisable at $0.40 per share (now $0.3936) on or before 30 June
2020 (DGOAI) and 10,042,129 options exercisable at $1.00 on or before 31 December 2021 are on issue.
Option holders do not have any right by virtue of the option to participate in any share issue of the Company or any related
body corporate.
During the financial year, executives have not exercised any options to acquire fully paid ordinary shares in DGO Gold
Limited.
Indemnification of Directors, Officers and Auditors
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.
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Directors’ report
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. R. C. Hutton
Mr. J. B. Parncutt
Mr. M. J. Ilett
Dr. D Clark (ii)
Board of Directors
Invited to
attend
9
9
9
9
2
Attended
9
8
8
9
2
Remuneration
& Nomination
Committee
Invited to
attend
1
1
1
1
-
Attended
1
1
1
1
-
Audit Committee
Invited to
attend
-
2
2
2
-
Attended
-
2
1
2
-
(i) Mr. E. Eshuys is not a member of the Audit Committee.
(ii) Dr. D Clark was appointed as a director on 15 October 2018 and resigned on 29 January 2019
Directors’ security holdings
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) (ii)
Mr. J. B. Parncutt
Mr. M. J. Ilett
Fully paid
ordinary shares
Number (i)
2,727,970
509,673
4,247,660
100,687
Indirect holdings
Total shares held
(beneficial interest)
Relevant
Interest
-
69,753
-
-
2,727,970
530,599
2,727,970
579,426
4,247,660
4,247,660
100,687
100,687
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.
The following table sets out each Director’s direct and indirect interest and relevant interest in options in the Company as
at the date of this report:
Directors
$0.40 options
(now $0.3936)
$1 Options
Mr. E. Eshuys (ii)
Mr. R. C. Hutton (i)
Mr. J. B. Parncutt (ii)
Mr. M. J. Ilett (ii)
-
40,000
-
-
680,268
-
1,333,333
20,608
(i)
(ii)
40c options - 40,000 of the options held by Mr R. C. Hutton are exercisable at $0.40 cents (now $0.3936) on or before 30 June 2020 and
were issued pursuant to the Entitlement Offer on 22 June 2017.
$1 options are exercisable at $1 on or before 31 December 2021 and were issued pursuant to the Entitlement Offer on 6 July 2018.
Mr R Hutton will be eligible to be re-elected as a Director at the next Annual General Meeting.
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Directors’ report
Remuneration report (Audited)
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 2019. 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 covered in this report
B. Remuneration policy for key management personnel
C. Relationship between remuneration policy and company performance
D. Remuneration of key management personnel
E. Key terms of employment contracts
F. Other transactions and other balances with key management personnel and their related parties
A.
Key management personnel covered in this report
The following persons acted as directors of the Company during or since the end of the financial year:
Mr. E. Eshuys (Executive Chairman)
Mr. R. C. Hutton (Non-Executive Director)
Mr. J. B. Parncutt (Non-Executive Director)
Mr. M. J. Ilett (Non-Executive Director)
Dr. D Clark (Managing Director appointed 15 October 2018 and resigned 29 January 2019)
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
are 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
senior executives and recommendations were made to and adopted by the Board. The senior executive consisting of Mr.
E. Eshuys has 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 understanding of their respective rights, duties, responsibilities, and the roles of board and senior
executives.
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Directors’ report
Remuneration report (Audited)
Non-executive director remuneration
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-
acquiring gold and base metal exploration businesses and seeking to create shareholder value through prospect
delineation, joint venture and sale or successful exploration
seeking shareholder value growth through investment in exploration ventures and companies.
The table below sets out summary information about the Consolidated Entity’s earnings and movements in shareholder’s
wealth for the five years to 30 June 2019:
Description
30 June 2019
30 June 2018
30 June 2017
30 June 2016
30 June
2015
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)
63,304
4,294
178,854
261,995
3,299
(5,077,633)
(611,890)
(201,964)
(871,690)
(741,521)
-
(5,077,633)
(5,077,633)
66.5 cents
64.5 cents
-
-
(20 cents)
(20 cents)
-
(611,890) (ii)
(611,890)
23.5 cents
66.5 cents
-
-
(5 cents)
(5 cents)
-
(201,964)
(201,964)
20 cents
23.5 cents
-
-
(3 cents)
(3 cents)
-
(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)
(i)
The calculation of the basic loss per share and share price adjusted for the 100:1 share consolidation that was approved by shareholders
on 17 September 2015.
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Directors’ report
Remuneration report (Audited)
D. Remuneration of key management personnel
The following table provides information about the remuneration of the Consolidated Entity’s key management personnel
during the 30 June 2019 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
$
$
$
2019
Executive chairman
Mr. E. Eshuys
Non-executive directors
Mr. R. C. Hutton
Mr. J. B. Parncutt
Non-executive director
and former Company
Secretary
Mr. M. J. Ilett (ii)
Former Managing
Director
Dr. D. Clark (iii)
Total
100,000
45,000
-
45,000
68,493
258,493
-
-
-
-
-
-
-
-
-
-
9,500
(i) 1,772
156,262
267,534
-
-
-
4,275
-
25,000
4,275
-
-
-
39,066
156,262
88,341
156,262
39,066
113,341
25,000
6,507
24,557
-
1,772
-
390,656
75,000
700,478
(i) Other long-term employee benefits consist of accrued Long Service Leave.
(ii) Short-term employee benefits include $25,000 representing consulting fees (net of Goods and Services Tax) paid to Kaus Australis Pty Ltd
a related party of Mr. M. J. Ilett for services to 31 August 2018.
(iii) Appointed 15 October 2018 and resigned 29 January 2019.
The following table provides information about the remuneration of the Consolidated Entity’s directors and senior
management during the 30 June 2018 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
-
45,000
190,000
-
-
-
-
-
-
-
-
-
-
-
-
-
9,500
(i) 15,489
4,275
-
-
-
75,000
75,000
4,275
18,050
-
15,489
-
-
-
-
124,989
49,275
-
124,275
298,539
2018
Executive chairman
Mr. E. Eshuys
Non-executive
directors
Mr. R. C. Hutton
Mr. J. B. Parncutt (ii)
Executive director and
Company Secretary
Mr. M. J. Ilett (iii)
Total
(i) Other long-term employee benefits consist of accrued Long Service Leave.
(ii) Appointed as Non-Executive Director on 23 May 2018
(iii) Short-term employee benefits include $75,000 representing consulting fees (net of Goods and Services Tax) paid to Kaus Australis Pty Ltd
a related party of Mr. M. J. Ilett.
There were no bonuses granted as compensation for the current or prior financial year. Performance rights were issued
as Compensation as shown on page 13.
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Directors’ report
Remuneration report (Audited)
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
Granted as
compensation
Received
on
exercise
of
options
(i)
No.
Net other
change (iii)
Balance
at the end
of the year
Relevant
interest
Balance
held
nominally
No.
No.
No.
No.
No.
No.
2019
Mr. E. Eshuys
Mr. R. C. Hutton
Mr. J. B. Parncutt
Mr. M. J. Ilett
2018
Mr. E. Eshuys
Mr. R. C. Hutton
Mr. J. B. Parncutt
Mr. M. J. Ilett
1,627,991
559,426
2,340,250
65,695
1,231,757
559,426
1,934,500 (ii)
49,271
-
-
-
-
-
-
-
-
-
-
-
-
1,099,979
20,000
1,907,410
34,992
351,244
-
405,750
16,424
44,990
-
-
-
2,727,970
579,462
4,247,660
100,687
1,627,991
559,426
2,340,250
65,695
2,727,970
579,462
4,247,660
100,687
1,627,991
559,426
2,340,250
65,695
-
-
-
-
-
-
-
-
Exercise of options at exercise price of $0.40 per share (now $0.3936) acquired on 6 June 2018.
(i)
(ii) Shares held upon appointment as director on 23 May 2018.
(iii) These are equity transactions with KMP other than those granted as remuneration which have been entered into under terms and
conditions no more favourable than those the Group would have adopted if dealing at arm's length.
Unlisted options of DGO Gold Limited held directly or indirectly at end of financial year $0.40 options (now $0.3936)
exercisable before 30 June 2020:
Balance
at
beginning
of year
No.
-
-
40,000
-
-
351,244
40,000
405,750
16,424
Granted as
compensation
Net other
change (ii)
Balance
at the end
of the year
Relevant
interest
Balance
held
nominally
No.
No.
No.
No.
No.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(351,244)
-
(405,750)
(16,424)
-
-
40,000
-
-
-
40,000
-
-
-
-
-
-
-
40,000
-
-
-
-
-
-
-
-
-
-
-
2019
Mr. E. Eshuys
Mr. R. C. Hutton
Mr. J. B. Parncutt
Mr. M. J. Ilett
2018
Mr. E. Eshuys
Mr. R. C. Hutton
Mr. J. B. Parncutt (i)
Mr. M. J. Ilett
(i) Options held upon appointment as director on 23 May 2018.
(ii) Exercise of options.
Unlisted options of DGO Gold Limited held directly or indirectly at end of financial year $1 options exercisable before 31
December 2021:
Balance
at
beginning
of year
No.
Granted as
compensation
Net other
change (i)
Balance
at the end
of the year
Relevant
interest
Balance
held
nominally
No.
No.
No.
No.
No.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
680,286
-
1,333,333
20,608
680,286
-
1,333,333
20,608
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2019
Mr. E. Eshuys
Mr. R. C. Hutton
Mr. J. B. Parncutt
Mr. M. J. Ilett
2018
Mr. E. Eshuys
Mr. R. C. Hutton
Mr. J. B. Parncutt
Mr. M. J. Ilett
(i)
These options were acquired by participation in the purchase of shares and options under the DGO entitlement offer announced 24 May,
2018 and allotted on 6 July 2018.
12
For personal use only
Directors’ report
Remuneration report (Audited)
Performance Rights
Details of performance rights issued to directors and other key management personnel as part of compensation during
the year ended 30 June 2019 are set out below.
Performance Rights of DGO Gold Limited held directly or indirectly at end of financial year:
Balance
at
beginning
of year
No.
Granted as
compen-
sation
Net other
change
No.
No.
Balance
at the
end of
the year
No.
Expiry Date
No
Lapsed
Value
granted
Value
Lapsed
$
$
-
-
-
-
-
-
-
-
-
1,000,000
250,000
1,000,000
250,000
500,000
-
-
-
-
(500,000)
1,000,000
250,000
1,000,000
250,000
-
31 Jul 21
31 Jul 21
31 Jul 21
31 Jul 21
30 Nov 21
-
-
-
-
(500,000)
339,700
84,925
339,700
84,925
169,850
-
-
--
-
169,850
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2019
Mr. E. Eshuys (i)
Mr. R. C. Hutton (i)
Mr. J. B. Parncutt (i)
Mr. M. J. Ilett (i)
Dr. D. Clark (ii)
2018
Mr. E. Eshuys
Mr. R. C. Hutton
Mr. J. B. Parncutt
Mr. M. J. Ilett
(i) Performance rights approved by shareholders at 27 September 2018 general meeting. These performance rights vest on 31 July 2021 and the
exercise price is $nil. The fair value of the performance rights was $0.34.
(ii) Performance rights approved by shareholders at 28 November 2018 and cancelled on 29 January 2019 upon resignation of Dr. D. Clark. Prior
to cancellation these performance rights vest on 30 November 2021 and the exercise price was $nil. The fair value of the performance rights was
$0.34.
The fair value of the performance rights at grant date was estimated using a Monte Carlo Simulation, taking into account
the terms and conditions upon which the performance rights were granted. The contractual life of each performance right
granted is two years and ten months. There is no cash settlement of the performance rights. The fair value of performance
rights granted during the year ended 30 June 2019 was estimated on the date of grant using the following assumptions:
Dividend yield: 0%
Expected volatility: 90.735%
Risk-free interest rate: 2.10%
Weighted average share price: $0.62
Expected life of share options: 2 years 10 months
E. Key terms of employment contracts
Contracts for services of key management personnel
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 Executive Chairman 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 Executive Chairman 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 Executive Chairman services together with any accrued long service leave.
13
For personal use only
Directors’ report
Remuneration report (Audited)
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;
No annual leave or long service leave accrued;
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. J. B. Parncutt
The Company has entered into an agreement with Mr. J. B. Parncutt pursuant to which Mr. J. B. Parncutt has agreed to
act in the capacity as a Non-Executive Director of the Company. The key terms of the agreement are as follows:-
No Director’s Fee is to be paid;
No annual leave or long service leave accrued;
Outgoings: Provision to reimburse Lion Capital Management Pty Ltd for all reasonable and necessary expenses
incurred by it or Mr. J. B. Parncutt in the performance of the services under the agreement;
Term of the Agreement: One (1) year renewed on an annual basis by mutual consent;
Termination due to change in control: In the event that a party acquires more than 50% of the Company and the
services of Lion Capital Management Pty Ltd is terminated, Lion Capital Management 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.
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 Non-Executive Director;
Term of the Agreement: One (1) year renewed on an annual basis by mutual consent;
No annual leave or long service leave accrued;
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;
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;
Termination due to resignation: Mr. M. J. Ilett 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.
M. J. Ilett is terminated, he shall be entitled total remuneration payable in respect of four (4) months’ Directors’
fees.
14
For personal use only
Directors’ report
Remuneration report (Audited)
Dr. D. Clark
The Company entered into an agreement on with Dr. D. Clark, pursuant to which Dr. D. Clark has agreed to act in the
capacity of Managing Director of the Company. The key terms of the agreement are as follows:-
Annual Director’s Fees: $250,000 per annum including superannuation obligations under the superannuation
guarantee payable on a monthly basis for the provision of services as Managing Director;
In addition, 500,000 performance rights were issued at the DGO AGM;
Term of the Agreement: One (1) year renewed on an annual basis by mutual consent;
Annual, personal and long service leave accrued in accordance with legislative requirements;
Termination due to resignation: Dr. D. Clark is required to provide six (6) months’ notice and be paid six (6)
month’s Director’s Fees during this notice period; and
Termination due to company notice: The Company is required to provide six (6) months’ notice and make a
payment of six (6) month’s Director’s Fees in lieu of notice.
Dr. D. Clark resigned on 29 January 2019.
F. Other transactions and other balances with key management, personnel and their related parties.
Lion Capital Management Pty Ltd, a company related to Mr. J B Parncutt, provided DGO Gold Ltd with an office, outgoings,
telephone, electricity, director travel expenses, CFO, Executive Assistant and Analyst services for a total of $288,675
(2018: $54,899) during the year excluding goods and services tax payable $21,091.
Exploration Drill Rigs Pty Ltd, a company related to Mr. Michael Ilett and Mr. Ross Hutton, provided the DGO Gold Ltd
with office accommodation, outgoings, telephone, electricity and receptionist services for a total of $18,450 (2018:
$19,637) per annum excluding goods and services tax.
End of audited remuneration report.
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 26 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 26 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 17 of the Annual Report.
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.
15
For personal use only
Directors’ report
Shares under options
Unissued ordinary shares
Unissued options of shares of Company under option at the date of the report are outlined in the following table:
Date options
granted
Balance
at
beginning
of year
No.
No of options
issued
Expiry
date
Exercise
price per
share
No of options
exercised
Balance at
date
of report
No.
$
No.
No.
No of shares
issued from
exercising
options
No.
22 June 2017
880,695
-
30 June 2020
$0.3936
38,520
842,175
38,520
6 July 2018
-
10,042,129
31 December 2021
$1.00
-
10,042,129
-
Performance Rights
Performance rights of shares of Company under option at the date of the report are outlined in the following table:
Date rights
granted
Balance
at
beginning
of year
No.
No of rights
issued
Expiry
date
Exercise
price per
right
No of rights
exercised
No of rights
lapsed
No.
$
No.
Balance at
date
of report
No.
27 September 2018
28 November 2018
-
-
2,850,000
500,000
31 July 2021
30 November 2021
-
-
-
-
-
(500,000)
2,850,000
-
Included in the performance rights above are the rights granted as remuneration to the directors and the five most highly
remunerated officers during the year. Details of performance rights granted to key management personnel are disclosed
in the remuneration report above. No other options or performance rights were granted to officers who are among the five
highest remunerated officers of the company and the group, but are not key management persons.
The directors’ report is signed in accordance with a resolution of Directors made pursuant to s.298 (2) of the Corporations
Act 2001.
On behalf of the Directors
Eduard Eshuys
Executive Chairman
Melbourne, 19 September 2019
16
For personal use only 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 of DGO Gold Limited for the year ended 30 June 2019, I declare that, to the best of my
knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of DGO Gold Limited and the entities it controlled during the period.
T R Mann
Director
BDO Audit Pty Ltd
Brisbane, 19 September 2019
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.
17
For personal use only DGO Gold Limited
Consolidated statement of profit or loss and other comprehensive income
for the financial year ended 30 June 2019
Note
Year ended
30/06/19
$
Year ended
30/06/18
$
Interest income
Dividend income
Other income
Administration and other expense
Consultants and contractor expense
Depreciation expense
Employee benefit expense
Exploration and evaluation expenditure
Loss on disposal of property, plant and equipment
Fair value losses on financial assets at fair value through profit or loss
Impairment of exploration and evaluation expenditure
Share based payments expense
Other expenses
10
11
Loss before tax
Income tax (expense)/benefit
Loss for the year
19,774
13,564
29,966
(509,184)
(68,225)
(4,643)
(47,266)
(99,134)
(5,520)
(2,418,510)
(1,518,157)
(445,347)
(24,951)
4,294
-
-
(241,633)
(102,674)
(7,097)
(67,284)
(172,279)
-
-
-
-
(25,217)
(5,077,633)
(611,890)
-
-
(5,077,633)
(611,890)
LOSS FOR THE YEAR
(5,077,633)
(611,890)
Other comprehensive income
Items that may be reclassified to profit or loss
Change in fair value of financial instruments
Income tax on items of other comprehensive income
Other comprehensive for the year net of tax
-
-
-
10,638
-
10,638
Total comprehensive loss for the year
(5,077,633)
(601,252)
Loss per share
Basic and diluted loss per share (cents per share)
16
(20)
(5)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with
the accompanying notes
18
For personal use only DGO Gold Limited
Consolidated statement of financial position
as at 30 June 2019
Current assets
Cash and cash equivalents
Trade and other receivables
Assets classified as held for sale
Total current assets
Non-current assets
Financial assets at fair value through profit or loss
Property, plant and equipment
Exploration and evaluation expenditure
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Note
Year ended
30/06/19
$
Year ended
30/06/18
$
7
8
9
10
11
12
13
14
15
4,803,007
333,340
-
5,136,347
1,625,441
572,322
60,638
2,258,401
4,623,348
57,662
1,335,012
6,016,022
-
16,611
1,642,437
1,659,048
11,152,369
3,917,449
255,219
20,056
275,275
510,436
15,489
525,925
275,275
525,925
10,877,094
3,391,524
35,866,880
745,999
(25,735,785)
10,877,094
23,749,024
311,290
(20,668,790)
3,391,524
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
19
For personal use only DGO Gold Limited
Consolidated statement of changes in equity
for the financial year ended 30 June 2019
Issued capital
Accumulated
losses
Share
based
payments
reserve
Share
revaluation
reserve
Total
Consolidated
Balance at 1 July 2017
$
21,232,367
$
(20,056,900)
$
300,652
$
$
-
1,476,119
Loss for the year
Other comprehensive income
Total comprehensive income
for the period
Transactions with owners in
their capacity as owners
Issue of shares
Share issue costs
-
-
-
(611,890)
-
(611,890)
2,608,833
(92,176)
2,516,657
-
-
-
-
-
-
-
-
-
10,638
10,638
(611,890)
10,638
(601,252)
-
-
-
2,608,833
(92,176)
2,516,657
Balance at 30 June 2018
23,749,024
(20,668,790)
300,652
10,638
3,391,524
23,749,024
(20,668,790)
300,652
10,638
3,391,524
-
10,638
-
(10,638)
-
Balance at 1 July 2018
Change in accounting policy
(Note 3(a))
Balance at 1 July 2018 -
restated
Loss for the year
Other comprehensive income
Total comprehensive income
for the period
Transactions with owners in
their capacity as owners
Share based payments
Issue of shares
Share issue costs
23,749,024
(20,658,152)
300,652
-
-
-
(5,077,633)
-
(5,077,633)
-
-
-
-
12,324,035
(206,179)
12,117,856
-
-
-
-
445,347
-
-
445,347
Balance at 30 June 2019
35,866,880
(25,735,785)
745,999
-
-
-
-
-
-
-
-
-
3,391,524
(5,077,633)
-
(5,077,633)
445,347
12,324,039
(206,183)
12,563,203
10,877,094
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
20
For personal use only
DGO Gold Limited
Consolidated statement of cash flows
for the financial year ended 30 June 2019
Cash flows from operating activities
Payments to suppliers and employees
Payments for exploration and evaluation activities
Year ended
30/06/19
$
Year ended
30/06/18
$
Note
(640,454)
(452,177)
(99,132)
(172,279)
Net cash (used)/generated by operating activities
20
(739,584)
(624,456)
Cash flows from investing activities
Interest received
Dividends received
Receipt of research and development tax rebate for exploration assets
Proceeds from sale of shares
Payments for plant and equipment
Payments for exploration and evaluation activities
Payments for financial assets at fair value through profit or loss
Payments for deposits
Net cash generated/(used) by investing activities
11
10
Cash flows from financing activities
Proceeds from issues of equity securities
Payment for share issue costs
Proceeds from share application monies
Net cash generated/(used) by investing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
10,609
4,294
13,564
-
779,674
234,033
48,775
-
(12,420)
(10,064)
(1,938,271)
(1,226,312)
(6,750,028)
-
(48,963)
(483,827)
(7,897,060)
(1,481,876)
12,008,583
2,608,833
(194,373)
(151,796)
-
315,456
11,814,210
(2,772,493)
3,177,566
666,162
1,625,441
959,279
Cash and cash equivalents at the end of the financial year
7
4,803,007
1,625,441
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
21
For personal use only
DGO Gold Limited
Notes to the financial statements
for the year ended 30 June 2019
Income taxes
Notes to the financial statements
1. General information
2. New accounting standards for application in future periods
3. Significant accounting policies
4. Critical accounting judgements and estimates
5. Business and geographical segments
6.
7. Cash and cash equivalents
8. Trade and other receivables
9. Assets classified as held for sale
10. Financial assets
11. Exploration and evaluation expenditure
12. Trade and other payables
13. Provisions
14. Issued capital
15. Reserves
16. Loss per share
17. Dividends
18. Commitments
19. Subsidiaries
20. Notes to the statement of cash flows
21. Contingent liabilities and contingent assets
22. Financial instruments
23. Key management personnel compensation
24. Related party transactions
25. Parent entity disclosures
26. Remuneration of auditors
27. Events after the reporting date
23
23
23
31
31
31
32
32
32
33
34
34
34
35
37
37
37
37
38
38
38
39
41
41
41
42
42
22
For personal use only
DGO Gold Limited
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
Level 9 63 Exhibition St
Melbourne Vic 3000
Principal place of business
Level 9 63 Exhibition St
Melbourne Vic 3000
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.
The consolidated financial statements of DGO Gold Limited and its subsidiary (collectively, the Group) were authorised
for issue by the Directors on 19 September 2019.
2. New accounting standards for application in future periods
Accounting standards issued by the AASB that are not yet mandatorily applicable to the Group, together with an
assessment of the potential impact of such pronouncements on the Group when adopted in future periods, are discussed
below:
AASB 16 Leases
This standard and its consequential amendments are currently applicable to annual reporting periods beginning on or
after 1 January 2019. When effective, this standard will replace the current accounting requirements applicable to leases
in AASB 117 Leases and related interpretations. AASB 16 introduces a single lessee accounting model that eliminates
the requirement for leases to be classified as operating or finance leases. This means that for most leases, a right-to-use
asset and a liability will be recognised, with the right-to-use asset being depreciated and the liability being unwound in
principal and interest components over the life of the lease.
The Group has evaluated the impact of adoption of this standard. Upon adoption of this standard, it is the Group’s
intention to transition using the modified retrospective approach, where the right-of-use asset is recognised at the date of
initial application at an amount equal to the lease liability, using the entity’s current incremental borrowing rate.
Comparative figures are not restated.
Based on the transition approach and the entity’s current leasing arrangements the entity has determined there will be no
material impacts in the current or future reporting periods and on foreseeable future transactions.
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.
New Accounting Standards and Interpretations adopted by the group
(a) New and amended standards adopted by the group
A number of new or amended standards became applicable for the current reporting period and the group had to
change its accounting policies as a result of adopting the following standards:
AASB 9 Financial Instruments, and
AASB 15 Revenue from Contracts with Customers.
The impact of the adoption of these standards and the new accounting policies are disclosed below. The other standards
did not have any impact on the group’s accounting policies and did not require retrospective adjustments.
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3. Significant accounting policies (continued)
AASB 15 Revenue from Contracts with Customers – Impact of adoption
The group has adopted AASB 15 Revenue from Contracts with Customers from 1 July 2018. In accordance with the
transition provisions in AASB 15, the group has adopted the new rules retrospectively however there was no material
impact on the amounts disclosed previously and as a result there has been no restatement required as a result of
reclassification or remeasurement and no change to the previously disclosed accounting policies.
AASB 9 Financial Instruments – Impact of adoption
AASB 9 replaces the provisions of AASB 139 that relate to the recognition, classification and measurement of financial
assets and financial liabilities, derecognition of financial instruments, impairment of financial assets and hedge
accounting. AASB 9 was generally adopted without restating comparative information.
The adoption of AASB 9 from 1 July 2018 resulted in changes in accounting policies. The new accounting policies are
set out in note below. In accordance with the transitional provisions in AASB 9 (7.2.15) comparative figures have not
been restated.
(i) Classification and Measurement
At the date of initial application of AASB 9 on 1 July 2018, the group’s management has assessed which business
models apply to the financial assets held by the group and has classified its financial instruments into the appropriate
AASB 9 categories.
The directors of the Group determined the existing financial assets as at 1 July 2018 based on the facts and
circumstances that were present, and determined that the initial application of AASB 9 had the following effects:
•
•
The Group's investments that were classified as available-for-sale financial assets (under AASB 139) have been
reclassified as financial assets at fair value through profit or loss under AASB 9 as they do not meet the criteria
for classification at amortised cost or fair value through other comprehensive income. There was no impact on
the amounts recognised in relation to these assets from the adoption of AASB 9. Related fair value gains/loss
of $10,638 were transferred from the ‘Share revaluation reserve’ to accumulated losses on 1 July 2018. Fair
value loss of $13,830 relating to these investments were recognised in profit or loss.
Financial assets as held-to-maturity and loans and receivables that were measured at amortised cost continue
to be measured at amortised cost under AASB 9, as they are held to collect contractual cash flows and these
cash flows consist solely of payments of principal and interest on the principal amount outstanding.
(ii) Impairment of financial assets
In adopting AASB 9, an expected credit loss model is applied and not an incurred credit loss model as per AASB 139.
To reflect changes in credit risk, this expected credit loss model requires the group to account for expected credit loss
since initial recognition. The group has one type of financial asset that is subject to AASB 9’s new expected credit loss
model, being trade and other receivables. A simple approach is followed in relation to trade receivables, as the loss
allowance is measured at lifetime expected credit loss.
The application of the AASB 9 impairment requirements did not result to a material change to the Group’s net trade and
other receivables. While cash and cash equivalents are also subject to the impairment requirements of AASB 9, there
was no material impairment loss identified.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated
upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to be measured at
fair value. Financial assets are classified as held for trading if they are acquired for the purpose of selling or
repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for
trading unless they are designated as effective hedging instruments. Financial assets with cash flows that are not
solely payments of principal and interest are classified and measured at fair value through profit or loss, irrespective of
the business model. Notwithstanding the criteria for debt instruments to be classified at amortised cost or at fair value
through OCI, as described above, debt instruments may be designated at fair value through profit or loss on initial
recognition if doing so eliminates, or significantly reduces, an accounting mismatch.
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net
changes in fair value recognised in profit or loss.
This category includes derivative instruments and listed equity investments which the Group had not irrevocably
elected to classify at fair value through OCI. Dividends on listed equity investments are also recognised as other
income in the statement of profit or loss when the right of payment has been established.
A derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separated from the host
and accounted for as a separate derivative if: the economic characteristics and risks are not closely related to the host;
a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and
the hybrid contract is not measured at fair value through profit or loss. Embedded derivatives are measured at fair
value with changes in fair value recognised in profit or loss. Reassessment only occurs if there is either a change in the
terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a
financial asset out of the fair value through profit or loss category.
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3. Significant accounting policies (continued)
A derivative embedded within a hybrid contract containing a financial asset host is not accounted for separately. The
financial asset host together with the embedded derivative is required to be classified in its entirety as a financial asset
at fair value through profit or loss.
Recognition and derecognition
Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the group
commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from
the financial assets have expired or have been transferred and the group has transferred substantially all the risks and
rewards of ownership.
Measurement
At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not at
fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial
asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows
are solely payment of principal and interest.
Equity instruments
The group subsequently measures all equity investments at fair value. Where the group’s management has elected to
present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value
gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue
to be recognised in profit or loss as other income when the group’s right to receive payments is established.
Changes in the fair value of financial assets at FVPL are recognised in fair value gains/(losses) in profit or loss as
applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not
reported separately from other changes in fair value.
Impairment
From 1 July 2018, the group assesses on a forward looking basis the expected credit losses associated with its trade
and other receivables. The impairment methodology applied depends on whether there has been a significant
increase in credit risk. For trade and other receivables, the group applies the simplified approach permitted by AASB
9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
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 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.
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3. Significant accounting policies (continued)
(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 and investment 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 with the next 18 months.
The directors have concluded as a result of the requirement to raise funds in the future 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 financial position of the
Company, 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.
Should the Group be unable to continue as a going concern, it may be required to realise its assets and extinguish
its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the
financial statements.
This financial report does not include any adjustments relating to the recoverability and classification of recorded
asset amounts or the amounts or classification of liabilities and appropriate disclosures that may be necessary
should the Group be unable to continue as a going concern.
(c) 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.
(d) 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.
The Group recognises a liability for long service leave measured as the present value of expected future payments
to be made in respect of services provided by employees up to the reporting date. Consideration is given to
expected future wage and salary levels, experience of employee departures, and periods of service. Expected
future payments are discounted using market yields at the reporting date on high quality corporate bonds with
terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows.
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3. Significant accounting policies (continued)
(e) AASB 9 Financial Instruments – Accounting policies applied from 1 July 2018
(i) Investments and other financial assets
Classification
From 1 July 2018, the group classifies its financial assets in the following measurement categories:
those to be measured subsequently at fair value (either through OCI, or through profit or loss); and
those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual
terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments
in equity instruments that are not held for trading, this will depend on whether the group has made an irrevocable
election at the time of initial recognition to account for the equity investment at fair value through other
comprehensive income (FVOCI). The election is made on an investment-by-investment basis. All other financial
assets are classified as measured at fair value through profit or loss (FVPL).
The group reclassifies debt investments when and only when its business model for managing those assets
changes.
(ii) Derivative financial instruments
Options
An option is a contractual arrangement under which the seller (writer) grants the purchaser (holder) the right, but
not the obligation, either to buy (a call option) or sell (a put option) at or by a set date or during a set period, a
specific amount of securities or a financial instrument at a predetermined price. The seller receives a premium from
the purchaser in consideration for the assumption of future securities price risk. Options held by the Group as part
of the investments in DEG and NTM are not listed. The Group is exposed to credit risk on purchased options to
the extent of their carrying amount, which is their fair value. Options are settled on a gross basis.
(f) 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:
at least one of the following conditions is also met:
the rights to tenure of the area of interest are current; and
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.
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.
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3. Basis of Preparation (continued)
(g)
Impairment of tangible (excluding financial 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.
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.
(h)
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
Group 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 statement of financial position liability method. Temporary differences are
differences between the tax base of an asset or liability and its carrying amount for financial reporting purposes at
the reporting date. 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 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.
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3. Basis of Preparation (continued)
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 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 profit or loss, except when it relates to items
credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity.
(i)
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 statement of financial position 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.
(j)
Property, plant and equipment
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. 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.
(k)
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.
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3. Basis of Preparation (continued)
(k)
Revenue
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 Group 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 unless the asset has previously been written
off in which case it is taken to income in profit or loss.
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.
(m) 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 or Monte
Carlo Simulation method as applicable. 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.
(n) 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 statement of cashflows 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.
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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 27.5% (2018: 27.5%)
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
30/06/19
$
(5,077,633)
1,396,349
Year ended
30/06/18
$
(611,890)
168,270
(793,690)
(602,659)
-
44,774
(213,044)
-
(i) The tax rate used in the above reconciliation is the corporate tax rate of 27.5% payable by Australian corporate
entities on taxable profits under Australian tax law.
Recognised deferred tax assets and liabilities
Deferred tax assets
Tax losses revenue
Temporary Differences
Deferred tax liabilities:
Exploration and evaluation expenditure
Prepayments
Interest receivable
Deferred tax liability
Unrecognised deferred tax balances
The following deferred tax assets have not been brought to account:
-Temporary Differences
-Tax losses revenue
31
Year ended
30/06/19
$
Year ended
30/06/18
$
66,065
74,624
428,741
29,248
(129,868)
(8,301)
(2,520)
-
(451,670)
(6,319)
-
-
Year ended
30/06/19
$
Year ended
30/06/18
$
-
7,588,499
7,588,499
30,422
6,929,140
6,959,562
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7. Cash and cash equivalents
Cash at Bank
8. Trade and other receivables
Current
Prepayments
Deposits (i)
Receivables
Goods and services tax receivable
Year ended
30/06/19
$
Year ended
30/06/18
$
4,803,007
1,625,441
Year ended
30/06/19
$
Year ended
30/06/18
$
30,184
255,361
9,166
38,629
333,340
22,979
483,827
-
65,516
572,322
(i) Deposits amounting to $191,108 (2018: $233,827) relates to refundable prepayments of rent for the first year of the
term of exploration licences applied for in Western Australia.
In May 2018, the Company paid a $250,000 deposit for an upcoming placement in De Grey Mining Limited. The
shares under this placement were issued on 11 July 2018.
(ii) At 30 June 2019 there were no receivables that were past due or impaired.
9. Assets classified as held for sale
Held for sale investments carried at fair value
Quotes shares – Talisman Mining Limited (i)
Year ended
30/06/19
$
Year ended
30/06/18
$
-
-
60,638
60,638
(i) The Company had 212,766 quoted shares in Talisman Mining Limited which were originally acquired for a
consideration of $100,000. The directors have sold the listed shares in Talisman and as a result, these have been
classified as assets classified as held for sale in accordance with AASB 5 Non-current Assets Held for Sale and
Discontinued Operations.
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10. Financial assets at fair value through profit or loss
Financial assets mandatorily measured at FVPL include the following:
Quoted Shares – De Grey Mining Ltd (i)
Quoted Shares – NTM Gold Ltd (ii)
Quoted Shares - Jindalee Resources Limited
Total equity securities
Unlisted options – De Grey Mining Ltd (i)
Unlisted options – NTM Gold Ltd (ii)
Unlisted options – Jindalee Resources Limited
Total derivative financial assets
Total financial assets held at fair value through profit or loss (FVPL)
30 June 2019
1,925,000
2,000,000
40,000
3,965,000
-
633,232
25,116
658,348
4,623,348
30 June 2018
-
-
-
-
-
-
-
-
(i)
Investment in De Grey Mining Ltd (ASX:DEG)
On 10 July 2018, the Company acquired 25,000,000 quoted shares in De Grey Mining Limited for a cash
consideration of $5,000,000. The shares include the following options for every two shares held:
Series A options with an exercise price of $0.25 and expiry date of 30 November 2019; and
Series B options with an exercise price of $0.30 and expiry date of 30 May 2021.
(ii)
Investment in NTM Gold Ltd (ASX:NTM)
On 20 November 2018, the Company acquired 12,500,000 quoted shares (Tranche 1) in NTM Gold Limited for a
cash consideration of $500,000. The Tranche 1 shares include the following options:
12,500,000 options with an exercise price of $0.05 and expiry date of 31 March 2020; and
12,500,000 options with an exercise price of $0.10 and expiry date of 31 March 2022.
On 31 March 2019, the Company invested a further $1,500,000 and invested for 37,500,000 shares (Tranche 2):
47,500,000 options with an exercise price of $0.05 and expiry date of 31 March 2020; and
47,500,000 options with an exercise price of $0.10 and expiry date of 31 March 2022.
(iii) Investment in Jindalee Resources Ltd (ASX:JRL)
On 11 January 2019, the Company acquired 100,000 quoted shares in Jindalee Resources Limited for consideration
of $28,000. The shares include the following two options for every share held:
200,000 options with an exercise price of $0.50 and expiry date of 30 June 2022.
Accounting policy - the difference between the transaction price and the fair value (day one profit or loss)
The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date. On initial recognition, the transaction price
generally represents the fair value of the financial instrument unless there is observable information from an active market
to the contrary. Where unobservable information is used, the difference between the transaction price and the fair value
(day one profit or loss) is recognised in profit or loss over the life of the instrument when the inputs become observable.
On day one, there was a difference between the transaction price and the fair value of the unlisted options as measured
using certain unobservable information. The table below details the unrecognised amount as at 30 June 2019:
Unlisted options – De Grey Mining Ltd (i)
Unlisted options – NTM Gold Ltd (ii)
Unlisted options – Jindalee Resources Limited
Total derivative financial assets
Fair Value at 30
June 2019
Un-recognised
amount
Fair value
recognised at 30
June 2019
65,074
895,710
32,277
993,061
(65,074)
(262,478)
(7,161)
(334,713)
-
633,232
25,116
658,348
33
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DGO Gold Limited
10. Financial assets at fair value through profit or loss
Classification
See note 3(a) for explanations regarding the change in accounting policy and the reclassification of certain investments
from available-for-sale to financial assets at fair value through profit or loss (FVTPL) following the adoption of AASB 9.
Quoted equity shares are mandatorily measured at FVTPL and subsequently measured at each reporting date based on
the quoted share price.
Unlisted options which do not meet the criteria for amortised cost or Fair Value Through Other Comprehensive Income
(FVOCI) are measured at FVTPL.
During the year, a fair value loss on equity securities and unlisted options amounting to $2,418,510 (2018:$NIL) has been
recognised in profit or loss.
Risk exposure and fair value measurements
Information about the group’s exposure to price risk is provided in note 22. For information about the methods and
assumptions used in determining fair value please refer to note 22.
11. Exploration and evaluation expenditure
Gross carrying amount balance:
Balance at beginning of financial year
Additions
Impairments
Balance at end of the financial year
Grant Revenue from research and development tax offset applied to
exploration and evaluation expenditure
Balance at beginning of financial year
Research and development tax refund
Balance at end of financial year
Net book value at end of financial year (i)
Year ended
30/06/19
$
Year ended
30/06/18
$
1,944,597
1,990,406
(1,518,157)
2,416,846
618,059
1,326,538
1,944,597
(302,160)
(779,674)
(1,081,834)
1,335,012
(68,127)
(234,033)
(302,160)
1,642,437
(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 (f). The ultimate recoupment
of the exploration and evaluation expenditure in respect of the areas of interest carried forward is 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 profit or loss until a mining operation is ready for
commencement or when tenements are relinquished.
12. Trade and other payables
Trade payables (i)
Subscription liability (ii)
Other – accrued expenses
Other – PAYG payable
Year ended
30/06/19
$
Year ended
30/06/18
$
150,505
-
86,358
18,356
255,219
95,701
315,456
90,869
8,410
510,436
(i) The average credit period on purchases of goods is 30 days. No interest is charged on the trade payables.
(ii) During 2018 the Company received payments in advance for the non-renounceable entitlement offer announced on
the ASX on 4 July 2018. As at 30 June, 2018 the amounts were refundable should the raising not proceed and as a
result these amounts are shown as a “Subscription Liability” above.
13. Provisions
Current
Employee benefits (i)
Year ended
30/06/19
$
Year ended
30/06/18
$
20,056
15,489
15,489
(i) The Group’s current employee benefits are represented by provisions for long service leave totalling $17,297 and
annual leave totalling $2,759 in 2019 and $15,489 for long service leave in 2018. The average number of employees
during the current financial year was 5 employees.
20,056
34
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DGO Gold Limited
14. Issued capital
Fully paid ordinary shares
Fully paid ordinary shares
Balance at beginning of financial year
Issue of shares under entitlements offer (i)
Issue of shares under private placements (ii)
Issue of shares under private placements (iii)
Issue of shares under entitlements offer (iv)
Issue of shares under private placements (v)
Issue of shares under option conversion (vi)
Issue of shares under private placements (vii)
Issue of shares under private placements (viii)
Issue of shares under option conversion (ix)
Share issue costs
Balance at end of financial year
Number of shares on issue
Balance as at beginning of the year
Issue of shares under entitlements offer (i)
Issue of shares under private placements (ii)
Issue of shares under private placements (iii)
Issue of shares under entitlements offer (iv)
Issue of shares under private placements (v)
Issue of shares under option conversion (vi)
Issue of shares under private placements (vii)
Issue of shares under private placements (viii)
Issue of shares under option conversion (ix)
Balance as at the end of the year
Number of $0.40 options (now $0.3936) on issue
Balance as at beginning of the year
Issue of options under private placements (vii)
Exercise of options
Balance as at the end of the year
Number of $1 options on issue
Balance as at beginning of the year
Issue of options under entitlements offer (i)
Issue of options under private placements (ii)
Issue of options under private placements (iii)
Exercise of options
Balance as at the end of the year
35
Year ended
30/06/19
$
35,866,880
Year ended
30/06/18
$
23,749,024
23,749,024
4,909,192
2,500,000
122,406
2,602,259
2,175,000
15,178
-
-
-
(206,179)
35,866,880
Year Ended
30/06/19
No.
15,099,415
6,545,587
3,333,334
163,208
4,003,476
3,346,155
38,520
-
-
-
32,529,695
21,232,367
-
-
-
-
-
-
174,542
1,000,000
1,434,291
(92,176)
23,749,024
Year Ended
30/06/18
No.
9,565,527
-
-
-
-
-
-
698,162
1,250,000
3,585,726
15,099,415
Year ended
30/06/19
$
Year ended
30/06/18
$
Year Ended
30/06/18
No.
880,695
-
(38,520)
842,175
Year Ended
30/06/19
No.
-
6,545,587
3,333,334
163,208
-
10,042,129
Year Ended
30/06/18
No.
3,768,259
698,162
(3,585,726)
880,695
Year Ended
30/06/18
No.
-
-
-
-
-
-
For personal use only
DGO Gold Limited
14. Issued capital (continued)
2019 Share Issues
(i) On 6 July 2018 the Company issued 6,545,587 fully paid ordinary shares at an issue price of $0.75 and 6,545,587
free attaching options exercisable at $1 on or before 31 December 2021 pursuant to the non-renounceable
entitlement offer announced 13 June 2019.
(ii) On 4 October 2018 the Company issued 3,333,334 fully paid ordinary shares at an issue price of $0.75 and 3,333,334
free attaching options exercisable at $1 on or before 31 December 2021 pursuant to the placement approved by
shareholders on 27 September 2018.
(iii) On 23 October 2018 the Company issued 163,208 fully paid ordinary shares at an issue price of $0.75 and 163,208
free attaching options exercisable at $1 on or before 31 December 2021 pursuant to the placement approved by
shareholders on 27 September 2018.
(iv) On 29 March 2019 the Company issued 4,003,476 fully paid ordinary shares at an issue price of $0.60 pursuant to
the non-renounceable entitlement offer announced 5 February 2019.
(v) On 29 March 2019 the Company issued 3,346,155 fully paid ordinary shares at an issue price of $0.65 pursuant to
the placement announced 5 February 2019.
(vi) During the year 38,520 $0.40 options were exercised, raising $15,178.
2018 Share Issues
(vii) On 7 September 2017, through a private placement, the Company issued 698,162 fully paid ordinary shares at an
issue price of $0.25. Attached to these shares were 698,162 options exercisable at $0.40 on or before 30 June 2020.
(viii) On 4 April 2018 the Company issued 1,250,000 fully paid ordinary shares at an issue price of $0.80.
(ix) During the year 3,585,726 $0.40 options were exercised, raising $1,434,291.
Share options on issue as at 30 June 2019
A total of 880,695 options exercisable at $0.40 (now $0.3936) on or before 30 June 2020 (DGOAI) are on issue.
A total of 10,042,129 options exercisable at $1.00 on or before 31 December 2021 are on issue.
Capital Management
Management controls the capital of the group in order to fund its operations and continue as a going concern. The
Group does not have any externally imposed capital requirements.
Performance Rights
On 27 September 2018, 2,850,000 performance rights were granted to senior executives and on 28 November 2018,
500,000 performance rights were issued to the Managing Director.
Under the plan eligible participants may be granted share rights for nil consideration (unless otherwise provided under
the relevant offer), which vest if certain vesting conditions are met. Upon vesting, subject to any exercise conditions,
each share right entitles the participant to one share in the company.
The fair value at grant date is estimated using a Monte Carlo Simulation, taking into account the terms and conditions
upon which the performance rights were granted. The contractual life of each performance right granted is two years
and ten months. There is no cash settlement of the performance rights. The fair value of performance rights granted
during the year ended 30 June 2019 was estimated on the date of grant using the following assumptions:
Dividend yield: 0%
Expected volatility: 90.735%
Risk-free interest rate: 2.10%
Weighted average share price: $0.62
Expected life of share options: 2 years 10 months
Set out below are summaries of performance rights granted in 2019:
Grant date
Expiry date
Exercise
price
Balance at
the start of
the year
Granted
Exercised
Expired/Forfeited/
other
Balance at
the end of
the year
27/9/2018
31/7/2021
28/11/2018
30/11/2021
-
-
Total
-
-
2,850,000
500,000
3,350,000
-
-
-
-
2,850,000
500,000
-
500,000
2,850,000
For the year ended 30 June 2019, the Group has recognised $445,347 of shared-based payment expense in the
Consolidated statement of profit or loss and other comprehensive income (2018 $nil).
36
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DGO Gold Limited
15. Reserves
Shared based premium reserve (i)
Share revaluation reserve (ii)
Year ended
30/06/19
$
Year ended
30/06/18
$
745,999
-
745,999
300,652
10,638
311,290
(i) The share-based payments reserve is used to recognise the value of equity benefits including options and
performance rights provided to employees and directors as part of their remuneration, and other parties as part
of their compensation for services. The movement during the half year relates to the shared based payments
expense for the performance rights issued in the General Meeting dated 27 September 2018 and AGM dated
28 November 2018.
(ii) The share revaluation reserve of $10,638 was transferred to accumulated losses on 1 July 2018 due to a change
in accounting policy as a result of the adoption of AASB9.
16. Loss per share
Loss per share
Basic and diluted loss per share (cents per share)
Year ended
30/06/19
Cents per
share
Year ended
30/06/18
Cents per
share
(20)
(5)
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)
Weighted average number of ordinary shares used in the calculation of basic
(loss) per share
Year ended
30/06/19
$
Year ended
30/06/18
$
(5,077,633)
(611,890)
Year Ended
30/06/19
No.
Year Ended
30/06/18
No.
25,971,447
10,845,763
Options could potentially dilute basic loss per share in the future but were not included in the calculation of diluted earnings
per share for 2019 or 2018 as they were anti-dilutive.
17. Dividends
There were no dividends paid or proposed during the current or previous financial year.
18. Commitments
Various state government departments require holdings of mining tenement to pay rent, rates and to meet minimum
exploration expenditures. The Group 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. Any 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 (that can be extinguished at any time) for granted tenements 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
Year ended
30/06/19
$
Year ended
30/06/18
$
1,353,942
1,585,833
-
2,939,775
1,736,883
3,356,895
-
5,093,778
37
For personal use only
DGO Gold Limited
19. Subsidiaries
Name of entity
Country of incorporation
Parent entity
DGO Gold Limited (i),(ii)
Subsidiary
Yandan Gold Mines Pty Ltd (i),(ii)
Australia
Australia
Ownership interest
2019
%
2018
%
100
100
(i) The parent and the subsidiaries are not within a tax consolidated group.
(ii) There are no significant restrictions of the ability of the Group to use any of the Group’s assets to settle the
liabilities of the Group.
20. 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
30/06/19
$
4,803,007
Year ended
30/06/18
$
1,625,441
Reconciliation of (loss)/profit for the period to net cash flows from operating activities
Net (loss) for the year
Interest income
Dividend income
Other income
Depreciation
Loss on assets sold
Fair value losses on financial assets at FVPL
Share based payments expense
Impairment of capitalised exploration expenditure
Decrease/(increase) in assets:
Trade and other receivables
Prepayments
(Decrease)/increase in liabilities:
Trade and other payables
Provision – Employee benefits
Net cash used from operating activities
(5,077,633)
(19,774)
(13,564)
(29,966)
4,643
5,520
2,418,510
445,347
1,518,158
7,296
(7,141)
4,453
4,567
(611,890)
(4,294)
-
-
7,096
-
-
-
-
(46,265)
(12,925)
36,210
7,612
(739,584)
(624,456)
21. 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.
38
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DGO Gold Limited
22. 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. Currently the Group does not have any revenue from metal sales.
There is market risk related to the listed shares and unlisted options held by the group. Refer below for further detail.
(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.
Fair Value of Investments Basis
Due to their short-term nature, the carrying amounts of cash and cash equivalents, trade and other receivables and
other payables 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 monitoring forecast and actual cash flows and working
capital 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 14, 15 and 16 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.
39
For personal use only
DGO Gold Limited
22. Financial instruments (continued)
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).
2019
Level 1
Level 2
Level 3
Total
Financial assets at FVPL
Quoted Shares
Unlisted options
-
-
$
$
3,965,000
-
-
658,348
3,965,000
658,348
$
-
-
-
3,965,000
658,348
4,623,348
2018
Level 1
Level 2
Level 3
Total
Quoted securities in Talisman Mining Limited
$
60,638
60,638
$
-
-
$
-
-
60,638
60,638
There were no transfers between level 1 and 2 in the period.
Valuation techniques used to determine fair values (Level 2)
The unlisted options were valued using an option-pricing model. The key inputs used in the valuations were, dividend
yield, expected volatility, risk-free interest rate, expected life of share options and exercise price.
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 2018 and 30 June 2019:
2019
Financial assets
Non-interest bearing
Variable interest rate
instrument
Financial liabilities
Non-interest bearing
2018
Financial assets
Non-interest bearing
Variable interest rate
instrument
Financial liabilities
Non-interest bearing
Weighted
average
effective
interest rate
%
-
0.62
Weighted
average
effective
interest rate
%
-
0.62
Less than 1
month
1-3 months
3 months to
1 year
1-5 years
5 + years
Total
$
$
$
$
$
112,048
191,108
2,103,007
2,215,055
2,700,000
2,891,108
255,219
255,219
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
303,156
4,803,007
5,106,163
255,219
255,219
Less than 1
month
1-3 months
3 months to
1 year
1-5 years
5 + years
Total
$
$
$
$
$
315,516
233,827
1,625,441
1,940,957
-
233,827
487,386
487,386
23,050
23,050
40
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
549,343
1,625,441
2,174,784
510,436
510,436
For personal use only DGO Gold Limited
23. Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share-based payment
24. Related party transactions
Year ended
30/06/19
$
283,493
24,557
1,772
-
390,656
700,478
Year ended
30/06/18
$
265,000
18,050
15,489
-
-
298,539
(a) Equity interests in related parties
Equity interest in subsidiary
Details of the percentage of ordinary shares held in the subsidiary are disclosed in note 19 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 23 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.
Other related party transactions
Lion Capital Management Pty Ltd, a company related to Mr. Bruce Parncutt, provided DGO Gold Ltd with office
accommodation, outgoings, telephone, electricity, director travel expenses, CFO, Executive Assistant and Analyst
Services for a total of $288,675 in 2019 (2018: $54,899) excluding goods and services tax.
Exploration Drill Rigs Pty Ltd, a company related to Mr. Michael Ilett and Mr. Ross Hutton, provides the DGO Gold Ltd
with office accommodation, outgoings, telephone, electricity and receptionist services for a total of $18,450 (2018:
$19,637) per annum excluding goods and services tax.
25. Parent entity disclosures
The parent entity in the Group is DGO Gold Limited which was incorporated in Brisbane, Australia on 5 April 2007.
Financial position
Current assets
Non-current assets
Total assets
Current liabilities
Non-Current Liabilities
Total Liabilities
Issued capital
Accumulated losses
Share revaluation reserve
Reserves
Total equity
Year ended
30/06/19
$
4,938,525
6,167,859
Year ended
30/06/18
$
3,629,560
16,611
11,106,384
3,646,171
229,932
-
229,932
473,182
-
473,182
35,866,880
(25,736,426)
-
745,998
10,876,452
23,749,024
(19,887,325)
10,638
300,652
3,172,989
41
For personal use only DGO Gold Limited
25. Parent entity disclosures (continued)
Financial performance
Loss for the year
Other comprehensive income
Total comprehensive (loss)
26. Remuneration of auditors
Auditor of the parent entity
Year ended
30/06/19
$
Year ended
30/06/18
$
(5,859,739)
-
(5,859,739)
(690,325)
10,638
(679,687)
Audit and review of financial statements – BDO Audit Pty Ltd
Other services – BDO (QLD) Pty Ltd
43,200
9,450
52,650
43,278
9,181
52,459
The auditor of DGO Gold Limited is BDO Audit Pty Ltd. BDO also supplies consulting work to DGO Gold Limited on an
as required basis, including taxation advice.
27. Events after the reporting date
On July 2019, DGO agreed to support NTM Gold Limited with a further investment of approximately $469,000 via a
placement of shares.
On 11 July 2019, DGO announced an extension and consolidation of its gold exploration land near Mt Tom Price in the
Pilbara, Western Australia through a farm-in agreement to earn 80% in contiguous Exploration Licences.
On 18 July 2019, DGO announced its commitment to additional investment in De Grey Mining Limited by way of a
placement of 6 million shares at 5 cents per share, accepting its entitlement of the rights issue and sub-underwriting the
De Grey entitlements issue to the extent of 70 million shares at 5 cents per share. This was partially funded by loans of
$2.5 million repayable by 31 July 2020.
On 14 August 2019 DGO relocated its head office and Registered Office to Level 9, 63 Exhibition Street, Melbourne
Victoria 3000.
On DGO announced a successful placement of 2,666,667 shares at $0.75 raising $2 million for working capital for further
exploration and strategic investment.
42
For personal use only DGO Gold Limited
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.
b.
comply with Australian Accounting Standards and the Corporations Regulations 2001; and
give a true and fair view of the Group’s financial position as at 30 June 2019 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 as issued by International Accounting Standards
Board.
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 9 to 15 of the directors’ report (as part of audited Remuneration
Report), for the year ended 30 June 2019, comply with section 300A of the Corporations Act 2001.
The directors have been given the declarations by the executive chairman 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
Melbourne, 19 September 2019
43
For personal use only 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 Audit of the Financial Report
Opinion
We have audited the financial report of DGO Gold Limited (the Company) and its subsidiary (the
Group), which comprises the consolidated statement of financial position as at 30 June 2019, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
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.
44
For personal use only Material uncertainty related to going concern
We draw attention to Note 3 (b) in the financial report which describes the events and/or conditions
which give rise to the existence of a material uncertainty that may cast significant doubt about the
group’s ability to continue as a going concern and therefore the group may be unable to realise its
assets and discharge its liabilities in the normal course of business. Our opinion is not modified in
respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
Recoverability of Exploration and Evaluation Assets
Key audit matter
How the matter was addressed in our audit
Please refer to notes 4 and 11 in the financial report.
Our audit procedures included, amongst others:
The Group carries exploration and evaluation assets as
at 30 June 2019 in relation to the application of the
Group’s accounting policy
for exploration and
evaluation assets, as set out in note 3(f).
There is a risk that the carrying value of the exploration
and evaluation assets is overstated and that there are
some assets carried which did not meet the
capitalisation criteria prescribed in AASB 6 Exploration
for Evaluation of Mineral Resources (‘AASB 6’).
The recoverability of exploration and evaluation asset is
a key audit matter due to:
-
-
The significance of the total; and
The level of procedures undertaken to evaluate
management’s application of the requirements
of AASB 6 in light of any indicators of
impairment that may be present.
Selected a sample of capitalised exploration
expenditure during the year to ensure it meets
the recognition criteria under AASB 6;
Ensured that the group has the rights to tenure
and maintains the tenements in good standing;
Assessed the Group’s ability to carry forward
exploration and expenditure assets under AASB
6;
Reviewed the management’s assessment of
impairment of exploration assets and
considered the reasonableness of the key
judgements and assumptions used.
We also assessed the adequacy of the related
disclosures in Note 3(f), Note 4, and Note 11 to the
financial statements.
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.
45
For personal use only Accounting for investments recorded at fair value through profit or loss
Key audit matter
How the matter was addressed in our audit
During the period, DGO executed agreements to
Our audit procedures included, amongst others:
acquire listed shares and unlisted options in De Grey
Mining Limited (DEG), NTM Gold Limited (NTM), and
Jindalee Resources Limited (JRL). There is a risk these
investments are not accounted for in line with AASB
132 Financial Instruments Presentation and AASB 9
Financial Instruments.
•
Obtaining from management a schedule of
investments held by the Group and vouching the
investments to supporting documentation
•
•
Reviewing appropriateness of classification and
measurement of investments in line with AASB 9
Agreeing a sample of the additions and disposals
The carrying amount of financial assets at fair value
of investments during the year to supporting
through profit or loss (FVTPL) is a key audit matter due
documentation, and ensuring that gains and
to the significance of the total balance and as
losses arising were treated appropriately
determining the valuation of the
investments
is
•
Reviewing managements' assessment of the fair
complex. Specifically, the valuation of the unlisted
value of the investments by reference to quoted
options is based on valuation models that incorporate
prices in active markets (for the listed shares)
significant judgements.
Further, on initial recognition it was noted that the fair
value of the instruments acquired was, in certain cases,
in excess the transaction price.
and by reference to valuation models (for
unlisted options) and ensuring that all gains and
losses have been treated appropriately
•
Reviewing management’s calculation of the
difference between the transaction price and the
On initial recognition, the transaction price generally
fair value (day one profit or loss) for unlisted
represents the fair value of the financial instrument
options and checking that any gain was
unless there is observable information from an active
recognised in profit or loss over the life of the
market
to
the
contrary. Where unobservable
instrument in line with AASB 9
information is used (as is the case for the unlisted
•
Reviewing the adequacy of the disclosures of
options), the difference between the transaction price
investments, including the fair value disclosures,
and the fair value (day one profit or loss) is deferred and
by comparing these disclosures to our
recognised in profit or loss over the life of the
understanding of the nature of the investment
instrument.
and the applicable accounting standards.
Please refer to note 10 in the financial report.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2019, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
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.
46
For personal use only In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 9 to 15 of the directors’ report for the
year ended 30 June 2019.
In our opinion, the Remuneration Report of DGO Gold Limited, for the year ended 30 June 2019,
complies with section 300A of the Corporations Act 2001. .
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.
47
For personal use only Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit Pty Ltd
T R Mann
Director
Brisbane, 19 September 2019
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.
48
For personal use only DGO Gold Limited
Unaudited additional ASX and other information as at 12 September 2019
Number of holders of equity securities
32,29,695 fully paid ordinary shares are held by 631 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
%
30,074,066
92.45
919,175
961,595
224,019
255,583
95,257
2.83
2.96
0.69
0.79
0.29
32,529,695
100.00
Holding less than a marketable parcel
63,038
Twenty largest shareholders of quoted equity securities
Ordinary shareholders
A/C Designation
Fully paid ordinary shares
Number
Percentage
GINGA PTY LTD
MUTUAL TRUST
CAIRNGLEN INVESTMENTS PTY LTD
WOODFORD SUPER FUND
ANDAMA HOLDINGS PTY LTD
COSTA ASSET MANAGEMENT PTY LTD
5,299,436
4,348,897
3,762,500
3,159,080
2,666,667
ESHUYS SUPER PTY LTD
1,502,029
CAIRNGLEN INVESTMENTS PTY LTD
CAROLINE HOUSE SUPERANNUATION FUND
THE CAROLINE HOUSE S/F A/C
CS THIRD NOMINEES PTY LIMITED
HBSC CUST NOM AU LTD 13 A/C
LADDARA PTY LTD
PATERSON CHENEY INVESTMENTS PTY LTD
RARE COSTA SUPER PTY LTD
RARE COSTA SUPER FUND A/C
UBS NOMINEES PTY LTD
RESOURCE SURVEYS PTY LTD
FILEKEEL PTY LIMITED
SHERATAN PTY LTD
R & m SUPERANNUATION FUND
GEE NOMINEES PTY LTD
NATIONAL NOMINEES
RESOURCE SURVEYS PTY LTD
RESOURCE SURVEYS S/F
RESOURCE SURVEYS PTY LTD
Total
Balance of register
Grand total
49
1,161,040
857,235
788,462
769,231
769,231
769,230
750,000
490000
384,616
345,000
303,653
301,777
301,287
180,000
29,142,704
3,386,991
32,529,695
100.00
16.29
13.37
11.57
9.71
8.2
4.62
3.57
2.64
2.42
2.36
2.36
2.36
2.31
1.51
1.18
1.061
0.93
0.93
0.93
0.56
89.59
10.41
Line
item
1
2
3
4
5
6
7
8
9
10
10
11
12
13
14
15
16
17
18
19
For personal use only
DGO Gold Limited
Substantial shareholders
Ordinary shareholders
Fully Paid Shares
Number
GINGA PTY LTD
CAIRNGLEN INVESTMENTS P/L
LION NOMINEES LIMITED (i)
COSTA ASSET MANAGEMENT PTY LTD
ANDAMA HOLDINGS PTY LTD
EDUARD ESHUYS
TOTAL
5,325,058
5,049,773
4,247,660
2,666,667
3,159,080
2,727,970
23,176,208
(i)
These are shares in which the Director’s individually hold a relevant interest or hold an interest through a related
party.
Tenements held
The following table details the list of mineral tenements granted and under application:
Competent person statement
Exploration or technical information in this release has been prepared by Mr. David Hamlyn, who is a part time employee of DGO
Gold Limited and a Member of the Australian Institute of Mining and Metallurgy. Mr. Hamlyn has sufficient experience which is
relevant to the style of mineralisation under consideration and to the activity which he is undertaking to qualify as a Competent
Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves” (the JORC Code). Mr. Hamlyn consents to the report being issued in the form and context in which it appears.
50
Tenements - Granted Tenements - Applications Area (km2) Western Australia Lake Randall JV Lake Randall E15/1573 E25/584 53 179 Ora Banda P24/4946 - 4956 22 Black Flag P24/4986 - 4992, E24/197 31 Mallina E47/3327 - 3329 E47/4267, E47/4270 281 East Pilbara E45/5034 - 5035 262 Tom Price E47/3898, E47/3900 987 Tom Price JV E47/3629, 3651, 3716 323 Yerrida Basin E51/1590, 1729, 1730, 1748 - 1753, E51/1833,E51/1897 E51/1920, E51/1921 2,226 Middelen Option E51/1725, 1726 268 Yamarna West E38/3343, E38/3344 728 Sub-Total 5,359 South Australia – Stuart Shelf Pernatty Lagoon EL 6145, EL 6302 348 Bookaloo EL 6030 ELA 2019/88 782 Myall North EL 6303 308 Sub-Total 1,438 TOTAL 6,797 For personal use only