DGO Gold Limited
ABN 96 124 562 849
Annual Report for the financial year ended 30 June 2021
DGO Gold Limited
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Corporate Directory
Directors:
Mr. E. Eshuys (Executive Chairman)
Mr. J. B. Parncutt AO (Executive Director)
Mr. R. C. Hutton (Non-Executive Director)
Ms K. Law (Non-Executive Director)
Mr M.J. Ilett (Non-Executive Director) – resigned 31 August 2020
Company Secretary and
Chief Operating Officer
Mr. M. Ziemer
Chief Financial Officer
Mr. A. Cook (appointed 12 February 2021)
Ms. C. Jupp (resigned 12 February 2021)
Registered office and principal
administrative office:
Level 9
63 Exhibition St
Melbourne Vic 3000
Telephone: + 61 3 9133 6251
Share registry:
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
Auditors:
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:
96 124 562 849
Corporate Governance
Statement
www.dgogold.com.au/corporate-governance
DGO Gold Limited
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Chairman’s Letter
Dear Fellow Shareholders,
On behalf of DGO’s Board and management team, I am pleased to present the Company’s annual report for the 2021 financial
year.
We continue to focus on our simple strategy, of providing our shareholders with a leveraged exposure to gold and copper
discovery success in Western Australia and South Australia and the gold and copper price. We do this through our directly
owned “greenfield” exploration activities as well as through our “brownfield” strategy of identifying and investing in ASX listed
companies which offer significant discovery upside.
The ongoing exploration success of De Grey Mining Limited (DGO holds a 15.8% interest), ensures the company continues on
the path to becoming a genuine Tier 1 producer. With more than 10 exploration rigs active all year on De Grey’s tenements in
the Mallina Basin, De Grey added approximately 450,000 ounces of gold to their resource base in each month of the 2021
financial year. We look forward to De Grey continuing their journey of exploration success and value creation, which we are
proud to be participating in on your behalf. We congratulate the De Grey management team on the rapid growth of the
Company’s mineral resources. Our investments in Dacian Gold and Yandal Resources also continue to provide significant
upside potential.
On our greenfield opportunities, we were heartened to identify copper mineralisation in the Stuart Shelf, consistent with our
concept for the discovery of Zambian style sediment hosted copper mineralisation. The next phase of our drilling at the Stuart
Shelf commences in the coming quarter. Following on from iron oxide copper-gold mineralisation (IOCG) success in the Stuart
Shelf by others, our own plans to drill the IOCG targets on our tenements have been brought forward. The Stuart Self is a
world class copper province in which our neighbours including BHP, Oz Minerals and Fortescue are also actively exploring for
large scale copper deposits.
A copper discovery has also been a key theme of our drilling program in the Yerrida Basin. With semi-massive sulphides
intersected in the initial diamond drilling program undertaken at Yerrida, we continue to be positive about the prospects for
the potential for a DeGrussa-style ore body being identified within these tenements. On the adjacent Bryah property, the
indications are also promising from the first phase of work which will be followed up this half year.
The past year has been characterised by significant pressures on the exploration industry, in part due to the industry’s own
success and extensive investment support, and in part through the ongoing external factor which none of us predicted, in the
form of the global Covid-19 pandemic. With the extensive exploration work underway in much of Australia and particularly
Western Australia, DGO like all others in the industry, is seeing a tightening of resource availability including delays in
laboratory processing time, constrained rig availability and a skills shortage. While we are experiencing some of these
pressures, I can report that we faired reasonably well thanks to good relationships with our existing suppliers. We have proven
to be an attractive employer, with several new staff joining our geology team this year. While these constraints will no doubt
continue in the medium term and we will expect to see delays and potential pricing pressures, our existing strong relationships
and targeted activity should allow us to continue our work effectively in the coming year.
During the past year, the continued support of our shareholders has been exceptional. With strong support in September
2020, we raised $28.5M, and subsequently in December, bringing in a new institutional investor and with the support of an
existing major holder, raised a further $10.5M. At the end of the financial year, we were also very pleased to see the support
of our cornerstone investors in bringing forward the exercise of options for further capital contributions to allow our
exploration and investment activities to continue. We are very grateful to those shareholders and are very mindful as a Board
and management team of our obligation to ensure that faith that you, as shareholders have shown, is well rewarded through
our ongoing successful endeavours.
On behalf of the Board, I express our gratitude to the DGO team, including our very insightful geology advisors and our
suppliers, for their continued support of our activities and for the efforts made during the year. We also acknowledge and
thank the native title groups and pastoralists on whose land we work.
We look forward to being able to deliver further strong results for you in the coming year.
Yours sincerely,
Eduard Eshuys
Executive Chairman
DGO Gold Limited
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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
subsidiaries Yandan Gold Mines Pty Ltd, DGO Copper Pty Ltd and Discovery Gold Pty Ltd (“the Group”) for the financial year ended 30
June 2021. 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 76 is a geologist with several decades of exploration experience in Western Australia. His successes as Director of
Resources for the Great Central Mines Group are well known. In the late 1980s and 1990s he led the teams that discovered the
Plutonic, Bronzewing and Jundee gold deposits, and the Cawse Laterite Nickel Deposit. He led the subsequent development and gold
production at Bronzewing and Jundee and nickel at Cawse. He has also led the discovery of nickel sulphides at Maggie Hays south of
Southern Cross and Mariners nickel at Widgiemooltha WA in the 1970s. As the Managing Director and CEO from July 2004 to March
2009 he developed St Barbara Limited into a substantial gold producer with the redevelopment of the Sons of Gwalia underground
mine which subsequently produced in excess of 2 million ounces.
Eduard joined the Company on 15 July 2010 as Executive Chairman with responsibility for corporate governance, discovery and
investments focused on gold and copper, administration, board conduct and leadership. As Executive Chairman, he ensures that the
Company maintains a well-balanced, suitably qualified, focused and motivated management team working for the benefit of all
shareholders.
Directorships of other listed companies in the last 3 years:
Mr. Eduard Eshuys was appointed a non-Executive Director of NTM Gold Limited on 25 March 2019 and Dacian Gold Limited on 15
March 2021 after the merger and De Grey Mining Limited on 23 July 2019.
Mr Jeffrey (Bruce) Parncutt AO, BSc, MBA (Executive Director)
Bruce, aged 70, is Chairman of investment banking group Lion Capital, a Board member of The Australian Ballet, a Trustee of the
Helen Macpherson Smith Trust and a Director of De Grey Mining Limited. 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, Executive Director on 1 April 2020 and is a member of
the Audit and Risk and Remuneration and Nomination Committees.
Directorships of other listed companies in the last 3 years:
Mr. Bruce Parncutt was appointed as a Director of De Grey Mining Limited on 23 July 2019.
Mr. Ross C. Hutton B. Eng (Min), MAusIMM (Non-Executive Director)
Ross, aged 73, is a Mining Engineer with over 50 years’ experience in the mining and minerals processing industry. He has worked in
corporate and consultative roles managing activities spanning feasibility studies to operations. Previous positions include VP of
smelting and mining operations, Savage Resources, USA and operations manager of mining projects in Australia.
Mr. Ross Hutton is a founding Director of the Company, is Chairman of the Remuneration and Nomination Committee and was the
Chairman of the Audit and Risk Committee until 16 September 2020 and is now a member of that 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.
DGO Gold Limited
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Directors’ report (continued)
Information about Directors and the Company Secretary (continued)
Ms. Katina Law BCom, FCPA, MBA, GAICD (Non-Executive Director – appointed 1 June 2020)
Katina, aged 51, has 30 years’ experience in the mining industry covering corporate and site-based roles across several continents.
She is an experienced company director and is currently a Non-Executive Director of Yandal Resources Ltd (ASX:YRL) and was
previously Non-Executive Chair of Ardea Resources Ltd (ASX:ARL). She has worked with a number of ASX listed resources companies
in strategic, financial advisory and general management roles, including on development and evaluation projects which were later
subject to corporate transactions. Ms. Law held senior positions at Newmont Mining Corporation’s Batu Hijau copper gold project in
Indonesia and their head office in Denver, USA and at LionOre International based in Perth.
Katina has a Bachelor of Commerce degree from UWA, is a Fellow of CPA Australia and has an MBA from London Business School. She
is currently a Non-Executive Director of Headspace National Youth Mental Health Foundation.
Ms. Katina Law was appointed a Non-Executive Director on 1 June 2020 and Chair of the Audit and Risk Committee on 16 September
2020. Katina became a member of the Audit and Risk Committee on 15 September 2021.
Directorships of other listed companies in the last 3 years:
Ms. Katina Law is a Non-Executive Director of Yandal Resources Limited and also served as a Non-Executive Director and Chair of
Ardea Resources Limited from 7 November 2016 to 31 July 2020.
Mr. Michael J. Ilett BBus(Accy), GradDipAdvAcctg, GradDipCorpGov, MBA, ACIS, CPA, CA (Non-Executive Director – resigned 31 August
2020)
Michael, aged 54, 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).
Mr. Michael Ilett was appointed as a Non-Executive Director and a member of the Audit and Risk and Remuneration and Nomination
Committees on 20 July 2015. Having served as Company Secretary of the Company from 5 April 2007 to 31 August 2018. He resigned
as a Non-Executive Director on 31 August 2020.
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.
Company Secretary
Mr. Markus Ziemer BA, LLB, MBA, GradDipCorpGov (Company Secretary and Chief Operating Officer appointed 17 August 2020)
Markus has over 20 years’ general management, legal and company secretarial experience in mining, exploration, energy and
technology businesses. For eight years he was General Manager Corporate at Pacific Hydro working on a range of corporate and
project development initiatives during a period of significant growth in the company’s project portfolio in Australia, Chile and Brazil.
Prior to that he worked in listed mining and exploration companies Newcrest Mining, Ashton Mining and Australian Diamond
Exploration in legal and company secretary roles, gaining experience in a range of project, joint venture, M&A, funding and
exploration activities.
Mr. Markus Ziemer was appointed Company Secretary on 17 August 2020.
Mr. Mark Licciardo B Bus(ACC), Grad Dip CSP, FGIA, FCIS, FAICD (Company Secretary – resigned 17 August 2020)
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, Melbourne Fringe Festival and former company secretary of Top 50 ASX listed companies Transurban Group
and Australian Foundation Investment Company Limited.
Mr. Mark Licciardo was appointed Company Secretary on 31 August 2018 and resigned on 17 August 2020
DGO Gold Limited
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Directors’ report (continued)
Review of Operations
The Principal Activities in the year focused on advancing DGO’s strategy of creating wealth for shareholders through leveraged
investment in gold discovery in Australia. DGO’s vision is to build a portfolio of gold discovery opportunities including high potential
brownfield gold investments and large-scale greenfield discovery opportunities to provide leverage to the gold price and achieve
substantial growth in shareholder value.
DGO differentiates itself from exploration companies by leveraging its extensive gold discovery experience and comprehensive
research to invest in the highest potential gold discovery opportunities. These investments take the form of direct ownership of highly
prospective greenfield targets or by taking influential positions in high potential exploration companies. DGO’s goal is to create
shareholder value by capitalising on the significant margin between the cost of discovery and the value attributed to resources by the
market.
Investment Activities
The Company continued to research all ASX listed Australian gold explorers to identify and evaluate investment opportunities with a
focus on Australia and particularly Western Australia. Companies with substantial land holdings in established gold fields or provinces,
potential for a significant discovery, and strong experienced management are prioritised for further study.
During the year, DGO increased its shareholding in De Grey Mining Limited (De Grey) to 15.8%; an asset with a market value of $251
million at 30 June 2021. De Grey reported a significant maiden resource for Hemi of 6.8 million ounces bringing the total Mallina Gold
Project resource to 9 million ounces. Drilling results released subsequent to the resource announcement continue to show the
potential for growth at Hemi.
During the year, DGO extended its brownfield discovery strategy through an investment in Yandal Resources Limited (Yandal). At 30
June 2021 this asset had a market value of $7.8 million. Subsequent to the end of year DGO increased its shareholding to 19.9% of
issued capital. Yandal reported significant results from Gordons Dam, Sim’s Find, and Flinders Park during the year.
During the year Dacian Gold Limited (Dacian) merged with NTM Gold Limited (NTM) through a scheme of arrangement. At 30 June
2021 DGO’s holding in Dacian had a market value of $14.6 million. Subsequent to the end of year, DGO increased its shareholding to
6.6% of issued capital with options to 8.7%.
Discovery Activities
Yerrida, Murchison, WA (DGO 100%)
Yerrida is located in the Yerrida Basin, 75 kilometres south of the DeGrussa copper-gold mine and 60km northeast of Meekatharra.
DGO’s detailed data review and analysis has confirmed that the Yerrida Basin is prospective for both DeGrussa style copper-gold
mineralisation and stratiform sediment-hosted copper deposits analogous to the world-class Zambian Copper Belt.
DGO’s exploration and detailed analysis at Yerrida has identified coincident electromagnetic, magnetic, and signature VHMS
geochemical anomalies. These coincident anomalies are within a geological sequence of the right lithology, age, and structure for
hosting DeGrussa style VHMS mineralisation.
During the year DGO completed a drilling program to test high priority DeGrussa style VHMS targets. These targets were identified by
signature multi-element soil sampling results which were strongly supported by EM anomalies and represent DeGrussa style VHMS
targets on the prospective contact of the Johnson Cairn and Killara formations. The drilling identified broad zones of alteration and
anomalous Zn, Cu, Sb and Ag including 132m @ 1.3g/t Ag intersected proximal to the prospective black shale – mafic contact represent
possible halo to VHMS mineralisation. In addition, gold mineralisation up to 2m @ 9.2g/t Au was intersected in quartz veining on
mafic contact with shales.
Subsequent to the end of year, DGO commenced a diamond drilling program at Yerrida. The maiden diamond hole (21YEDD001) was
completed at a depth of 634.3m and intersected a 1.8m interval of semi-massive pyrrhotite-pyrite from 302.2m within a broad interval
of stratabound bands of pyrrhotite-pyrite with disseminated chalcopyrite from 295 to 334m. These observations suggest that the
hole may have intersected the edge of a VHMS system. Follow up drilling is ongoing.
DGO Gold Limited
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Directors’ report (continued)
Bryah, Murchison, WA (DGO 70-100%)
Bryah is located 95km southwest of DeGrussa copper-gold mine, 70km north of Meekatharra, and adjacent to Judge’s Find, an area
of known gold nugget occurrences where surface mining for gold has occurred for some time. The source of this alluvial gold is
unknown.
During the year DGO completed a maiden diamond drilling program of seven holes for 3412m to test for both sediment-hosted and
volcanogenic-hosted massive sulphide (VHMS) style copper-gold mineralisation on the basin margin.
Several horizons of intense quartz/carbonate veining were intersected, containing pyrite, minor chalcopyrite, and intense magnetite
zoning including traces of galena and sphalerite, in a highly altered sequence of sediments, acid and mafic volcanics and dolomites.
Detailed analysis of the drill core and initial multi-element assays has been conducted by DGO’s expert geological consultants
Professor Ross Large AO and Dr Stuart Bull. Professor Large and Dr Bull have identified 3 distinct horizons (M1, M2, and M3)
approximately 100m apart in the volcano-sedimentary stratigraphy with potential for hosting VHMS mineralisation immediately
northwest of Judges’ Find gold nugget field. When extrapolated to the surface and along strike these horizons intersect an AEM
anomaly further north west. Laser ICPMS analyses completed on pyrite from the M3 horizon has identified a Pb isotope ratio
(207Pb/206Pb) in the same range as in the DeGrussa VHMS deposit suggesting both systems share a common mineralising fluid
source.
The AEM anomaly overlying the high potential VHMS horizons is now a high priority for follow up drilling.
Mallina, Pilbara, WA (DGO 100%)
DGO holds 281km2 of prospective tenements adjoining De Grey’s Mallina Gold Project. The Mallina Basin hosts substantial structurally
controlled gold resources including the intrusion related gold at Hemi, 75km east-northeast of DGO’s tenure.
Detailed analysis by DGO suggests that mineralisation at Hemi is associated with the Millindinna intrusives which are present in DGO’s
Mallina tenements. Broad spaced (400m x 160m) UltraFine soil sampling completed over the Millindinna intrusives has identified a
series of gold-in-soil anomalies including a high priority gold and semi-coincident arsenic anomaly. Detailed reprocessing and
interpretation of geophysical data has identified a series of targets coincident with the Millindinna intrusives and the soil anomalies.
During the year DGO commenced an air core drilling program targeting Hemi style mineralisation. The drilling is in an area where
native title claims have not been determined. A heritage survey was conducted over this area by one of the regional native title groups
and cleared for the drilling to commence. Subsequently, a second regional native title group has indicated it wishes to be consulted
in relation to exploration activities on these tenements. In light of this request, drilling activities were suspended to progress these
discussions. More recently a third group, the Kurlarnunya Tjinapi has prepared a native title claim for this area which it will seek to
register. DGO continues its discussions with these groups to progress its access to these tenements and to allow heritage surveys to
be completed ahead of drilling recommencing.
Pernatty, Stuart Shelf, SA (DGO 100%)
The Stuart Shelf contains BHP’s world class Olympic Dam copper-gold-uranium mine, and a number of other major copper-gold
deposits including Oz Minerals’ Prominent Hill and Carrapateena operations. The Stuart Shelf is prospective for Zambian Copper Belt
style sediment hosted copper in transition zone sediments between the outcropping Woocalla Dolomite and the deeper-basin Tapley
Hill shales.
During the year DGO completed a program of 44 reverse circulation (RC) holes for 3,733m at Pernatty. Copper-cobalt-silver
mineralisation was intersected at each of the 3 areas drilled. The best intersections were at Moseley where approximately 10 km of
strike of the target transition zone has had no previous exploration. Three holes covering 1.5km across the Mosely transition zone all
had 1m assays greater than 0.5% Cu with associated elevated Co and Ag at depths of 50 to 80m including 4m @ 0.8% CuEq (0.41%
Cu, 0.04% Co, & 10.6g/t Ag) from 73m and 6m @ 0.5% CuEq (0.36% Cu, 0.01% Co, & 3.3g/t Ag) from 73m.
At Maslins, results indicate the potential for the development of relatively thick ore zones in this area. The drilling also indicates that
better mineralisation is more likely at a shallower basin position (i.e. west) of the Maslins holes. Drilling at Winnie Pinnie intersected
grades up to 0.25% Cu, 420ppm Co and 7g/t Ag at the western edge of a 2.5 x 5km area where the prospective base of the Tapley Hill
Formation is approximately 100m deep and is untested by previous drilling.
DGO also continued to progress land access approvals for a drilling program on its 100% owned tenements. Negotiations of a Native
Title Mining Agreement with Kokatha Aboriginal Corporation is being progressed.
Lake Randall, Eastern Goldfields, W.A (DGO 30-100%)
DGO holds 230km2 of untested, prospective terrain under shallow lake and transported sediment cover 50km east of Kambalda and
7km south of Silverlake Resources’ Mt Belches Mining Centre. The Lake Randall target was generated as a result of a comprehensive
review for sediment hosted gold mineralisation in the Eastern Goldfields of Western Australia.
A ground gravity survey in late 2019 identified fourteen targets with potential to host granite-associated Granny Smith style, and
banded iron formation-associated Mt Belches-style, gold mineralisation beneath the lake sediments.
DGO Gold Limited
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Directors’ report (continued)
During the year, Lefroy Exploration (ASX:LEX) intersected 60m at 5.22g/t Au and 0.38% Cu from 112m to end of hole at Burns (ASX:LEX
23 February 2021), 15km west of DGO’s Lake Randall. Mineralisation is associated with a large felsic intrusion which does not outcrop.
These results have led to DGO planning the drilling of intrusive-associated Granny Smith style targets at Lake Randall and air core
drilling is expected to commence once access terms are agreed with holders of native title recently determined over a portion of
these tenements.
Black Flag, Eastern Goldfields, W.A (DGO 100%)
Black Flag is located 20km northwest of Kalgoorlie in Western Australia’s Eastern Goldfields. An RC drilling program completed in
January 2021 tested the intersections of north-east, mineralising structures with the contact of an anticlinal structure delineated by
porphyry intrusives.
The wide spaced drilling encountered strong silica-sulphide±sericite±chlorite alteration within the intermediate volcanics and zones
of Au anomalism (>0.1g/t Au). Elevated gold mineralisation was intersected in 11 of the 15 drill holes. Trends interpreted in narrow
(1m) high grade intersections up to 1m @ 6.5g/t Au and historical drilling results suggest that mineralisation is controlled by the north-
east trending cross faulting.
Deleta, Eastern Goldfields, W.A (DGO 100%)
Interpretation of historical geochemical datasets has identified gold and arsenic soil anomalies associated with structures within the
Deleta Greenstone Belt to the west of the Yamarna Belt. DGO is progressing heritage approvals in preparation for additional soil
sampling and drilling programs to evaluate the under-explored Deleta targets.
Tom Price, Pilbara, WA (DGO 80-100%)
DGO’s land position covers a large, 70 km long regional anticlinal structure, with the Pyradie Formation outcropping in the central
zone of the structure and interpreted to lie below younger units on the limbs. During the year DGO Gold continued discussions with
the Eastern Guruma people regarding the terms for an access agreement for these tenements.
Yilgarn Exploration Pty Ltd (DGO 40%)
During the year DGO entered into an agreement with SensOre Limited (“SensOre”), to acquire a 40% equity interest in SensOre’s
subsidiary Yilgarn Exploration Ventures Pty Ltd (“YEV”) for a total consideration of $4 million. DGO’s investment in YEV will provide
sufficient funding for proof of concept drilling on each of the 9 targets.
At Mt Magnet North JV (YEV earning an 85% interest), follow up drilling of a 2.5km long mineralised system defined by shallow gold
and multi-element geochemistry results intersected 14m @ 1.55g/t from 122m in the location predicted by SensOre’s proprietary
machine learning/AI technology. At Tea Well a low-level gold anomaly in shallow air core and RC drilling has been followed up with
diamond drilling for which assays are awaited. Diamond drilling at Desdemona identified alteration and veining in a sequence of mafics
and ultramafics interpreted to be the Gwalia stratigraphy however complete assays are yet to be received.
Research and Development
In prior years the Group conducted a research engagement with CODES at the University of Tasmania and the information obtained
continues to be reviewed and interpreted and used in the evaluation of exploration sites and drilling programs. 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 and
analysis. That has included, extensive sampling of favourable sedimentary diamond drill core, held in the Western Australian and
South Australian central core libraries.
Operating Results
The total loss from operations of the Group for the year ended 30 June 2021 was $6,969,399 (2020: net loss $87,621).
The financial position and performance of the Group was particularly affected by the following events and transactions during the
year:
During the year, NTM merged with Dacian Gold (ASX:DCN) through a Scheme of Arrangement. Under the scheme DGO received
1 Dacian share for every 2.7 NTM shares, resulting in DGO holding 50.1 million shares in DCN. In addition, NTM options, of
which DGO holds 60 million, were exchanged for 22.22 million Dacian options exercisable at $0.27 expiring 31 March 2022. As
a result, the Company recognised a gain of $10,650,257 on disposal of the NTM investment. At 30 June 2021, the Company
holds 5.58% of the issued capital of Dacian and does not carry any significant influence over that company, and as such the
Company’s interest in DCN is accounted for as a financial asset at fair value through profit or loss
DGO Gold Limited
8
Directors’ report (continued)
Operating Results (continued)
DGO sold 100% of its shares in Jindalee Resources Limited after exercising its options, for a profit on sale of $421,904.
Net loss on financial assets at fair value through profit or loss of $5,912,063 (2020 gains: $3,078,929) relating to equity
investments and unlisted options.
Non-cash share-based payments expense of $6,567,797 (2020: $957,027) relating to performance rights granted to directors,
employees and consultants.
Significant changes in state of affairs
The significant changes in the state of affairs of the Group during the financial year were as follows:
On 21 September 2020, the Company issued 8,261,450 fully paid ordinary shares at an issue price of $3.45 with total proceeds
of $28,502,002 before issue costs of $1,375,685.
On 15 July 2020, the Group acquired 18,232,142 shares in De Grey Mining Limited at a cost of $5,105,000 via participation in a
placement at $0.28 per share. On 27 October 2020, the Group acquired 10,000,000 shares in De Grey Mining Limited at a cost
of $12,000,000.
On 26 October 2020 and 2 November 2020 the Group disposed of all shares in Jindalee Resources Limited for $63,270. In April
2021, the Group exercised its options in Jindalee and disposed of all shares received upon exercise of the options for $521,905.
The Group does not hold any shares in Jindalee Resources Limited at 30 June 2021.
Through the year, the Company acquired 400 shares in Yilgarn Exploration Ventures Pty Ltd, an unlisted company at a cost of
$4.0 million
In November 2020, the Group disposed of all shares in Kairos Minerals Limited for a net return of $476,544. The Group
continues to hold 5,000,000 options in the company.
On 16 October 2020 and 21 October 2020 the Company acquired 8,056,000 shares in Yandal Resources Limited for
consideration of $4,026,550. In November 2020 and December 2020, a further 874,324 shares were purchased for
consideration of $358,447. In March 2021, the Group purchased a further 4,444,445 shares for consideration of $2,000,000. A
total of 13,318,769 shares are held by the Company at 30 June 2021.
On 18 November 2020 and 19 November 2020, the Company acquired 1,500,000 quoted shares in Dacian Gold Limited for
consideration of $526,452.
On 22 December 2020, the Company issued 3,500,000 fully paid ordinary shares at an issue price of $3.00 with total proceeds
of $10,500,000 before issue costs of $425,481.
Significant events after reporting date
On 13 July 2021, DGO Gold entered into a $15m loan facility with Bell Potter, secured against 100m of the Company’s holding
in De Grey Mining Limited. The facility remains undrawn at the date of this report.
On 16 July 2021, the Group purchased a further 6,612,781 shares in Yandal Resources Limited for consideration of $3,181,118,
taking its holding in Yandal to 19.9%.
On 14 July 2021, the Group purchased a further 12,500,002 shares in Dacian Gold Limited for consideration of $3,500,000
In July 2021, certain holders of $1.00 options elected to exercise their options early, providing a cash inflow of $5,596,790.
In August 2021, the Group issued 405,000 Series E Performance Rights to key employees and consultants, subject to a $7.00,
30 day VWAP hurdle with an expiry on 2 December 2023 and a $nil exercise price.
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 that are available on the DGO
website www.dgogold.com.au. At the onset of the Covid-19 situation, DGO implemented appropriate policies and the Group’s
operations were not hindered.
DGO Gold Limited
9
Directors’ report (continued)
Environmental regulations
The Company is subject to particular and significant environmental regulation under the laws of the Commonwealth or of a State or
Territory relating to the tenements that are granted. To the director’s knowledge, 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.
Traditional Owners
DGO acknowledges the traditional custodians of the land where we operate. Consistent with our Heritage and Community Policy, we
endeavour to engage early, engage often and engage well with the Traditional Owners of the land where we conduct our exploration
activities. DGO has native title agreements in place with eight Traditional Owner groups.
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
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 any 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, indemnified or agreed to indemnify an Officer or auditor of the Company or
of any related body corporate against a liability incurred by such an Officer or auditor.
Directors’ meetings
The following table sets out the number of Board of Directors’ Meetings (including Directors’ approvals requiring circulating
resolutions), Remuneration & Nomination Committee Meetings and Audit & Risk Committee Meetings held during the financial year
and attendance at such meeting by each Director and member of the committee.
Directors
Board of Directors
Remuneration &
Nomination Committee
Audit & Risk Committee
Held
Attended
Held
Attended
Held
Attended
Mr. E. Eshuys (i)
8
8
1
1
n/a
n/a
Mr. R. C. Hutton
8
8
1
1
2
2
Mr. J. B. Parncutt
8
8
1
1
2
2
Ms. K. Law (ii)
8
7
n/a
n/a
2
2
(i)
Mr. E. Eshuys is not a member of the Audit and Risk Committee.
(ii)
Ms K Law was not a member of the Remuneration and Nomination Committee during the reporting period. She was appointed to the Remuneration and
Nominations Committee on 15 September 2021.
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
Fully paid ordinary
shares
Number (i)
Indirect holdings
Total shares held
(beneficial interest)
Relevant Interest
Mr. E. Eshuys
3,977,064
-
3,977,064
3,977,064
Mr. R. C. Hutton (i) (ii)
699,673
69,753
769,426
769,426
Mr. J. B. Parncutt
8,088,404
-
8,088,404
8,088,404
Ms. K. Law
100,000
-
100,000
100,000
(i)
Fully ordinary shares held excluding those held in in the Mt Coolon Gold Mines Trust (MCGMT).
(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.
DGO Gold Limited
10
Directors’ report (continued)
The following table sets out each Director’s direct and indirect interest and relevant interest in options and performance rights in the
Company as at the date of this report:
Directors
$1 Options
$4.50 Options
Series C $4
Performance Rights
Series D $7
Performance Rights
Mr. E. Eshuys (i) (ii) (iii)
355,248
-
500,000
500,000
Mr. R. C. Hutton (iv)
-
10,000
-
-
Mr. J. B. Parncutt (i) (ii) (iii)
-
-
500,000
500,000
Ms. K. Law
-
-
-
-
(i)
Options are exercisable at $1.00 on or before 31 December 2021 and were issued pursuant to the Entitlement Offer on 6 July 2018.
(ii)
Series C Performance Rights were issued following shareholder approval at the Extraordinary General Meeting held on 19 June 2020.
(iii)
Series D Performance Rights were issued following shareholder approval at the Annual General Meeting held on 30 November 2020
(iv)
Options are exercisable at $4.50 on or before 31 July 2022 and were issued following shareholder approval at the Annual General Meeting on 30
November 2020
Mr R C Hutton and Mr J B Parncutt will be eligible to be re-elected as Directors at the next Annual General Meeting.
DGO Gold Limited
11
Directors’ report (continued)
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 2021. The term ‘key management
personnel’ relates to those persons having the authority and responsibility for planning, directing and controlling the activities of the
Group directly or indirectly including any director (whether executive or otherwise) of the Group. The Remuneration Report is audited.
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. J. B. Parncutt (Executive Director)
Mr. R. C. Hutton (Non-Executive Director)
Ms. K. Law (Non-Executive Director)
Mr M.J. Ilett (Non-Executive Director) - resigned 31 August 2020
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 reviews the performance of the key executives. During the financial year, the performance review for the Chairman,
Directors and senior executives resulted in remuneration recommendations made by the Remuneration and Nomination Committee
which were adopted by the Board. The review concluded the Board and its Chairman was operating efficiently; the Committees and
their Chairman were operating effectively; an appropriate mix of skills and balance of experience existed on the Board; timeliness and
quality of reporting and papers from management to enable informed decision making is appropriate; and operation of the Board
including the ability of its members to function cohesively is effective. The senior executives consisting of Mr. E. Eshuys and Mr. J. B.
Parncutt have the opportunity to participate in executive decision making and make regular reports to the Board. The senior
executives have an understanding of the Company’s financial position, strategies, operations and risk management policies and an
understanding of their respective rights, duties, responsibilities, and the roles of board and senior executives.
Non-executive director remuneration
The Directors’ Fees are reviewed on a regular basis against industry benchmarks. The Directors received the disclosed 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.
DGO Gold Limited
12
Directors’ report (continued)
Remuneration report (Audited) (continued)
The table below sets out summary information about the Group’s earnings and movements in shareholder’s wealth for the five years
to 30 June 2021:
Description
30 June 2021
30 June 2020
30 June 2019
30 June 2018
30 June 2017
Interest revenue and other
income
$56,624
$181,163
$63,304
$4,294
$178,854
Loss for the year from continuing
operations
($6,969,399)
($87,621)
($5,077,633)
($611,890)
($201,964)
Loss for the year from
discontinued operations
-
-
-
-
-
Net loss before tax
($6,969,399)
($87,621)
($5,077,633)
($611,890)
($201,964)
Net loss after tax
($6,969,399)
($87,621)
($5,077,633)
($611,890)
($201,964)
Share-based payments
($6,567,797)
($957,027)
($445,347)
-
-
Return of capital
-
-
-
-
-
Basic profit/(loss) per share (i)
(9.9 cents)
(0.2 cents)
(20 cents)
(5 cents)
(3 cents)
Diluted profit/(loss) per share (i)
(9.9 cents)
(0.2 cents)
(20 cents)
(5 cents)
(3 cents)
Share price at start of year
$3.61
$0.645
$0.665
$0.235
$0.20
Share price at end of year
$3.10
$3.61
$0.645
$0.665
$0.235
Share price movement
($0.51)
$2.965
($0.020)
$0.430
$0.035
% increase in share price
(14%)
460%
(3%)
183%
17.5%
D.
Remuneration of key management personnel
The following table provides information about the remuneration of the Group’s key management personnel during the 30 June 2021
year:
2021
Short Term Employee Benefits
Post
Employment
benefits
Other
long-term
employee
benefits
Termination
benefits
Share-
based
payments
Total
Salary &
fees
Bonus
Non-
monetary
Other
Superannuation
$
$
$
$
$
$
$
$
$
Executive
directors
Mr. E.
Eshuys (ii)
200,000
-
-
-
19,000
(i) 3,792
-
2,170,306
2,393,098
Mr. J. B.
Parncutt
200,000
-
-
-
19,000
(i) 196
-
2,170,306
2,389,502
Non-
executive
directors
-
Mr. R. C.
Hutton
65,000
-
-
-
6,175
-
-
-
71,175
Ms. K. Law
65,000
-
-
-
6,175
-
-
196,988
268,163
Mr. M. J.
Ilett
7,500
-
-
-
2,137
(iii) 15,000
-
24,637
Total
537,500
-
-
-
52,487
3,988
15,000
4,537,600
5,146,575
DGO Gold Limited
13
Directors’ report (continued)
Remuneration report (Audited) (continued)
2020
Short-term employee benefits
Post-
employment
benefits
Other
long-term
employee
benefits
Termination
benefits
Share-
based
payments
Total
Salary
& fees
Bonus
Non-
monetary
Other
Superannuation
$
$
$
$
$
$
$
$
$
Executive
directors
Mr. E.
Eshuys
128,333
-
-
(ii)11,000
12,192
(i)
40,423
-
280,763
472,711
Mr. J. B.
Parncutt
50,000
-
-
-
4,750
(i)
4,260
-
280,763
339,773
Non-
executive
directors
-
Mr. R. C.
Hutton
46,667
-
-
-
4,433
-
-
45,859
96,959
Ms. K.
Law
5,417
-
-
-
515
-
-
13,304
19,236
Mr. M. J.
Ilett
45,000
-
-
-
4,275
-
-
45,859
95,134
Total
275,417
-
-
11,000
26,165
44,683
-
666,548
1,023,813
(i)
Other long-term employee benefits consist of accrued long service leave.
(ii)
Short-term employee benefits include $11,000 representing consulting fees (net of Goods and Services Tax) paid to Eduard Eshuys in 2020.
(iii)
Payment is a termination payment upon resignation.
There were no bonuses granted as compensation for the current or prior financial year. Performance rights were issued as
Compensation as shown on page 16.
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 or
performance
rights
Net other
change (i)
Balance
at the end of
the year
Relevant interest
Balance
held
nominally
No.
No.
No.
No.
No.
No.
No.
2021
Mr. E. Eshuys
3,802,044
-
500,000
(650,000)
3,652,044
3,652,044
-
Mr. J. B. Parncutt
6,205,071
-
500,000
50,000
6,755,071
6,755,071
-
Mr. R. C. Hutton
869,426
-
-
(100,000)
769,426
769,426
-
Mr. M. J. Ilett
350,687
-
-
(2,040)
(ii) 348,647
348,647
-
Ms. K. Law
-
-
100,000
-
100,000
100,000
-
2020
Mr. E. Eshuys
2,727,970
-
1,000,000
74,074
3,802,044
3,802,044
-
Mr. J. B. Parncutt
4,247,660
-
1,000,000
957,411
6,205,071
6,205,071
-
Mr. R. C. Hutton
579,426
-
290,000
-
869,426
869,426
-
Mr. M. J. Ilett
100,687
-
250,000
-
350,687
350,687
-
Ms. K. Law
-
-
-
-
-
(i)
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.
(ii)
Balance of ordinary shares for Mr M.J. Ilett as at date of resignation.
DGO Gold Limited
14
Directors’ report (continued)
Remuneration report (Audited) (continued)
Unlisted options with an exercise price of $0.3936 of DGO Gold Limited held directly or indirectly at end of financial year exercisable
before 30 June 2021:
Balance
at beginning
of year
Granted as
compensation
Net other
change
(i)
Balance
at the end of
the year
Relevant
interest
Balance held
nominally
No.
No.
No.
No.
No.
No.
2021
-
-
-
-
-
-
Mr. E. Eshuys
-
-
-
-
-
-
Mr. J. B. Parncutt
-
-
-
-
-
-
Mr. R. C. Hutton
-
-
-
-
-
-
Mr. M. J. Ilett
-
-
-
-
-
-
Ms. K. Law
-
-
-
-
-
-
2020
Mr. E. Eshuys
-
-
-
-
-
-
Mr. J. B. Parncutt
-
-
-
-
-
-
Mr. R. C. Hutton
40,000
-
(40,000)
-
-
-
Mr. M. J. Ilett
-
-
-
-
-
-
Ms. K. Law
-
-
-
-
-
-
(i) Exercise of options.
Unlisted options with an exercise price of $1.00 of DGO Gold Limited held directly or indirectly at end of financial year exercisable
before 31 December 2021:
Balance
at beginning
of year
Granted as
compensation
Net other
change
(ii)
Balance
at the end of
the year
Relevant
interest
Balance held
nominally
No.
No.
No.
No.
No.
No.
2021
Mr. E. Eshuys
680,268
-
-
680,268
680,268
-
Mr. J. B. Parncutt
1,333,333
-
-
1,333,333
1,333,333
-
Mr. R. C. Hutton
-
-
-
-
-
-
Mr. M. J. Ilett
20,608
-
-
20,608
20,608
-
Ms. K. Law
-
-
-
-
-
-
2020
Mr. E. Eshuys
680,268
-
-
680,268
680,268
-
Mr. J. B. Parncutt
1,333,333
-
-
1,333,333
1,333,333
-
Mr. R. C. Hutton
-
-
-
-
-
-
Mr. M. J. Ilett
20,608
-
-
20,608
20,608
-
Ms. K. Law
-
-
-
-
-
-
(ii) 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.
Mr R.C. Hutton also holds 10,000 unlisted options with an exercise price of $4.50 and an expiry date of 31 July 2022 which were
approved for issue by shareholders at the 30 November 2020 Annual General Meeting.
DGO Gold Limited
15
Directors’ report (continued)
Remuneration report (Audited) (continued)
Performance Rights
Details of performance rights issued to directors and other key management personnel as part of compensation during the year
ended 30 June 2021 are set out below. Performance rights granted carry no dividend or voting rights and can only be exercised
once the vesting conditions have been met. There were no alterations to the terms and conditions of performance rights awarded
as remuneration since their award date.
The total number of Performance Rights that vested and exercised during the financial year was 1,100,000 (Series B).
Series A $2 Performance Rights of DGO Gold Limited held directly or indirectly at end of financial year:
Balance
at
beginning
of year
Granted as
compen-
sation
Net other
change
Balance
at the
end of
the year
Expiry Date
No
Lapsed
Value
granted
Value
Lapsed
No.
No.
No.
No.
$
$
2021
Mr. E. Eshuys
-
-
-
-
-
-
-
-
Mr. J. B. Parncutt
-
-
-
-
-
-
-
-
Mr. R. C. Hutton
-
-
-
-
-
-
-
-
Mr. M. J. Ilett
-
-
-
-
-
-
-
-
Ms. K. Law
-
-
-
-
-
-
-
-
2020
Mr. E. Eshuys (i)
1,000,000
-
(1,000,000)
-
-
-
-
-
Mr. J. B. Parncutt (i)
1,000,000
-
(1,000,000)
-
-
-
-
-
Mr. R. C. Hutton (i)
250,000
-
(250,000)
-
-
-
-
-
Mr. M. J. Ilett (i)
250,000
-
(250,000)
-
-
-
-
-
Ms. K. Law
-
-
-
-
-
-
-
-
(i) Performance rights met vesting conditions on 18 June 2020 and exercised on 30 June 2020.
Series B $3 Performance Rights of DGO Gold Limited held directly or indirectly at end of financial year:
Balance
at
beginning
of year
Granted as
compen-
sation
Net other
change
Balance
at the
end of
the year
Expiry Date
No
Lapsed
Value
granted
Value
Lapsed
No.
No.
No.
No.
$
$
2021
Mr. E. Eshuys (i)
500,000
-
(500,000)
-
-
-
-
-
Mr. J. B. Parncutt (i)
500,000
-
(500,000)
-
-
-
-
-
Mr. R. C. Hutton
-
-
-
-
-
-
-
-
Mr. M. J. Ilett
-
-
-
-
-
-
-
-
Ms. K. Law (i)
100,000
-
(100,000)
-
-
-
-
-
2020
Mr. E. Eshuys (i)
-
500,000
-
500,000
30 June 2022
-
1,051,500
-
Mr. J. B. Parncutt (i)
-
500,000
-
500,000
30 June 2022
-
1,051,500
-
Mr. R. C. Hutton
-
-
-
-
-
-
-
-
Mr. M. J. Ilett
-
-
-
-
-
-
-
-
Ms. K. Law (i)
-
100,000
-
100,000
30 June 2022
-
210,300
-
(i) Performance rights approved by shareholders at 19 June 2020 Extraordinary General Meeting subject to a $3.00, 30 day share price VWAP hurdle with an
expiry on 30 June 2022 and a $nil exercise price. The fair value of the performance rights at date of issue was $2.103.
(ii) Performance rights met vesting conditions on 27 July 2020 and exercised on 10 August 2020.
DGO Gold Limited
16
Directors’ report (continued)
Remuneration report (Audited) (continued)
Series C $4 Performance Rights of DGO Gold Limited held directly or indirectly at end of financial year:
Balance
at
beginning
of year
Granted as
compen-
sation
Net other
change
Balance
at the
end of
the year
Expiry Date
No
Lapsed
Value
granted
Value
Lapsed
No.
No.
No.
No.
$
$
2021
Mr. E. Eshuys (i)
500,000
-
-
500,000
-
-
-
-
Mr. J. B. Parncutt (i)
500,000
-
-
500,000
-
-
-
-
Mr. R. C. Hutton
-
-
-
-
-
-
-
-
Mr. M. J. Ilett
-
-
-
-
-
-
-
-
Ms. K. Law
-
-
-
-
-
-
-
-
2020
Mr. E. Eshuys (i)
-
500,000
-
500,000
30 June 2023
-
986,000
-
Mr. J. B. Parncutt (i)
-
500,000
-
500,000
30 June 2023
-
986,000
-
Mr. R. C. Hutton
-
-
-
-
-
-
-
-
Mr. M. J. Ilett
-
-
-
-
-
-
-
-
Ms. K. Law
-
-
-
-
-
-
-
-
(i) Performance rights approved by shareholders at 19 June 2020 Extraordinary General Meeting subject to a $4.00, 30 day share price VWAP hurdle with an
expiry on 30 June 2023 and a $nil exercise price. The fair value of the performance rights at date of issue was $1.972.
Series D $7 Performance Rights of DGO Gold Limited held directly or indirectly at end of financial year:
Balance
at
beginning
of year
Granted as
compen-
sation
Net
other
change
Balance
at the
end of
the year
Expiry Date
No
Lapsed
Value
granted
Value
Lapsed
No.
No.
No.
No.
$
$
2021
Mr. E. Eshuys (i)
500,000
-
500,000
1 December 2023
-
1,052,000
-
Mr. J. B. Parncutt (i)
-
500,000
-
500,000
1 December 2023
-
1,052,000
-
Mr. R. C. Hutton
-
-
-
-
-
-
-
-
Mr. M. J. Ilett
-
-
-
-
-
-
-
-
Ms. K. Law
-
-
-
-
-
-
-
-
2020
Mr. E. Eshuys (i)
-
-
-
-
-
-
-
-
Mr. J. B. Parncutt (i)
-
-
-
-
-
-
-
-
Mr. R. C. Hutton
-
-
-
-
-
-
-
-
Mr. M. J. Ilett
-
-
-
-
-
-
-
-
Ms. K. Law
-
-
-
-
-
-
-
-
(i) Performance rights approved by shareholders at 30 November 2020 Annual General Meeting subject to a $7.00, 30 day share price VWAP hurdle with an
expiry on 1 December 2023 and a $nil exercise price. The fair value of the performance rights at date of issue was $2.104 which was determined at the
time of grant per AASB 2 Share-Based Payments. For details on the valuation of the performance rights, including models and assumptions used, please
refer to Note 15.
DGO Gold Limited
17
Directors’ report (continued)
Remuneration report (Audited) (continued)
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. The key terms of the agreement are as follows:-
Annual Fee of $200,000 per annum plus superannuation obligations under the superannuation guarantee legislation for
the provision of services as Executive Chairman reviewed 1 April 2020;
Term of the Agreement: Open ended
Entitled to accrued long service leave and annual leave;
Termination due to resignation: Mr. E. Eshuys is required to provide twelve weeks’ notice and is entitled to 12 weeks
remuneration;
Termination due to company notice: The Company is required to provide twelve weeks’ notice and Mr Eshuys is entitled
to 12 weeks remuneration in lieu of notice and any related payments in accordance with the Fair Work Act 2009
requirements.
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 an Executive Director of the Company. The key terms of the agreement are as follows:-
Annual Fee of $200,000 per annum plus superannuation obligations under the superannuation guarantee legislation for
the provision of services as an Executive Director reviewed 1 April 2020;
Term of the Agreement: Open ended
Entitled to accrued long service leave and annual leave;
Termination due to resignation: Mr. J. B. Parncutt is required to provide four weeks’ notice and is entitled to 4 weeks
remuneration;
Termination due to company notice: The Company is required to provide four weeks’ notice and Mr Parncutt is entitled to
4 weeks remuneration in lieu of notice and any related payments in accordance with the Fair Work Act 2009 requirements;
and
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;
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 Fee of $65,000 per annum plus superannuation obligations under the superannuation guarantee legislation for the
provision of services as a Non-Executive Director reviewed 1 June 2020;
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 where a party acquires more than 50% of the Company Mr. Hutton shall be entitled
to four (4) months’ Directors’ fees.
DGO Gold Limited
18
Directors’ report (continued)
Remuneration report (Audited) (continued)
Ms. K. Law
The Company has entered into an agreement with Ms. K. Law dated 6 May 2020 pursuant to which Ms. K. Law 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 Fee of $65,000 per annum plus superannuation obligations under the superannuation guarantee legislation for the
provision of services as a Non-Executive Director from commencement 1 June 2020;
No annual leave or long service leave accrued
Termination due to resignation: Ms. K. Law is required to provide 4 weeks notice and is entitled to 4 weeks remuneration.
F.
Other transactions and other balances with key management, personnel and their related parties.
Mr Eduard Eshuys was paid $nil excluding goods and services tax for consulting services during the year (2020: $11,000).
Lion Capital Management Pty Ltd, a company related to Mr. J B Parncutt, provided DGO Gold Ltd with consulting services for CFO,
Executive Assistant and Analyst services for a total of $375,872 during the year (2020: $287,180) excluding goods and services tax.
End of audited remuneration report.
DGO Gold Limited
19
Directors’ report (continued)
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
27 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 27 to the financial statements do not compromise the external
auditor’s independence, based on advice received from the Audit and Risk 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 21 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.
Shares under options
Options
Unissued ordinary shares of DGO Gold Limited under option at the date of the report are outlined in the following table:
Date options
granted
Balance
1/7/20
No of
options
issued
Expiry date
Exercise
price per
share
Options
Lapsed
No of
options
exercised
Balance at
date of
report
No of shares
issued from
exercising
options
No.
No.
$
No.
No.
No.
8 February
2019 (i)
5,902
-
30 June 2020
$0.3936
(5,902)
-
-
-
6 July 2018
9,968,556
-
31 December
2021
$1.00
5,622,790
4,345,766
5,622,790
26 June 2020
(ii)
800,000
-
30 June 2022
$2.50
-
800,000
-
3 July 2020 (ii)
1,824,202
-
30 June 2022
$2.50
-
1,824,202
-
7 July 2020 (ii)
-
646,880
30 June 2022
$2.50
-
646,880
-
21 July 2020
(iii)
-
505,000
31 July 2022
$4.50
-
505,000
-
13 July 2021
(iv)
-
150,000
13 July 2023
$5.37
-
150,000
-
(i)
On 30 June 2020, a total of 5,902 unexercised options lapsed.
(ii) The issue of options with an exercise price of $2.50 on or before 30 June 2022 was approved by shareholders at the General Meeting on 19 June 2020
and in accordance with the ASX announcement on 12 March.
(iii) The issue of options with an exercise price of $4.50 on or before 31 July 2022 was announced on the ASX on 21 July 2020.
(iv) The issue of options with an exercise price of $5.37 on or before 13 July 2023 was announced on the ASX on 15 July 2021.
Refer to the remuneration report for further details of the options outstanding for Key Management Personnel (KMP). 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.
DGO Gold Limited
20
Directors’ report (continued)
Performance Rights
Unissued ordinary shares of DGO Gold Limited under performance rights at the date of the report are outlined in the following table:
Date rights
granted
Balance
1/7/2020
No of
performance
rights
issued
Expiry
date
Exercise
price per
right
No of rights
exercised
No of rights
lapsed
Balance at
date
of report
No.
No.
$
No.
No.
27/9/18
$2 Series A
50,000
-
31 July 2021
$nil
(50,000)
-
-
17/8/20
$3 Series B
1,600,000
-
30 June
2022
$nil
(1,600,000)
-
-
19/6/20
$4 Series C
1,000,000
-
30 June
2023
$nil
-
-
1,000,000
1/12/20
$7 Series D
1,000,000
-
1 December
2023
$nil
-
-
1,000,000
13/8/21
$7 Series E
-
405,000
2 December
2023
$nil
-
-
405,000
Performance rights above are all of the performance rights granted including those for remuneration to the directors 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, 29 September 2021
DGO Gold Limited
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.
21
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 CAMERON HENRY TO THE DIRECTORS OF DGO GOLD LIMITED
As lead auditor of DGO Gold Limited for the year ended 30 June 2021, I declare that, to the best of my
knowledge and belief, there have been:
1.
No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2.
No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of DGO Gold Limited and the entities it controlled during the period.
Cameron Henry
Director
BDO Audit Pty Ltd
Brisbane, 29 September 2021
DGO Gold Limited
22
Consolidated statement of profit or loss and other comprehensive income for the year ended
30 June 2021
Note
Year ended
30/06/21
$
Year ended
30/06/20
$
Interest income
6,624
12,005
Other income
50,000
169,158
Net gains/(losses) on financial assets at fair value through profit or loss
10(b)
(5,912,063)
3,078,929
Net gain on disposal of investment in associate
11
10,650,257
-
Administration and other expense
(1,187,178)
(754,403)
Consultants and contractor expense
(762,780)
(269,423)
Depreciation expense
(187,911)
(168,676)
Employee benefit expense
(421,101)
(142,728)
Exploration and evaluation expenditure
(775,067)
(103,064)
Finance cost
9
(30,367)
(229,894)
Share based payments expense
15
(6,567,797)
(957,027)
Share in net loss of investment in associates
11
(1,832,016)
(722,498)
Loss before tax
(6,969,399)
(87,621)
Income tax expense
-
-
Loss for the year
(6,969,399)
(87,621)
LOSS FOR THE YEAR
(6,969,399)
(87,621)
Other comprehensive income
-
-
Total comprehensive loss for the year
(6,969,399)
(87,621)
Loss per share
Basic and diluted loss per share (cents per share)
19
(9.9)
(0.2)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
DGO Gold Limited
23
Consolidated statement of financial position as at 30 June 2021
Note
Year ended
30/06/21
$
Year ended
30/06/20
$
Current assets
Cash and cash equivalents
7
7,086,624
11,544,067
Trade and other receivables
8
599,776
367,822
Total current assets
7,686,400
11,911,889
Non-current assets
Financial assets at fair value through profit or loss
10
22,476,691
2,032,431
Investments in associates
11
57,663,983
37,908,851
Property, plant and equipment
203,735
98,170
Right of use assets
9
199,221
314,307
Exploration and evaluation assets
12
11,106,877
4,823,239
Total non-current assets
91,650,507
45,176,998
Total assets
99,336,907
57,088,887
Current liabilities
Trade and other payables
13
1,122,221
767,495
Lease liabilities
9
82,086
106,316
Provisions
14
75,577
50,469
Total current liabilities
1,279,884
924,280
Non-current liabilities
Lease liabilities
9
158,675
240,761
Total non-current liabilities
158,675
240,761
Total liabilities
1,438,559
1,165,041
Net assets
97,898,348
55,923,846
Equity
Issued capital
15
122,094,448
76,841,403
Reserves
16
8,596,705
4,905,849
Accumulated losses
(32,792,805)
(25,823,406)
Total equity
97,898,348
55,923,846
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
DGO Gold Limited
24
Consolidated statement of changes in equity for the financial year ended 30 June 2021
Issued capital
Accumulated
losses
Share based
payments
reserve
Option
reserve
Total
Consolidated
$
$
$
$
$
Balance at 1 July 2019
35,866,880
(25,735,785)
745,999
-
10,877,094
Loss for the year
-
(87,621)
-
-
(87,621)
Other comprehensive income
-
-
-
-
-
Total comprehensive income for the period
-
(87,621)
-
-
(87,621)
Transactions with owners in their capacity
as owners
Share based payments (Note 15)
-
-
957,027
-
957,027
Transfer from reserves for performance
rights exercised
1,110,917
(1,110,917)
-
Options issued (Note 15)
4,313,740
4,313,740
Issue of shares (Note 15)
40,577,937
-
-
-
40,577,937
Share issue costs (Note 15)
(714,331)
-
-
-
(714,331)
40,974,523
-
(153,890)
4,313,740
45,134,373
Balance at 30 June 2020
76,841,403
(25,823,406)
592,109
4,313,740
55,923,846
Balance at 1 July 2020
76,841,403
(25,823,406)
592,109
4,313,740
55,923,846
Loss for the year
-
(6,969,399)
-
-
(6,969,399)
Other comprehensive income
-
-
-
-
-
Total comprehensive income for the period
-
(6,969,399)
-
-
(6,969,399)
Transactions with owners in their capacity
as owners
Transfer from reserves for performance
rights exercised
3,907,383
-
(3,907,383)
-
-
Share based payments (Note 15)
-
-
6,567,797
-
6,567,797
Options issued (Note 15)
4,191,782
-
-
1,030,442
5,222,224
Issue of shares (Note 15)
39,028,002
-
-
39,028,002
Share issue costs (Note 15)
(1,874,122)
-
-
-
(1,874,122)
45,253,045
-
2,660,414
1,030,442
48,943,901
Balance at 30 June 2021
122,094,448
(32,792,805)
3,252,523
5,344,182
97,898,348
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
DGO Gold Limited
25
Consolidated statement of cash flows for the financial year ended 30 June 2021
Note
Year ended
30/06/21
$
Year ended
30/06/20
$
Cash flows from operating activities
Payments to suppliers and employees
(2,535,903)
(1,109,702)
Payments for exploration and evaluation activities
(357,783)
(103,064)
Other income
50,000
120,010
Net cash used by operating activities
21(b)
(2,843,686)
(1,092,756)
Cash flows from investing activities
Interest received
6,624
21,170
Receipt of research and development tax rebate for exploration assets
-
298,230
Proceeds from sale of financial assets at fair value through profit or loss
1,061,718
-
Payments for plant and equipment
(187,547)
(148,567)
Payments for exploration and evaluation assets
(6,283,638)
(3,315,928)
Payments for financial assets at fair value through profit or loss
10
(6,911,449)
(110,000)
Payments for investment in associates
11
(26,103,158)
(10,999,891)
Payments for deposits
8,675
(31,768)
Net cash used by investing activities
(38,408,775)
(14,286,754)
Cash flows from financing activities
Proceeds from loans payable
-
2,500,000
Payments for loans payable
-
(2,500,000)
Proceeds from issues of equity securities
15
39,028,003
23,089,230
Payment for share issue costs
15
(2,096,302)
(658,621)
Finance costs
-
(209,679)
Principal paid on lease liabilities
9
(106,316)
(80,142)
Interest paid on lease liabilities
9
(30,367)
(20,218)
Net cash provided by financing activities
36,795,018
22,120,570
Net increase in cash and cash equivalents
(4,457,443)
6,741,060
Cash and cash equivalents at the beginning of the financial year
11,544,067
4,803,007
Cash and cash equivalents at the end of the financial year
7/21(a)
7,086,624
11,544,067
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
DGO Gold Limited
26
Notes to the financial statements for the year ended 30 June 2021
Notes to the financial statements for the year ended 30 June 2021
26
1.
General information
27
2.
Significant accounting policies
27
3.
Basis of preparation
27
4.
Critical accounting judgements and estimates
34
5.
Operating segments
35
6.
Income taxes
35
7.
Cash and cash equivalents
35
8.
Trade and other receivables
36
9.
Leases
36
10. Financial assets at fair value through profit or loss
37
11. Investments in associates
38
12. Exploration and evaluation assets
41
13. Trade and other payables
41
14. Provisions
41
15. Equity
41
16. Reserves
43
17. Loss per share
44
18. Dividends
44
19. Commitments
44
20. Subsidiaries
45
21. Notes to the statement of cash flows
45
22. Contingent liabilities and contingent assets
46
23. Financial instruments
46
24. Key management personnel compensation
49
25. Related party transactions
49
26. Parent entity disclosures
50
27. Remuneration of auditors
50
28. Significant events after reporting date
50
DGO Gold Limited
27
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 Victoria, South Australia and Western Australia. DGO Gold Limited’s registered office and
its principal place of business are as follows:
Registered office
Principal place of business
Level 9 63 Exhibition St
Melbourne Vic 3000
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 and
copper 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 subsidiaries (collectively, the Group) were authorised for issue by
the Directors on 29 September 2021.
DGO Gold Limited remained relatively unaffected during the period by COVID-19. Staff worked remotely when possible and followed
enhanced social distancing and health and safety procedures when at the workplace. The Company did not receive any subsidies
beyond the universally available ATO cashflow boost scheme ($50,000).
2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been
consistently applied to all the years presented, unless otherwise stated.
3. Basis of preparation
Statement of compliance
The financial report is a general-purpose financial report which has been prepared in accordance with the Corporations Act 2001,
Australian Accounting Standards and Interpretations of the Australian Accounting Standards Board’s other authoritative
pronouncements.
The financial statements comprise the consolidated financial statements of the Group. For the purpose of preparing the consolidated
financial statements, the Company is a for-profit entity. The financial statements and notes of the Group also comply with International
Financial Reporting Standards (‘IFRS’) as issued by the International Accounting Standards Board.
The financial report has been prepared on the basis of historical cost, except for financial assets classified at fair value through profit
or loss which 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:
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company
(subsidiaries) (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 profit or loss and other
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.
The accounting policies and methods of computation applied in this financial report are consistent with those applied in the previous
financial year and the corresponding reporting period except for the adoption of new and amended standards as set out below.
(a) New and amended standards adopted by the Group
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board (‘AASB’) that are mandatory for annual periods beginning on or after 1 July 2020. The adoption of these
Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the Group
during the financial year, other than as noted below.
DGO Gold Limited
28
3. Basis of preparation (continued)
Amendments to AASB 3: Definition of a Business
The amendment to AASB 3 Business Combinations clarifies that to be considered a business, an integrated set of activities and assets
must include, at a minimum, an input and a substantive process that, together, significantly contribute to the ability to create output.
Furthermore, it clarifies that a business can exist without including all of the inputs and processes needed to create outputs. These
amendments had no impact on the consolidated financial statements of the Group but may impact future periods should the Group
enter into any business combinations.
Amendments to AASB 101 and AASB 108 Definition of Material
The amendments provide a new definition of material that states, “information is material if omitting, misstating or obscuring it
could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the
basis of those financial statements, which provide financial information about a specific reporting entity.” The amendments clarify
that materiality will depend on the nature or magnitude of information, either individually or in combination with other information,
in the context of the financial statements. A misstatement of information is material if it could reasonably be expected to influence
decisions made by the primary users. These amendments had no impact on the consolidated financial statements of the Group.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. There were
no standards that had any impact on the Group’s accounting policies.
(b) Going concern
The Group generated a net loss of $6,969,399 for the year ended 30 June 2021. As at 30 June 2021, the Group held cash reserves of
$7,086,624 and its statement of financial position showed a net current asset surplus of $6,406,516.
The ability of the Group to continue as a going concern is principally dependent upon one or more of the following:
the successful exploration and subsequent exploitation of the Group’s tenements;
the ability of the Group to sell its investments in shares traded on the ASX to fund its continued operations;
the ability of the Group to raise capital; and
the ability of the Group to raise debt funding.
The directors believe that the going concern basis of preparation is appropriate due to the following reasons:
The Group has had success in raising capital in the past and the directors believe it will be able to fund its future activities
through further issuances of equity securities;
The directors believe there are sufficient liquid assets available for the Group to continue operating over the next 12 months
from the date of signing of these financial statements, particularly the holding in De Grey Mining Limited with a market value
of approximately $251 million at year end;
The directors believe that they would be able to sell its investments in shares and options, if required, to fund the Group’s
continued operation over the next 12 months.
The Group has entered into a $15.0 million secured debt facility which remains undrawn (ASX announcement 13 July 2021)
(c)
Investment in associates
Associates are all entities over which the Group has significant influence but not control or joint control. Where the Group has the
power to participate in (but not control) the financial and operating policy decisions of another entity, it is classified as an Associate.
Associates are initially recognised in the consolidated statement of financial position at cost. Subsequently Associates are accounted
for using the equity method, where the Group's share of post-acquisition profits and losses and other comprehensive income is
recognised in the consolidated statement of profit or loss and other comprehensive income. Dividends received or receivable from
Associates are recognised as a reduction in the carrying amount of the investment. Where the Group’s share of losses in an equity-
accounted investment equals or exceeds its interest in the entity, including any other unsecured long-term receivables, the Group does
not recognise further losses, unless it has incurred obligations or made payments on behalf of the other entity.
Profits and losses arising on transactions between the Group and its Associates are recognised only to the extent of unrelated investors'
interests in the Associate. The investor's share in the Associate's profits and losses resulting from these transactions is eliminated
against the carrying value of the Associate. Accounting policies of equity-accounted investees have been changed where necessary to
ensure consistency with the policies adopted by the Group.
Any premium paid for an Associate above the fair value of the Group's share of the identifiable assets, liabilities and contingent liabilities
acquired is capitalised and included in the carrying amount of the Associate. Where there is objective evidence that the investment in
an Associate has been impaired the carrying amount of the investment is tested for impairment in the same way as other non-financial
assets.
DGO Gold Limited
29
3. Basis of preparation (continued)
(d) Financial assets
i.
Investments and other financial assets
Classification
The Group classifies its financial assets in the following measurement categories:
those to be measured subsequently at fair value (either through Other Comprehensive Income (OCI), or through profit or
loss); and
those to be measured at amortised cost.
The classification depends on the Group’s business model for managing the financial assets and the contractual terms of the cash
flows.
For financial 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.
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the
instrument. 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. 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.
When the fair value of financial assets and liabilities differs from the transaction price on initial recognition, the group recognises
the difference as follows:
(a) when the fair value is evidenced by a quoted price in an active market for an identical asset or liability (i.e.: a Level 1 input)
or based on a valuation technique that uses only data from observable markets, the difference is recognised as a gain or loss.
(b) In all other cases, the difference is deferred and the timing of recognition of deferred day one profit or loss is determined
individually. It is amortised over the life of the instrument, deferred until the instrument’s fair value can be determined using
market observable inputs, or realised through settlement.
Debt instruments
Subsequent measurement of debt instruments depends on the group’s business model for managing the asset and the cash flow
characteristics of the asset. The Group has cash and cash equivalents and trade and other receivables as financial assets.
Consequently, the measurement category most relevant to the group is as follows:
Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely
payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included
in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly
in profit or loss and presented in other gains/(losses), together with foreign exchange gains and losses. Impairment losses
are presented as separate line item in the statement of profit or loss.
Equity instruments
Equity instruments are instruments that meet the definition of equity from the issuer’s perspective; that is, instruments that do
not contain a contractual obligation to pay and that evidence a residual interest in the issuer’s net assets. The Group subsequently
measures all equity investments at fair value through profit or loss. Gains and losses on equity investments at FVPL are included
in the ‘net gains/(losses) on financial assets at fair value through profit or loss’ in the statement of profit or loss and other
comprehensive income.
Impairment
The Group assesses on a forward-looking basis the expected credit losses associated with its debt instruments carried at amortised
cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade
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.
Derecognition other than modification
Financial assets, or portion thereof, are derecognised when the contractual rights to receive the cash flows from the assets have
expired, or when they have been transferred and either (i) the Group transfers substantially all the risks and rewards of ownership,
or (ii) the Group neither transfers nor retains substantially all the risks and rewards of ownerships and the Group has not retained
control.
DGO Gold Limited
30
3. Basis of preparation (continued)
ii.
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, DCN and others 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.
(e) Financial Liabilities
The Group’s financial liabilities are measured at amortised cost. The Group has trade payables and loans payable as financial
liabilities.
Derecognition
Financial liabilities are derecognised when they are extinguished (i.e. when the obligation specified in the contract is discharged,
cancelled, or otherwise.
(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:
the rights to tenure of the area of interest are current; and
at least one of the following conditions is also met:
-
the exploration and evaluation expenditures are expected to be recouped through successful development and
exploitation of the area of interest, or alternatively, by its sale; or
-
exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits
a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant
operations in, or in relation to, the areas of interest are continuing.
Exploration and evaluation 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.
(g) Impairment of assets (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.
DGO Gold Limited
31
3. Basis of preparation (continued)
(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).
Deferred tax
Deferred tax is accounted for using the 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.
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)
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available
for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for
any re-measurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial
direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-
of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the
assets.
The right-of-use assets are also subject to impairment. Refer to the accounting policy in Note 3(g).
(j)
Property, plant and equipment
Plant and equipment and leasehold improvements 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)
Trade and other payables
These amounts represent liabilities for goods and services provided to the group prior to the end of the financial year and which
are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts are
unsecured and are usually paid within 30 days of recognition.
DGO Gold Limited
32
3. Basis of preparation (continued)
(l)
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value
of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that
rate cannot be readily determined, the group's incremental borrowing rate. Lease payments comprise of fixed payments less any
lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under
residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and
any anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in the
period in which they are incurred.
After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for
the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change
in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate
used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.
The Group applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease term
of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value
assets recognition exemption to leases that are considered to be low value. Lease payments on short-term leases and leases of
low-value assets are recognised as expense on a straight-line basis over the lease term.
(m) 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.
Restoration, rehabilitation and environmental expenditure
Costs of site restoration are provided over the life of the facility from when exploration commences and are included in the costs
of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and building structure, waste
removal, and rehabilitation of the site in accordance with clauses of mining permits. Such costs have been determined using
estimates of future costs, current legal requirements and technology on an undiscounted basis.
Estimates of future costs are reassessed at least annually. Changes in estimates relating to areas of interest in the exploration and
evaluation phase are dealt with retrospectively, with any amounts that would have been written off or provided against under
the accounting policy for exploration and evaluation immediately written off.
Restoration from exploration drilling is carried out at the time of drilling and accordingly no provision is required.
(n) Other income
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 offset against expenses in the profit or loss.
Interest income
Interest income 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 income
Other income is recognised when it is received or when the right to receive payment is established.
(o) 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.
DGO Gold Limited
33
3. Basis of preparation (continued)
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 instruments that will eventually vest.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are
considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An
additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the
share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the group or employee, the failure to satisfy the condition is treated as a
cancellation. If the condition is not within the control of the group or employee and is not satisfied during the vesting period, any
remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is
recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is
treated as if they were a modification.
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.
(p) Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown
in equity as a deduction, net of tax, from the proceeds.
(q) Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of DGO Gold Limited, excluding any costs
of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the
financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after
income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average
number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
(r)
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value
is based on 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; and assumes that the transaction will take place either: in the principal market; or in the
absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they
act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best use.
Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value,
are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the significance
of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers between levels
are determined based on a reassessment of the lowest level of input that is significant to the fair value measurement.
(s)
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
(ii) for receivables and payables which are recognised inclusive of GST.
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.
DGO Gold Limited
34
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:
Exploration and evaluation costs
Exploration and evaluation costs have been capitalised on the basis that the Group will commence commercial production in the future,
from which time the costs will be amortised in proportion to the depletion of the mineral resources. Key judgements are applied in
considering costs to be capitalised which includes determining expenditures directly related to these activities and allocating overheads
between those that are expensed and capitalised. In addition, costs are only capitalised that are expected to be recovered either
through successful development or sale of the relevant mining interest. The Group determines whether exploration and evaluation
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. To the extent that capitalised costs are determined not to be
recoverable in the future, they will be written off in the period in which this determination is made. As at the end of the financial year,
the Group has determined that all capitalised exploration and evaluation costs are recoverable through either successful development
or sale in the future. The Group has determined that no capitalised amount should be considered as impaired through the financial
year.
Assessment of significant influence
Although the Group holds less than 20% of voting rights over De Grey Mining Limited and NTM Gold Limited until it merged with Dacian
Gold Limited, the Group concluded that it has the power to participate in the financial and operating policy decisions of these
investments and it was therefore determined that the Group has significant influence under accounting standards. Additional
information is disclosed in note 11.
Share-based payments
The Group initially measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. Estimating fair value for share-based payment transactions requires determination
of the most appropriate valuation model, which is dependent on the terms and conditions of the grant.
This estimate also requires determination of the most appropriate inputs to the valuation model taking into account the terms and
conditions upon which the instruments were granted, including the expected life of the share option, volatility, dividend yield, the risk-
free interest rate and making assumptions about them. The assumptions and models used for estimating fair value for share-based
payment transactions are disclosed in Note 15.
Estimation of fair values of financial assets
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques.
In determining the value of unlisted financial assets, including the unlisted options as disclosed in Note 10, the fair value has been
based on a reasonable estimate determined using Black-Scholes model. Estimating fair value requires determination of the most
appropriate inputs to the valuation model including the expected life of the option, volatility, dividend yield, risk free rate and making
assumptions about them.
Accounting for DGO/DEG share swap
The Group acquired additional shares in its associate (refer note 11) DEG in June 2020 pursuant to a Subscription and Share Swap
Agreement and following shareholders approval obtained on 19 June 2020. The consideration for these additional DEG shares consists
of issue of shares and options by DGO. These were issued subsequent to 30 June 2020. The cost of the additional investment has been
determined based on the ASX listed share price of DGO shares at the date DEG shares were received and a Black-Scholes valuation of
the unlisted $2.50 options. Estimating the fair value of the options issued requires determination of the most appropriate inputs to the
valuation model including the expected life of the option, volatility, dividend yield, risk free rate and making assumptions about them.
Refer to Note 15 for details.
Accounting for exercise of unlisted options held in Fair Value Assets and Associates
In determining the value of the options converted, the exercise price paid plus an estimate of the value of the unlisted option at the
date of exercise is included. To estimate the value of the unlisted option a Black Scholes valuation is used that requires a determination
of the most appropriate inputs to the valuation model including the expected life of the option, volatility, dividend yield, risk free rate
and making assumptions about them.
DGO Gold Limited
35
5. Operating segments
The Group operates predominantly in one business segment being the evaluation and exploration of mineral deposits in sediment
hosted gold and copper 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:
Year ended
30/06/21
$
Year ended
30/06/20
$
Loss from continuing operations
(6,969,399)
(87,621)
Income tax benefit calculated at 26.0% (2020: 27.5%)
1,812,043
24,096
Tax effects of amounts which are not assessable/ (deductible) in calculating taxable
income
(1,696,745)
(449,549)
Deferred tax assets not brought to account
(115,298)
425,453
Total tax benefit
-
-
(i)
The tax rate used in the above reconciliation is the corporate tax rate of 26% (2020: 27.5%) payable by Australian corporate entities on taxable profits under
Australian tax law.
Recognised deferred tax assets and liabilities
Year ended
30/06/21
$
Year ended
30/06/20
$
Deferred tax assets
Tax losses revenue
3,955,919
857,634
Temporary differences
342,740
934,709
Deferred tax liabilities:
Exploration and evaluation assets
(2,958,289)
(1,705,909)
Other
(1,340,370)
(86,434)
Deferred tax liability
-
-
Unrecognised deferred tax balances
Year ended
30/06/21
$
Year ended
30/06/20
$
The following deferred tax assets have not been brought to account:
-Temporary differences
-
-
-Tax losses revenue
6,399,988
7,896,066
6,399,988
7,896,066
The Group’s consolidated tax group total carry forward income tax losses at 30 June 2021 are $39,671,729 (2020: $29,380,641)
and capital losses at 30 June 2021 are $1,751,900 (2020: $2,447,148). The ability of the Group to use carry forward losses will
depend on the Group satisfying either the “continuity of ownership” test or the “business continuity” test and as future taxable
income being derived.
7. Cash and cash equivalents
Year ended
30/06/21
$
Year ended
30/06/20
$
Cash at Bank
7,086,624
11,544,067
DGO Gold Limited
36
8. Trade and other receivables
Year ended
30/06/21
$
Year ended
30/06/20
$
Current
Prepayments
77,708
82,910
Deposits (i)
126,385
121,197
Receivables (ii)
-
16,035
Goods and services tax receivable
395,683
147,680
599,776
367,822
(i)
Deposits amounting to $60,812 (2020: $49,532) relates to refundable prepayments of rent for the first year of the term of exploration licences applied for in
Western Australia and Rental Bond on new Storage site $6,616 (2020: $0), $58,957 (2020: $58,957) relates to bank guarantees for office leases in Melbourne
and Perth. The Perth rental deposit for office lease was refunded in December 2020 on expiry of lease (2020: $12,708).
(ii)
The Group assesses impairment on a forward looking basis for its trade and other receivables carried at amortised cost.
.
9. Leases
Right-of-use assets
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the year:
Year ended
30/06/21
$
Year ended
30/06/20
$
Opening balance
314,307
280,902
Net Addition
-
146,321
Depreciation expense
(115,086)
(112,916)
As at 30 June 2021
199,221
314,307
Lease liabilities
Set out below are the carrying amounts of lease liabilities recognised and the movements during the year:
Year ended
30/06/21
$
Year ended
30/06/20
$
Opening balance
347,077
280,902
Net Addition
-
126,103
Accretion of interest
30,367
20,215
Lease payments
(136,683)
(80,143)
As at 30 June 2021
240,761
347,077
Amounts recognised in profit or loss
The following are the amounts recognised in profit or loss:
Year ended
30/06/21
$
Year ended
30/06/20
$
Interest expense (included in finance cost)
30,367
20,215
Expense relating to leases of low-value assets (included in administration expense)
-
4,541
DGO Gold Limited
37
10. Financial assets at fair value through profit or loss
Financial assets mandatorily measured at FVPL include the following:
30 June 2021
30 June 2020
Quoted shares – Jindalee Resources Ltd
-
32,000
Quoted shares – Kairos Minerals Ltd
-
430,000
Quoted shares – Yandal Resources Ltd (i)
7,824,240
-
Quoted shares – Dacian Gold Ltd (ii) (iii)
13,405,222
-
Total equity securities
21,229,462
462,000
Unlisted options - NTM Gold Ltd (iii)
-
1,426,540
Unlisted Options – Jindalee Resources Ltd
-
143,891
Unlisted options – Dacian Gold Ltd (iii)
1,199,181
-
Unlisted options – Kairos Minerals Ltd
48,048
-
Total derivative financial assets
1,247,229
1,570,431
Total financial assets held at fair value through profit or loss (FVPL)
22,476,691
2,032,431
(i) The Group purchased a total of 13,318,769 shares in Yandal Resources Limited during the financial year for a total cash consideration of $6,384,997.
(ii) The Group purchased 1,500,000 shares in Dacian Gold Limited (“Dacian”) during the financial year for a total cash consideration of $526,452.
(iii) On 15 March 2021, DGO’s shareholding and options in NTM Gold Limited (NTM) were converted to shares and options in Dacian in accordance with a
Scheme of Arrangement for the acquisition of NTM by Dacian. Under the scheme, NTM Shareholders will receive 1 Dacian share for every 2.7 NTM shares.
The Group received 50,058,546 shares and 22,222,222 million options in Dacian, exercisable at $0.27 expiring 31 March 2022 with a total fair value of
$24,405,410 at the completion date of Dacian and NTM merger which were classified as financial assets through profit or loss. Refer to Note 11 for more
details.
(a) 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 gain or loss), if
any, is recognised in profit or loss over the life of the instrument when the inputs become observable or realised through
settlement.
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 deferred day one profit as at 30 June 2021:
Fair Value at 30 June
2021
Deferred day one
profit
Fair value recognised
at 30 June 2021
Unlisted options – Dacian Gold Ltd
1,199,181
-
1,199,181
Unlisted options – Kairos Ltd
97,750
(49,702)
48,048
Total derivative financial assets
1,296,931
(49,702)
1,247,229
The table below details the deferred day one profit as at 30 June 2020:
Fair Value at 30 June
2020
Deferred day one
profit
Fair value recognised
at 30 June 2020
Unlisted options – NTM Gold Ltd
1,525,379
(98,839)
1,426,540
Unlisted options – Other
148,661
(4,770)
143,891
Total derivative financial assets
1,674,040
(103,609)
1,570,431
DGO Gold Limited
38
10. Financial assets at fair value through profit or loss (continued)
(b) Net gains/(losses) recognised in the profit of loss
Year ended 30/06/21
$
Year ended 30/06/20
$
Fair value gains (losses) on equity investments at FVPL
(5,724,375)
754,868
Fair value gains (losses) on unlisted options at FVPL
(187,688)
2,324,061
(5,912,063)
3,078,929
11. Investments in associates
Set out below are the associates of the group as at 30 June 2021 which, in the opinion of the directors, are material to the group. The
entities listed below have share capital consisting solely of ordinary shares, which are held directly by the group. The country of
incorporation or registration is also their principal place of business, and the proportion of ownership interest is the same as the
proportion of voting rights held.
Principal place
of business/
country of
incorporation
Proportion of ownership held as
at
Carrying values
30 June 2021
30 June 2020
30 June 2021
$
30 June 2020
$
De Grey Mining Limited (i)
Australia
15.8%
14.27%
54,864,245
33,366,563
NTM Gold Limited (ii)
Australia
0.00%
13.56%
-
4,542,288
Yilgarn Exploration Ventures Pty Ltd (iii)
Australia
40.0%
0.00%
2,799,738
-
57,663,983
37,908,851
The principal activity of De Grey Mining Limited (DEG), NTM Gold Limited (NTM) and Yilgarn Exploration Ventures Pty Ltd (YEV) was
exploration and development activities of mining tenements. These are strategic investments as it advances the Group’s strategy of
building a portfolio in the West Australian gold exploration sector and provides access to tenements and land with key sediment
hosted mineral deposits that meet defined criteria.
Assessment of Significant Influence
The group has assessed that it obtained significant influence over two companies during the year ended 30 June 2020 and a further
company upon acquisition in the year ended 30 June 2021:
(i) De Grey Mining Limited
De Grey Mining Limited (DEG) is an Australian based Exploration company that is listed on the Australian Securities Exchange (“ASX”).
During the year ended 30 June 2020 the Group added to its holding in DEG by acquiring a further 8.42% through participation in
placements completed by DEG, a share swap and conversion of options. This brought the DGO’s total holding to 14.27% as at 30
June 2020. On 15 July 2020, the Group participated in a further placement completed by DEG, further increasing the Groups holding
to 16.22%. On 3 November 2020, the Group participated in a further placement, adding 10,000,000 shares and taking its holding
(after dilution from the placement) to 15.8%.
Under the original placement agreement DGO has a right (but not an obligation) to nominate two directors to the Board of DEG.
Consequently, at the date of completion of that placement it was determined that DGO had the power to participate in the
financial and operating policy decisions of DEG. It was therefore determined that DGO has significant influence under accounting
standards from that date. Upon completion of the placement, DGO’s representatives Edward Eshuys and Bruce Parncutt AO were
appointed to the board of De Grey and remain as directors at the date of this report. It was therefore determined that DGO has
significant influence under accounting standards from that date.
(ii) NTM Gold Limited
NTM Gold Limited (“NTM”) is an Australian based Exploration company that was listed on the Australian Securities Exchange
(“ASX”). At 30 June 2020 the Group held 13.56% of NTM. The Group also held options that are exercisable at any point and give it
the right to subscribe for additional share capital that would bring its holding to 20.53%.
Under the subscription agreement DGO has a right (but not an obligation) to nominate one director to the Board of NTM when
it’s holding exceeds 10%. DGO’s holding increased above 10% on 14 August 2019 and, accordingly, the Group determined that it
has the power to participate in the financial and operating policy decisions of NTM from that date. It was therefore determined
that DGO has significant influence under accounting standards from that date. DGO’s representative Edward Eshuys was a
director of NTM.
During the year ended 30 June 2021, NTM merged with Dacian Gold Limited (“DCN”). The company held 5.66% of the issued
capital in DCN, plus options to increase the holding to approximately 7.91% of DCN at 30 June 2021. Whilst the Company has a
representative on the Board of DCN, it is considered that the Company does not hold a significant influence over DCN and as
such, the accounting treatment for its investment in DCN is not as an equity accounted associate. Refer to Note 10 for details.
DGO Gold Limited
39
11. Investments in associates (continued)
(iii) Yilgarn Exploration Ventures Pty Ltd
Yilgarn Exploration Ventures Pty Ltd (“YEV”) is an Australian based exploration company that utilizes proprietary machine
learning / AI technology generated by SensOre in its exploration activities. The Company acquired a 40% interest in YEV during
the year and has 1 director on the YEV Board. It is considered that the Company holds a significant influence over YEV and as
such, the interest in YEV has been accounted for as an equity accounted associate.
Refer below for the reconciliation of the carrying amounts from opening to closing balances:
Note
30 June 2021
$
30 June 2020
$
Opening balance at 1 July
37,908,851
-
Reclassification from FVPL to equity accounted investment
-
5,206,144
Additions through shares placement
(i)
26,103,157
4,411,643
Additions through shares swap arrangements
(ii)
5,222,224
21,802,446
Additions through exercise of options
-
7,211,116
Disposal of shares in NTM
(iii)
(9,738,233)
-
Share in losses during the year
(1,832,016)
(722,498)
Share in other comprehensive income during the year
-
-
Closing balance at 30 June
57,663,983
37,908,851
(i)
During the year, the Group acquired shares in De Grey Mining Limited for total consideration of $17,105,000, NTM Gold Limited for a total
consideration of $5,463,555 and Yilgarn Exploration Ventures Pty Ltd for total consideration of $3,534,602.
(ii)
The Group acquired additional shares in its associate DEG in June 2020 pursuant to a Subscription and Share Swap Agreement and following shareholders
approval obtained on 19 June 2020. The consideration for these additional DEG shares consists of issue of shares and options by DGO. In July 2020, the
Group acquired 8,086,000 shares in De Grey Mining Limited in exchange of DGO issued 1,293,760 fully paid ordinary shares and 646,880 $2.50 options
to be exercised by 30 June 2022, in exchange for De Grey Mining Limited shares amounting to $5,222,224 via a share swap transaction. Refer to Note 15
for further details.
(iii)
During the year, NTM Gold Limited (ASX:NTM) merged with Dacian Gold (ASX:DCN) through a Scheme of Arrangement. Under the scheme DGO received
1 DCN share for every 2.7 NTM shares. The carrying value of shares in NTM Gold Limited of $9,738,233 was de-recognised as a result of the merger and
any difference between the carrying amount of investment at the date the equity method was discontinued and the fair value of the Dacian shares and
options received was recognised as gain on disposal. The carrying amount of the investment in NTM amounting to $13,755,153, consisting of shares of
$9,738,233 (included in investment in associates) and options of $4,016,920 (included in financial assets at FVPL), were de-recognised which resulted in
a gain on disposal of NTM investment in associate amounting to $10,650,257 recognised in the statement of profit or loss and other comprehensive
income.
Summarised financial information
The tables below provide summarised financial information for those associates that are material to the group. The group did not
have any immaterial associates.
As at 30 June 2021
DEG
$
NTM
$
YEV
$
Current assets
73,584,651
-
434,726
Non-current assets
123,319,766
-
2,044,871
Current liabilities
18,308,904
-
817,990
Non-current liabilities
2,958,113
-
-
Net assets (100%)
175,637,400
-
1,661,607
Group’s share in percentage
15.8%
0%
40%
Group’s share in net assets
27,750,709
-
664,643
Goodwill
27,113,536
-
2,135,095
Group’s carrying amount of the investments
54,864,245
-
2,799,738
DGO Gold Limited
40
11. Investments in associates (continued)
Summarised financial information
For the year ended 30 June 2021:
30 June 2021
DEG
$
30 June 2021
NTM
$
30 June 2021
YEV
$
Revenue and other income
296,291
50,000
227,045
Interest income
279,198
5,567
-
Expenses
(5,825,758)
(1,411,245)
(2,064,204)
Profit before tax
(5,250,269)
(1,355,678)
(1,837,159)
Income tax expense
-
-
-
Profit/(Loss) for the year
(5,250,269)
(1,355,678)
(1,837,159)
Other comprehensive income
-
-
-
Total comprehensive income/(loss) for the year
(5,250,269)
(1,355,678)
(1,837,159)
Group’s share of loss for the year (DEG 15.8%; NTM 19.74%; YEV 40.00%)
(829,542)
(267,610)
(734,864)
As at 30 June 2020
DEG
$
NTM
$
YEV
$
Current assets
28,670,525
6,789,105
-
Non-current assets
51,094,654
13,116,092
-
Current liabilities
(3,110,704)
(594,260)
-
Non-current liabilities
(1,422,045)
(71,582)
-
Net assets (100%)
75,232,430
19,239,355
-
Group’s share in percentage
14.27%
13.56%
0.00%
Group’s share in net assets
10,735,667
2,608,856
-
Goodwill
22,630,896
1,933,432
-
Group’s carrying amount of the investments
33,366,563
4,542,288
-
For the year ended 30 June 2020:
30 June 2020
DEG
$
30 June 2020
NTM
$
30 June 2020
YEV
$
Revenues
287,308
50,000
-
Interest income
78,721
8,385
-
Expenses
(4,319,367)
(1,226,209)
-
Profit before tax
(3,953,338)
(1,167,824)
-
Income tax expense
-
-
-
Profit/(Loss) for the year
(3,953,338)
(1,167,824)
-
Other comprehensive income
-
-
-
Total comprehensive income/(loss) for the year
(3,953,338)
(1,167,824)
-
Group’s share of profit/(loss) for the year (DEG 14.27%; NTM 13.56%; YEV 0.0%)
(564,141)
(158,357)
-
Total Group’s share of profit/(loss) for the year
30 June
2021
$
(1,832,016)
30 June
2020
$
(722,498)
Commitments and contingent liabilities in respect of associates
The group had no contingent liabilities or capital commitments relating to its associates as at 30 June 2021 (30 June 2020: nil).
DGO Gold Limited
41
12. Exploration and evaluation assets
Reconciliations of the carrying amounts at the beginning and end of the current and previous financial year are set
out below:
Year ended
30/06/21
$
Year ended
30/06/20
$
Balance at beginning of financial year
4,823,239
1,335,012
Additions
6,283,638
3,786,457
Research and development tax refund
-
(298,230)
Balance at end of the financial year
11,106,877
4,823,239
The exploration and evaluation assets 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 assets
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.
13. Trade and other payables
Year ended
30/06/21
$
Year ended
30/06/20
$
Trade payables (i)
905,486
147,310
Other – accrued expenses
112,208
585,479
Other – PAYG payable
104,527
34,706
1,122,221
767,495
(i)
The average credit period on purchases of goods is 30 days. No interest is charged on the trade payables.
14. Provisions
Year ended
30/06/21
$
Year ended
30/06/20
$
Current
Employee benefits (i)
75,577
50,469
75,577
50,469
(i)
The Group’s current employee benefits are represented by provisions for long service leave totalling $42,300 (2020: $38,063) and annual leave totalling
$33,278 (2020: $12,406).
15. Equity
30/06/21
30/06/20
30/06/21
30/06/20
No.
No.
$
$
Fully Paid Ordinary Shares
73,551,748
58,570,538
122,094,448
76,841,403
DGO Gold Limited
42
15. Equity (continued)
Movements in ordinary share capital
Details
Date
No. of Shares
$
Balance
01 July
2019
32,529,695
35,866,880
Issue of shares in exchange for DEG shares
5,248,404
17,488,706
Issue of shares under private placement
16,832,593
22,686,501
Issue of shares under option conversion
909,846
402,730
Performance rights vested and exercised
3,050,000
1,110,917
Share issue costs
-
(714,331)
Balance
30 June
2020
58,570,538
76,841,403
Details
Date
No. of Shares
$
Balance
01 July
2020
58,570,538
76,841,403
Issue of shares in exchange for DEG shares
(i)
1,293,760
4,191,782
Issue of shares under private placement
(ii)
11,761,450
39,002,002
Issue of shares under option conversion
(iii)
26,000
26,000
Performance rights vested and exercised
(iv)
1,900,000
3,907,383
Share issue costs
-
(1,874,122)
Balance
30 June
2021
73,551,748
122,094,448
2021 Share Issues
(i)
On 7 July 2020, the Company issued 1,293,760 fully paid ordinary shares in exchange for 8,086,000 De Grey Mining Limited shares as announced to the ASX
on 12 March 2020.
(ii)
On 21 September 2020, the Company issued 8,261,450 fully paid ordinary shares at an issue price of $3.45 with total proceeds of $28,502,002 before issue
costs of $1,375,685. On 22 December 2020, the Company issued 3,500,000 fully paid ordinary shares at an issue price of $3.00 with total proceeds of
$10,500,000 before issue costs of $425,481.
(iii)
On 7 July 2020, 1,000 options with an exercise price of $1.00 were exercised, raising $1,000.
On 10 July 2020, 20,000 options with an exercise price of $1.00 were exercised, raising $20,000
On 2 December 2020, 4,500 options with an exercise price of $1.00 were exercised, raising $4,500.
On 24 December 2020, 500 options with an exercise price of $1.00 were exercised, raising $500.
(iv)
On 10 July 2020, DGO issued 50,000 fully paid ordinary shares in exchange for 50,000 performance rights that had vested. On 10 August 2020, DGO issued
1,600,000 fully paid ordinary shares in exchange for 1,600,000 performance rights that had vested. On 5 October 2020, DGO issued 250,000 fully paid
ordinary shares in exchange for 250,000 performance rights that had vested.
Share Options
Share options outstanding at the end of the year have the following expiry dates and exercise prices:
Grant date
Expiry date
Exercise
price
No. of Share
options
30 June 2020
Options
issued
Options
Lapsed
Options
Exercised
No. of Share
options
30 June 2021
8 February 2019
30 June 2020
$0.3936
5,902
-
(5,902)
-
-
6 July 2018
31 December 2021
$1.00
9,968,556
-
-
(26,000)
9,942,556
26 June 2020
30 June 2022
$2.50
2,624,202
646,880
-
-
3,271,082
21 July 2020
31 July 2022
$4.50
-
(i) 505,000
-
-
505,000
12,598,660
1,151,880
(5,902
(26,000)
13,718,638
(i) On 21 July 2020, the Group received commitments from a number of key shareholders to participate in possible future capital raising, in aggregate an
amount of $12 million. The commitments were subject to a future capital raising being undertaken at a price no higher than a 20% discount to the 10 day
volume weighted average DGO Gold share price at the time the capital raising is announced, and are for a term of four months, expiring on 20 November
2020. In exchange for the commitment, committing shareholders were paid a commitment fee of 50,000 unlisted DGO Gold options per $1 million of
commitment being exercisable at $4.50 per share with an expiry date of 31 July 2022. The fair value of the 505,000 options issued in exchange of
standby equity commitment at the date of issue was $520,501 which was determined using Black-Scholes valuation and have been included in the share-
based payments expense during the year.
DGO Gold Limited
43
15. Equity (continued)
Performance Rights
On 30 November 2020, the Company issued a total of 1,000,000 Series D Performance Rights with key terms and conditions as
follows:
a)
Exercisable at $nil consideration on or before 1 December 2023
b)
The performance rights will vest if the following conditions are met:
on or before 30 June 2023 the 30 day volume weighted average price of Shares on the ASX exceeds $7.00 (subject to
certain adjustments) per Share (Market Condition), or
on or before 1 December 2023 a takeover bid is made for the Shares at a price or value which exceeds $3.50 (subject to
certain adjustments) and the bidder confirms that the takeover bid is unconditional (Takeover Condition); or
on or before 31 December 2023 a court orders a meeting to be held in relation to a proposed scheme of arrangement in
relation to the Company at a price or value which exceeds $3.50 (subject to certain conditions) per Share and
Shareholders approve the scheme resolution by the requisite majority; and
the employee continues to be a director of the Company
c)
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 2021 was estimated on the date of grant using the following assumptions:
Dividend yield: 0%
Expected volatility: 88.470%
Risk-free interest rate: 0.11%
Expected life of share options: 4 years
Weighted average share price: $2.90
Performance rights on issue at the end of the year are as follows:
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
27/9/18 Series A
31/7/21
$nil
50,000
-
50,000
-
-
19/6/20 Series B
30/6/22
$nil
1,600,000
-
1,600,000
-
-
19/6/20 Series C
30/6/23
$nil
1,000,000
-
-
-
1,000,000
30/11/20 Series D
1/12/23
$nil
-
1,000,000
-
-
1,000,000
Total
2,650,000
1,000,000
1,650,000
-
2,000,000
For the year ended 30 June 2021, the Group has recognised $6,567,797 of shared-based payment expense relating to performance
rights and options in the Consolidated statement of profit or loss and other comprehensive income (2020: $957,027).
16. Reserves
Year ended
30/06/21
$
Year ended
30/06/20
$
Shared based payments reserve (i)
3,252,523
592,109
Options reserve (ii)
5,344,182
4,313,740
8,596,705
4,905,849
(i)
The share-based payments reserve is used to recognise the grant date fair value of 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 year relates to the shared based
payments expense for the performance rights issued in the General Meeting dated 19 June 2020 and the General Meeting dated 30 November 2020 and
grant date fair value of the 505,000 options relating to stand-by equity commitments. Refer to Note 15 for more details.
(ii)
The options reserve is used to recognise the grant date fair value of options issued in exchange for De Grey shares as part of the DGO / DEG share swap
arrangement. Refer notes 11 and 15 for details.
DGO Gold Limited
44
17. Loss per share
Year ended
30/06/21
Cents per share
Year ended
30/06/20
Cents per share
Loss per share
Basic and diluted loss per share (cents per share)
(9.9)
(0.2)
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:
Year ended
30/06/21
$
Year ended
30/06/20
$
Net loss
(6,969,399)
(87,621)
Year Ended
30/06/21
No.
Year Ended
30/06/20
No.
Weighted average number of ordinary shares used in the calculation of basic loss per
share
70,045,234
37,503,015
Options and performance rights could potentially dilute basic loss per share in the future but were not included in the calculation of
diluted earnings per share for 2021 or 2020 as they were anti-dilutive.
18. Dividends
There were no dividends paid or proposed during the current or previous financial year.
19. Commitments
Various state government departments require holdings of mining tenements 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:-
Year ended
30/06/21
$
Year ended
30/06/20
$
Exploration and evaluation expenditure
No longer than 1 year
1,606,203
2,120,500
Longer than 1 year and not longer than 5 years
2,223,916
3,483,250
Longer than 5 years
-
-
3,830,119
5,603,750
DGO Gold Limited
45
20. Subsidiaries
Name of entity
Country of incorporation
Ownership interest
2021
%
2020
%
Parent entity
DGO Gold Limited (i) (ii)
Australia
Subsidiary
Yandan Gold Mines Pty Ltd (i) (ii)
Australia
100
100
DGO Copper Limited (i) (iii)
Australia
100
-
Discovery Gold Ltd (i) (ii) (iv)
Australia
60
60
(i)
The parent and the subsidiaries are 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.
(iii) DGO Copper Limited was incorporated on 8 June 2021. The company is dormant at the date of this report.
(iv) In early 2020, the Group acquired 60% of Discovery Gold Limited, a public unlisted company to apply for tenements in Victoria. The agreement involves
DGO contributing $1 million of equity investment to fund exploration costs if the Company is allocated tenements.
21. 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, 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:
Year ended
30/06/21
$
Year ended
30/06/20
$
Cash and cash equivalents
7,086,624
11,544,067
(b)
Reconciliation of (loss)/profit for the period to net cash flows from operating activities
Year ended
30/06/21
$
Year ended
30/06/20
$
Net loss for the year
(6,969,399)
(87,621)
Interest income
(6,624)
(12,005)
Dividend income
-
-
Gain on disposal of associates
(10,650,257)
(49,148)
Depreciation
187,911
168,676
Finance costs included in financing activity
(30,367)
209,677
Principal paid on leases
-
(80,142)
Fair value losses/(gains) on financial assets at FVPL
5,912,063
(3,078,929)
Share based payments expense
6,567,797
957,027
Share of associate losses
1,832,016
722,498
Decrease/(increase) in assets:
Trade and other receivables
(206,707)
63,420
Prepayments
(25,246)
(52,727)
(Decrease)/increase in liabilities:
Trade and other payables
520,015
116,105
Provision – Employee benefits
25,112
30,413
Net cash used from operating activities
(2,843,686)
(1,092,756)
DGO Gold Limited
46
21. Notes to the statement of cash flows (continued)
(c)
Reconciliation of movements of net debt to cash flows arising from financing activities
Year ended 30/06/21
Loans Payable
$
Lease liabilities
$
Total
$
Net debt at 30 June 2020
-
347,077
347,077
Cash inflow
-
-
-
Cash outflow
-
(106,316)
(106,316)
Acquisitions – leases
-
-
-
Net debt at 30 June 2021
-
240,761
240,761
Year ended 30/06/20
Loans Payable
$
Lease liabilities
$
Total
$
Net debt at 30 June 2019
-
-
-
Non-cash - recognised on adoption of AASB 16
-
266,935
266,935
Cash inflow
2,500,000
-
2,500,000
Cash outflow
(2,500,000)
(80,142)
(2,580,142)
Acquisitions – leases
160,284
160,284
Net debt at 30 June 2020
-
347,077
347,077
(d) Non-cash investing and financing activities
Non-cash investing and financing activities disclosed in other notes are:
Acquisition of shares in De Grey Mining Limited pursuant to a Subscription and Share Swap Agreement – Note 10 and 11
Disposal of NTM investment and acquisition of shares and options in Dacian Gold Limited through a Scheme of
Arrangement as a result of Dacian and NTM merger – Note 10 and 11
Performance rights issued to employees and directors for no cash consideration – Note 15
Options issued to shareholders under the Standby facility commitment deed for no cash consideration – Note 15
22. 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 apart from the contingent liability commitment for Discovery Gold Ltd. In early
2020, the Group acquired 60% of Discovery Gold Limited, a public unlisted company established to apply for tenements in Victoria.
The agreement involves DGO contributing $1 million of equity investment to fund exploration costs if the Company is allocated
tenements.
23. 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 4 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.
DGO Gold Limited
47
23. Financial instruments (continued)
(d)
Interest rate risk
There is a limited amount of interest rate risk relating to the cash and cash equivalents that the Group 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.
(g)
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.
(h)
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.
(i)
Cash flow and interest rate risk
The Group’s income and operating cash flows are not materially exposed to changes in market interest rates.
(j)
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 and reserves as disclosed in notes 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 did not have any
unused credit facilities at 30 June 2021.
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).
DGO Gold Limited
48
23. Financial Instruments (continued)
Capital risk management
Fair value measurements recognised in the consolidated statement of financial position (continued)
2021
Level 1
Level 2
Level 3
Total
$
$
$
Financial assets at FVPL
-
Quoted Shares
21,229,463
-
-
21,229,463
-
Unlisted Options
-
1,247,229
-
1,247,229
21,229,463
1,247,229
-
22,476,691
Fair value measurements recognised in the consolidated statement of financial position
2020
Level 1
Level 2
Level 3
Total
$
$
$
Financial assets at FVPL
-
Quoted Shares
462,000
-
-
462,000
-
Unlisted Options
-
1,570,431
-
1,570,431
462,000
1,570,431
-
2,032,431
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
2021 and 30 June 2020:
2021
Weighted
average
effective
interest
rate
Less than 1
month
1-3
months
3 months
to 1 year
1-5 years
5 + years
Total
%
$
$
$
$
$
Financial assets
Non-interest bearing
-
-
-
-
-
-
-
Variable interest rate instrument
0.05
7,086,624
-
-
126,385
-
7,213,009
7,086,624
126,385
7,213,009
Financial liabilities
Non-interest bearing
N/A
873,716
-
-
-
-
873,716
Fixed interest - Lease liabilities
10
-
38,824
62,999
192,343
-
293,466
873,716
38,824
62,999
192,343
-
1,167,182
DGO Gold Limited
49
23. Financial Instruments (continued)
2020
Weighted
average
effective
interest
rate
Less than 1
month
1-3
months
3 months
to 1 year
1-5 years
5 + years
Total
%
$
$
$
$
$
Financial assets
Non-interest bearing
-
163,716
-
-
-
-
163,716
Variable interest rate instrument
0.05
11,914,067
-
-
121,197
-
12,035,264
12,077,783
121,197
12,198,980
Financial liabilities
Non-interest bearing
N/A
708,495
-
-
-
-
708,495
Fixed interest - Lease liabilities
10
-
29,744
106,939
293,466
-
430,149
708,495
29,744
106,939
293,466
-
1,138,644
24. Key management personnel compensation
Year ended
30/06/21
$
Year ended
30/06/20
$
Short-term employee benefits
537,500
286,417
Post-employment benefits
52,487
26,165
Other long-term benefits
3,988
44,683
Termination benefits
15,000
-
Share-based payments
4,537,600
666,548
5,146,575
1,023,813
25. Related party transactions
(a) Equity interests in related parties
Equity interest in subsidiary
Details of the percentage of ordinary shares held in subsidiaries are disclosed in note 20 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 24 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. J B Parncutt, provided DGO Gold Ltd with consulting services for CFO,
Executive Assistant and Analyst services, and director travel expenses for a total of $375,872 (2020: $287,180) during the year excluding
goods and services tax.
Mr Eduard Eshuys did not provide any consulting services to DGO Gold Ltd in the 2021 year (2020: $11,000).
DGO Gold Limited
50
26. 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
Year ended
30/06/21
$
Year ended
30/06/20
$
Current assets
7,557,438
11,840,649
Non-current assets
92,401,204
44,647,575
Total assets
99,958,642
56,488,224
Current liabilities
1,235,621
849,970
Non-Current Liabilities
158,675
240,761
Total Liabilities
1,394,296
1,090,731
Issued capital
122,094,448
76,841,403
Accumulated losses
(32,126,807)
(26,349,759)
Reserves
8,596,705
4,905,849
Total equity
98,564,346
55,397,493
Financial performance
Year ended
30/06/2021
$
Year ended
30/06/20
$
Loss for the year
(5,777,048)
(613,333)
Other comprehensive income
-
-
Total comprehensive (loss)
(5,777,048)
(613,333)
27. Remuneration of auditors
Year ended
30/06/21
$
Year ended
30/06/20
$
Audit and review of financial statements
$107,350
96,000
Non-audit services
-
Taxation advice
67,303
30,389
-
Taxation compliance services
8,000
8,544
Total non-audit services
75,303
38,933
Total services provided by BDO
182,653
134,933
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.
28. Significant events after reporting date
On 13 July 2021, DGO Gold entered into a $15m loan facility with Bell Potter, secured against 100m of the Company’s holding in
De Grey Mining Limited. The facility remains undrawn at the date of this report.
On 16 July 2021, the Group purchased a further 6,612,781 shares in Yandal Resources Limited for consideration of $3,181,118,
taking its holding in Yandal to 19.9%.
On 14 July 2021, the Group purchased a further 12,500,002 shares in Dacian Gold Limited for consideration of $3,500,000
In July 2021, certain holders of $1.00 options elected to exercise their options early, providing a cash inflow of $5,596,790.
In August 2021, the Group issued 405,000 Series E Performance Rights to key employees and consultants, subject to a $7.00, 30
day VWAP hurdle with an expiry on 2 December 2023 and a $nil exercise price.
DGO Gold Limited
51
Directors’ declaration
The directors of the Company declare that:
1.
The financial statements, comprising the consolidated statement of profit or loss and other comprehensive income,
consolidated statement of financial position, consolidated statement of cash flows, consolidated statement of changes in
equity and accompanying notes, are in accordance with the Corporations Act 2001 and:
a.
comply with Australian Accounting Standards and the Corporations Regulations 2001; and
b.
give a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance for the year
ended on that date.
2.
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.
3.
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.
4.
The remuneration disclosures included in pages 11 to 18 of the directors’ report (as part of audited Remuneration Report),
for the year ended 30 June 2021, comply with section 300A of the Corporations Act 2001.
5.
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, 29 September 2021
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.
52
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
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 subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2021, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
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.
53
Classification and carrying value of investments accounted for using the equity method
Key audit matter
How the matter was addressed in our audit
Refer to notes 3(c), 4 and 11 of the financial
report.
The Group holds significant investments in its
portfolio. The Group obtained significant
influence while holding less than 20% voting
power on various entities which resulted to these
investments being accounted for as associates
using the equity method.
The classification of each investment as an
associate and measurement thereof is a key audit
matter due to:
the materiality of the investments to the
consolidated statement of financial position;
and
the level of judgement involved in
management’ assessment of the
classification of the investment which
include assessment whether significant
influence exists.
Our audit procedures included:
Evaluating management’s assessment of
whether control or significant influence
existed through holding discussions with
management and inspection of supporting
documentation including subscription
agreements.
Confirming the Group’s interest in each
investee entity and assessing carrying amount
of the Group’s equity method investment at
30 June 2021.
Reviewing the appropriateness of the
accounting treatment of the additional
investments effected through exercise of
options and share swap arrangements based
on relevant supporting documents and
associated valuations.
Reviewing the financial information of the
associates including assessing whether the
accounting policies of the associate were
consistent with the group.
Agreeing the Group’s share of associate losses
to the audited financial reports of the
associates.
Testing management’s impairment
assessment of the investments by considering
the market capitalisation of the investee
companies and recalculating fair value of
investments at 30 June 2021.
Reviewing the adequacy of the related
disclosures within the financial report in
respect of the investments in associates.
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.
54
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Recoverability of Exploration and Evaluation Assets
Key audit matter
How the matter was addressed in our audit
Please refer to notes 3(f), 4 and 12 of the
financial report.
The Group carries exploration and evaluation
assets as at 30 June 2021 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.
Our audit procedures included, amongst others:
Selecting a sample of capitalised exploration
expenditure during the year to ensure it
meets the recognition criteria under AASB 6.
Testing that the group has the rights to
tenure and maintains the tenements in good
standing.
Assessing the Group’s ability to carry forward
exploration and expenditure assets under
AASB 6.
Reviewing the management’s assessment of
impairment of exploration assets and
considered the reasonableness of the key
judgements and assumptions used.
Assessing adequacy of the related disclosures
within the financial statements.
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 2021, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
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.
55
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
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 (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 11 to 18 of the directors’ report for the
year ended 30 June 2021.
In our opinion, the Remuneration Report of DGO Gold Limited, for the year ended 30 June 2021,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit Pty Ltd
Cameron Henry
Director
Brisbane, 29 September 2021
DGO Gold Limited
56
Unaudited additional ASX and other information as at 13 September 2021
Number of holders of equity securities
79,148,538 fully paid ordinary shares are held by 1,089 individual shareholders. All issued ordinary shares carry one vote per share.
There is not a market buyback occurring.
Distribution of holders of equity securities
Fully paid
Ordinary Shares
%
100,001 and Over
71,769,460
90.68
10,001 to 100,000
5,876,541
7.42
5,001 to 10,000
682,019
0.86
1,001 to 5,000
651,598
0.82
1 to 1,000
168,920
0.21
Total
79,148,538
100.00
Holding less than a marketable parcel (220 shareholders)
15,930
Twenty largest shareholders of quoted equity securities
Line
item
Ordinary shareholders
Fully paid ordinary shares
Number
Percentage
1
MUTUAL TRUST PTY LTD
8,405,954
10.62
2
CITICORP NOMINEES PTY LIMITED
7,279,021
9.12
3
GINGA PTY LTD
6,188,228
7.82
4
CAIRNGLEN INVESTMENTS PTY LTD
6,048,329
7.64
5
ANDAMA HOLDINGS PTY LTD
5,027,347
6.35
6
CS THIRD NOMINEES PTY LIMITED
5,004,232
6.32
7
COSTA ASSET MANAGEMENT PTY LTD
4,370,371
5.52
8
GINGA PTY LTD
2,728,016
3.45
9
UBS NOMINEES PTY LIMITED
2,616,634
3.31
10
ESHUYS SUPER PTY LTD
1,782,029
2.25
11
CAIRNGLEN INVESTMENTS PTY LTD
1,612,893
2.04
12
ALIANDA OAKS PTY LTD
1,543,751
1.95
13
THIRTY SIXTH VILMAR PTY LTD
1,507,024
1.90
14
CAROLINE HOUSE SUPERANNUATION FUND PTY LTD
1,502,351
1.90
15
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
1,450,946
1.83
16
RARE COSTA SUPER PTY LTD
1,371,585
1.73
17
VALTELLINA PROPERTIES PTY LTD
1,239,601
1.57
18
BRISPOT NOMINEES PTY LTD
842,559
1.06
19
LADDARA PTY LTD
769,231
0.97
20
CS FOURTH NOMINEES PTY LIMITED
740,158
0.93
Total
62,030,260
78.36
Balance of register
17,118,278
21.64
Grand total
79,148,538
100.00
DGO Gold Limited
57
Substantial shareholders
Ordinary shareholders
Fully Paid Shares
Ginga Pty Ltd
10,489,483
Regal Funds Management Pty Ltd
9,336,102
Jeffrey Bruce Parncutt
6,755,071
Mutual Trust Pty Ltd
6,205,071
Cairnglen Investments Pty Ltd
7,161,892
Jupiter Asset Management – Merian Global Investors (UK) ltd
5,033,333
John Barlow
4,360,680
Costa Asset Management Pty Ltd
4,118,767
Eduard Eshuys
3,652,044
TOTAL
57,112,443
Based on most recent Notice of Substantial Shareholder Form lodged.
Unquoted Equity Securities
Unquoted Equity Securities
Number on
issue
Holders of 20% or more of each class of equity security (number
held by that holder)
Performance Rights – Series C
1,000,000
Eduard Eshuys (500,000), Bruce Parncutt (500,000)
Performance Rights – Series D
1,000,000
Eduard Eshuys (500,000), Bruce Parncutt (500,000)
Performance Rights – Series E
405,000
Andrew Cook (60,000), David Hamlyn (100,000), Chris Wilcox
(65,000), Markus Ziemer (150,000)
Options exercisable at $1, expiring
31.12.2021
4,345,766
Costa Asset Management Pty Ltd (1,333,333)
Options exercisable at $2.50, expiring
30.06.2022
3,271,082
CS Third Nominees Pty Ltd (800,000), Ginga Pty Ltd (1,328,587),
Thirty Sixth Vilma Pty Ltd (726,880)
Options exercisable at $4.50, expiring
31.07.2022
505,000
Ginga Pty ltd (150,000)
Options exercisable at $5.37, expiring
13.07.2023
150,000
Bell Potter Nominees Ltd (150,000)
DGO Gold Limited
58
Tenements held
The following table details the list of mineral tenements granted and under application as at 13 September 2021:
Project
Location
Tenement Number
Interest at
Beginning of
Quarter
Interest at End
of Quarter
Lake Randall
WA
E15/15731
E25/584
30
100
30
100
Black Flag
WA
E24/197,
P24/4986-4992
100
100
100
100
Mallina
WA
E47/3327-3329, 4315, 4316
100
100
Tom Price
WA
E47/3898, 39002
100
100
Maddina
WA
E45/5940, 5962, 6025-60282
E46/1397, 1401, 1402, 14052
E47/4557-4564, 4577, 45782
0
0
0
100
100
100
Bryah
WA
E51/15904
E51/1729
E51/20452
80
100
0
80
100
100
Yerrida
WA
E51/1725, 1726, 1730
E51/1748-1753
E51/1833, 1897, 1920, 1921
E51/1952, E51/20233
E51/2040-2043, 20602
E53/2163-2166, 21822
E51/20164
100
100
100
100
0
0
0
100
100
100
100
100
100
0
Deleta
WA
E38/3343, 3344
E38/35473
100
0
100
100
Pernatty Lagoon
SA
EL 6145, 6302, 6030, 6436, 6303,
6473, 6474, 6507, 6583
EL 5929, 66363
ELA 2020/2262
ELA 2021/0952
EL 5704, 5705, 5706, 5738, 64025
100
100
100
100
0
0
100
100
100
100
100
0
1 Farm-in and Joint Venture with Romardo Gold WA Pty Ltd – DGO earning up to 70%
2 Tenement application – on grant 100% DGO
3 Tenements granted during the quarter
4 Farm-in and Joint Venture with TasEx Geological Services Pty Ltd – DGO earning 90%
5 Farm-in and Joint Venture with Investigator Resources Limited – DGO earning 80%
Competent person statement
Exploration or technical information in this release has been prepared by Mr. David Hamlyn, who is a full-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.