Gold Mountain Limited
Annual Report 2018

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CORPORATE DIRECTORY GOLD MOUNTAIN LIMITED ABN 95 112 425 788 ASX: GMN Directors Share Register Graham Kavanagh Non-Executive Chairman Boardroom Pty Limited Sin Pyng “Tony” Teng Managing Director Douglas Smith Executive Director – Exploration Grosvenor Place, Level 12, 225 George Street, SYDNEY NSW 2000, GPO Box 3993, SYDNEY NSW 2001 Management Eric Kam Company Secretary David Clark Chief Financial Officer Registered and Principal Office Suite 2501, Level 25 31 Market Street SYDNEY NSW 2000 Australia Telephone: +61 2 9283 3880 info@goldmountainltd.com.au www.goldmountainltd.com.au Telephone: 1300 737 760 Facsimile: 1300 653 459 Solicitor Bird & Bird Lawyers Level 11, 68 Pitt Street SYDNEY NSW 2000 Banker Australia and New Zealand Banking Group Limited Westpac Banking Corporation Limited Auditor KS Black & Co. Chartered Accountants Level 1, 251 Elizabeth Street, SYDNEY NSW 2000 GOLD MOUNTAIN LIMITED ANNUAL REPORT 1 GOしD MOUNTAINしIMITED REPOR丁TO SHAREHOLDERS Dear Sharehoiders, On behalfofthe Board of Directors, l am pIeased to present the Annual Report ofGold Mountainしimited (GMN) forthe financiai yearended 30」une 2018. It has been a positive year and i am pIeased to reportthat during the yearthe Company has made progress in its quest to identify new goId and copper deposits in the highIy-PrOSPeCtive region of Wabag in the CentraI highIands ofPapua New Guinea. During the first haIfofthe FY2018, the Company successfu=y raised ;6.5 m冊on that led to the launching of a comprehensive exploration program, incIuding dr冊ng and surface sampiing programs at Crown Ridge and Mongai Creek. The expioration programs resuited in: -　discovery ofporphyry copper-gOld mineraIisation at the Mongai Creek; -　PrOmising indicators ofporphyry copper-gOld mineraiisation at SakCreek; - improved understanding of controIs on gold and pIatinum minera=sation in the congiomerates at Crown Ridge; and -　a POtentia=ow-SuIphidation epithermaI goid system at LaiIam. Community support, reSPeCt for the environment and good reばtjons with loca=andowners are criticai factors for the Company′s operations in PNG. The Company has piaced high priority on community reiationships′ inciuding the use of locai services′ emPIoyment of locai peopIe and engagement of Iandowners. Such rapport creates a more cooperative, PeaCeful and safer environment to conduct expIoration and wiiI pave the wayfor more e冊cient operating environments in the yearsto come. CruciaI to ongoing expIoration e什orts′ the Company has estabiished a fuiiy serviced 50-man CamP and is now in a position to e簡ciently support expIoration programmes on muItipIe prospects simuitaneousIy. The Company has aIso expanded its technicai team with more diverse expertise to extract vaiue from aII the information resuiting from the expIoration work. The Board wishes to express its appreciation of the continued support of Iong-term SharehoIde「s, Of new SharehoIders who joined the Company during the year, and of other investor groups who’ve come on board to progress the Company’s interests. Yours sincereIy /嬢祐 Graham Kavanagh Chairman 篭㊨㊧篭と￣鰐緯線懸㊧㊨態も鰐〆、怠篭釣縞を管も怠篭釣鱒b管〆亀駕釣篭多、㊧ GOLD MOUN丁AiN LIMITED ANNUAL REPORT　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　2 TABLE OF CONTENTS CORPORATE DIRECTORY ............................................................................................................................................... 1 LETTER TO SHAREHOLDERS.......................................................................................................................................... 2 DIRECTORS’ REPORT ...................................................................................................................................................... 4 INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY ............................................................................ 6 OPERATIONS REPORT................................................................................................................................................ 9 REMUNERATION REPORT (Audited)......................................................................................................................... 18 SCHEDULE OF TENEMENTS ......................................................................................................................................... 24 AUDITOR’S INDEPENDENCE DECLARATION ............................................................................................................... 25 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME.......................................................... 26 STATEMENT OF FINANCIAL POSITION......................................................................................................................... 27 STATEMENT OF CHANGES IN EQUITY......................................................................................................................... 28 STATEMENT OF CASHFLOWS....................................................................................................................................... 29 NOTES TO THE FINANCIAL STATEMENTS ................................................................................................................... 30 DIRECTORS’ DECLARATION.......................................................................................................................................... 56 INDEPENDENT AUDITORS REPORT ............................................................................................................................. 57 ADDITIONAL SHAREHOLDER INFORMATION .............................................................................................................. 62 GOLD MOUNTAIN LIMITED ANNUAL REPORT 3 DIRECTORS’ REPORT Your Directors submit the annual financial report of Gold Mountain Limited for the financial year ended 30 In order to comply with the provisions of the Corporations Act, the Directors’ report as follows: June 2018. KEY MANAGEMENT PERSONNEL DISCLOSURES DIRECTORS The names of Directors who held office during or since the end of the year and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated. Graham Kavanagh Sin Pyng “Tony” Teng Douglas Smith Names, qualifications, experience and special responsibilities Graham Kavanagh Non-Executive Chairman Qualifications B Comm ASIA Experience Mr Kavanagh has an extensive background over more than 25 years in securities and fund management, property investment and development as well as earlier experience in the Department of Mines. He has held senior positions as securities analyst, general manager and director in fund management and property investment. Interest in shares and Options 1,500,000 unlisted options granted under the Employee Share Option Plan exercisable at $0.30 and expiring on 28 November 2019 (indirect interest) (GMNAB) 1,000,000 unlisted options exercisable at $0.15 subject to vesting conditions and expiring on 26 July 2021 (indirect interest) (GMNAD) Directorships held in other listed entities No directorships held of ASX listed entities Sin Pyng “Tony” Teng Managing Director Qualifications B. Econ. Dip. Fin. Mangt. CPA, FAICD, AFAIM Experience Interest in shares and Options Mr Teng has had experience as a management consultant and with merger and acquisitions, corporate restructuring and public company capital raising. He was co-founder and former director of Coalworks Limited that was acquired by Whitehaven in 2012 in a $200m takeover bid. 700,000 ordinary shares 8,710,000 ordinary shares (indirect interest) 5,000,000 unlisted options granted under the Employee Share Option Plan exercisable at $0.30 and expiring on 28 November 2019 (indirect interest) (GMNAB) 1,000,000 unlisted options exercisable at $0.15 and expiring on 26 July 2021 subject to vesting conditions (indirect interest) (GMNAD) 3,000,000 unlisted options granted under the Employee Share Option Plan exercisable at $0.15 and expiring on 26 July 2021 (indirect interest) (GMNAE) Directorships held in other listed entities No directorships held of ASX listed entities in the past three years GOLD MOUNTAIN LIMITED ANNUAL REPORT 4 Douglas Smith Executive Director – Exploration (appointed 29 December 2016) Qualifications Experience Interest in shares and Options B.Sc (Geology), MAusIMM Mr Smith is a very experienced geologist with a 20+ year career working on major precious metals projects and exploration assets in Canada, Alaska, Australia, and more recently PNG where he has worked since 2011 on projects such as Ok Tedi and Highland Pacific’s Star Mountains exploration tenements. Mr Smith also worked on the giant Pebble Alaska 100M oz gold, 80B lbs copper project, jointly managing over 200 contractors and the design of the original geophysical survey (89 square miles), as well as executing an extensive drilling program to bring the resource to the Indicated category and take the project to a pre- feasibility stage. Nil ordinary shares 2,000,000 unlisted options granted under the Employee Share Option Plan exercisable at $0.30 and expiring on 28 November 2019 (indirect interest) (GMNAB) 3,000,000 unlisted options granted under the Employee Share Option Plan exercisable at $0.15 and expiring on 26 July 2021 (direct interest) (GMNAE) Directorships held in other listed entities No directorships held of ASX listed entities MANAGEMENT Eric Kam Company Secretary Qualifications: FCPA, FCMA, MBA, MAICD Mr Kam has extensive experience in finance and operations management across diverse businesses and industries in engineering, construction, mining & resources, finance, marketing and distribution. He is involved in corporate change and listing of companies, and is on the board of several other companies. Mr Kam has had extensive experience as Company Secretary in several public listed and unlisted companies. technology, David Clark Chief Financial Officer Qualifications: CA, CPA, AGIS, B Comm. (UNSW), MBA Executive (AGSM), Registered Tax Agent Mr Clark is a Chartered Accountant, Chartered Secretary and Registered Tax Agent of over twenty (20) years standing and holds a Bachelor of Commerce degree from UNSW and a Master of Business of Administration (Executive) from the Australian Graduate School of Management. Mr Clark is principal of D.W. Clark & Co., Chartered Accountant providing corporate financial, taxation and secretarial services and advice to listed and unlisted companies in the mineral exploration and oil and gas industries. GOLD MOUNTAIN LIMITED ANNUAL REPORT 5 INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY DIRECTORS’ SHAREHOLDINGS As at the date of this report, the interests of the Directors in the securities of Gold Mountain Limited were: Director Name Shares and Options Shares and Options Direct Indirect Graham Kavanagh Nil Douglas Smith Nil 1,500,000 unlisted options granted under the Employee Share Option Plan exercisable at Options $0.30 and expiring on 28 November 2019 (GMNAB) 1,000,000 unlisted options granted exercisable at $0.15 subject to vesting conditions and expiring on 26 July 2021 (GMNAD) 2,000,000 unlisted options granted under the Employee Share Option Plan exercisable at $0.30 and expiring on 28 November 2019 (GMNAB) 3,000,000 unlisted options granted under the Employee Share Option Plan exercisable at $0.15 and expiring on 26 July 2021 (direct interest) (GMNAE) Sin Pyng “Tony” Teng 700,000 shares 8,710,000 ordinary shares. 5,000,000 unlisted options granted under the Employee Share Option Plan exercisable at $0.30 and expiring on 28 November 2019 (indirect interest) (GMNAB) 1,000,000 unlisted options exercisable at $0.15 subject to vesting conditions and expiring on 26 July 2021 (GMNAD) 3,000,000 unlisted options granted under the Employee Share Option Plan exercisable at $0.15 and expiring on 26 July 2021 (GMNAE) GOLD MOUNTAIN LIMITED ANNUAL REPORT 6 - - Movement in equity instruments (other than options and rights) Details of the movement in equity instruments (other than options and rights) held directly, indirectly or beneficially by Directors and Key Management Personnel and their related parties are as follows: Balance at beginning of the Year Granted as remuneration during the Year Issued on Exercise of Options during the Year Other changes during the Year Balance at end of the Year 30 June 2018 Graham Kavanagh Sin Pyng “Tony” Teng 9,020,000 Douglas Smith Total - 9,020,000 - - - - - - - - - - 390,000 9,410,000 - - 390,000 9,410,000 Balance at beginning of the Year Granted as remuneration during the Year Issued on Exercise of Options during the Year - - - - - - - - - - Other changes during the Year Balance at end of the Year - - - (850,000) - 9,020,000 - - (850,000) 9,020,000 30 June 2017 Graham Kavanagh Sin Pyng “Tony” Teng 9,020,000 Douglas Smith1 Matthew Morgan2 Total - 850,000 9,870,000 (1) Deemed acquisition when joined the Board or Company. (2) Deemed disposal when left the Board or Company. Exercise of Options No ordinary shares were issued by the Company during and/or since the end of the financial year as a result of the exercise of options by Directors and Key Management Personnel and their related parties. There are no unpaid amounts on the shares issued. Options and Rights Holdings Details of movements in options and rights held directly, indirectly or beneficially by Directors and Key Management Personnel and their related parties are as follows: 30 June 2018 Balance at beginning of period Granted as remuneration Options exercised or vested Net change Other Balance at end of period Graham Kavanagh 1,500,000 1,000,000 Sin Pyng “Tony” Teng 5,000,000 4,000,000 Douglas Smith 2,000,000 3,000,000 Total 8,500,000 8,000,000 - - - - - - - - 2,500,000 9,000,000 5,000,000 16,500,000 GOLD MOUNTAIN LIMITED ANNUAL REPORT 7 30 June 2017 Graham Kavanagh Sin Pyng “Tony” Teng Douglas Smith1 Matthew Morgan2 Total Balance at beginning of period Granted as remuneration Options exercised or vested Net change Other Balance at end of period - - - - - 1,500,000 5,000,000 2,000,000 3,600,000 12,100,000 - - - - - - - - (3,600,000) 1,500,000 5,000,000 2,000,000 - (3,600,000) 8,500,000 (1) Deemed acquisition when joined the Board or Company. (2) Deemed disposal when left the Board or Company. Options on issue at the date of this report are:- Issue Date Number Expiry Date Exercise price 28 Nov 2016 29 Jun 2017 26 Sep 2017 26 Sep 2017 14,800,000 61,237,300 2,000,000 7,800,000 28 Nov 2019 30 Jun 2019 26 Jul 2021 26 Jul 2021 $0.303 $0.15 $0.154 $0.155 Number of holders 9 73 2 6 ASX Code GMNAB GMNAC GMNAD GMNAE (3) GMNAB ESOP Options are exercisable at $0.30 until expiry date 28/11/2019 and subject to the vending condition that the Company’s share price must exceed $0.50 based on VWAP over a 5 day consecutive period. (4) GMNAD Options are exercisable at $0.15 until expiry date 26/07/2021 and subject to the vending condition that the total granted options shall be vested over 3 periods of 12 months per period. (5) GMNAE ESOP Options are exercisable at $0.15 until expiry date 26/07/2021 and subject to the vending condition that the total granted options shall be vested over 3 periods of 12 months per period. Dividends No dividends have been paid or declared since the start of the financial year and/or the Directors do not recommend the payment of a dividend in respect of the financial year. GOLD MOUNTAIN LIMITED ANNUAL REPORT 8 OPERATIONS REPORT Principal Activities The principal activity of the Company during the financial period was to acquire, explore and develop areas that are highly prospective for gold and other precious and base metals and minerals in Australia, Papua New Guinea and elsewhere. Operating and Financial Review (i) Operations Gold Mountain is an exploration company operating in Australia and Papua New Guinea to acquire, explore and develop areas that are highly prospective for gold and other precious and base metals and minerals. The Company creates value for shareholders, through exploration activities which develop and quantify mineral assets. Once an asset has been developed and quantified within the framework of the JORC guidelines the Company may elect to move to production, to extract and refine ore which will then be available for sale as a primary product. The Company is actively exploring and developing gold projects in Australia and Papua New Guinea. Please refer to the Review of Operations for more information on the status of the projects. (ii) Financial Performance & Financial Position The financial results of the Company for the five (5) years to 30 June 2018 are: 30 June 2018 30 June 2017 30 June 2016 30 June 2015 30 June 2014 Cash and cash equivalents 2,985,066 2,693,337 1,189,947 759,938 200,070 Net assets 19,275,974 12,420,975 3,404,265 2,460,399 1,371,820 Revenue & financial income 119,426 32,874 3,178 5,046 38,151 Net loss after tax (1,484,473) (1,279,915) (1,515,979) (847,685) (526,993) EBITDAX (1,257,241) (840,424) (1,351,697) (659,879) (468,681) Share price at 30 June Loss per share (cents) $0.100 (0.32) $0.086 (0.35) $0.036 (0.69) $0.039 (0.57) $0.023 (0.69) a) Financial Performance The net loss after tax of the Company for the financial year after tax amounted to $1,484,473 (2017: Loss $1,279,915). The Company is creating value for shareholders through its exploration expenditure and currently has no revenue generating operations. Revenue and financial income are generated from interest income from funds held on deposit and miscellaneous income. As the average funds held on deposit have increased during the year, accordingly interest income has increased from $6,874 to $25,400 when compared to the prior year. The Company also received $51,792 as rental income in FY 2018 (FY 2017: $26,000) from sub-leasing unused office space at its Sydney CBD office. During the year, the operations relating to the Papua New Guinea gold project continued and expanded as the Company undertook its rapid exploration program, accordingly deferred exploration expenditure increased from $3,038,522 at 30 June 2017 FY to $11,816,184 at 30 June 2018. This increase includes additional exploration expenditure incurred of $3,578,730 and $5,350,000 booked from the acquisition of EL2306. Personnel and external consulting requirements and legal and professional costs remained constant. There was an increase in public and investor relations expense from $141,854 in the 2017 FY to $240,944 in the FY 2018. b) Financial Position The Company’s main activity during the year was the investment of cash of $2,985,066 (2017: $2,693,337). The carrying value of the exploration assets and the capitalised exploration assets increased by $8,777,662 or 289% to $11,816,184 (2017: $3,038,522). GOLD MOUNTAIN LIMITED ANNUAL REPORT 9 The 30 June 2018 financial report has been prepared on the going concern basis that contemplates the continuity of normal business activities and the realisation of assets and extinguishment of liabilities in the ordinary course of business. For the year ended 30 June 2018, the Company recorded a loss after tax of $1,484,473 (2017: Loss $1,279,915) and had a net working capital surplus of $2,061,160 (30 June 2017: Surplus of $2,692,751). As the Company is an exploration and development entity, ongoing exploration and development activities are reliant on future capital raisings. Based on these facts, the Directors consider the going concern basis of preparation to be appropriate for this financial report. (iii) Business Strategies and Prospects for future financial years The Company actively evaluates the prospects of each project as results from each program become available, these results are available via the ASX platform for shareholders information. The Company then assesses the continued exploration expenditure and further asset development. The Company will continue the evaluation of its mineral projects in the future and undertake generative work to identify and acquire new resource projects. There are specific risks associated with the activities of the Company and general risks which are largely beyond the control of the Company and the Directors. The risks identified below, or other risk factors, may have a material impact on the future financial performance of the Company and the market price of the Company’s shares. a) Operating Risks The operations of the Company may be affected by various factors, including failure to locate or identify mineral deposits, failure to achieve predicted grades in exploration and mining, operational and technical difficulties encountered in mining, sovereign risk difficulties in commissioning and operating plant and equipment, mechanical failure or plant breakdown, unanticipated metallurgical problems which may affect extraction costs, adverse weather conditions, industrial and environmental accidents, industrial disputes and unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment. b) Environmental Risks The operations and proposed activities of the Company are subject to the laws and regulations of Australia and Papua New Guinea concerning the environment. As with most exploration projects and mining operations, the Company’s activities are expected to have an impact on the environment, particularly if advanced exploration or mine development proceeds. It is the Company’s intention to conduct its activities to the highest standard of environmental obligation, including compliance with all environmental laws. c) Economic General economic conditions, movements in interest and inflation rates and currency exchange rates may have an adverse effect on the Company’s exploration, development and production activities, as well as on its ability to fund those activities. d) Market conditions Share market conditions may affect the value of the Company’s quoted securities regardless of the Company’s operating performance. Share market conditions are affected by many factors such as: (i) (ii) (iii) (iv) (v) (vi) general economic outlook; introduction of tax reform or other new legislation; interest rates and inflation rates; changes in investor sentiment toward particular market sectors; the demand for, and supply of, capital; and terrorism or other hostilities. The market price of securities can fall as well as rise and may be subject to varied and unpredictable influences on the market for equities in general and resource exploration stocks in particular. Neither the Company nor the Directors warrant the future performance of the Company or any return on an investment in the Company. e) Additional requirements for capital The Company’s capital requirements depend on numerous factors. Depending on the Company’s ability to generate income, the Company will require further financing. Any additional equity financing will dilute shareholdings, and debt financing, if available, may involve restrictions on financing and operating activities. If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations and scale back its exploration programs as the case may be. There is however no guarantee that the Company will be able to secure any additional funding or be able to secure funding on terms favourable to the Company. GOLD MOUNTAIN LIMITED ANNUAL REPORT 10 f) Speculative investment The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by investors in the Company. The above factors, and others not specifically referred to above, may in the future materially affect the financial performance of the Company and the value of the Company’s shares. Potential investors should consider that the investment in the Company is speculative and should consult their professional advisers before deciding whether to invest. 5. Significant Changes in the State of Affairs On 5 July 2017, the NSW Department of Industry (Resources & Energy) approved the cancellation of the Dalton, NSW exploration licence EL6922. On 19 July 2017, the Company announced it had entered into agreement to acquire 70% interest in highly prospective 328 km² tenement adjoining the flagship Crown Ridge Gold Project. The key terms of the acquisition include:   The purchase price for the Tenement is $5.2 million comprising of $3 million in cash ($300,000 of which was paid as a non-refundable deposit) and 22 million GMN shares @ $0.10 per share (Consideration Shares); Completion of the acquisition of the Tenement Interest is due to occur on the business day immediately following the second anniversary of the registration of EL 2306 (14th December 2017) by the PNG Mineral Resources Authority;  On Completion on or before 16/12/2017; o o o o Full title and risk in the Tenement Interest passes to the Company; The Company must issue the Consideration Shares and pay a Completion instalment of $450,000; The issue of Consideration Shares will be put to Shareholders approval at the next general meeting of the Company; and The Consideration Shares are subject to agreed voluntary escrow conditions for 24 months   The balance of the cash consideration ($2,250,000) is payable in six (6) bi-annual December 2020. instalments ending on 16 Completion of the acquisition of the Tenement Interest is conditional on conditions precedent including GMN has first right of refusal to acquire the remaining 30% of the project from the vendor. On 24 July 2017, the Company announced it had secured $3.7 million in funding commitments (increased by $700,000 from $3.0 million in funding commitments announced on 2 June 2017). The funds raised will be used for general working capital requirements and ongoing exploration and project development activities at the flagship Crown Ridge Project in PNG. On 9 August 2017, the Company announced the allotment of 7,984,800 new shares at a price of $0.10 per share and 3,992,400 free attaching options, one (1) free option entitlement for every two (2) shares issued. The options are exercisable at $0.15 and expire on 30 June 2019. On 23 August 2017, the Company announced it had secured $5.0 million in funding commitments (increased by $1.3 million from $3.7 million in funding commitments announced on 24 July 2017). Subject to the Company's placement capacity under Listing Rule 7.1A, new shares will be allotted at $0.10 per share with a free option entitlement of one (1) option for every two (2) shares issued. The options will be exercisable at $0.15 and expire on 30 June 2019. On 26 September 2017, the Company announced that it is well advanced for drilling and bulk sampling program at the Crown Ridge Gold Project with the view of delivering a JORC (2012) compliant maiden resource estimate and the work is expected to be completed in early 2018. On 26 September 2017, the Company announced the granting of 7,800,000 share options to employees and consultants including directors (subject to shareholders approval) according to the Company’s Employee Share Options Plan. The granted options have an exercise price of $0.15 and expires 46 months from the grant date and the granted options shall be vested over 3 periods of 12 months per period. On 27 September 2017, the Company lodged on its website an investment research report on the Company. The report, commissioned by the Company is prepared by Independent Investment Research who is an independent investment research house based in Australia and the United States. On 5 October 2017, the Company announced it had secured $6.65 million in funding commitments (increased by $1.65 million from $5 million in funding commitments announced on 23 August 2017). The Private Placement Offer which is “By Invitation Only” raised funds at an issue price of $0.10 per Fully Paid share. Each two shares subscribed for have an GOLD MOUNTAIN LIMITED ANNUAL REPORT 11 attaching free share options exercisable at $0.15 on or before 30 June 2019. The Company will put a resolution to shareholders at the forthcoming Annual General Meeting in November to approve the issue of securities for the over subscription. On 6 October the Company announced that 2,500,000 unlisted Options exercisable at $0.055 were exercised raising additional $137,500.00 towards the general working capital of the Company. On 6 October 2017, the Company made an Appendix 3B new issue announcement for the exercise of share options and the issue of 19,245,000 shares and 9,622,500 options to the 2017 Private Placement investors within the limit of the Company’s placement capacity under Listing Rule 7.1A. On 3 November 2017, the Company announced that an initial exploratory 3-hole, circa 600 metre diamond drilling program had commenced at its flagship Crown Ridge prospect in the Highlands region of Papua New Guinea. The drilling will target the hard rock gold potential at Crown Ridge along the margins of the interpreted volcanic crater. Additionally, the Company has begun a program of pitting and bulk sampling, together with shallow diamond drilling program, circa 400 metre (9-holes 40m-60m deep), aimed at defining a near-surface JORC 2012 compliant Mineral Resource of free gold. On 29 November 2017, following approval by shareholders at the Annual General Meeting held on 28 November 2017, the Company issued 10,000,000 shares and 5,000,000 options at an exercise price of $0.15 and expiring on 30 June 2019 to the August 2017 Placement Investor. On 14 December 2017, the Company announced the Hard Rock Exploration drilling has continued to progress with positive indications of mineralisation. Diamond drill hole CRD005 showed visible gold mineralisation at various depths from 230 to 398m mixed mafic volcanics with variable sulphides and quartz between 88m and 230m downhole, carbonate chlorite veining were encounter. Four (4) diamond drill holes have been completed with CRD005 continuing to drill. Total drilling metreage to date was 1,178.7m. In addition, the Company announced pitting work, aimed at defining a near-surface JORC 2012 compliant Mineral Resource, with 10 of the planned 32, 1x1x4m deep pits completed to date. Concentrate samples were dispatched to the ALS Laboratory in Perth, Australia with results and grade determination work ongoing. On 19 December 2017 the Company announced the discovery of a mineralised porphyry outcrop with visual chalcopyrite, chalcocite and bornite mineralisation observed in the outcrop, all common copper ore minerals. The host rocks show classic porphyry-style alteration and veining with the mineralised quartz-pyrite veins found in the outcrop similar in appearance to float samples from Crown Ridge that assayed up to 29.2 grams per tonne gold, offering the potential for a large immediate gold resource tonnage potential. On 29 December 2017, following approval by shareholders at the Annual General Meeting on 28 November 2017, the Company issued 2,000,000 share options (GMNAD) to Participating Directors pursuant to resolutions 9 and 10 of the 2017 AGM and 7,800,000 share options under the Employee Share Option Plan (ESOP) pursuant to resolution 12 of the 2017 AGM. Both the GMNAD and the GMNAE (ESOP options granted on 26 September 2017) have an exercise price at $0.15 with vesting conditions that the total granted options shall be vested over 3 periods of 12 months per period. On 22 January 2018 the Company announced that 40,110,715 unlisted Options (GMNAA) exercisable at $0.055 were exercised raising additional $2,206,089 towards the general working capital of the Company. On 22 January 2018 the Company announced that 28,000,000 unlisted Options (GMNAC) exercisable at $0.15 and expiring on 30 June 2019 were issued to Promoters following Shareholder approval of Resolution 7 at the Annual General Meeting held on 28 November 2017. On 16 February 2018, the Company issued 22,000,000 shares to the EL2306 Vendors as part consideration for the acquisition by the Company of the EL2306 Interest on the terms as set out in an agreement, announced to the market on 19 July 2017 and approved by shareholders at the Annual General Meeting held on 28 November 2017. The issue of the consideration shares is subject to a voluntary escrow arrangement for a period of 24 months from shareholders’ approval date and will be released from escrow on 28 November 2019. On 5 March 2018, the Company announced confirmation of a Dendritic-Wire Gold Diagnostic of Bonanza Grade Type Gold discovered at Crown Ridge. This type of mineralisation is frequently found in the high grade gold zones of Low Sulphidation Epithermal Gold Systems. The delicate gold structures discovered at Crown Ridge have not been transported far and are very close to the in-ground source. The mineralisation and diagnostic textures of Low Sulphidation Epithermal Gold Systems discovered in EL1968 and EL2306 have the potential for a concealed porphyry GOLD MOUNTAIN LIMITED ANNUAL REPORT 12 system. Geophysical data has also identified structures interpreted as fault intersections hosting ore shoots of fluid mixing and gold deposition as Drill-ready Targets. On 9 March 2018, the Company released supplementary information that the bonanza type gold nuggets are affinities to Porgera’s Zone VII. This is indicative that Crown Ridge is a low sulphidation epithermal system which can be quite large, and quite rich in contained gold, as with neighbouring Porgera 24M oz. The Company is vectoring the source area to design the drill testing of possible host rocks. On 22 March 2018, the Company announced that analysis of heavy mineral concentrates and drill core using a portable handheld XRF analyser have discovered Cobalt of up to 0.44% in heavy mineral concentrates derived from panning stream sediments in the current drainage. A low capex gravity process to recover gold and platinum could also recover high Cobalt contents in heavy mineral concentrates as a by-product. Diamond drilling and bulk pit sampling continue on site with the aim to achieve a maiden Mineral Resource Estimation. On 12 April 2018, the Company announced Phase 5 of the resource assessment program at Crown Ridge has commenced with the purchase of a portable bulk sampling plant, planned to be on-site during June 2018. Phase 4 Scout diamond drilling program confirms that the gold-platinum hosting conglomerate is continuous over hundreds of metres laterally and 70 to 90 metres thick. Furthermore, the re-interpretation of geophysics has identified potential bonanza grade gold-bearing structures, which are being tested by deeper diamond drill-holes. On 18 April 2018, the Company announced the appointment of the highly experienced Senior Geologist Mr. Michael Leu to assist in fast tracking the exploration program in addition to developing the Flagship Crown Ridge Conglomerate Gold Project. Mr. Leu has over 37 years geological experience and has held a variety of managerial roles including Chief Geologist, CEO and Managing Director of ASX listed exploration companies. On 3 May 2018, the Company announced the mobile bulk sampling gold plant for testing nugget-bearing conglomerate gold unit was completed and containerised for shipping to PNG. The bulk sampling gold plant will expedite definition of near surface the Mineral Resource Estimate from close-spaced large volume (125m3) conglomerate samples. A new Caterpillar Excavator 320DL2 is now permanently on site to expedite exploration trenching to sample potential Bonanza grade gold-bearing structures identified in geophysical data. Four exploration teams have been mobilised to fast track ground-truthing multiple targets in unexplored terrain of Papuan Mobile Belt that hosts World Class mines On 17 May 2018, the Company announced the discovery of bonanza-type gold has now been extended along the key drainage headwaters of several creeks starting from the flanks, ridges and spurs of Crown Ridge. The location constrained around the headwaters to an area of 1,000m x 1,000m. The Company is fortunate to have a narrow target area and is aggressively exploring to pinpoint location. Multiple field teams have been mobilised and helipads and fly camps are being constructed. This expanded exploration program includes detailed mapping and sampling to locate drill targets at the large porphyry copper target discovered at Mongae Creek (or “Mongai Creek”). On 29 May 2018, the Company announced the initial 50m x 100m-spaced pitting program has been successfully completed with full results pending. Diamond drilling is ongoing. The best pitting interval results to date (first 10 pits, 1m x 1m dimensions) include: 3.0m @ 240 mg/m3 and include 0.5m @ 415 mg/m3. Pitting results confirm gold mineralisation from Discovery Pit 200. Larger processing plant are being shipped to site to fast-track sample processing and aid with resource reconciliation through trial mining. Two Komatsu PC 200 excavators will be on site dedicated to expanded exploration. One will feed the mobile bulk sampling plant to be commissioned late June and the other will be dedicated to extensively costean the ridges shedding Bonanza-type Gold into juxtaposed, isolated creek drainages On 13 June 2018, the Company announced the exploration program confirming characteristics of a potentially large porphyry Au‐Cu system. The mineralised system is only 77km north‐east of the world class 24 million ounces Porgera gold mine. Free gold has been panned from outcropping gossanous rocks. Abundant coarse gold is also present in all creeks draining the porphyry system. This classic signature typically represents mineral and alteration suites of large porphyry systems. This system has the potential for a world class discovery. The Company is now fast tracking the geochemical survey to define drill targets for the 3rd Quarter 2018. On 26 June 2018, the Company announced analyses of black sand concentrates from gold-bearing sediments in the creek systems at Crown Ridge suggest potential for vanadium, titanium and chrome bi-products of gold recovery. QEMSCAN analysis is planned to determine mineral species and relative quantities in the black sand concentrates and metallurgical testwork is planned to separate minerals into individual concentrates. GOLD MOUNTAIN LIMITED ANNUAL REPORT 13 Review of Operations A. Papua New Guinea Project The Company holds rights and interests in various exploration leases in the Enga Province Papua New Guinea at Wabag that covers a contiguous area of over 2,000 km². The exploration licences fall within the fertile gold-copper endowed Papuan Mobile Belt that hosts several world class mines. In 2014 and 2015, the Company assimilated the rights and interests of the first three (3) leases, EL1966 Sak Creek, EL1967 Pocket Creek and EL1968 Crown Ridge through the acquisition of 70% interest in Viva No.20 Limited. In 2016, two (2) new exploration licences were granted by the PNG Mineral Resources Authority to GMN 6768 (PNG) Limited, a wholly own subsidiary of the Company registered in Papua New Guinea. EL2426 Keman and EL2430 Meriamanda both granted on 26 May 2016 was a recovery of area relinquished by Viva No.20 Limited to maintain status quo of the highly-prospective area within the tenement portfolio. On 19 July 2017, the Company announced the acquisition of 70% interest in the prospective tenement EL2306 that adjoins the flagship Crown Ridge Gold Project at a purchase price of $5.2 million, comprising of a mixed consideration of $3.0 million in cash and 22 million in GMN Shares at $0.10 per share (Consideration Shares). Consistent to the terms of the acquisition agreement, the outstanding balance of the cash consideration as at 30 June 2018 of $1,950,000 shall be payable to the Vendor in bi-annual instalments ending 16 December 2020. Exploration Programs The primary focus of the Company is the implementation of its exploration drilling and the bulk pit sampling programs aimed to deliver an initial mineral resource estimate that is compliant with the JORC guidelines. Drilling plant and equipment were mobilised on site in September 2017 after having conducted detailed surveys of selected drill locations, prepared access roads, constructed camp facilities and cleared drill pads. Quest Exploration Drilling (PNG) Ltd has been contracted to undertake the exploration drilling program. Large volume bulk samples are essential to define gold grades more accurately, as opposed to the low probability of sampling representative gold grades with drilling due to “nugget effect” of the uneven nature of mineralisation. The diamond drilling program complements the bulk sampling program from shallow pits with dimensions of 1m x 1m x 5m. The pits have been excavated and sampled at nominal 0.5m intervals. The bulk sampling program is managed and supervised by the Company’s team of competent geologists. Drilling Program During the reporting period, the Company completed a diamond drilling program of 19 drill-holes totalling 3,761.8m at Crown Ridge (EL1968) and commenced drilling the potential Mongai Creek porphyry copper-gold system (EL2306). The Crown Ridge drilling program was aimed at gaining a more insightful understanding of the Timun Conglomerate unit hosting free gold and platinum, its stratigraphy, mineralisation and gold grades within the structurally controlled quartz- pyrite veins around the rim of the interpreted volcanic crater. Drill cores were progressively sent for various laboratory analyses and testing after completion of geological logging and core photography. Samples were also used for geological studies of any alteration or mineralisation zones within the drill core. Notably diamond drill-hole CRD005 showed visible gold mineralisation at various depths between 88m and 230m downhole, and from 230m to 398m of mixed mafic volcanics, variable sulphides and quartz-carbonate-chlorite veining which were encouraging signs of possible mineralisation where both crustiform and fine wire gold was observed. Pitting Program A total of 38 pits with dimensions of 1m x 1m and depths varying between 4m and 5.3m were excavated in the prospective Crown Ridge area identified by soil geochemistry and by previous bulk processing samples. All bulk samples are processed on-site through a Knelson concentrator with sluice box collection of heavy mineral concentrates. The concentrates and representative samples of tailings are sent to Australian Laboratory Services Pty Ltd (ALS) for laboratory testing and analysis. Larger processing plant is required to fast-track bulk sample processing and aid with reconciliation and validation, by trial mining of the expected Mineral Resource estimate. A purpose-built, mobile, large-capacity plant is being assembled at the Crown Ridge Project site and is expected to be in full operation by early September 2018. GOLD MOUNTAIN LIMITED ANNUAL REPORT 14 Reconnaissance exploration Reconnaissance exploration program of geological mapping, stream sediment and rock sampling in an area north of Alakula village has uncovered mineralised porphyry outcrops with visual chalcopyrite, chalcocite and bornite, which were indicative of a porphyry copper system with added potential for gold at the Mongai Creek prospect. Helicopter-supported exploration work confirmed that the Mongai Creek-Mount Wirit area hosts mineralisation indicative of a large porphyry copper-gold system. Field sampling at Crown Ridge area 50km north of Pit 200 has discovered mineralisation of dentritic-wire gold diagnostic of bonanza grade gold associated with low sulphidation epithermal gold system. Further geophysical data indicated structures that may host ore shoots of gold deposition, these are potentially drill ready targets to be tested by deeper diamond drill-holes. Laboratory analysis on black sand pan concentrates collected from the gold-bearing sediments of Kiangap-Uman-Timun creek system indicate potential for the bi-product of gold recovery to contain Vanadium, Titanium and Chrome. It is planned that the concentrates will be analysed by QEMSCAN to identify the relative mineral contents to assist in further metallurgical studies. B. Australian Projects The Company considered the prospects of past exploration leases held in southern New South Wales do not meet the aspirations of the Company and has since relinquished all exploration leases held in NSW. EL6922 Dalton was cancelled on 5 July 2017. The Company received confirmation of the last cancellation EL5939 Cowarra from the NSW Department of Industry (Resources & Energy) on 3 July 2018. Capital Raisings During the reporting period, the Company completed three placements to institutional and sophisticated investors, the first in August 2017, the second in October 2017 and the third in November 2017 following approval by shareholders at the 2017 AGM. In addition, the Company raised $2,343,589 from the exercise of unlisted options with an exercise price of $0.055 expiring on 18 January 2018. In total, the Company raised $6,066,569 to fund ongoing operations in Papua New Guinea and Australia. Separately, the Company issued 22,000,000 shares at the issue price of $0.10 to raise $2,200,000 as part consideration for the acquisition of a 70% interest in EL2306 approved by Shareholders at the Annual General Meeting held on 28 November 2017. Capital Raising Date Shares Issued Price Amount Raised August 2017 Placement October 2017 Placement Exercise of options November 2017 Placement Exercise of options Placement to Khor Eng Hock & Sons (PNG) Limited to acquire 70% EL2306 Total 09-08-2017 06-10-2017 06-10-2017 29-11-2017 22-01-2018 19-02-2018 7,984,800 19,245,000 2,500,000 10,000,000 40,110,715 22,000,000 101,840,515 $0.100 $0.100 $0.055 $0.100 $0.055 $0.100 798,480 1,924,500 137,500 1,000,000 2,206,089 - $6,066,569 Risk management Details of the Company’s Risk Management policies are contained within the Corporate Governance Statement. GOLD MOUNTAIN LIMITED ANNUAL REPORT 15 Corporate Governance A statement disclosing the extent to which the Company has followed the best practice recommendations set by the ASX Corporate Governance Council during the period is displayed on the Company’s website. Subsequent events after balance date On 3 July 2018, the Company announced a helicopter-assisted drill program initiated for the large Mongae Creek (or Mongai Creek) Porphyry Cu-Au System in EL2306. Abundant coarse gold is present in creeks within the Mongai Creek system and gold has been panned from gossanous rocks. Copper mineralisation is located in outcrops. Reconnaissance mapping and sampling in adjoining drainage systems is planned to determine the extent of the mineralisation. On 12 and 13 July 2018, the Company announced the progress of its mineral exploration programs on the Crown Ridge prospect in Enga Province, Papua New Guinea. The Company has completed a diamond drilling program of 19 drill-holes totalling 3761.8m, drilled between 14 October 2017 and 10 June 2018. The drilling targeted shallow conglomerate-hosted free gold-platinum mineralisation (Target 1) and high-grade gold mineralisation hosted by structurally controlled quartz-pyrite veins (Target 2). The Target 1 drill-holes were undertaken in conjunction with bulk sampling pits and aimed to define a Mineral Resource for the shallow conglomerate material. The Company will release the laboratory analysis and test results of the drill cores and the bulk pit samples as and when they become available. Assay results for the samples from the remaining 26 pits have been received and logged into the LIMS system by ALS in Perth. The results are expected in mid to late August 2018. However, the assays will require compilation and assessment against geological data before final results can be released. This is not expected until at least December 2018. On 24 July 2018, the Company announced the arrival of a custom-built mobile bulk sampling plant at Crown Ridge and is undergoing commissioning. A helicopter-portable drill rig has also arrived on site at the Mongae Creek Au-Cu prospect with diamond drilling starts this week. Assays are underway on Mongae Creek rock samples. An Excavator continues costeaning at Crown Ridge, exploring for hard-rock source of large gold nuggets and coarse free gold found in shallow sampling programmes to date. Regional heli-borne geophysical survey is planned to search for Porgera- style gold systems. Metallurgical investigations on black sand pan concentrates will be undertaken to identify hosts of vanadium, titanium and chrome. On 7 August 2018, the Company announced the maiden diamond drill hole at Mongai Creek confirmed diagnostic characteristics of a porphyry copper-gold system. Also noted that visible copper and molybdenite mineralisation was observed in drill cones. On 14 August 2018, the Company announced the finalisation of assembly and commissioning of large capacity mobile plant for processing of coarse-gold and platinum bulk samples, and recovery heavy black sands to test titanium, vanadium and chrome concentrations. The plant would improve processing time of infill and extensional pitting samples that form the basis of the Mineral Resource estimation that is in progress. On 28 August 2018, the Company announced the results for 35 rock chip samples from outcrop and float that confirmed the potential for economic grades of copper and gold mineralisation at Mongai Creek. This is supported by a petrographic report on test of samples from Mongai Creek which confirmed the expected diagnostics of porphyry copper-gold mineralisation, hydrothermal alterations, porphyritic texture, and primary mineralogical compositions. It is complimented with a maiden diamond drill-hole MCD001 completed at 521m down-hole below the mineralised outcrop with logging data providing a first view at the 3D geological framework of the system. There has not been any other matter or circumstance that has arisen after balance date that has significantly affected, or may significantly affect, the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial periods. GOLD MOUNTAIN LIMITED ANNUAL REPORT 16 Environmental legislation The Company is subject to significant environmental and monitoring requirements in respect of its natural resource exploration activities. The Directors are not aware of any significant breaches of these requirements during the period. Indemnification and insurance of Directors and Officers The Company has agreed to indemnify all the Directors of the Company for any liabilities to another person (other than the Company or related entity) that may arise from their position as Directors of the Company, except where the liability arises out of conduct involving a lack of good faith. During the financial year, GMN paid a premium in respect of a contract insuring the Directors and officers of the Company against any liability incurred in the course of their duties 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. Options The maximum terms of options granted during the year are as follows: 18,614,900 unlisted options were granted (GMNAC) to participants who were entitled to one option for every two shares issued as part of placements completed in August 2017, October 2017 and November 2017. In addition, 28,000,000 unlisted options were granted to a promoter as approved by Shareholders at the Annual General Meeting held on 28 November 2017. The remaining unexercised options expire on 30 June 2019 and are exercisable at $0.15 with no vesting conditions. 2,000,000 unlisted options (GMNAD) were granted to participating directors on 29 December 2017 as approved by Shareholders at the Annual General Meeting held on 28 November 2017. The remaining unexercised options expire on 26 July 2021, have an exercise price of $0.15 with vesting conditions that the total granted options shall be vested over 3 periods of 12 months per period. 7,800,000 unlisted options (GMNAE) were granted on 29 December 2017 pursuant to the Company’s Employee Share Option Plan, have an exercise price of $0.15 with vesting conditions that the total granted options shall be vested over 3 periods of 12 months per period. The options must be exercised on or before the expiry date in cash. GOLD MOUNTAIN LIMITED ANNUAL REPORT 17 REMUNERATION REPORT (AUDITED) in consultation with the Remuneration Committee, The Board, is responsible for determining and reviewing compensation arrangements for the directors and executive management. The Board assesses the appropriateness of the nature and amount of remuneration of key personnel on an annual basis. In determining the amount and nature of officers’ packages, the Board takes into consideration the Company’s financial and operational performance along with industry and market conditions. The Committee has the authority to retain any outside advisor at the expense of the Company, without the Board’s approval, at any time and has the authority to determine any such advisor’s fees and other retention terms. In setting corporate goals and objectives relevant to Senior Executives’ compensation, the Committee considers both short-term and long-term compensation goals and the setting of criteria around this. In relation to setting Directors’ remuneration the Committee looks at and considers comparative data from similar companies. This report outlines the remuneration arrangements in place for Directors and Key Management Personnel of Gold Mountain Limited (the “Company”) for the financial year ended 30 June 2018. The following persons acted as Directors during or since the end of the financial year: Graham Kavanagh Sin Pyng “Tony” Teng Douglas Smith The term ‘Key Management Personnel’ is used in this remuneration report to refer to the following persons. Except as noted, the named persons held their current position for the whole of the financial year and since the end of the financial year: Graham Kavanagh Sin Pyng “Tony” Teng Douglas Smith Remuneration Philosophy Eric Kam David Clark The performance of the Company depends upon the quality of the Directors and executives. The philosophy of the Company in determining remuneration levels is to:    set competitive remuneration packages to attract and retain high calibre employees; link executive rewards to shareholder value creation; and establish appropriate, demanding performance hurdles for variable executive remuneration Remuneration Committee The Remuneration Committee of the Board of Directors of the Company is responsible for determining and reviewing compensation arrangements for the Directors and the Senior Management team. The Remuneration Committee assesses the appropriateness of the nature and amount of remuneration of Directors and senior executives on a periodic basis by reference to relevant employment market conditions with an overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and executive team. GOLD MOUNTAIN LIMITED ANNUAL REPORT 18 Remuneration Structure In accordance with best practice Corporate Governance, remuneration is separate and distinct. the structure of Non-Executive Director and executive Non-Executive Director Remuneration The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract and retain Directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders. Each Director is entitled to such remuneration from the Company as the Directors decide, but the total amount provided to all non-executive directors must not exceed in aggregate the amount fixed by the Company in a general meeting. The aggregate remuneration for all non-executive directors has been set at an amount of $300,000 per annum. The ASX Listing Rules specify that the aggregate remuneration of Non-Executive Directors shall be determined from time to time by a general meeting. The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned amongst Directors is reviewed annually. The Board considers advice from external shareholders as well as the fees paid to Non-Executive Directors of comparable companies when undertaking the annual review process. Each Director is entitled to receive a fee for being a Director of the Company. The remuneration of Non-Executive Directors for the year ended 30 June 2018 is detailed in the Remuneration of Directors and named executives section of this report on the following pages of this report. Senior Manager and Executive Director Remuneration Remuneration consists of fixed remuneration and Company options (as determined from time to time). In addition to the Company employees and Directors, the Company has contracted key consultants on a contractual basis. These contracts stipulate the remuneration to be paid to the consultants. Fixed Remuneration Fixed remuneration is reviewed annually by the Independent Directors’ Committee (which assumes the role of the Remuneration Committee). The process consists of a review of relevant comparative remuneration in the market and internally and, where appropriate, external advice on policies and practices. The Committee has access to external, independent advice where necessary. Fixed remuneration is paid in the form of cash payments. The fixed remuneration component of the six most highly remunerated Company executives is detailed in Table 1. Employment Contracts During the year and to the date of this report there are no employment contracts with the Company. GOLD MOUNTAIN LIMITED ANNUAL REPORT 19 Remuneration of Directors and named executives Table 1: Directors’ and named executives remuneration for the year ended 30 June 2018 Short-term employee benefits Post-employment benefits Equity Other Total % Salary & Fees Bonuses Non- Monetary Benefits Super- annuation Prescribed Benefits Options Shares Deferred Benefits Performance Related Graham Kavanagh 1 36,000 Sin Pyng “Tony” Teng 2 108,000 Douglas Smith 3 Eric Kam 5 David Clark 6 Total 232,000 108,000 36,000 520,000 - - - - - - - - - - - - - 1,140 1,140 - - 2,280 - - - - - - 35,524 35,524 - - - 71,048 Table 2: Directors’ and named executives remuneration for the year ended 30 June 2017 Short-term employee benefits Post-employment benefits Equity Salary & Fees Bonuses Non- Monetary Benefits Super- annuation Prescribed Benefits Options Shares Graham Kavanagh 1 36,000 Sin Pyng “Tony” Teng 2 108,000 Douglas Smith 3 182,000 Matthew Morgan 4 Eric Kam 5 David Clark 6 Total 99,000 77,500 36,000 538,500 - - - - - - - - - - - - - - - 1,140 570 - - - 1,710 - - - - - - - - - - - - - - GOLD MOUNTAIN LIMITED ANNUAL REPORT - - - - - - - - - - - - - - - - - - - 71,524 144,664 233,140 108,000 36,000 593,328 0% 0% 0% 0% 0% - Other Total % Deferred Benefits Performance Related 0% 0% 0% 0% 0% 0% - 36,000 109,140 182,570 99,000 77,500 36,000 540,210 - - - - - - - 20 1. Paid to Drumcliffe Investments Pty Ltd for corporate advisory services of which Mr Kavanagh is a director and shareholder. 2. Paid to Rodby Holdings Pty Ltd for corporate advisory services of which Mr Teng is a director. 3. Paid to of Dougnic Pty Ltd for geological services which Mr Smith is a director and shareholder and Dougie Downunder which Mr Smith is principal. 4. Paid to Mineral X Pty Ltd for corporate advisory services of which Mr Morgan is a director and shareholder. 5. Paid to Useful Ways Pty Ltd for corporate advisory services of which Mr Kam is a director and shareholder and Ekam Commercial of which Mr Kam is principal. 6. Paid to D.W. Clark & Co., Chartered Accountant for corporate advisory services of which Mr Clark is principal. GOLD MOUNTAIN LIMITED ANNUAL REPORT 21 Other Key Management Personnel Transactions The Company has established the Gold Mountain Limited Employee Share Option Plan (ESOP) and a summary of the terms and conditions of the Plan are set out below: i. ii. iii. iv. v. vi. vii. All employees (full time and part time) will be eligible to participate in the Plan. Options are granted under the Plan at the discretion of the board and if permitted by the board, may be issued to an employee’s nominee. Each option is to subscribe for one ordinary share in the Company and will expire 5 years from its date of issue. An option is exercisable at any time from its date of issue provided all relevant vesting conditions, if applicable, have been met. Options will be issued free. The exercise price of options will be determined by the board. The total number of shares the subject of options issued under the Plan, when aggregated with issues during the previous 5 years pursuant to the Plan and any other employee share plan, must not exceed 5% of the Company’s issued share capital. If, prior to the expiry date of options, a person ceases to be an employee of the Company for any reason other than retirement at age 60 or more (or such earlier age as the board permits), permanent that person’s nominee) redundancy or death, disability, automatically lapse on the first the expiry of the period of 30 days from the date of such occurrence, and b) the expiry date. If a person dies, the options held by that person will be exercisable by that person’s legal personal representative. the options held by that person (or to occur of a) Options cannot be transferred other than to the legal personal representative of a deceased option holder. The Company will not apply for official quotation of any options. Shares issued as a result of issued shares. the exercise of options will rank equally with the Company’s previously viii. Option holders may only participate in new issues of securities by first exercising their options. ix. x. xi. Options are granted under the plan for no consideration. Each share options converts into one ordinary shares of Gold Mountain Limited. 14,800,000 unlisted options granted on 29 August 2016 pursuant to the Company’s Employee Share Option Plan have an exercise price of $0.30 and are subject to the following vesting conditions: (1) The Company's underlying share price must exceed $0.50 based on volume weighted average price (VWAP) over a 5 day consecutive period; (2) The holder must be an actual consultant to or employee of the Company at the time of exercise of the relevant Granted Options. In addition, the exercise of the Granted Options is subject to the following conditions: (3) The exercise period shall not commence until a date that is at least 12 months after the date of the grant of the Granted Options to the holder; and (4) a granted option expires 36 months after the date on which the relevant granted options were granted. The unlisted options granted under the Employee Share Option Plan are exercisable at $0.30 expire on 28 November 2019. xii. 7,800,000 unlisted options granted on 29 December 2017 pursuant to the Company’s Employee Share Option Plan have an exercise price of $0.15 and are subject to the vending condition that the total granted options shall be vested over 3 periods of 12 months per period. The unlisted options granted under the Employee Share Option Plan are exercisable at $0.15 expire on 26 July 2021. The Board may amend the terms and conditions of the plan subject to the requirements of the Listing Rules. There have been no other transactions involving equity instruments other than those described in the tables above. For details of other transactions with Key Management Personnel, refer to Note 18: Related Party Disclosures. GOLD MOUNTAIN LIMITED ANNUAL REPORT 22 Directors’Meetings The number of meetings of Directors (inciuding meetings of committees of Directors) heId du「ing the yea「 and the numbe「 of meetings attended by each Directo「 was as foliows: Board Meetings Directo「　　　　Attended E悪霊O G「aham Kavanagh　　　　　　6　　　　　　6 Douglas Smith　　　　　　　　　6　　　　　　　6 Sin Pyng “Tony’’Teng　　　　　6　　　　　　6 In addition, th「ee ci「cuIar 「esolutions we「e signed by the Boa「d during the period. Audito「 independence Section 307C of the Co「po「ations Act 2001 「equi「es ou「 auditors to provide the Directo「S Of the Company with an Independence Deciaration in relation to the audit ofthe annuaI 「eport. This lndependence Declaration is set out on Page 25, and forms part of this Di「ecto「s’「eport fo「 the yea「 ended 30 June 2018. Non-Audit Services DetaiIs of amounts paid o「 payabIe to the audito「 fo「 non-audit services provided during the yea「 by the audito「 are Ou佃ned in Note 22 to the financial statements. The Di「ecto「s a「e satisfied that the p「ovision of non-audit services is COmPatibie with the gene「aI standa「d of independence fo「 audito「S imposed by the Corpo「ations Act 2001. The Di「ecto「s a「e of the opinion that the services do not comp「Omise the audito「’s independence as a= non-audit Services have been 「eviewed to ensure that they do not impact the integrity and objectivity of the audito「 and none Of the services unde「mine the gene「ai p「incipies 「eIating to audito「 independence. Signed in acco「dance with a 「esoIution of the Di「ectors. /彩縁㌣し字へ Non-Executive Chai「man D。t。d this 。Z啓a, 。f S。。t。mb。。 2018 繊㊨㊨罷宅t、餞吋も漫壁紗の蝿b節々・$薦多㊥鱒♂鰐雪無電の㊧篭め呼声恵贈鵬と,曹 GOLD MOUNTAIN LIMiTED ANNUAL REPORT　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　23 SCHEDULE OF TENEMENTS EL No. Holder EL1966 Sak Creek EL1967 Pocket Creek EL1968 Crown Ridge EL2426 Keman EL2430 Meriamanda ELA2522 ELA2563 ELA2565 EL2306 Viva No.20 Limited Viva No.20 Limited Viva No.20 Limited GMN Interest 70% 70% 70% Location Enga Province, PNG Enga Province, PNG Enga Province, PNG GMN 6768 (PNG) Ltd 100% Enga Province, PNG GMN 6768 (PNG) Ltd 100% Enga Province, PNG GMN 6768 (PNG) Ltd Abundance Valley (PNG) Limited Viva Gold (PNG) Limited Khor Eng Hock & Sons (PNG) Limited / Abundance Valley (PNG) Limited Application Application Enga Province, PNG Enga Province, PNG Enga Province, PNG Enga Province, PNG Application Registration of transfer pending Area (sq km) 103 103 103 48 154 841 226 537 164 Expiry 26/06/2017 (Renewal pending) 27/11/2017 (Renewal pending) 27/11/2017 (Renewal pending) 27/05/2018 (Renewal pending) 27/05/2018 (Renewal pending) - - - 13/12/2017 (Renewal pending) Figure 1 – Suite of tenements located at the Enga Province in Papua New Guinea GOLD MOUNTAIN LIMITED ANNUAL REPORT 24 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2018 Other income Administration costs Depreciation expense Employment costs Exploration expense Impairments expense Investor and public relations expense Legal and professional costs Other expenses Loss before income tax expense Note 3 2018 $ 119,426 119,426 2017 $ 32,874 32,874 (369,322) (302,398) (56,164) (11,049) (62,280) (62,010) 9 (171,068) (428,442) - (2) (240,944) (141,854) (308,167) (319,474) (395,954) (47,560) (1,484,473) (1,279,915) Income tax expense Net loss for the period Attributable to the owners of Gold Mountain Limited 5 - - (1,484,473) (1,279,915) Other comprehensive income Total other comprehensive income for the year, net of tax Total comprehensive loss for the period Attributable to the owners of Gold Mountain Limited - - - - (1,484,473) (1,279,915) Loss per share Basic loss per share (cents) Diluted loss per share (cents) 20 (0.32) N/A (0.35) N/A The statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes. GOLD MOUNTAIN LIMITED ANNUAL REPORT 26 STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2018 Note 2018 $ 2017 $ ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables TOTAL CURRENT ASSETS NON-CURRENT ASSETS Plant and equipment Deferred exploration and evaluation expenditure Intangible assets Investments Other assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables Other current liabilities TOTAL CURRENT LIABILITIES NON CURRENT LIABILITIES Other non current liabilities TOTAL NON CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated losses 6 7 8 9 10 11 12 13 14 14 15 16 2,985,066 2,693,337 82,239 125,439 3,067,305 2,818,776 489,797 108,620 11,816,184 3,038,522 6,002,733 6,004,982 50,555 55,545 500,555 75,545 18,414,814 9,728,224 21,482,119 12,547,000 238,545 767,600 126,025 - 1,006,145 126,025 1,200,000 1,200,000 - - 2,206,145 126,025 19,275,974 12,420,975 27,885,834 19,942,315 395,953 - (9,005,876) (7,521,403) Total equity attributable to equity holders of the Company 19,275,911 12,420,912 Non controlling interest TOTAL EQUITY 63 63 19,275,974 12,420,975 The statement of financial position should be read in conjunction with the accompanying notes. GOLD MOUNTAIN LIMITED ANNUAL REPORT 27 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2018 Issued Capital Reserves Accumulated Losses Non Controlling Interest Total $ $ $ $ $ Balance at 1 July 2016 9,645,792 23,250 (6,264,777) Comprehensive Income Net loss for the period Other comprehensive income Total comprehensive income for the year Transactions with owners in their capacity as owners Accumulated losses - Non controlling interest Issue of share capital Share issue costs Lapse of options Total transactions with owners in their capacity as owners - - - - 10,412,173 (115,650) - - - - - - (1,279,915) - (1,279,915) 39 - - - (23,250) 23,250 10,296,523 (23,250) 23,289 Balance at 30 June 2017 19,942,315 Balance at 1 July 2017 19,942,315 - - - - - - - (7,521,403) (7,521,403) (1,484,473) - (1,484,473) - - - - - - - - 8,266,569 (323,050) (1) - 395,954 7,943,519 395,953 Comprehensive Income Net loss for the period Other comprehensive income Total comprehensive income for the year Transactions with owners in their capacity as owners Issue of share capital Share issue costs Foreign Currency Translation Options expense Total transactions with owners in their capacity as owners - - - - (39) 102 - - 63 63 63 - - - - - - - - 3,404,265 (1,279,915) - (1,279,915) - 10,412,275 (115,650) - 10,296,625 12,420,975 12,420,975 (1,484,473) - (1,484,473) 8,266,569 (323,050) (1) 395,954 8,339,472 Balance at 30 June 2018 27,885,834 395,953 (9,005,876) 63 19,275,974 GOLD MOUNTAIN LIMITED ANNUAL REPORT 28 STATEMENT OF CASHFLOWS FOR YEAR ENDED 30 JUNE 2018 Cash flows from operating activities Interest received Payments to suppliers and employees Other receipts Note 2018 $ 2017 $ 25,400 6,874 (825,903) (982,519) 94,936 50,200 Net cash (used in) provided by operating activities 27 (705,567) (925,445) Cash flows from investing activities Payments for plant and equipment Payments for security deposits Payments for other investments (407,996) (118,398) - (35,545) 14 (750,000) (470,000) Receipt of tenement security deposits 10,000 10,000 Payments for exploration and evaluation 9 (3,598,227) (1,261,990) Net cash (used in) provided by investing activities (4,746,223) (1,875,933) Cash flows from financing activities Proceeds from issue of shares Payments for share issue costs Net cash provided by (used in) financing activities Net increase/(decrease) in cash and cash equivalents 6,066,569 4,330,873 (323,050) (26,105) 5,743,519 4,304,768 291,729 1,503,390 Cash and cash equivalents at beginning of financial year 2,693,337 1,189,947 Cash and cash equivalents at end of financial year 6 2,985,066 2,693,337 Non-cash financing activities (i) Share issue On 19 February, 2018 the Company issued 22,000,000 shares at the issue price of $0.10 to raise $2,200,000 as part consideration for the acquisition of a 70% interest in EL2306 as approved by Shareholders at the Annual General Meeting held on 28 November 2017. The statement of cashflows should be read in conjunction with the accompanying notes. GOLD MOUNTAIN LIMITED ANNUAL REPORT 29 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 This financial report includes the financial statements and notes of Gold Mountain Limited. Number Notes to the Financial Statements 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Summary of significant accounting policies Operating segments Revenue & other income Loss for the year Income tax expense Current assets - Cash and cash equivalents Current assets - Trade and other receivables Non-current assets – Plant and equipment Non-current assets – Deferred exploration and evaluation expenditure Non-current assets – Intangible assets Non-current assets – Investments Non-current assets – Other assets Current liabilities – Trade and other payables Current and non current liabilities – Other Contributed equity Reserves Share based payments Related party disclosures Key management personnel compensation Loss per share Financial Risk Management Auditor’s remuneration Commitments and contingencies Dividends Events subsequent to reporting date Controlled entities Cash flow information GOLD MOUNTAIN LIMITED ANNUAL REPORT 30 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES a. Basis of Preparation The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards as issued by the IASB. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless otherwise stated. The financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities b. Comparative Figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. When the Company applies an accounting policy retrospectively, makes a retrospective restatement or reclassifies items in its financial statements, financial statements as at the beginning of the earliest comparative period will be disclosed. c. Principles of consolidation Business combinations For every business combination, the Company identifies the acquirer, which is the combining entity that obtains control over the other combining entities. An investor controls an investee when it is exposed to, or has rights to, variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. In assessing control, the Company takes into consideration potential voting rights that are currently exercisable. The acquisition date is the date on which control is transferred from the acquirer. Interests in equity-accounted investees The Company’s interests in equity-accounted investees comprise the interest in a joint venture. A joint venture is a joint arrangement, whereby the Group and other parties have joint control and have rights to the net assets of the arrangement. The interest in the joint venture is accounted for using the equity method. It is recognised initial at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Company’s share of the profit or loss and other comprehensive income of equity- accounted investees, until the date on which significant influence or joint control ceases. Joint arrangements As a result of AASB 11, the Company has changed its accounting policy for its interests in joint arrangements. Under AASB 11, the Company has classified its interests in joint arrangements as either joint operations (if the Group has rights to the assets, and obligations for the liabilities, relating to an arrangement) or joint ventures (if the Group has rights only to the net assets of an arrangement). When making this assessment, the Company considered the structure of the arrangements, the legal form of any separate vehicles, the arrangements and other facts and circumstances. Previously, the structure of the arrangement was the sole focus of classification. the contractual terms of GOLD MOUNTAIN LIMITED ANNUAL REPORT 31 The Company did not have any joint arrangements at the start of the financial year. On 16 August 2016, the Company completed the acquisition of an additional 50% of the issued capital of Viva No. 20 Limited (“Viva”) through the issue of 60,000,000 shares at $0.08 each to the Vendors. Simultaneously, the Vendors issued 125 ordinary shares to GMN comprising 50% of the entire issued capital of Viva held by the Vendors. On completion of this acquisition, the Company now holds a controlling interest of 70% in Viva.As a result of the acquisition and in accordance with AASB 11, this new arrangement has been recognised on a consolidated basis. On 18 July 2017, the Company announced that it had entered a binding agreement for the acquisition of the EL2306 Interest from the EL2306 Vendor for purchase price of $5,200,000 comprising 22 million Shares at a notional price of $0.10 per Share and $3,000,000 in cash. The cash consideration of $3,000,000 is payable in instalments. An exclusivity fee of $150,000 was also paid and capitalised as Deferred Expenditure in FY 2016. On 19 February, 2018 the Company issued 22,000,000 shares at the issue price of $0.10 to raise $2,200,000 as part consideration for the acquisition of a 70% interest in EL2306 as approved by Shareholders at the Annual General Meeting held on 28 November 2017. Instalment costs of $1,050,000 were paid by the Company in FY 2017 and FY 2018. The remaining instalment costs of $1,950,000 is payable over 30 months with $750,000 payable by 30 June 2019 and $1,200,000 payable by 31 December 2020. As a result of the this new arrangement has been recognised as a joint acquisition and in accordance with AASB 11, arrangement. See Note 14 for further information. d. Impairment of Assets At the end of each reporting period, the Company assesses whether there is any indication that an asset may be impaired. The assessment will include the consideration of external and internal sources of information. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, to the asset’s carrying amount. Any excess of the asset’s carrying amount over its recoverable amount is recognised immediately in profit or loss, unless the asset is carried at a revalued amount in accordance with another Standard (eg in accordance with the revaluation model in AASB 116). Any impairment loss of a revalued asset is treated as a revaluation decrease in accordance with that Standard. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. e. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits available on demand with banks and other short- term highly liquid investments with original maturities of three months or less. f. Provisions Provisions are recognised when the Company has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period. g. Trade and other payables Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services received by the Company during the reporting period which remain unpaid. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of the liability. h. Income Tax The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income). Current income tax expense charged to profit or loss is the tax payable on taxable income. Current tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. GOLD MOUNTAIN LIMITED ANNUAL REPORT 32 Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well unused tax losses. Current and deferred income tax expense (income) is charged or credited outside profit or loss when the tax relates to items that are recognised outside profit or loss. Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled and their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability. Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised. Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where: (a) a legally enforceable right of set-off exists; and (b) the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled. i. Exploration and Development Expenditure Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an exploration and evaluation asset in the year in which they are incurred where the following conditions are satisfied: (i) (ii) The rights to tenure of the area of interest are current; and at least one of the following conditions is also met: (a) (b) the exploration and evaluation expenditures are expected to be recouped through successful development and exploration of the area of interest, or alternatively, by its sale; or exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing. Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies, exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and amortised of assets used in exploration and evaluation activities. General and administrative costs are only included in the measurement of exploration and evaluation costs where they are related directly to operational activities in a particular area of interest. Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years. Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified to development. Costs of site restoration are provided over the life of the project 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 structures, waste removal, and rehabilitation of the site in accordance with local laws and regulations and clauses of the permits. Such costs have been determined using estimates of future costs, current legal requirements and technology on an undiscounted basis. GOLD MOUNTAIN LIMITED ANNUAL REPORT 33 Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site restoration, there is uncertainty regarding the nature and extent of the restoration due to community the expectations and future legislation. Accordingly the costs have been determined on the basis that restoration will be completed within one year of abandoning the site. j. Revenue and Other Income the consideration received or receivable. When the inflow of Revenue is measured at consideration is deferred, it is treated as the provision of financing and is discounted at a rate of interest that is generally accepted in the market initially recognised and the amount ultimately received is interest revenue. for similar arrangements. The difference between the amount the fair value of All revenue is stated net of the amount of goods and services tax (GST). k. Earnings (Loss) per share Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any costs of servicing equity (other than dividends) divided by the weighted average number of ordinary shares, adjusted for any bonus element. Diluted earnings per share is calculated as net profit attributable to members, adjusted for: (i) (ii) (iii) costs of servicing equity (other than dividends); the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element. l. Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO). Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included with other receivables or payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to, the ATO are presented as operating cash flows included in receipts from customers or payments to suppliers. m. Plant and Equipment Each class of plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses. Plant and equipment less accumulated Plant and equipment are measured on the cost basis and therefore carried at cost In the event the carrying amount of plant and equipment is depreciation and any accumulated impairment. greater than the estimated recoverable amount, is written down immediately to the estimated recoverable amount and impairment losses are recognised either in profit or loss or as a revaluation decrease if the impairment losses relate to a revalued asset. A formal assessment of recoverable amount is made when impairment indicators are present. the carrying amount The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. GOLD MOUNTAIN LIMITED ANNUAL REPORT 34 Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of profit or loss and other comprehensive income during the financial period in which they are incurred. Depreciation The depreciable amount of all fixed assets is depreciated on a straight-line basis over the asset’s useful life to the Company commencing from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Depreciation Rate Plant and equipment 20%-32% The assets’ residual values and useful reporting period. lives are reviewed, and adjusted if appropriate, at the end of each An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of profit or loss and other comprehensive income. When revalued assets are sold, amounts included in the revaluation surplus relating to that asset are transferred to retained earnings. n. Financial Instruments Recognition and initial measurement Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the Company commits itself to either the purchase or sale of the asset (ie trade date accounting is adopted). Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified “at fair value through profit or loss”, in which case transaction costs are expensed to profit or loss immediately. Classification and subsequent measurement Finance instruments are subsequently measured at fair value, amortised cost using the effective interest rate method, or cost. Amortised cost is the amount at which the financial asset or financial liability is measured at initial recognition less principal repayments and any reduction for impairment, and adjusted for any cumulative amortisation of the difference between that initial amount and the maturity amount calculated using the effective interest method. The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense item in profit or loss. (i) Financial assets at fair value through profit or loss Financial assets are classified at “fair value through profit or loss” when they are held for trading for the purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss. GOLD MOUNTAIN LIMITED ANNUAL REPORT 35 (ii) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost. Loans and receivables are included in current assets, where they are expected to mature within 12 months after the end of the reporting period. (iii) Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the Company’s intention to hold these investments to maturity. They are subsequently measured at amortised cost. Held-to-maturity investments are included in non-current assets where they are expected to mature within 12 months after the end of the reporting period. All other investments are classified as current assets. (iv) Available-for-sale financial assets Available-for-sale financial assets are non-derivative financial assets that are either not suitable to be classified into other categories of financial assets due to their nature, or they are designated as such by management. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments. They are subsequently measured at fair value with changes in such fair value (ie gains or losses) recognised in other comprehensive income (except for impairment losses and foreign exchange gains and losses). When the financial asset is derecognised, the cumulative gain or loss pertaining to that asset previously recognised in other comprehensive income is reclassified into profit or loss. Available-for-sale financial assets are included in non-current assets where they are expected to be sold within 12 months after the end of the reporting period. All other financial assets are classified as current assets. (v) Financial liabilities Non-derivative financial amortised cost. Impairment liabilities (excluding financial guarantees) are subsequently measured at At the end of each reporting period, the Company assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in profit or loss. Also, any cumulative decline in fair value previously recognised in other comprehensive income is reclassified to profit or loss at this point. Derecognition Financial assets are derecognised where the contractual rights to receipt of cash flows expire or the asset is transferred to another party whereby the Company no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations liability are discharged, cancelled or expired. The difference between the carrying value of extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non- cash assets or liabilities assumed, is recognised in profit or loss. the financial GOLD MOUNTAIN LIMITED ANNUAL REPORT 36 o. Employee Benefits Provision is made for the Company’s liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be settled within one (1) year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later than one (1) year have been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wages increases and the probability that the employee may satisfy vesting requirements. Those cash flows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cash flows. p. Rounding of Amounts The parent entity has applied the relief available to it under ASIC Class Order 98/100 and accordingly, amounts in the financial statements and directors’ report have been rounded off to the nearest one dollar ($1). q. Critical Accounting Estimates and Judgments The directors evaluate estimates and judgments incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Company. Key estimates (i) Impairment The Company assesses impairment at the end of each reporting period by evaluating conditions and events specific to the Company that may be indicative of impairment triggers. Recoverable amounts of relevant assets are reassessed using value-in-use calculations which incorporate various key assumptions. Key judgments (i) Exploration and evaluation expenditure The Company capitalises expenditure relating to exploration and evaluation where it is considered likely to be recoverable or where the activities have not reached a stage that permits a reasonable assessment of the existence of reserves. While there are certain areas of interest from which no reserves have been extracted, the directors are of the continued belief that such expenditure should not be written off since feasibility studies in such areas have not yet concluded. r. Going concern The financial statements have been prepared on the going concern basis, the validity of which depends upon the positive cash position. The Company’s existing projections show that further funds will be required to be generated, either by capital raisings, sales of assets or other initiatives, to enable the Company to fund its currently planned activities for at least the next twelve months from the date of signing these financial statements. take action to reprioritise Should new opportunities present activities, dispose of assets and or raise further funds. funds the Directors will that require additional Notwithstanding this issue, accordingly the Directors have prepared the financial statements of the Company on a going concern basis. In arriving at this position, the Directors have considered the following pertinent matter: - Australian Accounting Standard, AASB 101 “Accounting Policies”, states that an entity shall prepare financial statements on a going concern basis unless management either intends to liquidate the entity or to cease trading, or has no realistic alternative but to do so. In the Directors’ opinion, at believe that prepared on a going concern basis. there are reasonable grounds to the matters set out above will be achieved and therefore the financial statements have been the date of signing the financial report, GOLD MOUNTAIN LIMITED ANNUAL REPORT 37 s. 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 from the proceeds. t. Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors of Gold Mountain Limited. u. Associates Associates are entities over which the Company has significant influence but not control or joint control. Investments in associates are accounted for using the equity method. Under the equity method, the share of the profits or losses of the associate is recognised in profit or loss and the share of the movements in equity is recognised in other comprehensive income. Investments in associates are carried in the statement of financial position at cost plus post-acquisition changes in the Company’s share of net assets of the associates. Dividends received or receivable from associates reduce the carrying amount of the investment. When the Company’s share of losses in an associate equals or exceeds its interest in the associate, including any unsecured long-term receivables, the consolidated entity does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate. v. Joint Ventures A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control. The Company’s interest in joint venture entities are accounted for using the proportionate consolidation method of accounting. The Company recognises its interest in the assets that it controls and the liabilities that it incurs and the expenses that it incurs and its share of the income that it earns from the sale of goods or services by the joint venture, classified according to the nature of the assets, liabilities, income or expense. Profits or losses on transactions establishing the joint venture entities and transactions with the joint venture are eliminated to the extent of the Company’s ownership interest until such time as they are realised by the joint venture entity on consumption or sale, unless they relate to an unrealised loss that provides evidence of the impairment of an asset transferred. The Company discontinues the use of proportionate consolidation from the date on which it ceases to have joint control over a jointly controlled entity. w. Fair Value of Assets and Liabilities Equity Instruments The fair value of available-for-sale financial assets is determined by reference to their quoted closing bid price at the reporting date. Trade and Other Receivables The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date. This fair value is determined for disclosure purposes. Due to the short term nature of other receivables, their carrying value is assumed to approximate their fair value. Non-Derivative Financial Liabilities Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date. x. New Accounting Standards and Interpretations not yet mandatory or early adopted Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the Company for the annual reporting period ended 30 June 2018. The Company’s assessment of the impact of these new or amended Accounting Standards and Interpretations are that they will have no material effect. GOLD MOUNTAIN LIMITED ANNUAL REPORT 38 NOTE 2: OPERATING SEGMENTS Segment Information Identification of reportable segments During the year, the Company operated principally in one business segment being mineral exploration and in three geographical segments being Australia, Papua New Guinea (from 1 July 2014) and Peru. The Company’s revenues and assets and liabilities according to geographical segments are shown below. June 2018 June 2017 Total Australia PNG Peru Total Australia PNG $ $ $ $ $ $ $ Peru $ 119,426 119,426 119,426 119,426 - - - - 32,874 32,874 32,874 32,874 - - REVENUE Revenue Total segment revenue RESULTS Net loss before income tax (1,484,473) (1,381,637) (102,836) - (1,279,915) (815,176) (464,737) Income tax Net loss - - - - - - - (1,484,473) (1,381,637) (102,836) - (1,279,915) (815,176) (464,737) ASSETS AND LIABILITIES Assets Liabilities 21,482,119 2,795,323 18,686,796 - 12,547,000 2,954,395 9,592,605 2,206,145 121,226 2,084,919 - 126,025 117,475 8,550 - - (2) - (2) - - NOTE 3: REVENUE AND OTHER INCOME Note 2018 $ 2017 $ a. Revenue Other income Interest received 1 Rental income Foreign exchange gains Total other income Total revenue 1 Interest received from: Bank 25,400 51,792 42,234 119,426 119,426 6,874 26,000 - 32,874 32,874 25,400 6,874 GOLD MOUNTAIN LIMITED ANNUAL REPORT 39 NOTE 4: LOSS FOR THE YEAR Loss before income tax includes the following specific expenses: — — — a. Consultants fees Legal costs Rental expense on operating leases Significant expenses The following significant expense items are relevant in explaining the financial performance: — — Exploration expense Impairments expense NOTE 5: INCOME TAX EXPENSE 2018 $ 2017 $ 170,200 28,862 100,373 149,000 53,474 12,976 171,068 428,442 - 2 2018 $ 2017 $ The prima facie tax on the loss before income tax is reconciled to income tax as follows: Loss before income tax expense Prima facie tax benefit on the loss before income tax at 27.5% (2017: 27.5%) (1,484,473) (1,279,915) (408,230) (351,977) Add: Tax effect of: Other non-allowable items Less: Tax effect of: Other deductible expenses Future tax benefits not brought to account Income tax attributable to the Company 195,692 144,012 195,692 144,012 (84,579) (77,297) 297,117 285,262 - - The Company has tax losses arising in Australia of $7,340,591 (2017: $6,238,066) that are available indefinitely to offset against future taxable profits. Deferred tax assets not brought to account, the benefits of which will only be realised if the conditions for deductibility set out in Note 1(h) occur. GOLD MOUNTAIN LIMITED ANNUAL REPORT 40 NOTE 6: CASH AND CASH EQUIVALENTS Cash at bank Short-term bank deposits 2018 $ 2017 $ 136,973 198,524 2,848,093 2,494,813 2,985,066 2,693,337 Reconciliation of cash Cash at the end of the financial year as shown in the statement of cash flows is reconciled to items in the statement of financial position as follows: Cash and cash equivalents 2,985,066 2,693,337 Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the Company, and earn interest at the respective short-term deposit rates. NOTE 7: TRADE AND OTHER RECEIVABLES Current PNG Project Advance Performance bonds with NSW Mines Department Other receivables Total current trade and other receivables NOTE 8: PLANT AND EQUIPMENT Plant and equipment – at cost Accumulated depreciation Reconciliation of the carrying amount of plant and equipment at the beginning and end of the current and previous financial year: Carrying amount at beginning of the year Additions Disposals Depreciation expense Carrying amount at end of the year 2018 $ 8,566 - 73,673 82,239 2017 $ 77,246 10,000 38,192 125,438 2018 $ 2017 $ 558,295 120,954 (68,498) (12,334) 489,797 108,620 108,620 437,341 1,273 118,398 - - (56,164) (11,049) 489,797 108,620 GOLD MOUNTAIN LIMITED ANNUAL REPORT 41 NOTE 9: DEFERRED EXPLORATION AND EVALUATION EXPENDITURE Assets in Development Balance at the beginning of the year Expenditure incurred 2018 $ 2017 $ 3,038,522 1,675,098 3,578,730 1,261,990 Expenditure incurred on acquisition of 70% interest in EL2306 5,350,000 - Expenditure incurred on acquisition of subsidiary Impairment loss on existing tenements Net carrying value - 294,876 (151,068) (193,442) 11,816,184 3,038,522 Recoverability of the carrying amount of deferred exploration and evaluation expenditure is dependent on the successful development and commercial exploitation or sale of the areas of interest. Management reassess the carrying value of the Company’s tenements at each half year, or at a period other than that should there be an indication of impairment. During the year to 30 June 2018, an impairment expense of $171,068 (2017: $193,442) was recognised. This impairment refers to past costs incurred in maintaining the Company’s NSW exploration projects. NOTE 10: INTANGIBLE ASSETS Intangible assets Goodwill on acquisition Total intangible assets 2018 $ 2017 $ 6,002,733 6,002,733 6,004,982 6,004,982 Movements in Carrying Amounts Movement in the carrying amounts for intangible assets between the beginning and the end of the current financial year: Carrying amount at 30 June 2017 Additions Disposals Movement in foreign exchange Carrying amount at 30 June 2018 Goodwill on acquisition 2018 $ 2017 $ 6,004,982 6,004,982 - - (2,249) - - - 6,002,733 6,004,982 On 16 August 2016, the Company completed the acquisition of an additional 50% of the issued capital of Viva through the issue of 60,000,000 shares at $0.08 each to the Vendors. Simultaneously, the Vendors issued 125 ordinary shares to GMN comprising 50% of the entire issued capital of Viva held by the Vendors. On completion of this acquisition, the Company now holds a controlling interest of 70% in Viva. Goodwill of $6,002,733 was recorded from the acquisition. GOLD MOUNTAIN LIMITED ANNUAL REPORT 42 NOTE 11: INVESTMENTS Non-Current Gold nuggets Papua New Guinea exclusive option fees NOTE 12: OTHER ASSETS Non-Current Security deposits Acquisition costs - EL5939 Cowarra NSW NOTE 13: TRADE AND OTHER PAYABLES Current Unsecured liabilities: Trade payables and accrued expenses Amounts payable to Director and related entities NOTE 14: OTHER CURRENT AND NON CURRENT LIABILITIES Current Rental deposit received Instalment costs - EL2306 Total other current liabilities Non current Instalment costs - EL2306 Total other non current liabilities Instalment costs - EL2306 2018 $ 2017 $ 50,555 50,555 - 450,000 50,555 500,555 2018 $ 55,545 - 55,545 2017 $ 55,545 20,000 75,545 2018 $ 2017 $ 206,445 108,425 32,100 17,600 238,545 126,025 2018 $ 2016 $ 17,600 750,000 767,600 1,200,000 1,200,000 - - - - - On 18 July 2017, the Company announced that it had entered a binding agreement for the acquisition of the EL2306 Interest from the EL2306 Vendor for purchase price of $5,200,000 comprising 22 million Shares at a notional price of $0.10 per Share and $3,000,000 in cash. The cash consideration of $3,000,000 is payable in instalments. An exclusivity fee of $150,000 was also paid and capitalised as Deferred Expenditure in FY 2016. On 19 February, 2018 the Company issued 22,000,000 shares at the issue price of $0.10 to raise $2,200,000 as part consideration for the acquisition of a 70% interest in EL2306 as approved by Shareholders at the Annual General Meeting held on 28 November 2017. Instalment costs of $1,050,000 were paid by the Company in FY 2017 and FY 2018. The remaining instalment costs of $1,950,000 is payable over 30 months with $750,000 payable by 30 June 2019 and $1,200,000 payable by 31 December 2020. GOLD MOUNTAIN LIMITED ANNUAL REPORT 43 NOTE 15: CONTRIBUTED EQUITY (a) Ordinary shares Ordinary Shares, issued Share issue costs Total issued capital 2018 Number of shares 2018 $ 2017 Number of shares 2017 $ 515,142,680 29,551,110 413,302,165 21,284,541 (1,665,276) 27,885,834 (1,342,226) 19,942,315 Ordinary shares carry one vote per share and carry the rights to dividends. Ordinary shares participate in dividends and the proceeds on winding-up of the parent entity in proportion to the number of shares held. At the shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands. (b) Movements in ordinary shares on issue Date Particulars At 30 June 2016 Number of shares 261,514,508 08-08-16 Placement to professional and sophisticated investors 57,197,619 Placement to Viva No.20 Ltd for 50% of issued capital (escrowed for 12 months) 60,000,000 Issue Price $ $0.042 $0.080 9,645,792 2,402,300 4,800,000 placement Additional and sophisticated investors following over-subscription of 8 August placement. professional to 1,238,095 $0.042 52,000 17-08-16 18-10-16 13-12-16 Issue of shares on exercise of options 1,150,000 13-12-16 Issue of shares on exercise of 2013 employee options 500,000 20-01-17 Issue of shares on exercise of options 31-03-17 Issue of shares on exercise of options 1,000,000 707,143 15-05-17 Placement to professional and sophisticated investors 10,660,000 15-05-17 Issue of shares on exercise of options 750,000 05-06-17 Placement to professional and sophisticated investors 17,034,000 29-06-17 Placement to professional and sophisticated investors 1,550,800 30-06-17 Share issue costs At 30 June 2017 413,302,165 09-08-17 Placement to professional and sophisticated investors 7,984,800 06-10-17 Placement to professional and sophisticated investors 19,245,000 06-10-17 Issue of shares on exercise of options 2,500,000 29-11-17 Placement to professional and sophisticated investor 10,000,000 22-01-18 Issue of shares on exercise of options 40,110,715 $0.055 $0.070 $0.055 $0.055 $0.100 $0.055 $0.100 $0.100 $0.100 $0.100 $0.055 $0.100 $0.055 63,250 35,000 55,000 38,893 1,066,000 41,250 1,703,400 155,080 (115,650) 19,942,315 798,480 1,924,500 137,500 1,000,000 2,206,089 19-02-18 Placement to acquire 70% of EL2306 (as approved at 2017 AGM and escrowed for 24 months) 22,000,000 $0.100 2,200,000 30-06-18 Share issue costs At 30 June 2018 515,142,680 (323,050) 27,885,834 GOLD MOUNTAIN LIMITED ANNUAL REPORT 44 Ex. Price $0.07 Exp 31Dec16 Ex. Price $0.055 Exp 18Jan18 Code: GMNAA Ex. Price $0.15 Exp 30Jun19 Code: GMNAB Ex. Price $0.301 Exp 28Nov19 Code: GMNAC Ex. Price $0.15 Exp 26Jul21 Code: GMNAD Ex. Price $0.152 Exp 26Jul21 Code: GMNAE Movement in options over ordinary shares on issue Date Particulars 30-Jun-16 18-Oct-16 18-Oct-16 18-Oct-16 28-Nov-16 13-Dec-16 13-Dec-16 29-Dec-16 Total options on issue Issue of unlisted options to Aug 16 placement investors Issue of unlisted options to promoters following shareholder approval Issue of unlisted options to Aug 16 placement investors Issue of unlisted ESOP(1) options subject to vending conditions Exercise of unlisted options Exercise of 2012 KMP unlisted options Lapse of unlisted ESOP options on departure of employee 20-Jan-17 Exercise of unlisted options 31-Mar-17 Exercise of unlisted options 15-May-17 29-Jun-17 Exercise of unlisted options Issue of unlisted options to May17 placement investors 30-Jun-17 Total options on issue 10 Aug 17 06 Oct 17 6 Oct 17 28 Nov 17 29 Dec 17 29 Dec 17 22 Jan 18 22 Jan 18 Issue of unlisted options to Aug17 placement investors Issue of unlisted options to Oct17 placement investors Exercise of unlisted options Issue of unlisted options to placement investor Issue of unlisted options to participating directors Issue of unlisted options under Employee Share Option Plan Exercise of unlisted options Issue of unlisted options to promoter as approved by shareholders at 2017 AGM 30-Jun-18 Total options on issue 500,000 - - 28,598,810 - - - - 17,000,000 619,048 - (1,150,000) - - (1,000,000) (707,143) (750,000) (500,000) - - - - - - - - - - - - - - - - - - - - - - - - - - - - 18,400,000 - - (3,600,000) - - - - - - - - - - - - - - - - - - - - - 2,000,000 - - - - - - - - - - - - - - - - - - - - - 7,800,000 - - - - - - - - - - - 14,622,400 42,610,715 14,622,400 14,800,000 - 3,992,400 - (2,500,000) 9,622,500 - 5,000,000 - - - (40,110,715) - 28,000,000 - - 61,237,300 14,800,000 2,000,000 7,800,000 (1) ESOP options are exercisable at $0.30 until expiry date 28/11/2019 and subject to vending condition that the Company’s share price must exceed $0.50 based on VWAP over a 5 day consecutive period. (2) ESOP options are exercisable at $0.15 until expiry date 26/07/2021 and subject to vending condition that the total options granted shall be vested over 3 periods of 12 months per period. GOLD MOUNTAIN LIMITED ANNUAL REPORT 45 (d) Capital Management The Directors’ objectives when managing capital are to safeguard the Company’s ability to continue as a going concern, so that they may continue to provide returns for shareholders and benefits for other stakeholders. The Group’s overall strategy remains unchanged from the 2017 financial year. The focus of the Company’s capital risk management is the current working capital position against the requirements of the Company to meet exploration programs and corporate overheads. The Company’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating appropriate capital raisings as required. The Company’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets. There are no externally imposed capital requirements. Management effectively manages the Company’s capital by assessing the Company’s financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, budgeting and share issues. There have been no changes in the strategy adopted by management to control the capital of the Company since the prior year. NOTE 16: RESERVES Reserves Foreign currency translation reserve Share based payments reserve Movements in the Foreign Currency Translation Reserve At 1 July 2017 Foreign Currency Translation At 30 June 2018 Movements in options over ordinary shares on issue At 1 July 2017 Options issued during the year Options exercised/lapsed during the period At 30 June 2018 NOTE 17: SHARE BASED PAYMENTS (a) Share-based payments Options issued during the year Write-back arising from exercise of options Total allocated against Share Based Payment Reserve 2018 $ (1) 395,954 395,953 - (1) (1) - 395,954 - 395,954 2018 $ 395,954 - 395,954 2017 $ - - - - - - 23,250 - (23,250) - 2017 $ - (23,250) (23,250) GOLD MOUNTAIN LIMITED ANNUAL REPORT 46 (b) Unlisted options The following table details the number, weighted average exercise prices (WAEP) and movements in share options issued as capital raising purposes, employment incentives or as payments to third parties for services during the year. 2018 2018 2017 2017 Number WAEP Number WAEP Outstanding at the beginning of the year Unlisted options granted during the year Options lapsed during the year(1) Exercised during the year 72,033,115 56,414,900 $0.12 $0.15 500,000 79,240,258 - - (3,600,000) (42,610,715) $0.055 (4,107,143) Outstanding at the end of the year 85,837,300 $0.176 72,033,115 $0.07 $0.13 $0.30 $0.06 $0.12 (c) Options exercisable at reporting date 2018 Exercise 2017 Exercise Unlisted options expiring 18 January 2018 Unlisted options expiring 30 June 2019 Unlisted options expiring 28 November 2019(1) Unlisted options expiring 26 July 2021 Unlisted options expiring 26 July 2021(2) Exercisable at reporting date Number - 61,237,300 14,800,000 2,000,000 7,800,000 85,837,300 Price $0.055 $0.150 $0.300 $0.150 $0.150 Number Price 42,610,715 14,622,400 14,800,000 $0.055 $0.150 $0.300 - - 72,033,115 (1) ESOP options are exercisable at $0.30 until expiry date 28/11/2019 and subject to vending condition that the Company’s share price must exceed $0.50 based on VWAP over a 5 day consecutive period. (2) ESOP options are exercisable at $0.15 until expiry date 26/07/2021 and subject to vending condition that the total options granted shall be vested over 3 periods of 12 months per period. (d) Options issued during the year The maximum terms of options granted during the year are as follows: 3,992,400 unlisted options granted to participants who were entitled to one option for every two shares issued as part of a placement during August 2017. The remaining unexercised options expire on 30 June 2019 and are exercisable at $0.15 with no vesting conditions. 9,662,500 unlisted options granted to participants who were entitled to one option for every two shares issued as part of a placement during August 2017. The remaining unexercised options expire on 30 June 2019 and are exercisable at $0.15 with no vesting conditions. 5,000,000 unlisted options granted to an August 2017 Placement investor following approval by shareholders at the Annual General Meeting of the Company held on 28 November 2017. The options expire on 30 June 2019 and are exercisable at $0.15 with no vesting conditions. 2,000,000 unlisted options were granted to participating directors following approval by shareholders at the Annual General Meeting of the Company held on 28 November 2017. The options expire on 26 July 2021 and are exercisable at $0.15 with no vesting conditions. 7,800,000 unlisted options granted on 29 December 2017 pursuant to the Company’s Employee Share Option Plan have an exercise price of $0.15 and are subject to vending condition that the total options granted shall be vested over 3 periods of 12 months per period. The options must be exercised on or before the expiry date in cash. GOLD MOUNTAIN LIMITED ANNUAL REPORT 47 (e) Fair value of unlisted options The following table lists the fair value of options granted during the year ended 30 June 2018 and the total number of unexercised at 30 June 2018. The inputs to the Black-Scholes model used to determine each valuation are stated after taking into account the terms and conditions upon which the options were granted. The unlisted options were issued in separate tranches during the year on 10 August 2017, 6 October 2017, 28 November 2017, 29 December 2017 and 21 January 2018. Unlisted ESOP options expiring 28 November 2019 (Code: GMNAB) Fair value at grant date (29 August 2016) Share price at grant date Exercise price Expected volatility Expected life Expected dividends Risk-free interest rate Number of options issued Valuation Unlisted options Nil $0.170 $0.300 10% 39 months Nil 2.67% 14,800,000 Nil The total value of these options was $Nil at the date they were granted. GMNAC ESOP options are exercisable at $0.30 until expiry date 28/11/2019 and subject to the vending condition that the Company’s share price must exceed $0.50 based on VWAP over a 5-day consecutive period. Unlisted options expiring 30 June 2019 (issued 10 August 2017, 6 October 2017, 28 November 2017 and 21 January 2018) (Code: GMNAC) Fair value at Placement Offer date (3 May 2017) Share price at Placement Offer date Exercise price Expected volatility Expected life Expected dividends Risk-free interest rate Number of options issued FY 2017 Number of options issued FY 2018 Total number of options issued Valuation $0.01 per option $0.090 $0.150 10% 24 months Nil 2.60% 14,622,400 46,614,900 61,237,700 $612,373 The total value of these options was $612,373 at the date they were granted. Unlisted options expiring 26 July 2021 (Code: GMNAD) Fair value at grant date (26 September 2017) $0.0036 per option Share price at grant date Exercise price Expected volatility Expected life Expected dividends Risk-free interest rate Number of options issued Valuation $0.090 $0.150 68% 3.8 years Nil 2.75% 2,000,000 $71,048 The total value of these options was $71,048 at the date they were granted. GMNAD options are exercisable at $0.15 until expiry date 26/07/2021 and subject to vending condition that the total options granted shall be vested over 3 periods of 12 months per period. GOLD MOUNTAIN LIMITED ANNUAL REPORT 48 Unlisted ESOP options expiring 26 July 2021(2) (Code: GMNAE) Fair value at grant date (26 September 2017) Share price at grant date Exercise price Expected volatility Expected life Expected dividends Risk-free interest rate Number of options issued Valuation Nil $0.09 $0.150 10% 46 months Nil 2.75% 7,800,000 Nil The total value of these options was $Nil at the date they were granted. GMNAE ESOP options are exercisable at $0.15 until expiry date 26/07/2021 and subject to vending condition that the total options granted shall be vested over 3 periods of 12 months per period. NOTE 18: RELATED PARTY DISCLOSURES Related Parties a. The Company’s main related parties are as follows: i. Key management personnel: Any person(s) having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, including any director (whether executive or otherwise), are considered key management personnel. The directors in office during the year were as follows: Graham Kavanagh Sin Pyng “Tony” Teng Douglas Smith Appointed 5 June 2014 Appointed 9 July 2014 Appointed 29 December 2016 For details of disclosures relating to key management personnel, refer to Key Management Personnel disclosures Directors and Remuneration Report. b. Transactions with related parties: Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. The following transactions occurred with related parties: i. Other related parties: Purchase of goods and services: Corporate advisory fees paid to Drumcliff Investment Pty Ltd as Directors Fees, an entity associated with Mr Graham Kavanagh. Corporate advisory fees paid to Rodby Holdings Pty Ltd as Directors Fees and Consulting Fees, an entity associated with Mr Sin Pyng “Tony” Teng. Corporate advisory fees paid to Dougnic Pty Ltd and Dougie Downunder as Directors and Consulting Fees, entities associated with Mr Doug Smith. Corporate advisory fees paid to Mineral X Pty Ltd as Directors Fees and Consulting Fees, an entity associated with Mr Matthew Morgan. 2018 $ 2017 $ 36,000 36,000 108,000 108,000 232,000 176,000 - 99,000 GOLD MOUNTAIN LIMITED ANNUAL REPORT 49 c. Amounts payable to related parties: Trade and other payables: Amounts payable to Directors and related entities, as follows: Directors fees Superannuation Reimbursement of expenses Corporate advisory services Total trade and other payable related party amounts NOTE 19: KEY MANAGEMENT PERSONNEL COMPENSATION Short-term employee benefits Post-employment benefits Share based payments Non Executive Directors Fees Balance at the end of year NOTE 20: LOSS PER SHARE 2018 $ 2017 $ 32,100 23,018 - - - 32,100 32,100 2018 $ 460,000 2,280 71,048 60,000 593,328 9,300 570 4,348 8,800 23,018 2017 $ 478,500 1,710 - 60,000 540,210 2018 $ 2017 $ (0.32) (0.35) Basic Loss per share Basic Loss (cents per share) a. i ii. iii. b. Net loss used to calculate basic loss per share (1,484,473) (1,279,915) Weighted average number of ordinary shares outstanding during the year used in calculating basic loss per share 467,801,944 370,116,937 Diluted loss per share The Company’s potential ordinary shares, being its options granted, are not considered dilutive as the conversion of these options would result in a decrease in the net loss per share. Not applicable Not applicable No. No. GOLD MOUNTAIN LIMITED ANNUAL REPORT 50 NOTE 21: FINANCIAL RISK MANAGEMENT The Company’s financial instruments consist mainly of deposits with banks, local money market instruments, short-term investments, accounts receivable and payable, loans to and from related parties, bills and leases. The following table details the expected maturities for the Company’s non-derivative financial assets. These have been drawn up based on undiscounted contractual maturities of the financial assets including interest that will be earned on those assets except where the Company anticipates that the cash flow will occur in a different period. Financial Risk Management Policies The Board has overall responsibility for the establishment and oversight of the risk management framework. The Board reviews and agrees policies for managing each of these risks as summarised below. The Audit and Risk Committee (ARC) has been delegated responsibility by the Board of Directors for, among other issues, monitoring and managing financial risk exposures of the Company. The ARC monitors the Company’s financial risk management policies and exposures and approves financial transactions within the scope of its authority. It also reviews the effectiveness of internal controls relating to commodity price risk, counterparty credit risk, currency risk, financing risk and interest rate risk. The ARC’s overall risk management strategy seeks to assist the Company in meeting its financial targets, while minimising potential adverse effects on financial performance. Its functions include the review of the use of hedging derivative instruments, credit risk policies and future cash flow requirements. Specific Financial Risk Exposures and Management The main risks the Company is exposed to through its financial instruments are credit risk, liquidity risk and market risk consisting of interest rate risk. This note presents the information about the Company’s exposure to each of the above risks, their objectives, policies and processes for measuring and managing risk, and the management of capital. a. Credit risk Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract obligations that could lead to a financial loss to the Company. Credit risk is managed through the maintenance of procedures (such procedures include the utilisation of systems for the approval, granting and renewal of credit limits, regular monitoring of exposures against such limits and monitoring of the financial stability of significant customers and counterparties), ensuring to the extent possible, that customers and counterparties to transactions are of sound credit worthiness. Such monitoring is used in assessing receivables for impairment. Depending on the division within the Company, credit terms are generally 14 to 30 days from the invoice date. Risk is also minimised through investing surplus funds in financial institutions that maintain a high credit rating, or in entities that the FRMC has otherwise cleared as being financially sound. Where the Company is unable to ascertain a satisfactory credit risk profile in relation to a customer or counterparty, the risk may be further managed through title retention clauses over goods or obtaining security by way of personal or commercial guarantees over assets of sufficient value which can be claimed against in the event of any default. Credit risk exposures The maximum exposure to credit risk by class of recognised financial assets at the end of the reporting period excluding the value of any collateral or other security held, is equivalent to the carrying value and classification of those financial assets (net of any provisions) as presented in the statement of financial position. The Company has no significant concentrations of credit risk with any single counterparty or company of counterparties. Details with respect to credit risk of trade and other receivables are provided in Note 7. Trade and other receivables that are neither past due nor impaired are considered to be of high credit quality. GOLD MOUNTAIN LIMITED ANNUAL REPORT 51 b. Liquidity risk Liquidity risk arises from the possibility that the Company might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Company manages this risk through the following mechanisms: preparing forward-looking cash flow analysis in relation to its operational, investing and financing activities; using derivatives that are only traded in highly liquid markets; monitoring undrawn credit facilities; obtaining funding from a variety of sources; maintaining a reputable credit profile; managing credit risk related to financial assets; only investing surplus cash with major financial institutions; and comparing the maturity profile of financial liabilities with the realisation profile of financial assets. Cash flows realised from financial assets reflect management’s expectation as to the timing of realisation. Actual timing may therefore differ from that disclosed. The timing of cash flows presented in the table to settle financial liabilities reflects the earliest contractual settlement dates and does not reflect management’s expectations that banking facilities will be rolled forward. c. Market risk Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or value of the holdings of financial instruments. The Company is exposed to movements in market interest rates on short term deposit. The policy is to monitor the interest rate yield curve out to 120 days to ensure a balance is maintained between the liquidity of cash assets and the interest rate return. The Company does not have short or long term debt, and therefore this risk is minimal. The Company limits its exposure to credit risk by only investing in liquid securities and only with counterparties that have acceptable credit ratings. d. Interest rate risk Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting period whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments. The Company is also exposed to earnings volatility on floating rate instruments. The Company is exposed to interest rate risk as the Company deposits the bulk of its cash reserves in Term Deposits. The risk is managed by the Company by maintaining an appropriate mix between short term and medium-term deposits. The Company’s exposures to interest rate on financial assets and financial liabilities are detailed in the liquidity risk management section of this note. Interest rate sensitivity At 30 June 2018, the effect on loss and equity as a result of changes in the interest rate, with all other variable remaining constant would be as follows: Increase in interest rate by 1% Decrease in interest rate by 1% Interest rate risk is not material to the Company. 2018 $ 2017 $ 29,851 26,933 (29,851) (26,933) GOLD MOUNTAIN LIMITED ANNUAL REPORT 52 The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting policies to these financial statements, are as follows: Not e 6 7 12 Financial Assets Cash and cash equivalents Trade and other receivables Other financial assets 2018 2017 Floating Interest Rate Non- interest bearing Fixed Interest Rate Total 2018 Floating Interest Rate Non- interest bearing Fixed Interest Rate Total 2017 2,985,066 - - 2,985,066 2,693,337 - - 2,693,337 - - 82,239 55,545 - - 82,239 55,545 - - 115,438 75,545 - - 115,438 75,545 Total financial assets 2,985,066 137,784 - 3,122,850 2,693,337 190,983 - 2,884,320 Financial liabilities at amortised cost: Financial Liabilities - Trade and other payables 13 - Other financial liabilities 14 Total financial liabilities - - - 238,545 - 238,545 - - - 238,545 - 238,545 - - - 126,025 - 126,025 - - - 126,025 - 126,025 Net Financial Assets 2,985,066 (100,761) - 2,884,305 2,693,337 64,958 - 2,758,295 NOTE 22: AUDITOR'S REMUNERATION Remuneration of the auditor of the Company for: Auditing or reviewing the financial statements NOTE 23: COMMITMENTS AND CONTINGENCIES Remuneration Commitments 2018 $ 34,585 34,585 2017 $ 30,900 30,900 There are no remuneration commitments apart from ongoing director and management fees incurred on a monthly basis. Guarantees Gold Mountain Limited did not commit to nor make guarantees of any form as at 30 June 2018. Contingent liabilities There are no contingent liabilities as at 30 June 2018. GOLD MOUNTAIN LIMITED ANNUAL REPORT 53 Exploration licence expenditure requirements The Company holds six (6) exploration licences covering an area of about 1,600 sq km in the Enga province, Papua New Guinea (collectively termed the Wabag Project) and is required to incur $600,000 minimum expenditure per year on the development and maintenance on these licences. The Company has also made applications for additional three (3) exploration licences in the areas surrounding the existing tenements. Pending Warden Hearing, approval granting of these new exploration licenses will incur additional expenditure commitments of $350,000 spread over two (2) years. It is likely that the granting of new licences and changes in licence areas at renewal or expiry, will change the expenditure commitment to the Company from time to time. It is likely that the granting of new licences and changes in licence areas at renewal or expiry, will change the expenditure commitment to the Company from time to time. NOTE 24: DIVIDENDS The Directors of the Company have not declared any dividends for the year ended 30 June 2017. NOTE 25: EVENTS SUBSEQUENT TO REPORTING DATE On 3 July 2018, the Company announced a helicopter-assisted drill program initiated for the large Mongae (or Mongai) Creek Porphyry Au-Cu System in EL2306. Abundant coarse gold is present in creeks within the Mongae Creek system and gold has been panned from gossanous rocks. Copper mineralisation is located in outcrops. Reconnaissance mapping and sampling in adjoining drainage systems is planned to determine the extent of the mineralisation. On 12 and 13 July 2018, the Company announced the progress of its mineral exploration programs on the Crown Ridge prospect in Enga Province, Papua New Guinea. The Company has completed a diamond drilling program of 19 drill-holes totalling 3761.8m, drilled between 14 October 2017 and 10 June 2018. The drilling targeted shallow conglomerate-hosted free gold-platinum mineralisation (Target 1) and high-grade gold mineralisation hosted by structurally controlled quartz-pyrite veins (Target 2). The Target 1 drill-holes were undertaken in conjunction with bulk sampling pits and aimed to define a Mineral Resource for the shallow conglomerate material. The Company will release the laboratory analysis and test results of the drill cores and the bulk pit samples as and when they become available. Assay results for the samples from the remaining 26 pits have been received and logged into the LIMS system by ALS in Perth. The results are expected in mid to late August 2018. However, the assays will require compilation and assessment against geological data before final results can be released. This is not expected until at least December 2018. On 24 July 2018, the Company announced the arrival of a custom-built mobile bulk sampling plant at Crown Ridge and is undergoing commissioning. A helicopter-portable drill rig has also arrived on site at the Mongae Creek Au-Cu prospect with diamond drilling starts this week. Assays are underway on Mongae Creek rock samples. An Excavator continues costeaning at Crown Ridge, exploring for hard-rock source of large gold nuggets and coarse free gold found in shallow sampling programmes to date. Regional heli-borne geophysical survey is planned to search for Porgera-style gold systems. Metallurgical investigations on black sand pan concentrates will be und ertaken to identify hosts of vanadium, titanium and chrome. On 7 August 2018, the Company announced the maiden diamond drill hole at Mongai Creek confirmed diagnostic characteristics of a porphyry copper-gold system. Also noted that visible copper and molybdenite mineralisation was observed in drill cones. On 14 August 2018, the Company announced the finalisation of assembly and commissioning of large capacity mobile plant for processing of coarse-gold and platinum bulk samples, and recovery heavy black sands to test titanium, vanadium and chrome concentrations. The plant would improve processing time of infill and extensional pitting samples that form the basis of the Mineral Resource estimation that is in progress. On 28 August 2018, the Company announced the results for 35 rock chip samples from outcrop and float that confirmed the potential for economic grades of copper and gold mineralisation at Mongai Creek. This is supported by a petrographic report on test of samples from Mongai Creek which confirmed the expected diagnostics of porphyry copper-gold mineralisation, It is complimented with a maiden hydrothermal alterations, porphyritic texture, and primary mineralogical compositions. diamond drill-hole MCD001 completed at 521m down-hole below the mineralised outcrop with logging data providing a first view at the 3D geological framework of the system. There has not been any other matter or circumstance that has arisen after balance date that has significantly affected, or may significantly affect, the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial periods. GOLD MOUNTAIN LIMITED ANNUAL REPORT 54 NOTE 26: CONTROLLED ENTITIES Controlled Entities Consolidated Country of Incorporation Percentage Owned (%) Subsidiaries of Gold Mountain Limited: Viva No. 20 Limited GMN 6768 (PNG) Limited Viva Gold (PNG) Limited Abundance Valley (PNG) Limited Papua New Guinea Papua New Guinea Papua New Guinea Papua New Guinea 70% 100% 100% 100% Unless otherwise stated, the subsidiary listed above has share capital consisting solely of ordinary shares, which are held directly by the group, and the proportion of ownership interests held equals to the voting rights held by the group. The country of incorporation or registration is also their principal place of business. NOTE 27: CASH FLOW INFORMATION Reconciliation of Net Cash (used in) provided by operating activities with Loss after Income Tax Loss Non-cash flows in profit: Impairments expense Options expense Exploration expense Depreciation expense Changes in assets and liabilities (Increase)/decrease in trade and other receivables Increase/(decrease) in trade payables and other payables 2018 $ 2017 $ (1,484,473) (1,279,915) - 395,954 171,068 56,164 43,200 112,520 2 - 428,442 11,049 (79,622) (5,401) Net Cash (used in) provided by operating activities (705,567) (925,445) GOLD MOUNTAIN LIMITED ANNUAL REPORT 55 D音RECTORS’DECLARA丁ION ln the opinion ofthe Di「ecto「s of Gold Mountain Limited (the Company): 1.　　The financiai statements and notes thereto, aS Set Out On PageS 26 to 55 are in acco「dance with the Corporations Act 2001incIuding: a・ givi=g a t「ue and fai「 view ofthe Company’s financiaI position as at 30 June 2018 and of its performance fo「the yearthen ended; and b. complying with Accounting Standards and Corpo「ations Reguiations 2001; and 2.　there are reasonabie g「ounds to beIieve that the Company wili be abIe to pay its debts as and when they become due andpayabie. 3.　The血anciai statements and notes thereto a「e in accordance with lnte「national Financial Reporting Sta=da「ds issued by the lnte「nationaI Accounting Standards Boa「d. This decIa「ation has been made a償e「 「eceiving the declarations 「equired to be made to the Di「ectors in acco「dance with Section 295A ofthe Co「po「ations Act 2001 for the financiai yea「 ended 30 June 2018. This decIa「ation is signed in accordance with a 「esoiution of the Board of Di「ecto「s. 畿竹ん、 Non-Executive Chairman Dat。d this;汗も。f S。。t。mb。. 201 8 私の㊨壁缶チ曹}恵篭の㊧篭り餞〆⑧篭釣　宅チ曾野禽亀董㊦篭め呼〆愈筒釣篤♂徳 GOLD MOUNTAIN 」IMITED ANNUAL REPORT　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　56 Independent Auditors Report GOLD MOUNTAIN LIMITED ANNUAL REPORT 57 ADDITIONAL SHAREHOLDER INFORMATION GOLD MOUNTAIN LIMITED ANNUAL REPORT 62 ADDITIONAL SHAREHOLDER INFORMATION AS AT 12 SEPTEMBER 2018 A. Corporate Governance A statement disclosing the extent to which the Company has followed the best practice recommendations set by the ASX Corporate Governance Council during the period is contained within the Directors’ Report. B. Shareholding 1. Substantial Shareholders Shareholders 1 2 HSBC Custody Nominees (Australia) Limited Citicorp Nominees Pty Limited Substantial Holding % of Issued Capital 30,368,070 25,911,974 5.895% 5.030% 2. Number of holders in each class of equity securities and the voting rights attached (as at 12 September 2018) Ordinary Shares In accordance with the Company’s Constitution, on a show of hands every number present in person or by proxy or attorney or duly authorised representative has one vote. On a poll every member present in person or by proxy or attorney or duly authorised representative has one vote for every fully paid ordinary share held. Options There were four (4) classes of options and ninety (90) holder of options at 12 September 2018. Option Code Holders Units GMNAB GMNAC GMNAD GMNAE Total on Register 9 73 2 6 90 14,800,000 61,237,300 2,000,000 7,800,000 85,837,300 3. Distribution schedule of the number of holders in each class of equity security as at close of business on 12 September 2018. Ordinary Shares Spread of Holdings Holders 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001+ Total on Register 25 29 152 304 323 833 Units 3,813 112,872 1,399,850 13,557,476 % of Issued Capital 0.001% 0.022% 0.272% 2.632% 500,068,669 97.074% 515,142,680 100% GOLD MOUNTAIN LIMITED ANNUAL REPORT 63 4. Marketable Parcel There are 63 non-marketable parcels at 12 September 2018, representing 165,506 shares. 5. Twenty largest holders of each class of quoted equity security The names of the twenty largest holders of each class of quoted security, the number of equity security each holds and the percentage of capital each holds (as at 12 September 2018) is as follows: Ordinary Shares Top 20 holders and percentage held Shareholder Holding % of Issued Capital HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 30,850,912 CITICORP NOMINEES PTY LIMITED MR GHINAN MOHAMED SANI MS IRENE TENG PAY CHUAN LIM SYED HIZAM ALSAGOFF MS SIOW KWEE HENG 26,434,074 24,016,667 21,423,311 20,000,000 12,250,000 12,000,000 ASLAN EQUITIES PTY LTD 11,684,588 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 KO CHU HONG ISMAIL HARITH MERICAN G H A DEVELOPMENT PTY LTD MINPAX RESOURCES LIMITED MISS YOKE LAN GAN MR SUWEI CHEN MS QIN ZHANG RASHIDAH MOHD SANI SIEW HONG KOH DR PETER ASLAN MS NYOK CHIN WONG JUDITH CHRISTINE LING TOP 20 TOTAL Other shareholders TOTAL ISSUED CAPITAL 5.99% 5.13% 4.66% 4.16% 3.88% 2.38% 2.33% 2.27% 1.99% 1.81% 1.76% 1.75% 1.56% 1.44% 1.44% 1.43% 1.30% 1.00% 0.89% 0.87% 10,250,000 9,350,000 9,070,562 9,000,000 8,050,000 7,410,000 7,406,334 7,350,000 6,700,000 5,177,341 4,590,000 4,500,000 247,513,789 48.05% 267,628,891 51.95% 515,142,680 100% GOLD MOUNTAIN LIMITED ANNUAL REPORT 64 6. Company Secretary The name of the Company Secretary is Eric Kam. Address and telephone details of the Company’s registered administrative office and principal place of business: Suite 2501, Level 25 31 Market Street SYDNEY NSW 2000 Australia Telephone: +61 2 9283 3880 info@goldmountainltd.com.au www.goldmountainltd.com.au Address and telephone details of the office at which a registry of securities is kept: Boardroom Pty Limited Grosvenor Place, Level 12, 225 George Street, SYDNEY NSW 2000 GPO Box 3993, SYDNEY NSW 2001 Telephone: 1300 737 760 (In Australia) +61 2 9290 9600 (International) Facsimile: 1300 653 459 Stock exchange on which the Company’s securities are quoted: The Company’s listed equity securities are quoted on the Australian Securities Exchange – code GMN. Restricted Securities There are restricted ordinary shares 22,000,000 ordinary shares escrowed to 29 November 2018 Options Code Number Strike Expiry Restriction GMNAB 14,800,000 $0.30 28 November 2019 ESOP Vesting VWAP $0.50 GMNAC 61,237,300 $0.15 30 June 2019 GMNAD 2,000,000 $0.15 26 July 2021 GMNAE 7,800,000 $0.15 26 July 2021 Vesting over 3 periods of 12 months per period ESOP Vesting over 3 periods of 12 months per period Review of Operations A review of operations is contained in the Directors’ Report on page 14 of this Annual Report. Schedule of Tenements The Company’s Schedule of Tenements is on page 24 of this Annual Report. GOLD MOUNTAIN LIMITED ANNUAL REPORT 65 Front Cover Pictogram Front Cover Picture 1. 2. Stratigraphy in Crown Ridge Pit 006 Alluvial gold flakes recovered from EL2306 3. Geologists investigating alteration in diamond core sample from MCD002 4. 5. 6. Excavator digging Pit 200 at Crown Ridge Trench digging at Crown Ridge Coarse platinum nuggets recovered at Crown Ridge 7. Drill crew working at Mongai Creek 8. Chalcocite, chalcopyrite and pyrite mineralization in quartz vein recovered from Laialam Area 9. Gold in quartz recovered from stream at Crown Ridge, specimen was nicknamed ‘The Golden Kangaroo’ GOLD MOUNTAIN LIMITED ANNUAL REPORT 66 Annual Report 2018 Gold Mountain Limited

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