PREDICTIVE DISCOVERY LIMITED
(FORMERLY KNOWN AS PREDICTIVE DISCOVERY PTY LTD)
ACN 127 171 877
AND CONTROLLED ENTITIES
ANNUAL REPORT
FOR THE FINANCIAL YEAR ENDED
30 JUNE 2010
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
TABLE OF CONTENTS
Contents
Directors’ Report
Auditor’s Independence Declaration
Directors’ Declaration
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Independent Audit Report
Schedule of Tenements
Corporate Directory
Page
2
10
11
12
13
14
15
16
33
35
36
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This report contains “forward-looking statements” which are subject to various risks and uncertainties that
could cause actual results and future events to differ materially from those expressed or implied by such
statements. Investors are cautioned that such statements are not guarantees of future performance and results.
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
DIRECTORS’ REPORT
Your Directors present their annual financial report on Predictive Discovery Limited and its controlled entities for
the year ended 30 June 2010. In order to comply with the provisions of the Corporations Act 2001, the Directors
report as follows:
Directors
The names of Directors of the Company in office at any time during or since the end of the period are:
Director
Phillip Harman
Paul Roberts
Thomas Whiting
Robert Danchin
Philip Henty
Position held
Non-executive Chairman
Managing Director
Non-executive Director
Non-executive Director
Non-executive Director
Company Secretary
The following persons held the position of Company Secretary at the end of the financial period, except for:
Lisa Norden (resigned 30 July 2010)
Melvyn J Drummond (appointed 30 July 2010)
Principal Activities
The principal activity of the Consolidated Entity during the period was mineral exploration with the objective of
identifying and developing economic reserves in West Africa and Australia.
Operating Result
The net loss of the Consolidated Entity for the financial period was ($182,605) (2009: loss $54,617).
Dividends Paid or Recommended
No amounts have been paid or declared as dividends during the course of the financial period just concluded.
Review of Operations
In the year to June 2010, Predictive Discovery Limited (PD) established itself as a viable mineral exploration
Company. A total of $1.6 million was raised through a series of placements to private investors, and rights to
significant tenement holdings were acquired in Burkina Faso, West Africa, Victoria and the Northern Territory in
Australia. Areas were selected utilising the Company’s unique geological skills, targeting areas which are
amenable to the application of PD’s technology for target generation.
In Burkina Faso, an office was established and local geological and administrative staff were employed. The
completion of a farm-in agreement with ElDore Mining Corporation Ltd gave the Company access to exploration
permits in the Samira Hill greenstone belt in north eastern Burkina Faso. The tenements cover 795 square
kilometres and contain numerous untested gold anomalies and artisanal workings. During the year, exploration
was carried out over two of the known prospects, Fouli and Watamtonga, culminating with RAB drilling of 6,102
metres. The program gave more than 30 intersections 1 g/t Au or better, including two intersections of 15m at 2.3
g/t Au and 6m at 4.9 g/t Au. An anomalous gold zone 1.7km long was outlined for further follow-up in late 2010.
When combined with PD’s own tenement applications totalling 480 square kilometres and other acquisition
opportunities in the pipeline, these tenements will form a package ideally suited to the application of PD’s defining
technology.
In Australia, PD concluded a farm-in agreement with Lagoon Creek Resources Pty Ltd over part of the Murphy
Inlier uranium province in the Northern Territory, known as the Benmara project. The Company utilised its unique
technology to identify specific targets under cover in similar settings to the Westmoreland uranium deposits in
Queensland further to the east. These targets will be drill tested, once heritage surveys are completed and the dry
season allows access for heavy vehicles.
2
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
DIRECTORS’ REPORT
Review of Operations (cont’d)
The Company is exploring the Skipton area in Victoria for analogues of the Stawell gold deposit. Analysis of
regional aeromagnetic and gravity data identified a target beneath a younger cover of sediments and basalt. A
ground gravity survey was completed and a setting similar to that at Stawell has been tentatively identified.
Further ground geophysics is planned prior to utilising PD’s technology to determine the optimum target location
for drilling.
During the year, the Company’s technical team continued with project generation, focussing principally on Burkina
Faso in West Africa and in particular, on additional areas in the Samira Greenstone belt in north eastern Burkina
Faso.
Financial Position
The loss after tax of the Consolidated Entity for the financial year was ($182,605) (2009: loss $54,617).
The loss for the period was mainly attributable to exploration expenditure and administration costs required to
operate the Consolidated Entity in the normal course of business.
The net assets of the Consolidated Entity as at 30 June 2010 was $1,681,597 (2009: $264,202). The Directors
believe the Consolidated Entity is in a strong financial position to undertake its outlined exploration activities.
Significant Changes in the State of Affairs
The following significant changes in the state of the affairs of the Consolidated Entity occurred during the financial
period:
-
The Company raised $1.6 million in capital raisings to undertake exploration activities in West Africa and
Australia.
After Balance Date Events
In June 2010, Predictive Discovery’s Board of Directors approved plans for the Company to seek a listing on the
Australian Stock Exchange (ASX) during this calendar year. Independent experts and consultants were engaged
in preparing Predictive Discovery Limited for an initial public offering, targeting a capital raising between $6 to $8
million.
On 12 July 2010, at a general meeting of shareholders of Predictive Discovery Limited passed an ordinary
resolution that the ordinary shares in the capital of the Company be converted into a smaller number of shares on
a 2:1 basis. A consolidation of the Company’s shares will facilitate the proposed listing of the Company’s entire
issued share capital on ASX. All of the Company’s shares were consolidated in the same proportion, and the
proportional interest of each shareholder in the Company did not change as a result of the consolidation.
On 12 July 2010, a further ordinary resolution was passed that the Company change its legal status to a public
company limited by shares, in order to enable it to expand its shareholder base and to provide the Company with
flexibility in its capital raising options and is in anticipation of listing on the ASX.
On 20 August 2010, the Board proposed to issue 1,700,000 options to the Managing Director, 2,700,000 to Non-
executive Directors and 700,000 to other employees under the Employee Option Plan, subject to shareholders
approving the issue of options at an Annual General Meeting. The purpose of the options issue is to assist in
further aligning the interests of employees with those of shareholders and will also serve as a retention
mechanism. If the optionholder is still employed by the Company at the time the options are exercised, the
exercise price for the options will be 25 cents per share. If the optionholder is not employed by the Company at
the time of exercise, the exercise price for the options will be the higher of 25 cents or the 5 day volumne weighted
average price (VWAP) of the Company’s shares on the ASX once listed prior to exercise. The exercise period of
proposed options is between 24 and 60 months post grant date, and carry no rights to dividends and no voting
rights. The total estimated value of proposed options is $222,352, which will vest immediately, subject to
shareholders approval.
On 27 August 2010, the Company was converted to a public company limited by shares, the Company’s name
changed to “Predictive Discovery Limited”.
3
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
DIRECTORS’ REPORT
After Balance Date Events (cont’d)
On 10 September 2010, the Company was raising up to $1 million in capital, at the date of this report it had raised
$900,000, which represents 9 million shares at 10 cents per share.
Business Strategies
The Consolidated Entity is committed to the corporate objective of:
-
“The discovery and development of major new economic ore deposits principally, but not exclusively, for
commodities of gold and/or uranium.”
It seeks to meet this objective by:
- Seeking an appropriate risk reward profile in its exploration portfolio, where the exploration effort in
expenditure and personnel, is weighted towards areas, which in the opinion of the Board, offer the best
chance of a major discovery through the application of the Company’s unique skills and technology.
-
The Company is committed to applying for and holding exploration tenements in its own right.
However, in areas where ground is held by other companies and in the technical opinion of Predictive
Discovery Limited, the potential for discovery is high, the Board has chosen to enter into joint ventures
on the basis that at all times it tries to obtain a significant majority shareholding in any resulting mining
project.
- Should the results of exploration, in the opinion of the Board downgrade the potential of an area, the
Board may seek to farm-out the properties to another company for cash and or an expenditure
commitment while attempting to maintain a reasonable if diminished share of the project.
Future Developments
The Consolidated Entity intends to continue to explore and, should a viable discovery be made, would then move
that project towards the development phase – subject to completing full feasibility studies, financing and
development studies.
Disclosure of information regarding likely developments in the operations of the Consolidated Entity in future
financial years and the expected results of those operations is likely to result in unreasonable prejudice to the
Consolidated Entity. Accordingly, this information has not been disclosed in this report.
Environmental Issues
The Consolidated Entity’s exploration activities are subject to various environmental regulations under both state
and federal legislation in Australia and West Africa. The ongoing operation of these tenements is subject to
compliance with the respective mining and environmental regulations and legislation.
Licence requirements relating to ground disturbance, rehabilitation and waste disposal exist for all tenements held.
The Directors are not aware of any significant breaches of mining and environmental regulations and legislation
during the period covered by this report.
Meetings of Directors
The number of meetings of the Company's Board of Directors held during the period ended 30 June 2010, and the
number attended by Directors were:
Director
Phillip Harman
Paul Roberts
Thomas Whiting
Robert Danchin
Philip Henty
Number of meetings
held
4
4
4
4
4
Number eligible to
attend
4
4
4
4
4
Number of meetings
attended
4
4
4
3
4
4
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
DIRECTORS’ REPORT
Remuneration Report
(a) Names and Positions Held of Key Management Personnel in Office at any time during the
Financial Period were:
Phillip Harman
Paul Roberts
Thomas Whiting
Robert Danchin
Philip Henty
Lisa Norden
–
–
–
–
–
–
Non-executive Chairman
Managing Director
Non-executive Director
Non-executive Director
Non-executive Director
Company Secretary
(b) Directors’ and Executives’ Compensation
It is the policy of the Company that, except in special circumstances, non-executive directors normally be
remunerated by way of fixed fees, should not receive a bonus or options and should not be provided with
retirement benefits other than statutory superannuation.
The Board, within the limit pre-approved by shareholders, determines fees payable to individual non-executive
directors. The remuneration level of any executive director or other senior executive is determined by the Board
after taking into consideration levels that apply to similar positions in comparable companies in Australia and
taking account of the individual’s possible participation in any equity-based remuneration scheme. The Board may
use industry-wide data gathered by independent remuneration experts annually as its point of reference. Options
or shares issued to any Director pursuant to any equity-based remuneration scheme require approval by
shareholders prior to their issue. Options or shares granted to senior executives who are not directors are issued
by resolution of the Board.
It is the policy of the Company that persons to whom options have been issued should not enter into any
transaction in any associated product which is designed to limit the economic risk of participating in unvested
entitlements under an equity-based remuneration scheme.
There are no schemes for retirement benefits, other than the payment of the statutory superannuation contribution
for non-executive and executive Directors.
All executives receive a base salary (which is based on factors such as qualifications, expertise, experience etc.),
superannuation and fringe benefits and are eligible for the grant of options under the Employee Option Plan.
The Board policy is to remunerate non-executive directors at market rates for comparable companies for the time,
commitment and responsibilities.
The fees payable to individual non-executive directors must be determined by the Board within the aggregate sum
of $500,000 per annum provided for under clause 21.1 of the constitution. That aggregate sum can only be
increased with the prior approval of the shareholders of the Company at a general meeting. A non-executive
director is entitled to a refund of approved expenditure and may also receive payments for consultancy work
contracted for and performed separately on the Company’s behalf.
(c) Remuneration of Directors and Senior Management
2010
Short term employee benefits
Non-monetary
Salary & Fees
Post-employment benefits
Total
Superannuation
Other
$
$
$
$
$
Director
Phillip Harman
Paul Roberts
Thomas Whiting
Robert Danchin
Philip Henty
Executive
Lisa Norden
-
70,461
-
-
-
14,595
85,056
-
9,189
-
-
-
-
9,189
-
-
-
-
-
-
-
-
79,650
-
-
-
14,595
94,245
-
-
-
-
-
-
-
5
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
DIRECTORS’ REPORT
Remuneration Report (cont’d)
(c) Remuneration of Directors and Senior Management (cont’d)
2009
Short term employee benefits
Non-monetary
Salary & Fees
Post-employment benefits
Superannuation
Other
Total
$
$
$
$
$
Director
Phillip Harman
Paul Roberts
Thomas Whiting
Robert Danchin
Philip Henty
Executive
Lisa Norden
-
58,226
-
-
-
3,713
61,939
-
-
-
-
-
-
-
-
5,240
-
-
-
-
5,240
-
-
-
-
-
-
-
-
63,466
-
-
-
3,713
67,179
All key management personnel compensation is paid by Predictive Discovery Limited. No Director or key
management personnel appointed during the period received a payment as part of consideration for agreeing
to hold the position.
(d) Compensation Options: Granted and Vested during the Year
There were no options issued to Directors or executives during the financial year, or in the previous financial
year.
(e) Details concerning Remuneration of Directors and Executives
The Company’s policy for determining the nature and amount of emoluments of Board members and senior
executives of the Company is as follows:
The remuneration structure for executive officers, including executive Directors, is based on a number of
factors, including length of service, particular experience of the individual concerned, and overall performance
of the Company. The contracts for service between the Company, Directors and executives are on a
continuing basis the terms of which are not expected to change in the immediate future.
(f) Loans to Key Management Personnel
There were no loans to key management personnel at anytime during the current or prior financial year.
(g) Number of Shares held by Key Management Personnel
2010
Balance
1/07/09
Received as
compensation
Net change other
Balance
30/06/10
Directors
Phillip Harman
Paul Roberts
Thomas Whiting
Robert Danchin
Philip Henty
Executives
Lisa Norden
2,875,000
5,875,000
1,875,000
-
7,500,000
1,875,000
20,000,000
-
-
-
-
-
-
-
500,000
500,000
-
-
3,125,000
-
4,125,000
3,375,000
6,375,000
1,875,000
-
10,625,000
1,875,000
24,125,000
6
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
DIRECTORS’ REPORT
Remuneration Report (cont’d)
(g) Number of Shares held by Key Management Personnel (cont’d)
2009
Balance
1/07/08
Received as
compensation
Net change other
Balance
30/06/09
Directors
Phillip Harman
Paul Roberts
Thomas Whiting
Robert Danchin
Philip Henty
Executives
Lisa Norden
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,875,000
5,875,000
1,875,000
-
7,500,000
2,875,000
5,875,000
1,875,000
-
7,500,000
1,875,000
20,000,000
1,875,000
20,000,000
Information on Directors and Executives
The qualifications, experience and special responsibilities of each person who has been a Director of Predictive
Discovery Limited at any time during or since the end of the financial year are provided below, together with details
of the Company Secretary as at year end.
Chairman
Phillip Harman
BSc (Hons) MAusIMM
Appointed 12 February 2008
Director
Paul Roberts
BSc MSc FAIG
Appointed 28 April 2009
Director
Thomas Whiting
BSc (Hons) PhD FINSIA
Appointed 1 July 2008
Mr Harman is a professional geophysicist who spent more 30 years working for
BHP Billiton in minerals exploration in a broad number of roles both technical
and managerial, both in Australia and overseas. Mr Harman was material in
bringing BHP Billiton’s proprietary FALCON® airborne gravity gradiometer
technology to Gravity Capital Limited in 2001 which was the precursor to Gravity
Diamonds Limited.
Shareholding:
3,375,000
long and successful history
in mineral exploration
Mr Roberts has a
management and mine geology both in Australia and overseas. He was
responsible for discovery of the Henty gold deposit and major extensions to the
St Dizier tin deposit both in Tasmania, as well as resource evaluations of the
Kuridala copper-gold deposit in North Queensland, the Bongara zinc deposit in
Peru and a number of gold deposits in the Cue and Meekatharra districts in
Western Australia. In addition, he led the pmd*CRC’s research effort from 2002
to 2007, and therefore has a deep understanding of the practical application of
PD technology to mineral exploration. From June 2007 to January 2008, Mr
Roberts was responsible for all of CSIRO’s mineral exploration-related research
under the umbrella of the Minerals Down Under National Research Flagship, a
program with an annual budget in excess of A$20 million. Consequently, he
possesses a strong understanding of current trends in exploration innovation
which he combines with extensive industry experience.
Shareholding:
6,375,000
Dr Whiting is currently a consultant, having retired from BHP Billiton in 2008,
after a distinguished career covering 30 years. He is a widely respected
explorer with profound insights on the need for innovation in the mineral
exploration sector. Dr Whiting was Vice President of Minerals Exploration for
BHP Billiton from 2000 to 2004. Earlier in his career, he led the use of
innovative reconnaissance airborne geophysical techniques which led to the
discovery of the Cannington lead-zinc-silver mine in North Queensland and the
development and deployment of the FALCON® system, the world’s first airborne
gravity gradiometer.
Shareholding:
1,875,000
7
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
DIRECTORS’ REPORT
Information on Directors and Executives (cont’d)
Director
Robert Danchin
BSc (Hons) MSc PhD
Appointed 11 April 2008
Director
Philip Henty
BA Acc Dip Sec Ins
Appointed 16 July 2009
Company Secretary
Lisa Norden
CPA CSA Dip GAICD
Appointed 7 March 2008
Resigned 30 July 2010
Company Secretary
Melvyn J Drummond
BA BCom FCIS FInstCM
Appointed 30 July 2010
Dr Danchin has over 40 years experience in the exploration industry. He was
Chief Executive Officer of Anglo American PLC’s Exploration and Acquisition
Division and the Anglo American Group’s Deputy Technical Director (Geology).
From 1997 to 2002, he was an executive director of Anglo American Corporation
of South Africa Limited. In 1980, he joined Stockdale Prospecting Limited, (an
Australian subsidiary of De Beers) as Chief Geologist based in Australia. He
remained with that company for 15 years, eventually becoming Exploration
Manager heading up its Australian-based diamond exploration programme.
Shareholding:
nil
Mr Henty has extensive experience in the Australian securities markets. He has
worked for nearly 30 years in stockbroking and investments markets. His
experience covers the equities, derivatives and fixed interest markets and most
aspects of
to
management, capital raising, investment management and private investment.
from dealing and advice
the securities
industry
through
Shareholding:
10,625,000
Mrs Norden has 25 years of financial experience in industry and not-for-profit
organisations. Lisa has spent the last 10 years working with research
consortiums.
Shareholding:
1,875,000
Mr Drummond worked and resided in four countries prior to permanently
relocating to Australia in 1985. He has held senior finance and administrative
positions (including directorships) in both private and public companies in
various business sectors, including the mining sector, in Australasia and the
West Indies between 1976 and since coming to Melbourne. Mr Drummond has
been responsible for the establishment and management of resources-linked
companies in the DRC, Senegal and Mauritius and was closely involved in
listings on the ASX and AIM, also the TSX, in recent years.
Shareholding:
nil
Indemnifying Officers
The Company has paid premiums to insure each of the Directors, Company Secretary and executive officers
against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their
conduct while acting in the capacity of director/officer of the Company, other than conduct involving a wilful breach
of duty in relation to the Company. The terms and conditions of the insurance are confidential and cannot be
disclosed.
Proceedings on Behalf of the Company
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for
all or any part of these proceedings.
Non Audit Services
No non-audit services were provided by the Company’s auditors, Nexia ASR, during the financial period ended 30
June 2010. Nexia ASR Pty Ltd has been appointed as tax agent and advisors after the year-end, but no costs
have been incurred as at 30 June 2010.
8
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
DIRECTORS’ REPORT
Auditor’s Independence Declaration
The lead auditor’s Independence Declaration for the year ended 30 June 2010 has been received and can be
found on page 10 of the Directors’ Report.
This Directors’ Report is signed in accordance with a resolution of Directors’ made pursuant to s.298(2) of the
Corporations Act 2001 and dated this 13th day of September, 2010.
On behalf of the Directors
Phillip Harman
Chairman
Melbourne
9
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
DIRECTORS’ DECLARATION
The Directors of the Company declare that:
1. The financial statements and notes are in accordance with the Corporations Act 2001, including:
a)
complying with International Financial Reporting Standards and the Corporations Act 2001 as stated in
note 1 to the financial statements; and
b) giving a true and fair view of the financial position as at 30 June 2010 and of the performance for the
financial period ended on that date of the Company.
c)
in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay
its debts as and when they become due and payable.
d) The Directors have been given the declarations required by s.295A of the Corporations Act 2001.
2. The Managing Director and Chief Financial Officer have declared that:
a)
the financial records of the Company for the financial period have been properly maintained in
accordance with section 286 of the Corporations Act 2001;
b)
the financial statements and notes for the financial period comply with the Accounting Standards; and
c)
the financial statements and notes for the financial period give a true and fair view.
This declaration is made in accordance with a resolution of the Directors made pursuant to s.295 (5) of the
Corporations Act 2001 and dated this 13th day of September, 2010.
On behalf of the Directors
Phillip Harman
Chairman
Melbourne
11
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED TO 30 JUNE 2010
Revenue
Other income
Administration expenses
Exploration expenditure written off
Loss before tax
Income tax expense
Loss for the year
Note
Year to
30 Jun 2010
Year to
30 Jun 2009
$
$
2
2
3
9
5
10,205
-
(174,993)
(17,817)
(182,605)
-
3,068
169,126
(226,811)
-
(54,617)
-
(182,605)
(54,617)
Other comprehensive income
-
-
Total comprehensive income for the year
(182,605)
(54,617)
Notes to the financial statements are included on pages 16 to 32.
12
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2010
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current assets
Property, plant and equipment
Exploration expenditure
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Total liabilities
Net assets
Equity
Shareholders funds
Accumulated losses
Total equity
Note
Year to
30 June 2010
$
Year to
30 June 2009
$
6
7
8
9
10
11
12
1,174,944
23,814
1,198,758
7,593
598,939
606,532
262,397
22,200
284,597
-
-
-
1,805,290
284,597
110,869
12,824
123,693
123,693
20,395
-
20,395
20,395
1,681,597
264,202
1,915,000
(233,403)
1,681,597
315,000
(50,798)
264,202
Notes to the financial statements are included on pages 16 to 32.
13
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2010
Note
Shareholder
funds
Accumulated
losses
Total equity
Balance at 1 July 2008
Loss for the year
Total comprehensive income for the year
Shareholder funds
Balance at 30 June 2009
Balance at 1 July 2009
Loss for the year
Total comprehensive income for the year
Shareholder funds
12
12
$
$
$
-
-
-
315,000
3,819
(54,617)
(54,617)
-
3,819
(54,617)
(54,617)
315,000
315,000
(50,798)
264,202
315,000
-
-
1,600,000
(50,798)
(182,605)
(182,605)
-
264,202
(182,605)
(182,605)
1,600,000
Balance at 30 June 2010
1,915,000
(233,403)
1,681,597
Notes to the financial statements are included on pages 16 to 32.
14
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2010
Cash flows from operating activities
Receipts from customers
GST receipts from taxation authorities
Payments to suppliers and employees
Note
Year to
30 Jun 2010
$
Year to
30 Jun 2009
$
-
69,527
(144,411)
169,126
3,716
(236,131)
Net cash (used in) operating activities
18
(74,884)
(63,289)
Cash flows from investing activities
Interest received or receivable
Payments for exploration expenditure
Payment for property, plant and equipment
Net cash (used in)/provided by investing activities
Cash flows from financing activities
10,205
(611,899)
(7,593)
(609,287)
3,068
-
-
3,068
Proceeds from shareholder funds
1,600,000
315,000
Net cash provided by financing activities
1,600,000
315,000
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of financial year
Effects of exchange rate changes on the balance of cash
held in foreign currencies
Cash and cash equivalents at the end of the financial
year
6
915,829
262,397
(3,282)
254,779
7,618
-
1,174,944
262,397
Notes to the financial statements are included on pages 16 to 32.
15
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General information
Predictive Discovery Limited (the Company) is a company incorporated in Australia, operating in Australia,
Burkina Faso and West Africa and comprises the Company and its subsidiaries (together referred to as the
Group).
Statement of compliance
These financial statements are general purpose financial statements which have been prepared in
accordance with the Corporations Act 2001, Accounting Standards and Interpretations, and complies with
other requirements of the law.
The financial report comprise the consolidated financial statements of the Group.
Accounting Standards include Australian equivalents to International Financial Reporting Standards (“A-
IFRS”). Compliance with A-IFRS ensures that the financial statements and notes of the Group comply with
International Financial Reporting Standards (“IFRS”).
Basis of preparation
The financial report has been prepared on the basis of historical cost, except for the revaluation of certain
non-current assets. Cost is based on the fair value of the consideration given in exchange for assets. All
amounts are presented in Australian dollars, unless otherwise noted.
Critical accounting judgements and key sources of estimation uncertainty
In the application of the Groups accounting policies, management is required to make judgments, estimates
and assumptions about carrying values of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical experience and other factors
that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that period
or in the period of the revision and future periods if the revision affects both current and future periods.
The critical accounting judgement areas primarily relate to the carrying values in respect of exploration costs.
Refer note 1(g) for details.
Accounting policies are selected and applied in a manner which ensures that the resulting financial
information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the
underlying transactions or other events is reported.
Adoption of new and revised Accounting Standards
In the current year, the Group has adopted all of the new and revised Standards and Interpretations issued by
the Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for the
current annual reporting period.
The following is a summary of the material accounting policies adopted by the Group in the preparation of the
financial report. The accounting policies have been consistently applied, unless otherwise stated.
(a)
Income Tax
Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the
taxable profit or tax loss for the period. It is calculated using tax rates and tax laws that have been enacted or
substantively enacted by reporting date. Current tax for current and prior periods is recognised as a liability
(or asset) to the extent that it is unpaid (or refundable).
Deferred tax is accounted for using the comprehensive balance sheet liability method in respect of temporary
differences arising from differences between the carrying amount of assets and liabilities in the financial
statements and the corresponding tax base of those items.
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets
are recognised to the extent that it is probable that sufficient taxable amounts will be available against which
deductible temporary differences or used tax losses and tax offsets can be utilised.
16
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(b) Revenue
Revenue is measured at the fair value of the consideration received or receivable. Interest revenue is
accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial asset to the asset’s net carrying amount.
All revenue is stated net of the amount of goods and services tax (“GST”).
(c) Cash and Cash Equivalents
Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid
investments that are readily convertible to known amounts of cash and which are subject to an insignificant
risk of changes in value.
(d) Receivables
Trade receivables are recognised and carried at original invoice amount less a provision for any uncollectible
debts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad
debts are written off as incurred.
(e)
Impairment of Assets
At each reporting date, the Group reviews the carrying amounts of its tangible and intangible assets to
determine whether there is any indication that those assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the
impairment loss (if any). Where the asset does not generate cash flows that are independent from other
assets, the Group estimates the recoverable amount of the cash generating unit to which the asset belongs.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for
impairment annually and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use,
the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset for which
the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An
impairment loss is recognised in the statement of comprehensive income immediately, unless the relevant
asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is
increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying
amount does not exceed the carrying amount that would have been determined had no impairment loss been
recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised
in the statement of comprehensive income immediately, unless the relevant asset is carried at fair value, in
which case the reversal of the impairment loss is treated as a revaluation increase.
(f) Property, Plant and Equipment
Plant and equipment are stated at cost less depreciation and impairment losses. The cost of fixed assets
constructed within the Group includes the cost of materials and direct labour where appropriate.
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
Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to
the statement of comprehensive income during the financial period in which they are incurred.
17
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(f) Property, Plant and Equipment (cont’d)
The asset’s residual values, depreciation method and useful lives are reviewed and adjusted, if appropriate,
at each balance date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its 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 comprehensive
income.
The following estimated useful lives are used in the calculation of depreciation:
Class of Fixed Asset
Camp under construction
Depreciation Period
7 to 20 years
(g) Exploration, Evaluation and Development Expenditure
Costs carried forward
Costs arising from exploration and evaluation activities are carried forward provided such costs are expected
to be recouped through successful development, or by sale, or where exploration and evaluation activities
have not, at reporting date, reached a stage to allow a reasonable assessment regarding the existence of
economically recoverable reserves.
Costs carried forward in respect of an area of interest that is abandoned are written off in the period in which
the decision to abandon is made.
Contributions received from third parties in exchange for participating interests in exploration and evaluation
tenements (e.g. as part of farm-out arrangements) are netted off against the costs carried forward in respect
of those tenements in which the third party acquires a participating interest.
(h) Foreign Currency Transactions and Balances
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at
the date of transaction. At the end of each reporting period, monetary items denominated in foreign
currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that
are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value
was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are
not retranslated. Exchange differences are recognised in the statement of comprehensive income in the
period in which they arise.
(i) Payables
Liabilities for trade payables and other amounts are carried at cost, which is the fair value of the consideration
to be paid in the future for goods and services received, whether or not billed to the Group.
(j) Employee Benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and
long service leave when it is probable that settlement will be required and they are capable of being
measured reliably.
Liabilities recognised in respect of employee benefits expected to be settled within 12 months, are measured
at their nominal values using the remuneration rate expected to apply at the time of settlement.
Liabilities recognised in respect of employee benefits which are not expected to be settled within 12 months
are measured as the present value of the estimated future cash outflows to be made by the Group in respect
of services provided by employees up to reporting date.
18
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(k) Goods and Services Tax (GST)
Revenues, expenses and assets (except receivables) are recognised net of the amount of GST, except
where the amount of GST incurred is not recoverable from the Australian Taxation Office. In these
circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the
expense. Receivables and payables in the balance sheet are shown inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables.
Cash flows are included in the consolidated statement of cash flows on a gross basis. The GST component
of cash flows arising from investing and financing activities which is recoverable from, or payable to, the
taxation authority is classified as operating cash flows.
(l) Adoption of New and Revised Accounting Standards
During the current year, the Group has adopted all of the new and revised Australian Accounting Standards
and Interpretations applicable to its operations which became mandatory.
The adoption of these Standards has impacted the recognition, measurement and disclosure of certain
transactions. The following is an explanation of the impact the adoption of these Standards and
Interpretations has had on the financial statements of Predictive Discovery Limited.
AASB 101: Presentation of Financial Statements
In September 2007, the Australian Accounting Standards Board revised AASB 101, and as a result there
have been changes to the presentation and disclosure of certain information within the financial statements.
Below is an overview of the key changes and the impact on the Group’s financial statements.
Disclosure impact
Terminology changes — The revised version of AASB 101 contains a number of terminology changes,
including the amendment of the names of the primary financial statements.
Reporting changes in equity — The revised AASB 101 requires all changes in equity arising from transactions
with owners in their capacity as owners to be presented separately from non-owner changes in equity.
Owner changes in equity are to be presented in the statement of changes in equity, with non-owner changes
in equity presented in the statement of comprehensive income. The previous version of AASB 101 required
that owner changes in equity and other comprehensive income be presented in the statement of changes in
equity.
Statement of comprehensive income — The revised AASB 101 requires all income and expenses to be
presented in either one statement — the statement of comprehensive income, or two statements — a
separate income statement and a statement of comprehensive income. The previous version of AASB 101
required only the presentation of a single income statement.
The Group’s financial statements now contain a statement of comprehensive income.
Other comprehensive income — The revised version of AASB 101 introduces the concept of ‘other
comprehensive income’ which comprises of income and expense that are not recognised in profit or loss as
required by other Australian Accounting Standards. Items of other comprehensive income are to be
disclosed in the statement of comprehensive income. Entities are required to disclose the income tax relating
to each component of other comprehensive income. The previous version of AASB 101 did not contain an
equivalent concept.
19
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(l) Adoption of New and Revised Accounting Standards (cont’d)
New Accounting Standards for Application in Future Periods
The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory
application dates for future reporting periods and which the Group has decided not to early adopt. A
discussion of those future requirements and their impact on the Group is as follows:
— AASB 9: Financial Instruments and AASB 2009–11: Amendments to Australian Accounting Standards
arising from AASB 9 [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 121, 127, 128, 131, 132, 136, 139,
1023 & 1038 and Interpretations 10 & 12] (applicable for annual reporting periods commencing on or
after 1 January 2013).
These Standards are applicable retrospectively and amend the classification and measurement of
financial assets. The Group has not yet determined any potential impact on the financial statements.
The changes made to accounting requirements include:
–
–
–
–
simplifying the classifications of financial assets into those carried at amortised cost and those
carried at fair value;
simplifying the requirements for embedded derivatives;
removing the tainting rules associated with held-to-maturity assets;
removing the requirements to separate and fair value embedded derivatives for financial assets
carried at amortised cost;
– allowing an irrevocable election on initial recognition to present gains and losses on investments in
equity instruments that are not held for trading in other comprehensive income. Dividends in
respect of these investments that are a return on investment can be recognised in the statement of
comprehensive income and there is no impairment or recycling on disposal of the instrument; and
–
requiring financial assets and to be reclassified where there is a change in an entity’s business
model as they are initially classified based on: (a) the objective of the entity’s business model for
managing the financial assets; and (b) the characteristics of the contractual cash flows.
— AASB 124: Related Party Disclosures (applicable for annual reporting periods commencing on or after 1
January 2011).
This Standard removes the requirement for government-related entities to disclose details of all
transactions with the government and other government-related entities and clarifies the definition of a
‘related party’ to remove inconsistencies and simplify the structure of the Standard. No changes are
expected to materially affect the Group.
— AASB 2009–4: Amendments to Australian Accounting Standards arising from the Annual Improvements
Project [AASB 2 and AASB 138 and AASB Interpretations 9 & 16] (applicable for annual reporting
periods commencing from 1 July 2009) and AASB 2009–5: Further Amendments to Australian
Accounting Standards arising from the Annual Improvements Project [AASB 5, 8, 101, 107, 117, 118,
136 & 139] (applicable for annual reporting periods commencing from 1 January 2010).
These Standards detail numerous non-urgent but necessary changes to Accounting Standards arising
from the IASB’s annual improvements project. No changes are expected to materially affect the Group.
— AASB 2009–8: Amendments to Australian Accounting Standards — Group Cash-settled Share-based
Payment Transactions [AASB 2] (applicable for annual reporting periods commencing on or after 1
January 2010).
This Standard clarifies the accounting for group cash-settled share-based payment transactions in the
separate or individual financial statements of the entity receiving the goods or services when the entity
has no obligation to settle the share-based payment transaction. The amendments incorporate the
requirements previously included in Interpretation 8 and Interpretation 11 and as a consequence, these
two Interpretations are superseded by the amendments. These amendments are not expected to impact
the Group.
20
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(l) Adoption of New and Revised Accounting Standards (cont’d)
— AASB 2009–9: Amendments to Australian Accounting Standards — Additional Exemptions for First-time
Adopters [AASB 1] (applicable for annual reporting periods commencing on or after 1 January 2010).
This Standard specifies requirements for entities using the full-cost method in place of retrospective
application of Australian Accounting Standards for oil and gas assets and exempt entities with existing
leasing contracts from reassessing the classification of those contracts in accordance with Interpretation
4, when the application of their previous accounting policies would have given the same outcome.
These amendments are not expected to impact the Group.
— AASB 2009–10: Amendments to Australian Accounting Standards — Classification of Rights Issues
[AASB 132] (applicable for annual reporting periods commencing on or after 1 February 2010).
This Standard clarifies that rights, options or warrants to acquire a fixed number of an entity’s own equity
instruments for a fixed amount in any currency are equity instruments if the entity offers the rights,
options or warrants pro rata to all existing owners of the same class of its own non-derivative equity
instruments. The amendments are not expected to impact the Group.
— AASB 2009–12: Amendments to Australian Accounting Standards [AASBs 5, 8, 108, 110, 112, 119, 133,
137, 139, 1023 & 1031 and Interpretations 2, 4, 16, 1039 & 1052] (applicable for annual reporting
periods commencing on or after 1 January 2011).
This Standard makes a number of editorial amendments to a range of Australian Accounting Standards
and Interpretations, including amendments to reflect changes made to the text of IFRSs by the IASB.
The Standard also amends AASB 8 to require entities to exercise judgment in assessing whether a
government and entities known to be under the control of that government are considered a single
customer for the purposes of certain operating segment disclosures. The amendments are not expected
to impact the Group.
— AASB 2009–13: Amendments to Australian Accounting Standards arising from Interpretation 19 [AASB
1] (applicable for annual reporting periods commencing on or after 1 July 2010).
This standard makes amendments to AASB 1 arising from the issue of Interpretation 19. The
amendments allow a first-time adopter to apply the transitional provisions in Interpretation 19. This
Standard is not expected to impact the Group.
— AASB 2009–14: Amendments to Australian Interpretation — Prepayments of a Minimum Funding
Requirement [AASB Interpretation 14] (applicable for annual reporting periods commencing on or after 1
January 2011).
This Standard amends Interpretation 14 to address unintended consequences that can arise from the
previous accounting requirements when an entity prepays future contributions into a defined benefit
pension plan.
— AASB Interpretation 19: Extinguishing Financial Liabilities with Equity Instruments (applicable for annual
reporting periods commencing from 1 July 2010).
This Interpretation deals with how a debtor would account for the extinguishment of a liability through the
issue of equity instruments. The Interpretation states that the issue of equity should be treated as the
consideration paid to extinguish the liability, and the equity instruments issued should be recognised at
their fair value unless fair value cannot be measured reliably, in which case they shall be measured at
the fair value of the liability extinguished. The Interpretation deals with situations where either partial or
full settlement of the liability has occurred. This Interpretation is not expected to impact the Group.
The Group does not anticipate early adoption of any of the above Australian Accounting Standards.
21
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
2. REVENUE
Operating activities
Interest received – bank deposits
Other revenue
Total revenue
3. LOSS FOR THE YEAR
Loss for the year includes the following significant items of
expenses:-
Exploration expenditure written off
Consultants
Net foreign exchange loss
Legal fees
Rental expense
Salaries and wages
Travel – local and overseas
4. SEGMENT INFORMATION
Year to
30 June 2010
$
Year to
30 June 2009
$
10,205
-
10,205
3,068
169,126
172,194
(17,817)
(6,000)
(3,282)
(18,732)
(38,788)
(21,424)
(30,524)
-
(77,475)
-
-
-
(58,227)
(41,691)
a) The following is an analysis of the Group’s revenue and results from operations by reportable segment.
2010
Corporate
Gold
Aust
Uranium
Aust
$
$
$
Gold
Burkina
Faso
$
Other
Aust
$
Other
West
Africa
$
Revenue
Interest income
Expenses
Administration
expenses
Exploration
expenditure written off
10,205
(136,205)
-
Loss before tax
(126,000)
-
-
-
-
-
-
-
-
-
(38,788)
(17,817)
(56,605)
-
-
-
-
Total
$
10,205
(174,993)
(17,817)
(182,605)
-
-
-
-
b) The Group operates in three principal geographical areas – Australia (country of domicile), Burkina Faso
and other West African countries.
Current assets
Exploration
expenditure
Other non-current
assets
Current liabilities
1,198,758
-
-
-
-
- 1,198,758
-
64,094
7,629
474,148
7,434
45,634
598,939
-
(65,238)
-
-
-
-
7,593
(58,455)
-
-
-
-
7,593
(123,693)
Net assets
1,133,520
64,094
7,629
423,286
7,434
45,634 1,681,597
22
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
4. SEGMENT INFORMATION (cont’d)
2009
There was no exploration expenditure in the previous financial year.
The Group operates in the mineral exploration sector where it is actively pursuing opportunities for a number of
mineral targets through various tenements all of which are currently at exploration stage and require further
funding to proceed to revenue generation stages. As such the Group is required to prioritise its funding allocation
and does so based on the assessment of the market sentiment and the potential of finding a viable mineral
resource. Each exploration licence may be identified as a separate business activity that has revenue earning
potential. However, licences of the same mineral exploration targets have been aggregated into the same
segment based on similar economic characteristic. Various corporate and investing activities have been allocated
to a corporate operating segment of the Group.
5.
INCOME TAX
(a)
Income Tax Recognised in the Statement of Comprehensive
Income
Tax expense/(income) comprises:
Current tax expense/(benefit)
Deferred tax expense relating to origination and reversal of temporary
differences
Total tax expense/(benefit)
The prima facie income tax expense on pre-tax accounting profit from
operations reconciles to the income tax expense in the financial
statements as follows:
Loss from operations
Income tax expense/(benefit) calculated at 30%
Non-deductible expenses
Unused tax losses and tax offsets not recognised as deferred tax
assets
Total tax expense/(benefit)
Year to
30 June 2010
$
Year to
30 June 2009
$
-
-
-
(182,605)
(54,782)
54,782
-
-
-
-
(54,617)
(16,385)
-
16,385
-
The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate
entities on taxable profits under Australian tax law. There has been no change in the corporate tax rate when
compared with the previous reporting period.
(b) Unrecognised Deferred Tax Balances
The following deferred tax assets have not been brought to account
as assets:
Tax losses – revenue
Tax losses – capital
Total tax benefit
237,962
-
237,962
-
-
-
23
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
Year to
30 June 2010
$
Year to
30 June 2009
$
6. CASH AND CASH EQUIVALENTS
Cash at bank
1,174,944
262,397
Reconciliation of cash
Cash at the end of the financial year as shown in the consolidated
statement of cash flows is reconciled to items in the consolidated
statement of financial position as follows:
Cash and cash equivalent
1,174,944
262,397
7. TRADE AND OTHER RECEIVABLES
Debtors
GST/VAT receivable
Other receivables
Other
-
10,566
10,951
2,297
23,814
22,200
-
-
-
22,200
Other receivables comprise advances to contractors. The average credit period on other receivables is 30
days. No interest is charged on outstanding amounts.
8. PROPERTY, PLANT AND EQUIPMENT
Camp under
construction
$
-
7,593
-
7,593
-
-
-
-
-
7,593
Gross carrying amount
Balance at 1 July 2009
Additions
Disposals
Balance at 30 June 2010
Accumulated depreciation
Balance at 1 July 2009
Depreciation expense
Disposals
Balance at 30 June 2010
Net book value
As at 30 June 2009
As at 30 June 2010
24
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
9.
EXPLORATION EXPENDITURE
Carrying Values
Balance at the beginning of the period
Expenditure incurred during the period
Expenditure written off during the period
Expenditure recoupment during the period
Exploration expenditure at the end of the period
Year to
30 June 2010
$
Year to
30 June 2009
$
-
616,756
(17,817)
-
598,939
-
-
-
-
-
Ultimate recovery of capitalised exploration expenditure is dependent upon success in exploration and
development, sale , and farm-in or farm-out of the exploration interests.
10. TRADE AND OTHER PAYABLES
Other creditors and accruals
110,869
20,395
The average credit period on purchases is 30 days. No interest is charged on trade payables.
11. PROVISIONS
Employee benefits – annual leave
12,824
-
Balance at 1 July 2009
Additional provisions recognised
Payments made
Balance at 30 June 2010
–
Aggregate employee benefits liability
– Number of employees at year-end
Annual leave
-
19,124
(6,300)
12,824
Year to
30 June 2010
$
Year to
30 June 2009
$
12,824
1
-
1
25
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
Year to
30 June 2010
$
Year to
30 June 2009
$
12. SHAREHOLDER FUNDS
Seed Investors
92,000,000 fully paid capital:-
a) October 2009, 25,000,000 fully paid at $0.02c = $500,000
b) March 2010, 27,500,000 fully paid at $0.04c = $1,100,000
(2009: 39,500,000 fully paid capital)
1,915,000
315,000
Seed investors participate in dividends and the proceeds on winding up of the Company in proportion to the
number of shares held.
At 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.
13. KEY MANAGEMENT PERSONNEL COMPENSATION
(a) Names and Positions Held of Key Management Personnel in Office at any time during the
Financial Period were:
Phillip Harman
Paul Roberts
Thomas Whiting
Robert Danchin
Philip Henty
Lisa Norden
–
–
–
–
–
–
Non-executive Chairman
Managing Director
Non-executive Director
Non-executive Director
Non-executive Director
Company Secretary
(b) Directors’ and Executives’ Compensation
The aggregate compensation made to key management personnel of the Group is set out below:
Short-term employees benefits
Post-employment benefits
Other long-term benefits
85,056
9,189
-
94,245
61,939
5,240
-
67,179
(c) Number of Options Held by Key Management Personnel
2010
No options were issued to Directors or executives during the financial year.
2009
No options were issued to Directors or executives during the prior financial year.
26
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
13. KEY MANAGEMENT PERSONNEL COMPENSATION (cont’d)
(d) Loans to Key Management Personnel
There were no loans to key management personnel at anytime during the current or prior financial year.
(e) Number of Shares Held by Key Management Personnel
2010
Balance
1/07/09
Received as
compensation
Net change other
Balance
30/06/10
Directors
Phillip Harman
Paul Roberts
Thomas Whiting
Robert Danchin
Philip Henty
Executives
Lisa Norden
2,875,000
5,875,000
1,875,000
-
7,500,000
1,875,000
20,000,000
2009
Balance
1/07/08
Received as
compensation
Directors
Phillip Harman
Paul Roberts
Thomas Whiting
Robert Danchin
Philip Henty
Executives
Lisa Norden
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
500,000
500,000
-
-
3,125,000
-
4,125,000
3,375,000
6,375,000
1,875,000
-
10,625,000
1,875,000
24,125,000
Net change other
Balance
30/06/09
2,875,000
5,875,000
1,875,000
-
7,500,000
2,875,000
5,875,000
1,875,000
-
7,500,000
1,875,000
20,000,000
1,875,000
20,000,000
Year to
30 June 2010
$
Year to
30 June 2009
$
14. REMUNERATION OF AUDITORS
Remuneration for audit or review of the financial reports of the
Company
Other services
18,000
-
18,000
15. COMMITMENTS FOR EXPENDITURE
Exploration Commitments
4,959,700
-
-
-
-
In order to maintain current rights of tenure to exploration tenements, the Group has minimum exploration
expenditure requirements up until the expiry of leases. These obligations, which are subject to renegotiation
upon expiry of leases, are not provided for in the financial statements and are payable:
Not later than one year
Later than one year and not longer than five years
1,373,300
3,586,400
-
-
27
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
15. COMMITMENTS FOR EXPENDITURE (cont’d)
Commitments for the Group’s exploration portfolio later than one year are dependent on the Board and
management’s assessment of the prospectivity of individual projects. This assessment will be based on
exploration results achieved in the next review period.
The current view of the Board is that the Group has sufficient funds to meet its immediate exploration
commitments. During the past year, the Company raised funds to enable it to maintain its current suite of
projects and keep them in good standing. Future funding needs are dependent on the results of the
proposed initial public offering (IPO) planned for the latter half of 2010. The IPO is targeting a capital raising
between $6 to $8 million. Based on current evidence there is no indication that this will not succeed, and the
Group’s financial requirements will be achieved in the foreseeable future.
16. RELATED PARTIES
Remuneration Benefits
Information on remuneration benefits of Directors and executives is disclosed in the Directors’ Report and
Note 13 to the Financial Statements.
Other Transactions with Directors, Executives and their Related Entities
There were no related party transactions with Directors or executives at anytime during the current or prior
financial year.
17. SUBSIDIARIES
Details of the Company’s subsidiary at 30 June 2010 is as follows:-
Country of incorporation
Percent owned (%)
2009
2010
Company:
Predictive Discovery Limited
Australia
-
Subsidiaries of Predictive Discovery Limited:
Predictive Discovery SARL
Burkina Faso
100%
-
-
On 3 August 2009, Predictive Discovery SARL was established in Burkina Faso for the purpose of mining
research and exploration activities.
Year to
30 June 2010
$
Year to
30 June 2009
$
18. CASH FLOW INFORMATION
Reconciliation of cash flow from operations with loss after income tax:
Loss for the year
(182,605)
(54,617)
Exploration expenditure written off
Net foreign exchange loss
Interest income received and receivable
Changes in working capital
(Increase)/decrease in receivables
Increase/(decrease) in payables
Increase/(decrease) in employee entitlements
17,817
3,282
(10,205)
4,524
79,479
12,824
-
-
(3,716)
(25,351)
20,395
-
Net cash from operating activities
(74,884)
(63,289)
28
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
19. FINANCIAL INSTRUMENTS
(a) Off-balance Sheet Derivative Instruments
The Group does not utilise any off-balance sheet derivative instruments.
(b) Commodity Contracts
As at 30 June 2010, the Group does not have in place any commodity contracts.
(c) Credit Risk Exposure
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial
loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties as a
means of mitigating the risk of financial loss from defaults. The Group’s exposure to credit risks are
continuously monitored and controlled by counterparty limits that are reviewed and approved by the
management on a regular basis.
The Group does not have any significant credit risk exposure to any single counterparty or any group of
counterparties having similar characteristics. The credit risk on liquid funds is limited as the counterparties
are banks with high credit ratings assigned by international credit rating agencies.
The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses,
represent the Group’s maximum exposure to credit risk.
(d) Categories of Financial Instruments
Financial assets:
Receivables
Cash and cash equivalents
Financial liabilities:
Other payables and accruals
(e) Capital Risk Management
Year to
30 June 2010
$
Year to
30 June 2009
$
23,814
1,174,944
22,200
262,397
110,869
20,395
The Group is not subject to any externally imposed capital requirements.
(f) Market Risk
The Group’s activities expose it primarily to the financial risks of changes in interest rates and foreign
currency exchange rates.
There has been no change to the Group’s exposure to market risks or the manner in which it manages and
measures the risk from the previous period.
(g)
Interest Rate Risk Management
The Group is exposed to interest rate risk on cash and cash equivalents.
The Group’s exposure to interest rates on financial assets are detailed in the liquidity risk management
section of this note.
(h)
Interest Rate Sensitivity Analysis
The Group’s sensitivity to interest rates has increased during the current period mainly due to an increase in
the level of cash and cash equivalents at balance date.
(i) Other Price Risks
The Group does not actively trade in equity investments.
29
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
19. FINANCIAL INSTRUMENTS (cont’d)
(j) Credit Risk Management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial
loss to the Group.
The Group does not have any significant credit risk exposure to any single counterparty or any group of
counterparties having similar characteristics. The credit risk on liquid funds is limited because the Group is
exploring for minerals rather than producing and the counterparties are banks with high credit ratings
assigned by international credit rating agencies.
(k) Liquidity Risk Management
Ultimate responsibility for liquidity risk management rests with the Board of Directors, who have built an
appropriate liquidity risk management framework for the management of the Group’s funding and liquidity
management requirements. The Group manages liquidity risk by maintaining sufficient cash balances.
(l) Liquidity and Interest Rate Risk Exposure
The following table details the Group’s remaining contractual maturity for its non-derivative financial assets
and liabilities. The tables have been drawn up based on the earliest date on which the Group can be
required to pay and receive.
Weighted
average
effective
interest
rate
%
Less than
1 month
1-3
months
3 months
to 1 year
1-5
years
5+
years
$
$
$
$
$
2010
Financial assets
Non-interest bearing
Financial liabilities
Non-interest bearing
2009
Financial assets
Non-interest bearing
Financial liabilities
Non-interest bearing
-
-
-
-
23,814
110,869
22,200
20,395
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
20. PARENT ENTITY DISCLOSURES
(a) Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued capital
Accumulated losses
Total equity
(b) Financial Performance
Loss for the year
Other comprehensive income
Total comprehensive income
Year to
30 June 2010
$
Year to
30 June 2009
$
1,136,080
669,210
1,805,290
284,597
-
284,597
123,693
-
123,693
20,395
-
20,395
1,915,000
(233,403)
1,681,597
315,000
(50,798)
264,202
(182,605)
-
(182,605)
(54,617)
-
(54,617)
(c) Guarantees Entered into by the Parent Entity in Relation to the Debts of its Subsidiaries
Guarantee provided under the deed of cross guarantee
-
-
As at 30 June 2010, the parent entity had not entered into a deed of cross guarantee, as the parent
entity is responsible for all debts.
(d) Commitments for the Acquisition of Property, Plant and Equipment by the Parent Entity
Plant and equipment
Not longer than 1 year
Longer than 1 year and not longer than 5 years
Longer than 5 years
-
-
-
-
-
-
-
-
21. EVENTS SUBSEQUENT TO REPORTING DATE
In June 2010, Predictive Discovery’s Board of Directors approved plans for the Company to seek a listing on the
Australian Stock Exchange (ASX) during this calendar year. Independent experts and consultants were engaged
in preparing Predictive Discovery Limited for an initial public offering, targeting a capital raising between $6 to $8
million.
On 12 July 2010, at a general meeting of shareholders of Predictive Discovery Limited passed an ordinary
resolution that the ordinary shares in the capital of the Company be converted into a smaller number of shares on
a 2:1 basis. A consolidation of the Company’s shares will facilitate the proposed listing of the Company’s entire
issued share capital on ASX. All of the Company’s shares were consolidated in the same proportion, and the
proportional interest of each shareholder in the Company did not change as a result of the consolidation.
On 12 July 2010, a further ordinary resolution was passed that the Company change its legal status to a public
company limited by shares, in order to enable it to expand its shareholder base and to provide the Company with
flexibility in its capital raising options and is in anticipation of listing on ASX.
31
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
21. EVENTS SUBSEQUENT TO REPORTING DATE (cont’d)
On 20 August 2010, the Board proposed to issue 1,700,000 options to the Managing Director, 2,700,000 to Non-
executive Directors and 700,000 to other employees under the Employee Option Plan, subject to shareholders
approving the issue of options at an Annual General Meeting. The purpose of the options issue is to assist in
further aligning the interests of employees with those of shareholders and will also serve as a retention
mechanism. If the optionholder is still employed by the Company at the time the options are exercised, the
exercise price for the options will be 25 cents per share. If the optionholder is not employed by the Company at
the time of exercise, the exercise price for the options will be the higher of 25 cents or the 5 day volumne weighted
average price (VWAP) of the Company’s shares on the ASX once listed prior to exercise. The exercise period of
proposed options is between 24 and 60 months post grant date, and carry no rights to dividends and no voting
rights. The total estimated value of proposed options is $222,352, which will vest immediately, subject to
shareholders approval.
On 27 August 2010, the Company was converted to a public company limited by shares, the Company’s name
changed to “Predictive Discovery Limited”.
On 10 September 2010, the Company was raising up to $1 million in capital, at the date of this report it had raised
$900,000, which represents 9 million shares at 10 cents per share.
32
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
SCHEDULE OF TENEMENTS
Number
Owner
Grant date
Next renewal
date
Location
Farm-in partner
(if applic)
Area (sq.
km)
352 (arrêté 2005-
060/MCE/SG/DGMGC)
arrêté 2007-
019/MCE/SG/DGMGC
351 (arrêté 2005-
059/MCE/SG/DGMGC)
353 (arrêté 2005-
061/MCE/SG/DGMGC)
Birrimian (BVI) Ltd
4/7/2005
4/7/2011
Burkina Faso
Birrimian (BVI) Ltd
19/2/2007
19/2/2013
Burkina Faso
Birrimian (BVI) Ltd
4/7/2005
4/7/2011
Burkina Faso
Birrimian (BVI) Ltd
4/7/2005
4/7/2011
Burkina Faso
ElDore Mining
Corporation Ltd.
ElDore Mining
Corporation Ltd
ElDore Mining
Corporation Ltd
ElDore Mining
Corporation Ltd
Name
Fouli
Tantiabongou
Sirba
Madyabari
Tyekanyebi
Tenement application
Tamfoagou
Tenement application
Predictive
Discovery SARL
Predictive
Discovery SARL
Not yet granted
Not yet granted
n/a
n/a
Burkina Faso
None
Burkina Faso
None
Tangagari
Aoura
arrêté 2009-
068/MCE/SG/DGMGC
Sebi, Bourougou
2/3/2009
2/3/2012
Burkina Faso
arrêté 2008-
023/MCE/SG/DGMGC
Nabaloum,
Patrice
21/1/2008
21/1/2011
Burkina Faso
Sebi, Bourougou and
SOMIKA
Nabaloum, Patrice and
SOMIKA
Skipton
EL 5172
Benmara north
EL24645
Benmara south
EL24666
Predictive
Discovery Limited
Lagoon Creek
Resources Pty Ltd
Lagoon Creek
Resources Pty Ltd
9/9/2009
9/9/2014
Victoria, Australia
None
16/3/2006
16/3/2012
Northern Territory,
Australia
Lagoon Creek
Resources Pty Ltd
16/3/2006
16/3/2012
Northern Territory,
Australia
Lagoon Creek
Resources Pty Ltd
35
248
126
189
232
242
238
128
25
462
445
470
PREDICTIVE DISCOVERY LIMITED
ACN 127 171 877
AND CONTROLLED ENTITIES
CORPORATE DIRECTORY
DIRECTORS
Phillip Harman (Non-executive Chairman)
Paul Roberts (Managing Director)
Thomas Whiting (Non-executive)
Robert Danchin (Non-executive)
Philip Henty (Non-executive)
SOLICITORS
Baker & McKenzie
Level 19, CBW
181 William Street
Melbourne VIC 3000
Australia
COMPANY SECRETARY
Melvyn J Drummond
REGISTERED OFFICE
Level 7, Exchange Tower
530 Little Collins Street
Melbourne VIC 3000
Australia
Telephone: (03) 9909-7990
Facsimile: (03) 9621-1460
E-Mail:
Website: www.predictivediscovery.com
mel.drummond@predictivediscovery.com
PERTH OFFICE
Suite 1, 11
South Perth Professional Office Suites
68 South Terrace
South Perth WA 6151
Australia
BURKINA FASO OFFICE
612 Street Zag-Bako
Secteur 13
Ouagadougou 01
Burkina Faso
TAX AGENTS AND ADVISERS
Nexia ASR Pty Ltd
Level 14
440 Collins Street
Melbourne VIC 3000
Australia
AUDITOR
Nexia ASR
Level 14
440 Collins Street
Melbourne VIC 3000
Australia
BANKERS
ANZ
280 Lygon Street
Carlton VIC 3053
Australia
Bicia du Burkina
Avenue Du Dr Kwame NKrumah
01 BP 8
Ouagadougou 01
Burkina Faso
36