CORPORATE DIRECTORY
DIRECTORS
Mr Phillip Harman BSc (Hons), MAusIMM, MAICD (Chairman)
Mr Paul Roberts BSc, MSc, FAIG, MGSA
Dr Thomas Whiting BSc (Hons)PhD, Grad Dip Fin, MASDEG, MAICD
Dr Robert Danchin BSc, BSc Hons, MSc, PhD, FAusIMM
Mr Philip Henty BA Acc, Dip SIA, F Fin
SECRETARY
Mr Ian Hobson BBus, FCA, ACIS
REGISTERED OFFICE
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PREDICTIVE DISCOVERY LIMITED
TABLE OF CONTENTS
CHAIRMAN’S REPORT
REVIEW OF OPERATIONS
DIRECTORS’ REPORT
CORPORATE GOVERNANCE STATEMENT
AUDITOR’S INDEPENDENCE DECLARATION
FINANCIAL STATEMENTS
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
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
ADDITIONAL SHAREHOLDER INFORMATION
INTERESTS IN MINING TENEMENTS
1
2 - 25
26 - 36
37 - 41
42
43
44
45
46
47 - 86
87
88 - 90
91 - 92
93
PREDICTIVE DISCOVERY LIMITED
CHAIRMAN’S REPORT
30 JUNE 2012
The past year has been an exciting one for Predictive Discovery Limited (“PDI”). It has seen our portfolio in
Burkina Faso demonstrate its true potential. Those of you who choose to read this annual operations report
in detail will understand just what remarkable progress has been made.
At Laterite Hill on the Bonsiega project, PDI has discovered a new gold-field under shallow cover. So far it is
around 20 kilometres long and contains a number of different prospects. The broad spaced drilling program
carried out during the year demonstrated clear potential for large tonnages of moderate grade gold
mineralisation at shallow depths. More importantly, a number of holes intersected significant widths of
higher grades which have the potential to upgrade the tenor of the overall gold-field.
Towards the end of the field season a hole drilled beneath old workings at a prospect known as Bongou
intersected 20m at 4.8g/t Au from 70m including 2m at 24g/t Au. Bongou previously returned only
modestly encouraging assays from surface sampling. The gold mineralisation is located on a strong
structural contact between felsic volcanics and gabbro that is visible in the high resolution aeromagnetic
map and clearly extends for several kilometres beneath younger cover, either side of the workings.
This is a high priority target and to my mind demonstrates the success of PDI’s approach based on pragmatic
exploration utilising the PredictoreTM technology to highlight favourable areas and structures. Further
detailed analysis should lead to a greater understanding of the structural controls on mineralisation
elsewhere in the Laterite Hill Gold-field.
At Bangaba, 60 kilometres north of the Laterite Hill area, our drilling confirmed the high grade tenor of the
Solna and Tambiri prospects with numerous additional high grade intersections such as 6m at 20g/t Au and
5.6m at 16g/t Au. We now have a greater understanding of the scale and distribution of gold mineralisation
and have demonstrated clear potential to establish an initial high grade resource during the next field season
and for further high grade discoveries along strike and at depth.
A recent analysis of the more advanced prospects in our portfolio has indicated the potential of PDI’s
discoveries. An exploration target1 has been estimated of between 750,000 and 1.2 million ounces at an
average grade of 1.9 to 2.3g/t Au in some of the areas drilled so far. The projects included are within a
reasonable trucking distance of one another and could form the basis of an overall regional mining centre.
Substantial upside exists in other projects such as Fouli, not included in this estimation.
Although this has been a successful year operationally, it has also been frustrating in that the news flow
about our excellent results was severely hampered by extremely slow performance by the analytical
laboratories. Most of the results were only available after the end of May when the news had virtually no
impact.
Considering the May-June timing, our recent rights issue was reasonably well supported nevertheless more
funding will be required if we are to capture the full value of our efforts. The board is working with our
major shareholders and other potential investors to remedy this situation.
In this more constrained environment field activities will continue at a more modest rate. PDI’s immediate
intention is to prioritise our main prospects and to carry out focussed drilling programs with the clear aim of
upgrading the status of the known gold mineralisation and our understanding of its potential to turn into
mines.
I would like to thank Paul and his team in Australia and Burkina Faso for their dedication over the past year.
I would also like to thank our major shareholders for their understanding and support.
Phillip Harman
CHAIRMAN
1 This targeted tonnage and grade is conceptual in nature and there has been insufficient exploration to define a Mineral Resource under the
JORC Code and it is uncertain if further exploration will result in the determination of a Mineral Resource.
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PREDICTIVE DISCOVERY LIMITED
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30 JUNE 2012
HIGHLIGHTS
Predictive Discovery Limited (PDI) carried out a very large exploration program in 2011-12 which
delivered many, highly encouraging drill results and has enabled a focus on a number of high grade
prospects in Eastern Burkina Faso for 2012-2013.
Significant achievements included:
Establishment of an Exploration Target2 based on drilled areas in the Laterite Hill Gold Field and
Bangaba Permit totalling:
o 750,000 to 1.2 million ounces at an average grade of 1.9 to 2.3g/t Au3
Completion of a second large scale exploration program in Burkina Faso involving 28,000m of
reverse circulation (RC), 3,000m of diamond drilling and 35,000m of geochemical drilling (power
auger and air core), 4,300 line km of airborne magnetics and approximately 300 km2 of geological
mapping.
RC drilling obtained widespread and strongly encouraging gold intercepts from nine separate
mineralised Prospects in Burkina Faso, including:
o Solna Prospect:
6m at 20g/t Au from 40m including 1m at 111g/t Au
2m at 20g/t Au from 70m
5.6m at 16g/t Au from 205.4m including 1m at 81g/t Au
4m at 8.0g/t Au from 194m including 1m at 29g/t Au
o Tambiri Prospect:
3m at 18g/t Au from 58m including 1m at 51g/t Au
9.3m at 4.9g/t Au including 2.3m at 17g/t Au
28.4m at 1.7g/t Au including 1m at 16g/t Au and 1m at 17g/t Au
13.3m at 3.6g/t Au including 1.2m at 22g/t Au
o Dave Prospect:
26m at 5.0g/t Au from 26m including 2m at 31g/t Au
6m at 10 g/t Au from 74m
28m at 1.6g/t Au from 30m
38m at 1.3 g/t Au from 0m
24m at 1.9g/t Au from 4m
o Bongou Prospect (new discovery):
20m at 4.8g/t Au from 70m including 2m at 24g/t Au
o Tamboana Zone (new discovery):
5m at 5.1g/t Au from 36m including 1m at 22g/t Au
2 This targeted tonnage and grade is conceptual in nature and there has been insufficient exploration to define a Mineral Resource
under the JORC Code and it is uncertain if further exploration will result in the determination of a Mineral Resource.
3 The assumptions used in making this calculation are detailed in the Section below entitled “Eastern Burkina Faso - Exploration
Target”.
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o Koundi Zone (new discovery):
4m at 5.7g/t Au from 76m (stopped in mineralisation)
o Laterite Hill Shear Zone (includes Laterite Hill artisanal mine site):
26m at 1.2g/t Au from 71m including 14m at 1.8g/t Au
22m at 1.4g/t Au from 48m
o Prospect 71 (2 separate zones – new discovery):
4m at 7.1g/t Au from 20m
32m at 1.7g/t Au from 26m including 24m at 2.1g/t Au
o Prospect 71 West:
18m at 1.0g/t Au from 54m including 6m at 2.3g/t Au (stopped in mineralisation)
Extension of strong power auger anomalies to more than 33km in aggregate strike length including
20km on the Laterite Hill Gold Field, 8km on the Bangaba permit and more than 5km on the Aoura
and Tangagari permits.
Acquisition of one additional property in Burkina Faso extending the coverage of greenstone strike
length in the Bonsiega permit group from 90km to 100km.
Agreement signed for acquisition of an exploration permit in Cote D’Ivoire (subject to grant).
RC drilling, Bangaba permit, Burkina Faso
Cut drill core – sheared granodiorite and
quartz veins, Solna Prospect, Burkina Faso
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INTRODUCTION
PDI is exploring for large, high value gold
deposits in West Africa and Australia. The
focus
Company’s project
is on 11 gold
exploration permits
in Burkina Faso, West
Africa, covering a total area of 1,544 km2.
Within those areas, PDI has concentrated its
drilling programs in the east of the country on a
series of prospects all of which are located
within trucking distance of each other.
PDI’s
exploration
strategy begins with
identification of high priority regions within
well mineralised terrains using analyses of
country-scale geophysical, geological and
mineral deposit data. Ground-based work then
involves extensive geophysical surveys and
geological mapping, followed by geochemistry
and drilling. PDI’s PredictoreTM technology plays
a critical role in identifying high priority targets
at all scales - from country scale area selection
to drill target prioritisation.
BURKINA FASO GOLD PROJECTS
BACKGROUND
PDI’s Burkina Faso projects are all located
within the Birimian gold belts in West Africa.
These belts contain numerous gold ore deposits
(Figure 1), many of which are in production.
Burkina Faso is a landlocked country, bounded
to the south by Ghana, Cote D’Ivoire, Togo and
Benin, to the west by Mali and to the east by
Niger (Figure 1). Gold mining in the past was
confined
to artisanal mining and one
substantial mining operation at Poura in the
west of the country which closed in 1999. In
the past eight years, however, there has been a
strong resurgence in exploration and mine
development, stimulated especially by the
release of new mining regulations in 2003.
The Taparko, Mana, Kalsaka, Inata, Essakane
and Youga gold mines are now in production.
Of these, the largest known deposits are at
Mana and Essakane. In addition, exploration
results announced by Ampella Mining Limited
(Batie West), Gryphon Minerals Ltd (Banfora),
Volta Resources Inc. (Kiaka), Orezone Gold
Corporation (Bombore) and Orbis Gold Limited
(Nabanga) suggest that more gold mines will be
developed in future years.
Figure 1: Map of the Birimian Gold Belt showing major mines and PDI
project location areas
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In common with other West African countries,
the Government has the right to take a free
carried interest of 10% in any ore deposit that is
brought into production.
Gold mining royalties range from 3% to 5%
depending on the gold price. The rate of
corporate tax for mining companies is 20%.
In Burkina Faso, PDI holds rights to explore 11
granted exploration permits covering a total
area of 1,544 square kilometres (Figure 2). Of
these, all but one is located in the east of the
country.
The bulk of the tenement area is contained in
eight permits known as the Bonsiega permit
in the Samira Hill greenstone belt
group
(Figures 2 and 3).
A second important focus for the Company is
the Bangaba permit in the Sebba Belt nearby to
the north (Figures 2 and 3).
EASTERN BURKINA FASO PROJECT
Ten of PDI’s Burkina Faso permits are located in
the east of the country (Figure 2). The
Company’s objective there is to discover a large
resource/reserve inventory with an average
grade exceeding 2g/t Au capable of supporting
a major gold mining operation.
Highly encouraging gold results have been
obtained from drilling at Bangaba and on the
Bonsiega permit group. Based on the results so
far, PDI expects higher average grades in the
resource inventory from the Bangaba permit
and somewhat lower average grades but with
much larger tonnages on the Bonsiega permit
group. This lends itself to construction of a
central mill on one of the Bonsiega permits
blending high grade ore from Bangaba with
moderate grade ore
from Bonsiega and
maintaining a head grade above 2g/t Au.
Figure 3 provides a conceptual layout of haul
roads connecting the permit areas.
Figure 2: Location of PDI’s Burkina Faso permits in Eastern Burkina Faso. Note that the nearby operating
Samira Hill gold mine in Niger contains resources and reserves of 2.5 million ounces (source:
www.semafo.com)
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Figure 3: Concept haulage road plan for PDI’s Eastern Burkina Faso project. The proposed road from
Bangaba to Bonsiega crosses one significant river where a concrete causeway would have to be
constructed to cross a sandy river bed; the remaining route is flat.
BANGABA PERMIT
BACKGROUND
This permit in Eastern Burkina Faso (Figures 2
and 4) covers areas of extensive artisanal
mining. PDI is earning a 95% interest in the 128
km2 Bangaba exploration permit by making a
series of staged payments in cash and shares.
PDI’s equity now stands at 68%.
PDI estimates that artisanal miners have
produced several tonnes of gold at Bangaba
over the past 28 years. Artisanal workings are
located on two complex structures on the
north-west and south-east contacts of a
granodiorite-diorite body (Figure 4). A large
artisanal mining site is located at Solna with a
population of approximately 4,000 people.
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RC and diamond drilling programs at the two
major sites of artisanal mining, Solna and
Tambiri, have generated a series of high grade
intercepts, including: 6m at 20g/t Au, 2m at
56g/t Au, 5m at 17g/t Au, 7m at 13g/t Au and
5.6m at 16g/t Au. All PDI’s drill intercepts are in
primary mineralisation. There is no evidence of
supergene enrichment in the near surface so
the high gold grades may persist to considerable
depths.
In the 2011-12 year, PDI carried out a total of
8,186m of RC drilling, 2,055m of diamond
drilling, 10,488m of power auger drilling and
line km of aerial magnetic and
1,474
radiometric surveys at Bangaba.
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The RC and diamond drilling programs were
focused on two prospects, Tambiri and Solna.
The drilling was aimed at drilling between and
along strike from encouraging gold intercepts
obtained in the 2011 program and developing a
better geological understanding in both areas.
(Figure 4) was
The power auger drilling
designed
gold
to
mineralisation below shallow cover, mainly
along the diorite-granodiorite contacts where
Solna and Tambiri are located.
for more
explore
of
These programs have resulted in a much better
the
the
understanding
mineralisation at both prospects and a clearer
picture of discovery potential elsewhere on the
permit.
nature
of
Core cutting, Bangaba permit, Burkina Faso
Figure 4: Geological map of Bangaba permit showing drill locations and bedrock gold geochemistry results. The
fine grey lines indicate the locations of power auger drill holes.
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RC AND DIAMOND DRILLING RESULTS
TAMBIRI
PDI’s RC and diamond drilling at Tambiri has
revealed a steeply dipping gold deposit hosted
by mafic volcanics. The gold mineralisation is
located in a quartz vein system.
High grades (typically more than 20g/t Au) in
thin veins are associated with small quantities
of zinc and
lower grades
lead sulphides;
(typically 1 to 10g/t Au) are found in a broader
set of veins surrounding and extending beyond
the high grade sections.
Hole to hole continuity of the mineralised
quartz vein set is good. The mineralised system
is open to the north and south. Some shallow,
high grade gold mineralisation has been
removed by artisanal miners, however PDI
believes that the bulk of the quartz vein system
remains unmined, even at shallow depths.
A longitudinal projection of the mineralisation
(Figure 5) suggests that higher grades are
located in a shallow plunging shoot. Other such
shoots may occur either at depth or along
strike.
SOLNA
Gold mineralisation at Solna is hosted in quartz-
veined shear zones within a granodiorite host.
These
south-east at
to
zones dip
approximately 45 degrees.
the
PDI’s RC and diamond drilling has intersected a
series of high grade intercepts in several lodes.
The current interpretation is that the higher
grades are located in a series of sub-parallel
sub-horizontal shoots.
Figure 6 illustrates this interpretation for the B
Lode, the largest known mineralised shear zone
system drilled to date. High grade intercepts in
the adjacent A Lode include 2m at 56g/t Au and
2m at 20g/t Au, both approximately 50m below
surface (Figure 7), and indicate the potential for
discovering more gold mineralised structures
either at this prospect or nearby.
Figure 5: Tambiri Prospect – longitudinal projection of PDI’s RC and diamond drill results.
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If sufficient continuity can be demonstrated, it
could be possible to drill out and develop a
shoots,
series of parallel
sub-horizontal
repeating to significant depths, and resulting in
a substantial gold deposit.
Figure 6: Solna Prospect – longitudinal projection of PDI’s RC and diamond drill results.
Figure 7: Solna Prospect – plan view of PDI’s RC and diamond drill results, showing the three known
gold mineralised lodes (A, B and C).
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Bedrock Geochemistry Results
BONSIEGA PERMIT GROUP
The power auger drilling at Bangaba revealed
extensive bedrock gold geochemical anomalies,
along strike from the Solna and Tambiri
Prospects (Figure 4). At least 8km of strong
bedrock gold anomalies were identified. These
results open up significant potential
for
discovery of new mineralisation in both areas.
The interpreted shallow plunge of ore shoots at
Solna and Tambiri means that similar shoots
may be present at shallow (open pittable)
depths along strike from both prospects. The
shallow depth of the B Lode high grade
intersection at the southern end of Solna (6m
at 20g/t Au; Figure 6) illustrates this potential;
there are no surface workings above this
intercept.
Aeromagnetic Survey
An aerial magnetic and radiometric survey at
Bangaba in July 2011 revealed strong structures
(highlighted in Figure 8), which were the focus
of the power auger drilling campaign (Figure 4).
BACKGROUND
The Bonsiega Permit Group consists of eight
permits covering a total area of 1,056 km2 and
approximately 100km of greenstone strike
length. This is the same greenstone belt which
hosts the Samira Hill Mine in Niger (Figure 2).
Most of the permits contain artisanal workings
geochemical
and/or
anomalies.
significant
gold
The eight permits were acquired both by
direct application in PDI’s name and through
four separate agreements.
Four of the
permits were acquired through the ElDore
Joint Venture; PDI first earned a 60% stake and
then increased its percentage to 72% through
additional exploration expenditure.
Since the end of the 2011-2012 year, PDI has
signed an agreement with Stratos Resources
Limited (ASX:SAT; formerly ElDore Mining
Corporation
the
remaining 28% through a transaction in which
SAT provides $300,000 in partial re-payment
of cash calls and receives up to 13 million PDI
shares.
to purchase
Limited)
The other three agreements are option deals
with local businessmen in which PDI is earning
either a 95% or 100% equity through a series
of option payments.
Figure 8: Bangaba permit – aeromagnetic image showing
locations of Solna and Tambiri and interpreted structures (black
lines) revealed by the aeromagnetics. The half filled black squares
are artisanal mining locations.
Gold prill produced by artisanal miners, Solna
Prospect, Burkina Faso
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In the past 18 months, power auger drilling
has identified a 20km long zone of strong
bedrock gold anomalies which now constitutes
the majority of the Laterite Hill Gold Field
(Figures 9 and 10) located in the south-
western part of the Bonsiega permit group. A
the 2011-2012 drilling
major
campaign was to test those anomalies in order
to identify mineral resource potential and to
infill drilling targets.
focus of
is
Exploration on the contiguous permit group at
the north-east end of Bonsiega
less
advanced than on the Laterite Hill Gold Field.
Nonetheless, extensive power auger drilling
and geological mapping programs were
carried out during 2011-2012 together with a
small RC drilling program. Significant new gold
bedrock anomalies were identified by the
power auger drilling.
LATERITE HILL GOLD FIELD DRILLING
PDI carried out a large RD, air core and
diamond drilling campaign on the Laterite Hill
Gold Field in 2011-2012. Of this, 19,402m was
RC and air core drilling and 1,170m was
diamond drilling (see Figure 11 for drill hole
locations). This program was divided between
reconnassance drilling testing some of the
very large geochemical anomalies discovered
on the Laterite Hill Gold Field and infill and
extension drilling on the Dave Prospect.
This drilling yielded many significant gold
mineralised
in seven separate
mineralised prospects, including:
Dave Prospect (Figures 11-13)
intercepts
o 26m at 5.0g/t Au from 26m including
2m at 31g/t Au
o 6m at 10 g/t Au from 74m
o 13m at 4.7g/t Au from 67m including
1m at 33g/t Au (re-assay of earlier
results)
o 28m at 1.6g/t Au from 30m
o 38m at 1.3 g/t Au from 0m
o 24m at 1.9g/t Au from 4m
Bongou Prospect (Figure 14):
o 20m at 4.8g/t Au from 36m including
2m at 24g/t Au
Figure 9: Location of PDI’s Bonsiega Permit Group and drilled prospects superimposed on a Government geological interpretation map of the
area (note: PDI mapping has shown that the greenstone is more extensive in the Tamfoagou permit than shown in this map).
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Tamboana Zone:
o 5m at 5.1g/t Au from 36m including
1m at 22g/t Au
Koundi Zone:
o 4m at 5.7g/t Au from 76m (stopped
in mineralisation)
Laterite Hill Shear Zone (includes Laterite
Hill artisanal mine site):
o 26m at 1.2g/t Au from 71m including
14m at 1.8g/t Au
o 22m at 1.4g/t Au from 48m
Prospect 71 (2 separate zones):
o 4m at 7.1g/t Au from 20m (Figure
15)
o 32m at 1.7g/t Au from 26m including
24m at 2.1g/t Au
Prospect 71 West:
o 18m at 1.0g/t Au from 54m including
in
(stopped
6m at 2.3g/t Au
mineralisation)
Drill core, Laterite Hill Gold Field, Burkina Faso
Figure 10: Laterite Hill Grid bedrock geochemistry results superimposed on satellite imagery, showing prospect
locations and the path of the Sirba River (notes: (1) Sirba River only flows during the rainy season and (2) Bongou
Prospect not shown on this image)
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Figure 11: Laterite Hill Gold Field showing locations of prospects, RC, diamond and air core drill holes and known
bedrock gold geochemical anomalies above 25ppb Au (note: in places, the bedrock gold anomaly limits reflect
the extent of effective bedrock drill coverage e.g. the area west-south-west of Dave and north-west of Prospect
71 and Laterite Hill is largely untested because the cover was too thick, hard or wet to penetrate with the power
auger rig)
More information on each of the prospects is
as follows:
DAVE PROSPECT
The Dave Prospect is now known to consist of
multiple gold mineralised zones extending for
at least 5.5km along strike and several hundred
metres across strike (Figure 12). The Prospect
was named by an earlier explorer after artisanal
for approximately
workings which extend
600m. However, the gold mineralisation is
much more extensive than defined by these
workings and is buried under a thin ferricrete
layer to the east and south, and under alluvium
formed by the Sirba River west of the workings.
The gold mineralised system may extend for up
to 10km further to the west, (Figure 10)
concealed beneath the Sirba River which
bedrock power auger drilling
is unable to
penetrate.
Gold mineralisation is hosted in intermediate
volcanics with
lesser amounts of mafic
intrusives and minor granite. PDI’s analysis
suggests that gold mineralisation has been
deposited in a broad ENE oriented shear zone
mostly within or on the margins of small mafic
intrusive bodies. Weathering extends to an
average depth of approximately 50m.
PDI’s drilling in 2011-12 consisted mainly of RC
with minor air core and diamond drilling. Most
drilling extended to a vertical depth of 70m or
less. Drill line spacing varied from 400m to
50m. Closer spaced drilling in several locations
at Dave showed that the envelope of low grade
material can be correlated from line to line (e.g.
Figure 13). So far the entire width of the gold
mineralised system is undefined as there are
gold intercepts in drill holes at both edges of
the drill coverage.
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In general, gold grades at Dave are moderate,
with many assays recorded in the 1 to 2g/t Au
range, however significantly higher grade
intercepts are also present (e.g. 26m at 5.0g/t
is working to understand the
Au).
geological controls on
the higher grade
intercepts, since it is clear that they have the
potential to lift the average gold grade of the
PDI
whole mineralised system.
The Dave Prospect and its extensions offer the
potential for a large tonnage of moderate grade
gold mineralisation. Most of the mineralisation
drilled to date is oxidised, offering hope for
treatment
simple metallurgical
relatively
options, at least in the top 50m.
Figure 12: Dave Prospect – RC, air core and diamond drill result highlights over 3km of strike.
Figure 13: Dave Prospect – plan view of eastern mineralised zone showing surface projection of
outline of low grade envelope within which higher grade gold intercepts have been recorded.
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BONGOU PROSPECT
The Bongou Prospect is located 8km north of
the Laterite Hill Gold Field (Figure 11). The
workings are approximately 200m long and
are located on the edge of a small hill of
gabbro just to the north. Potential extensions
to the mineralisation east and west of the
workings
gold
mineralisation is located on a strong structural
contact between felsic volcanics and gabbro;
based on aerial magnetic data, this contact
appears to extend for several kilometres to
the east and west.
lie under
cover.
The
Surface rock chip sampling and
limited
trenching were carried out in 2010 with the
highest gold value obtained 4.5g/t Au from a
rock chip sample.
One hole was drilled underneath the artisanal
workings late in the 2011-12 field season and
intersected 54m at 2.1g/t Au including 20m at
4.8g/t Au and 2m at 24g/t Au (Figure 14).
Nearly all of the mineralisation was
in
unweathered rock, suggesting it may extend
to depth. This significant new result indicates
the untapped potential of PDI’s ground
holding.
Figure 14: Dave Prospect (eastern area) – section number 5 (see Figure 13).
Figure 15: Bongou Prospect – cross section through the one hole drilled to date.
The peak value shown on the histogram is 24g/t Au.
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PREDICTIVE DISCOVERY LIMITED
REVIEW OF OPERATIONS…..
30 JUNE 2012
LATERITE HILL – TAMBOANA - KOUNDI
large
seen on
In this area, broad spaced reconnaissance
identified a series of
drilling
in 2011-12
intercepts within
contiguous
a
geochemical anomaly (Figures 10-11). At the
Laterite Hill artisanal mine site, bedrock is
exposed over several hundred metres. A visible
strong shear zone contains a broad zone of ENE
oriented mineralisation (best drill result: 26m at
1.2 g/t Au), similar to some of the broad
intercepts
the Dave Prospect.
Mineralisation persists along the strike of this
structure under thin cover for two kilometres.
Elsewhere, other encouraging intercepts have
been obtained, several of which appear to be in
NE trending zones i.e. Tamboana and Koundi.
Higher grades in the latter zones (5m at 5.1g/t
Au and 4m at 5.7g/t Au, respectively) suggests
that narrower but higher
gold
mineralised zones may be found
in a NE
orientation throughout the Gold Field. The
results at Prospect 71 (see below) reinforce this
possibility.
grade
PROSPECT 71
line
Reconnaissance RC drilling on broad
spacing
to 600m apart) was
conducted over Prospect 71 in 2011-2012
(lines up
intercepts were obtained
along with four scout RC holes on the Prospect
71 West bedrock gold anomaly. As in the
other areas, a number of gold-bearing
intersections were obtained. Of particular
interest,
from
beneath thin cover in areas with no artisanal
workings nearby. These higher grade results
may reflect additional narrow but higher grade
NE-oriented zones (cf. Tamboana, Koundi):
4m at 7.1 g/t Au from 20m including 2m at
12.6g/t Au, and
24m at 2.1 g/t Au from 26m including 2m
at 7.6g/t Au, 2m at 9.6g/t Au and 2m at
5.1g/t Au.
in 1996-1997,
Previous RC drilling by a Canadian company,
Emerging African Gold,
is
reported to have intersected 4m at 15g/t Au
approximately 130m north-east of the first
intercept and 2m at 7.5g/t Au about 100m
south-west of it (Figure 16). This implies a NE
strike orientation, similar to that at Tamboana.
The orientation of the second mineralised
zone is unknown, however given the inferred
strike of the first mineralised zone and the fact
that the known artisanal workings nearby are
all oriented NNE, it is assumed to strike NE to
NNE as well (Figure 16).
Figure 16: Prospect 71 – location RC drill holes and higher grade intercepts superimposed on satellite imagery. Locations of PDI RC holes are
the blue dots and the approximate positions of the historic (1996-97) RC holes are the black dots. The outline of the known bedrock gold
anomaly is shown as a pink line.
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PREDICTIVE DISCOVERY LIMITED
REVIEW OF OPERATIONS…..
30 JUNE 2012
AOURA AND FOULI PERMITS - RC DRILLING
At the Aoura gold prospect (Figure 8), artisanal
workings extend intermittently over a strike
length of 2km. Historic drilling by Anmercosa
there
late 1990’s obtained some
encouraging intercepts including:
14m at 2.4g/t Au from 83m including 1m at
in the
26g/t Au
7m at 1.7g/t Au from 33m
4m at 4.6g/t Au from 8m
The projected eastern extension of these
workings was drill tested with a 480m RC
drilling program. Anomalous gold values were
intersected in five of the six holes drilled.
potential
gold mineralisation
Significant
remains within the workings area and to the
west. In addition, power auger drilling (see next
section) also identified a strong bedrock gold
anomaly in the north-west corner of the Aoura
permit, which requires follow-up along strike to
the east and west (Figure 17).
A manganese bearing horizon on the Fouli
permit was also tested with two short holes but
with relatively disappointing results.
BONSIEGA PERMIT GROUP – Power Auger
Drilling
A total of 21,720m of power auger drilling was
conducted on the Bonsiega Permits during
2011-2012, focussed on the Fouli, Tangagari,
Aoura, Sirba and Kogodou South permits. Gold
anomalous bedrock samples were obtained in
many locations with stronger anomalies found
at Prospect 71 West (Figure 10) and Aoura and
Tangagari (Figure 17). Bedrock gold anomalies
on Tangagari extend over at least 5km of strike
length with a peak value of 15g/t Au.
Figure 17: Bedrock gold geochemical results superimposed on satellite imagery – Aoura
and Tangagari permits
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PREDICTIVE DISCOVERY LIMITED
REVIEW OF OPERATIONS…..
30 JUNE 2012
SIRBA & MADYABARI PERMITS – Aerial
Magnetic & Radiometric Survey
A detailed aerial magnetic and radiometric
survey, covering 1,439 line km was carried out
on the Sirba and Madyabari permits in July
the principal areas of gold
2011 over
geochemistry results at Laterite Hill.
Structural analysis of the magnetic data allowed
interpretation of significant structural
the
patterns and helped to focus the follow up
bedrock geochemical drilling.
BOUSSOUMA PERMIT
is
in
located
the very well
Boussouma
mineralised Boromo Belt in central Burkina
Faso (Figure 2). The permit contains a number
of artisanal gold workings and large unexplored
areas covered by thin cover. PDI is earning 95%
of the Boussouma permit through a series of
option payments.
Access into the permit is excellent as it is
crossed
from
Ouagadougou to the large regional centre of
Dori in north-east Burkina Faso.
bitumen
road
the
by
The 2011-2012 work program consisted of
1,360
line km of aerial magnetics and
radiometrics, geological mapping and 2,819m
of wide spaced power auger drilling. A series of
bedrock gold anomalies were identified on the
permit with a peak value of 1.8g/t Au.
TYEKANYEBI PERMIT
This wholly owned permit was granted to PDI in
December 2010. It is located on the south-
western extension of a greenstone belt which
hosts the Koma Bangou artisanal working in
Niger, reputedly the
largest artisanal gold
mining site in that country.
Work during the 2010-2011 financial year was
confined to geological mapping. A planned
power auger geochemistry survey has been
postponed to the 2012-2013 field season.
Power augur drilling, Laterite Hill Gold Field, Burkina
Faso
EASTERN BURKINA FASO – Exploration
Target
The Company has calculated an Exploration
Target3 based on drilling completed on the
Laterite Hill Gold Field and the Bangaba permit.
This totals:
750,000 to 1.2 million ounces at an
average grade of 1.9 to 2.3g/t Au4
from which
the
Locations of
Exploration Target1 was calculated are provided
on Figure 18.
the areas
because
The Fouli gold mineralised system was excluded
calculations
from
of
these
uncertainties
geological
about
interpretation.
However, given the very
extensive artisanal workings at Fouli, it is clear
that there is a significant amount of gold
mineralisation also in this Prospect.
the
Assumptions made in the calculation were as
follows:
A polygonal method was employed –
mineralised areas were measured from
drill cross sections from the Laterite Hill
Gold Field and Tambiri and off a
longitudinal projection at Solna. Volumes
at Laterite Hill and Tambiri were calculated
by multiplying mineralised areas by the
half distance to the adjacent section.
4 This targeted tonnage and grade is conceptual in nature and
there has been insufficient exploration to define a Mineral
Resource under the JORC Code and it is uncertain if further
exploration will result in the determination of a Mineral Resource.
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PREDICTIVE DISCOVERY LIMITED
REVIEW OF OPERATIONS…..
30 JUNE 2012
areas
Volumes at Solna were calculated by
multiplying
on
measured
longitudinal projection by the estimated
horizontal widths. Extrapolations from
outermost drill sections were a maximum
of 200m at Laterite Hill and 100m at
Tambiri and Solna.
The cut-off grade was 0.7g/t Au.
An arbitrary top cut of 20g/t Au was
applied to the Laterite Hill Gold Field
assays. No top cut was applied to the
Solna or Tambiri assays.
The assumed average density was 2.0 at
Laterite Hill, 2.7 at Solna and 2.8 at Tambiri
(based on core measurements).
A minimum down-hole width of 4m was
used on the Laterite Hill Gold Field and
Tambiri Prospect. A minimum 2m down-
hole width was used at Solna (interpreted
to be close to true width). The maximum
internal waste was 4m down-hole.
A steep dip to the south-east was assumed
for all Dave and Laterite Hill cross sections.
On the Laterite Hill Grid, mineralised
sectional areas extended down to a
maximum vertical depth of 70m and up to
surface or half way to the adjacent hole (if
un-mineralised). At Tambiri, the maximum
vertical depth was 100m and at Solna, it
was 180m (deeper blocks are assumed to
be underground mineable).
Figure 18: Locations of areas from which the Exploration Target5 calculation was made.
5 This targeted tonnage and grade is conceptual in nature and there has been insufficient exploration to define a Mineral Resource under the
JORC Code and it is uncertain if further exploration will result in the determination of a Mineral Resource.
- 19 -
PREDICTIVE DISCOVERY LIMITED
REVIEW OF OPERATIONS…..
30 JUNE 2012
Approximately 80% of the calculated total is
derived from the Laterite Hill Gold Field and
20% from Bangaba, with lower average grades
from Bonsiega and higher average grades from
Bangaba.
The drilled areas cover approximately 10km of
strike of bedrock gold anomalies on the PDI
permits.
However at least 33 strike km of bedrock
geochemical anomalies have been defined so
far at Bonsiega and Bangaba (20km at Laterite
Hill, 8km at Bangaba and 5km at Tangagari-
Aoura), the majority of which has not yet been
tested by RC drilling.
In addition, there is significant potential to
define more bedrock geochemical anomalies
e.g.:
West-south-west of Dave on the Dave
structure beneath the Sirba River;
Along strike from Bongou to the east and
west
In the Tangagari and Fouli permits where
large structures remain untested.
Given such large areas of untested potential,
PDI believes that its objective of discovering a
large resource inventory capable of supporting
a major mining operation with an average
grade of more than 2g/t Au is achievable on its
permits in eastern Burkina Faso.
Fouli artisanal workings, Bonsiega permit group, Burkina Faso
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PREDICTIVE DISCOVERY LIMITED
REVIEW OF OPERATIONS…..
30 JUNE 2012
COTE D’IVOIRE
BACKGROUND
PDI began
investigating project generation
opportunities in Cote D’Ivoire in 2009 however
progress was delayed for several years by
political unrest in the country.
Political stability returned to Cote D’Ivoire after
the accession of President Ouattara in 2011,
clearing the way for the Company to investigate
ground acquisition opportunities in this highly
prospective and underexplored country.
In 2011-2012, the Company negotiated an
agreement on one permit, Komboro, and made
application for several permits elsewhere in the
country
GROUND SELECTION PROCESS
PDI’s ground selection process in Cote D’Ivoire
applied PredictoreTM to identify high priority
areas for investigation. As in Burkina Faso, the
large scale
Company acquired all of the
geological and geophysical data sets in 2009
and 2010 in order to identify areas of high
prospectivity within well mineralised belts.
As airborne magnetic data was available, a
component of the PredictoreTM system was
employed to identify very deep, ore-controlling
fault zones. High priority areas were then
identified by
these
structures with known mineralised areas and
features. PDI’s
other
permit application areas and the Komboro
permit were prioritised by this method.
the coincidence of
important geological
KOMBORO PROJECTY
The Komboro project is located in the north of
Cote D’Ivoire (Figure 19). It consists of an
exploration permit application of 169 km2. The
application was made by BIPTFOP, an Ivoirian
company and covers a portion of a Birimian
greenstone belt containing abundant gold
occurrences and active artisanal workings.
PDI’s agreement is subject to the permit being
granted and allows the Company to earn
- 21 -
between 70% and 90% of the permit.
The Komboro permit application has been
recommended to the President of Cote D’Ivoire
for grant by a Government committee, known
as the COMINES, which was established to
review exploration permit applications.
legislation
in Cote D’Ivoire
The mining
is
currently being reviewed and the future status
of the COMINES is uncertain. Nevertheless, PDI
believes that the Komboro permit is likely to be
granted.
BIPTFOP has undertaken a regional soil and
rock chip geochemical sampling program,
totalling 579 samples, and some geological
mapping. The geochemical program identified
widespread gold anomalous values including a
number of high grade values. 36 samples
contained more than 1g/t Au, with peak values
of 51 and 52g/t Au (Figure 19).
Higher grade values are from what is described
as saccharoidal quartz. PDI sampling of this rock
type obtained peak values of 14 and 18g/t Au,
indicating that the BIPTFOP data are probably
valid.
is covered by
BIPTFOP’s geological mapping indicates that
lateritic
much of the area
material. PDI’s geological inspection suggests
that some of this material
is transported,
indicating that a bedrock sampling method may
identify additional target areas.
While there is insufficient outcrop to determine
the potential width of mineralisation, the
examined prospects contain very attractive
grades at shallow depths. Artisanal workings
suggest the presence of multiple gold-bearing
quartz veins.
Therefore, based on its field examination and
the BIPTFOP data, the Company has concluded
that the permit has potential for one or more
large, open pittable gold deposits.
PREDICTIVE DISCOVERY LIMITED
REVIEW OF OPERATIONS…..
30 JUNE 2012
19:
Figure
Komboro
Project locality plan. Red
gold
denote
circles
mines.
Greenstone
areas, which host gold
mineralisation,
are
coloured pale green.
zones
BIPTFOP
Figure
20:
geochemical
results,
Komboro Project (Note:
two
the presence of
gold-rich
each
extending over several
the
kilometres
the
southern part of
permit, both of which
are open to the south-
east.
in
- 22 -
PREDICTIVE DISCOVERY LIMITED
REVIEW OF OPERATIONS…..
30 JUNE 2012
AUSTRALIAN PROJECTS
Figure 15: Location of PDI’s Australian Projects in 2011-12.
BENMARA URANIUM, NORTHERN
TERRITORY
This project consisted of two joint ventured
Exploration Licences (ELs), a granted 100%
owned EL and one EL application.
joint venture ELs
PDI completed a combined RC and diamond
drilling campaign, totalling 11 holes and
in
1,768m, on the two
October 2011. Four targets were tested. No ore
grade uranium values were obtained. While the
Company believes
retains
that
potential for a Westmoreland-style ore deposit,
these results, derived from wide spaced drilling,
indicate that the size of ore deposit that PDI
the area
was seeking (>50 million lb U3O8) is unlikely to
be present in the area.
The Company therefore withdrew from its two
joint venture commitments and relinquished
the granted EL and EL application. This decision
allowed PDI to focus its activities in West Africa
during the remainder of the 2011-2012 year.
VICTORIA GOLD
PDI’s objective is the discovery of a large gold
deposit on the margins of one of more
concealed volcanic domes beneath basalt cover
(cf. the 5 million ounce Stawell gold deposit in
Western Victoria).
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PREDICTIVE DISCOVERY LIMITED
REVIEW OF OPERATIONS…..
30 JUNE 2012
The target areas are located west of Ballarat.
PDI currently holds two ELs there (Skipton and
Woady Creek) covering 348km2.
During 2011, the Company briefly entered into
a small joint venture on the Cape Clear EL
adjacent to Woady Creek but then withdrew
when it became clear that the EL was not in
good standing with the Victorian Government
owing
in
the conditions
contravention of one of
precedent in the joint venture agreement.
under-expenditure,
past
to
The Company conducted modest gravity survey
programs on the Skipton and Woady Creek ELs
during 2011-2012.
APPLICATION OF PREDICTORETM
PredictoreTM
is an Australian developed
technology that resulted from over seven years
of joint government/industry funded research
at a cost of approximately $17 million. A
number of case history studies carried out
during that research program demonstrated
the effectiveness of the approach. PDI has the
exclusive right to apply the technology outside
of Australia and non-exclusive rights to apply it
within Australia. The technology has two
components:
the first is applied to regional data sets and
is able to highlight subtle large and deep
structures that potentially controlled large
mineralised systems.
The second utilises advanced computer
simulation to map the movement of
rocks and
mineralising
thereby predict where ore deposits are
most likely to have formed.
through
fluids
This approach allows PDI’s geologists to test a
variety of predictions against what they actually
observe in the field and make more rigorous
conclusions about the
location of priority
targets. PDI believes that PredictoreTM has the
potential to increase the odds of discovery.
The Company’s principal use of the first
component in 2011-2012 was on the Cote
D’Ivoire aeromagnetic data, and resulted in
selection of a number of high priority target
- 24 -
areas. The second component was applied to
most of PDI’s Burkina Faso permit areas.
Application of the technology to the Bangaba
permit has provided clear guidance on prospect
prioritisation
the 2012-2013 drilling
program.
for
CORPORATE
PDI listed on 1st December 2010, following a
heavily oversubscribed IPO, having raised $8
million. The Company raised an additional $5.2
million in August 2011 via a placement and a
rights issue. This raising resulted in a significant
increase in the holdings of microcap investment
funds in the company. Two well-known and
respected funds, Acorn Capital and the African
Lion 3 fund joined the Company’s share register
at this time.
The Company maintained a strong Burkina Faso
team, including eight geologists, during the
2011-2012 year in order to carry out the very
large work program that was then in progress.
PDI is therefore well placed to prosecute an
effective exploration program in the 2012-2013
financial year.
OUTLOOK
BURKINA FASO
In the next field season, PDI’s plans to
concentrate on its Eastern Burkina Faso project.
A sequence of carefully targeted RC and air
core/RAB drilling programs will be directed at
higher grade (i.e. 2.5 to 10g/t Au) prospects in
(e.g.
the Bonsiega and Bangaba permits
Bongou, Solna, Tambiri, Prospect 71, Tamboana
etc). The goal will be to first expand the high
grade resource potential at each prospect and
then to drill out high grade resources, targeting
average grades of more than 3g/t Au.
The Company’s primary objective is to build an
inventory of high grade resources as a nucleus
for a future mining operation before testing the
more moderate grade mineralisation which has
in reconnaissance
already been
drilling in the Laterite Hill Gold Field.
identified
PREDICTIVE DISCOVERY LIMITED
REVIEW OF OPERATIONS…..
30 JUNE 2012
COTE D’IVOIRE
VICTORIA
The Company plans to severely restrict its
exploration activities
in Victoria during the
coming year.
At present, the Company maintains a very small
administrative presence in Cote D’Ivoire.
On grant of the Komboro permit or any of its
three permit applications, PDI will commence
focused geochemical programs on the ground.
Initial drilling programs will employ low cost
methods such as power auger or RAB drilling.
Competent Persons Statement
The exploration results reported herein, insofar as they relate to mineralisation, are based on information compiled by Mr Paul
Roberts (Fellow of the Australian Institute of Geoscientists). Mr Roberts is a full time employee of the company and has
sufficient experience relevant to the style of mineralisation and type of deposits being considered to qualify as a Competent
Person as defined by the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves (the JORC Code, 2004 Edition). Mr Roberts consents to the inclusion in the report of the matters based on his
information in the form and context in which it appears.
- 25 -
PREDICTIVE DISCOVERY LIMITED
30 JUNE 2012
DIRECTORS’ REPORT
Your directors present their report for the financial year ended 30 June 2012.
The names of the directors in office at any during, or since the end of the year are:
NAMES
Mr Phillip Harman
Mr Paul Roberts
Dr Thomas Whiting
Dr Robert Danchin
Mr Philip Henty
POSITION
Non-Executive Chairman
Managing Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
The Directors have been in office since the start of the financial year to the date of this report unless
otherwise stated.
COMPANY SECRETARY
Mr Ian Hobson holds a bachelor of business degree and is a Chartered Accountant and Chartered
Secretary. Mr Hobson provides company secretarial and corporate, management and accounting
advice to a number of listed public companies involved in the resource, mining services and oil and gas
industries. He was appointed on 17 September 2010.
PRINCIPAL ACTIVITIES
During the financial year, the principal activity of The Group was mineral exploration with the objective
of identifying and developing economic reserves in West Africa and Australia.
OPERATING RESULTS FOR THE PERIOD
The consolidated loss of The Group for the financial year after providing for income tax amounted to
$2,706,350 (2011: $1,412,255). This was largely from the costs of administering The Group to 30 June
2012, foreign exchange losses and impairment of exploration.
REVIEW OF OPERATIONS
In the year to June 2012, Predictive Discovery Limited (PDI) acquired several new properties and undertook a
very substantial work program. Capital raisings during the year totaled $5.2 million via a placement and
rights issue in August-September 2011. PDI's Burkina Faso team grew slightly to 27 staff in order in order to
support the company's aggressive gold exploration program in Burkina Faso. An option agreement was
concluded on one exploration permit in Burkina Faso, covering a total area of 45 km2. The Company
withdrew from all of its uranium exploration interests in the Northern Territory. In Victoria, PDI was granted
a 2 km2 Exploration Licence west of Ballarat and completed a compulsory area reduction of its Skipton
Exploration Licence in Victoria. The Company also entered into an agreement on a 169 km2 property in
Northern Cote D'Ivoire which will come into effect once the permit is granted.
- 26 -
PREDICTIVE DISCOVERY LIMITED
DIRECTORS’ REPORT….
30 JUNE 2012
During the year, intense exploration was carried out in Burkina Faso, particularly on the Madyabari, Sirba,
Bangaba, Fouli, Tangagari and Aoura exploration permits. 66,000m of drilling was completed, consisting of
3,000m of diamond drilling, 28,000m of reverse circulation and air core and 35,000m of power auger drilling.
273 km2 of tenement area was geologically mapped and 4,300 line kilometres surveyed with airborne
The PredictoreTM technology was applied to understanding known
magnetics and radiometrics.
mineralisation in the Laterite Hill Gold Field and the Bangaba permits and applied to prioritise target areas
throughout PD's Burkina tenement package. Highly promising drill results were obtained on the Bangaba
exploration permit and the Laterite Hill Gold Field including 5.6m at 16g/t Au and 6m at 20g/t Au at Solna
(Bangaba permit), 54m at 2.1 g/t Au at the Bongou Prospect (Madyabari permit) and 10m of 18/t Au and
26m at 5.0g/t Au at Dave (Madyabari permit). Gold mineralisation has now been revealed in RC drilling over
a strike length of approximately 9 km on PDI's Burkina Faso permits. In addition, power auger sampling
extended weathered bedrock gold anomalies for an additional 4 km of strike on the Laterite Hill Gold Field
(Sirba and Madyabari permits), and revealed more than 8 km of bedrock gold anomalies on the Bangaba
permit and over 5km of bedrock gold anomalies on the Tangagari and Aoura permits.
In Australia, PD undertook RC and diamond drilling on the Benmara Project in the Northern Territory,
totaling 1768m, and ground geophysical surveys on the Skipton project in Victoria. Disappointing drilling
results at Benmara resulted in withdrawal from all Exploration Licenses in the Northern Territory and
cessation of uranium exploration, freeing up PDI to focus more heavily on its gold exploration projects in
Burkina Faso.
Project generation activities continued during the year, focused on West Africa.
DIVIDENDS PAID OR RECOMMENDED
No dividends were paid or declared since the start of the financial year. No recommendation for
payment of dividends has been made.
FINANCIAL POSITION
The net assets of The Group have increased by $2,258,265 from 30 June 2011 to $11,130,953 at 30 June
2012. This increase is largely due to the following factors:
$5,275,213 capital raising;
Expenditure on exploring and evaluating the assets in Burkina Faso; and
Purchase of plant and equipment to develop the West African operations.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
No significant changes in The Group’s state of affairs occurred during the financial year.
EVENTS SUBSEQUENT TO BALANCE DATE
The Group undertook a pro rata non-renounceable rights issue to subscribe for one (1) new fully paid
ordinary share for every five (5) ordinary shares held by Eligible Shareholders at $0.08 cents per share
plus one free attaching option for every two shares to raise up to $2,088,886 before costs of the issue.
- 27 -
PREDICTIVE DISCOVERY LIMITED
DIRECTORS’ REPORT….
30 JUNE 2012
The issue closed on 20 July 2012 and the shortfall is to be placed within 3 months of the closing date.
At the date of this report, 9,512,108 have been issued pursuant to the rights issue and the shortfall
placement.
The Group signed an agreement with Stratos Resources Limited (SAT), enabling The Group to move to
100% ownership of Birrimian Pty Ltd (BPL). The Group owns 72.1% of BPL as at 30 June 2012. Subject
to approval by an Extraordinary General Meeting of SAT shareholders, the Group will purchase SAT’s
entire shareholding in BPL for the consideration of 13 million shares in the Company. At the same time,
SAT will make a cash payment to PDI of $140,000 in partial repayment of outstanding cash calls from
the Joint Venture. Also, as part of this transaction, SAT and its Directors are contributing $160,000 to
the shortfall in the Group’s recent entitlement issue which closed on 20 July 2012.
FUTURE DEVELOPMENTS
Likely developments in the operations of The Group and the expected results of those operations in
future financial years have not been included in this report, as the inclusion of such information is likely
to result in unreasonable prejudice to The Group.
ENVIRONMENTAL ISSUES
The Group’s operations are subject to significant environmental regulations under both Commonwealth
and State legislation. The Board believes that The Group has adequate systems in place for the
management of its environmental regulations and is not aware of a breach of those environmental
requirements as they apply to The Group.
INFORMATION ON DIRECTORS
Mr Phillip Harman
Non-Executive Chairman
Qualifications
Experience
BSc (Hons), MAusIMM, MAICD
Mr Harman is a professional geophysicist who spent more
than 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.
Interest in Shares and Options
Shareholding: 2,345,626
Optionholding: 1,095,469
Directorships held
listed
entities during the three years prior to
the current year
in other
Callabonna Uranium Limited and Stellar Resources Limited.
Mr Paul Roberts
Qualifications
Experience
Managing Director
BSc, MSc, FAIG, MGSA
Mr Roberts has a long and successful history in mineral
- 28 -
DIRECTORS’ REPORT….
Mr Paul Roberts
Experience (continued)
PREDICTIVE DISCOVERY LIMITED
30 JUNE 2012
exploration 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.
Interest in Shares and Options
Shareholding: 3,570,500
Optionholding: 1,825,000
Directorships held
listed
entities during the three years prior to
the current year
in other
None
Dr Thomas Whiting
Non-Executive Director
Qualifications
Experience
BSc (Hons), PhD, MAppFin, MASEG, MAICD
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.
led the use of
in his career, he
innovative
Earlier
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
first airborne gravity
FALCON®
gradiometer.
the world’s
system,
Interest in Shares and Options
Shareholding: 1,265,626
Optionholding: 705,469
Directorships held
listed
entities during the three years prior to
the current year
in other
Stellar Resources, EXCO Resources Ltd, Mineral Deposits
Limited.
- 29 -
PREDICTIVE DISCOVERY LIMITED
DIRECTORS’ REPORT….
30 JUNE 2012
Dr Robert Danchin
Non-Executive Director
Qualifications
Experience
BSc, BSc (Hons), MSc, PhD, FAusIMM
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.
Interest in Shares and Options
Shareholding: Nil
Optionholding: 600,000
Directorships held
listed
entities during the three years prior to
the current year
in other
Mineral Deposits Limited
Mr Philip Henty
Qualifications
Experience
Non-Executive Director
BA Acc, Dip SIA, F Fin
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 the
securities
industry from dealing and advice through to
management, capital raising, investment management and
private investment.
Interest in Shares and Options
Shareholding: 8,429,688
Optionholding: 1,226,563
Directorships held
listed
entities during the three years prior to
the current year
in other
None
- 30 -
PREDICTIVE DISCOVERY LIMITED
30 JUNE 2012
DIRECTORS’ REPORT….
MEETINGS OF DIRECTORS
During the financial year, 6 meetings of directors (including committees of directors) were held.
Attendances by each director during the year were as follows:
DIRECTORS' MEETINGS
AUDIT COMMITTEE MEETINGS
NUMBER ELIGIBLE TO ATTEND
NUMBER ATTENDED
NUMBER ELIGIBLE TO ATTEND
NUMBER ATTENDED
Mr Phillip Harman
Mr Paul Roberts
Dr Thomas Whiting
Dr Robert Danchin
Mr Philip Henty
6
6
6
6
6
INDEMNIFYING OFFICERS OR AUDITORS
6
6
6
6
6
-
-
1
1
1
-
-
1
1
1
The Group has paid premiums to insure directors against liabilities for costs and expenses incurred by
them in defending legal proceedings arising from their conduct while acting in the capacity of director
of The Group, other than conduct involving a wilful breach of duty in relation to The Group. The terms
and conditions of the insurance are confidential and cannot be disclosed.
OPTIONS
At the date of this report, the unissued ordinary shares of Predictive Discovery Limited under option,
including those options issued during the year and since 30 June 2012 to the date of this report are as
follows:
GRANT DATE
20 August 2010
21 July 2011
DATE OF EXPIRY
EXERCISE PRICE
NUMBER UNDER OPTION
20 August 2015
21 July 2015
0.25
0.31
6,000,000
500,000
6,500,000
During the year ended 30 June 2012, no ordinary shares of Predictive Discovery Limited were issued on
the exercise of options granted.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of Court to bring proceeding on behalf of The Group or intervene in any
proceedings to which The Group is a party for the purpose of taking responsibility on behalf of The
Group for all or any part of those proceedings.
The Group was not a party to any such proceeding during the year.
- 31 -
PREDICTIVE DISCOVERY LIMITED
DIRECTORS’ REPORT….
30 JUNE 2012
NON AUDIT SERVICES
The Board of Directors in accordance with the advice from the audit committee is satisfied that no
provision of non-audit services was provided by the auditors during the year.
AUDITOR’S INDEPENDENCE DECLARATION
The auditors’ independence declaration for the year ended 30 June 2012 has been received and can be
found on page 42 of the financial report.
REMUNERATION REPORT (AUDITED)
REMUNERATION POLICY
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.
- 32 -
PREDICTIVE DISCOVERY LIMITED
DIRECTORS’ REPORT….
30 JUNE 2012
REMUNERATION REPORT (continued)
REMUNERATION POLICY …..
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.
PERFORMANCE-BASED REMUNERATION
Performance based remuneration for key management personnel is limited to granting of options.
RELATIONSHIP BETWEEN REMUNERATION POLICY AND COMPANY PERFORMANCE
The remuneration policy has been tailored to increase goal congruence between shareholders,
directors and executives. The issue of options to the majority of directors and executives is to
encourage the alignment of personal and shareholder interests. The company believes this policy will
be effective in increasing shareholder wealth.
PERFORMANCE CONDITIONS LINKED TO REMUNERATION
The Group’s remuneration of key management personnel does not include any performance
conditions.
EMPLOYMENT DETAILS OF MEMBERS OF KEY MANAGEMENT PERSONNEL AND OTHER EXECUTIVES
The following table provides employment details of persons who were, during the financial year,
members of key management personnel of The Group, and to the extent different, among the five
Group executives or company executives receiving the highest remuneration. The table also illustrates
the proportion of remuneration that was performance and non-performance-based and the proportion
of remuneration received in the form of options.
Key Management
Personnel
Mr Phillip Harman
Mr Paul Roberts
Dr Thomas Whiting
Dr Robert Danchin
Mr Philip Henty
Mr Ian Hobson
Mr David Pascoe
POSITION HELD AS AT 30 JUNE
2012
Non-Executive Chairman
Managing Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
-
-
-
-
-
Company Secretary
Head Geologist
100
-
- 33 -
NON-SALARY
CASH-BASED
INCENTIVES
%
OPTIONS/
RIGHTS
%
FIXED
SALARY/FEES
%
TOTAL
%
-
-
-
-
-
-
19
100
100
100
100
100
-
81
100
100
100
100
100
100
100
PREDICTIVE DISCOVERY LIMITED
DIRECTORS’ REPORT….
30 JUNE 2012
REMUNERATION REPORT (continued)
EMPLOYMENT DETAILS OF MEMBERS OF KEY MANAGEMENT PERSONNEL AND OTHER EXECUTIVES…..
The employment terms and conditions of key management personnel and group executives are
formalised upon each Director's appointment. All non-executive directors are remunerated on a
monthly basis with no fixed term or termination benefits.
Paul Roberts, Managing Director, has entered into a contract of employment that requires 12 months’
notice of voluntary termination of employment that entitles Mr Roberts to $250,000 as a termination
benefit.
REMUNERATION DETAILS FOR THE PERIOD ENDED 30 JUNE 2012
The following table of benefits and payment details, in respect to the financial year, the components of
remuneration for each member of the key management personnel of The Group and, to the extent
different, the five Group executives and five company executives receiving the highest remuneration:
Table of Benefits and Payments for the Period Ended 30 June 2012
KEY MANAGEMENT
PERSONNEL
SALARY,
FEES AND
LEAVE
OTHER
PENSION
AND SUPER-
ANNUATION
OTHER
SHARES/
UNITS
OPTIONS/
RIGHTS
TOTAL
$
$
$
$
$
$
$
Mr Phillip Harman
2012
45,873
Mr Paul Roberts
2012
203,928
2011
45,873
Dr Thomas Whiting
2011
162,856
2012
2011
750
-
Dr Robert Danchin
2012
32,110
Mr Philip Henty
Mr Ian Hobson
2011
32,110
2012
2011
-
-
2012
165,016
2011
108,586
Mrs Lisa Norden
2012
-
2011
34,375
Mr Mel Drummond
2012
-
Mr David Pascoe
2012
194,072
2011
33,868
Total Key Management
Personnel
2011
-
2012
641,749
2011
417,668
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,128
4,128
44,918
32,397
34,250
35,000
2,890
2,890
35,000
35,000
-
-
-
-
-
-
17,466
-
138,652
109,415
- 34 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
50,001
50,001
248,846
195,253
35,000
35,000
35,000
35,000
35,000
35,000
165,016
108,586
-
34,375
-
33,868
50,253 261,791
-
-
50,253
830,654
-
527,083
PREDICTIVE DISCOVERY LIMITED
DIRECTORS’ REPORT….
30 JUNE 2012
REMUNERATION REPORT (continued)
SECURITIES RECEIVED THAT ARE NOT PERFORMANCE-BASED
No members of key management personnel received securities during the period which were not
dependent upon the performance of The Group’s share price as part of their remuneration package
CASH BONUSES, PERFORMANCE-RELATED BONUSES AND SHARE-BASED PAYMENTS
The terms and conditions relating to options and bonuses granted as remuneration during the year to
key management personnel and other executives during the year are as follows:
KEY MANAGEMENT
PERSONNEL
REMUNERATION
TYPE
GRANT
DATE
GRANT
VALUE
$
Mr David Pascoe
Options
21/07/2011
50,253
PERCENTAGE
VESTED/PAID
DURING THE
PERIOD
PERCENTAGE
FORFEITED
DURING
PERIOD
PERCENTAGE
REMAINING AS
UNVESTED
%
100
%
-
%
-
All options were issued by Predictive Discovery Limited and entitle the holder to 1 ordinary share in
Predictive Discovery Limited for each option exercised.
There have not been any alterations to the terms or conditions of any grants since grant date.
DESCRIPTION OF OPTIONS/RIGHTS ISSUED AS REMUNERATION
Details of the options granted as remuneration to those key management personnel and executives
listed in the previous table are as follows:
GRANT DATE
ISSUER
ENTITLEMENT ON
EXERCISE
DATES EXERCISABLE
EXERCISE PRICE
VALUE PER
OPTION AT
GRANT DATE
AMOUNT
PAID/PAYABLE
BY RECIPIENT
21 July 2011
Predictive Discovery
Limited
1 Ordinary Share in
Predictive Discovery
Limited
On or before
21/07/2015
$
$
0.31
0.10
$
-
Option values at grant date were determined using the Black-Scholes method.
- 35 -
PREDICTIVE DISCOVERY LIMITED
DIRECTORS’ REPORT….
30 JUNE 2012
END OF THE REMUNERATION REPORT
Signed in accordance with a resolution of the Board of Directors:
Paul Roberts
Managing Director
24 September 2012
- 36 -
PREDICTIVE DISCOVERY LIMITED
CORPORATE GOVERNANCE STATEMENT
30 JUNE 2012
BOARD COMPOSITION
The skills, experience and expertise relevant to the position of each director, and board committee
member, who is in office at the date of the annual report and their term of office are detailed in the
Director’s report.
The independent directors of the Company are Phil Harman, Phil Henty, Tom Whiting and Bobby
Danchin.
When determining the independent status of a director, the Board used the Guidelines detailed in the
ASX Corporate Governance Council’s Principles of Good Corporate Governance and Best Practice
Recommendations.
The Board sets out below its “if not why not” report in relation to those matters of corporate
governance where the Company’s practices depart from the Recommendations.
Recommendation
Current Practice
1.1
Companies should establish the functions
reserved for the board and those delegated to
senior executives and disclose those functions.
Satisfied. The functions reserved for the Board
and delegated to senior executives have been
established.
The Board Charter is available at
www.predictivediscovery.com.au in the
Corporate Governance policy.
Satisfied. Formal evaluation process has been
adopted.
The Performance Evaluation Policy is available
at www.predictivediscovery.com.au in the
Corporate Governance policy.
Satisfied.
The Board Charter is available at
www.predictivediscovery.com.au in the
Corporate Governance policy.
No formal appraisal of management was
conducted.
Satisfied.
Phil Harman, Phil Henty, Tom Whiting and
Bobby Danchin are Non Executive
independent directors as defined in ASX
guidelines.
1.2
Companies should disclose the process for
evaluating the performance of senior
executives.
1.3
Companies should provide the information
indicated in the Guide for reporting on Principle
1.
2.1
A majority of the board should be independent
directors.
37
PREDICTIVE DISCOVERY LIMITED
CORPORATE GOVERNANCE STATEMENT…..
30 JUNE 2012
Recommendation
Current Practice
2.2
The chair should be an independent director.
Satisfied.
Mr Phil Harman is an independent director.
2.3
The roles of chair and Chief Executive Officer
should not be exercised by the same individual.
Satisfied.
2.4
The board should establish a nomination
committee.
2.5
Companies should disclose the process for
evaluating the performance of the board, its
committees and individual directors.
2.6
Companies should provide the information
indicated in the guide to reporting on Principle 2
3.1
Companies should disclose a code of conduct
and disclose the code or a summary of the code
as to:
-
The practices necessary to maintain
confidence in the company’s integrity
The practices necessary to take into account
their legal obligations and the reasonable
expectations of their stakeholders
The responsibility and accountability of
individuals for reporting and investigating
reports of unethical practices.
-
-
Not Satisfied.
The Board consider that given the current size
of the Board (5) and the recent listing of the
company, this function is efficiently achieved
with full Board participation.
Satisfied.
Board Performance Evaluation Policy is
available at www.predictivediscovery.com.au
in the Corporate Governance policy.
Satisfied.
No formal board appraisal was conducted as
the company only listed on ASX on 1
December 2010.
Satisfied.
The Code of Conduct is available at
www.predictivediscovery.com.au in the
Corporate Governance policy.
3.2
Companies should establish a policy concerning
trading in company securities by directors,
senior executives and employees, and disclose
the policy or a summary of that policy.
Satisfied.
The Trading Policy is available at
www.predictivediscovery.com.au in the
Corporate Governance policy.
38
PREDICTIVE DISCOVERY LIMITED
CORPORATE GOVERNANCE STATEMENT…..
30 JUNE 2012
Recommendation
Current Practice
3.3
Companies should provide the information
indicated in the Guide to reporting on Principle
3.
Satisfied.
4.1
The board should establish an audit committee.
Satisfied.
Satisfied.
4.2
The audit committee should be structured so
that it:
- Consists only of non-executive directors
- Consists of a majority of independent
-
directors
Is chaired by an independent chair, who is
not chair of the board
- Has at least three members
4.3
The audit committee should have a formal
charter.
Satisfied.
4.4
Companies should provide the information
indicated in the Guide to reporting on Principle
4.
Satisfied.
The audit committee charter is available at
www.predictivediscovery.com.au in the
Corporate Governance policy.
5.1
Companies should establish written policies
designed to ensure compliance with ASX Listing
Rule disclosure requirements and to ensure
accountability at senior executive level for that
compliance and disclose those policies or a
summary of those policies.
Satisfied.
Continuous disclosure policy is available at
www.predictivediscovery.com.au in the
Corporate Governance policy.
5.2
Companies should provide the information
indicated in the Guide to reporting on Principle
5.
Satisfied.
6.1
Companies should design a communications
policy for promoting effective communication
with shareholders and encouraging their
participation at general meetings and disclose
their policy or a summary of their policy.
Satisfied.
Shareholders communication strategy is
available at www.predictivediscovery.com.au
in the Corporate Governance policy.
39
PREDICTIVE DISCOVERY LIMITED
CORPORATE GOVERNANCE STATEMENT…..
30 JUNE 2012
Recommendation
Current Practice
6.2
Companies should provide the information
indicated in the Guide to reporting on Principle
6.
Satisfied.
7.1
Companies should establish policies for the
oversight and management of material business
risks and disclose a summary of those policies.
7.2
7.3
The board should require management to
design and implement the risk management and
internal control system to manage the
company’s material business risks and report to
it on whether those risks are being managed
effectively. The board should disclose that
management has reported to it as to the
effectiveness of the company’s management of
its material business risks.
The board should disclose whether it has
received assurance from the chief executive
officer (or equivalent) and the chief financial
officer (or equivalent) that the declaration
provided in accordance with section 295A of the
Corporations Act is founded on a sound system
of risk management and internal control and
that the system is operating effectively in all
material respects in relation to financial
reporting risks.
7.4
Companies should provide the information
indicated in the Guide to reporting on Principle
7.
Satisfied.
The company has established policies for the
oversight and management of material
business risks.
Risk management program is available at
www.predictivediscovery.com.au in the
Corporate Governance policy.
Satisfied.
Management consist of the managing
director, who has designed and implemented
a risk management and internal control
system to manage material business risks.
Management have reported to the Board that
those risks are being managed effectively.
Satisfied.
The Board has received a section 295A
declaration pursuant to the 2011 financial
period.
Satisfied.
The board has received the reports and
assurances in 7.2 and 7.3. The policies are
available on the company’s website.
40
PREDICTIVE DISCOVERY LIMITED
CORPORATE GOVERNANCE STATEMENT…..
30 JUNE 2012
Recommendation
8.1
The board should establish a remuneration
committee.
Current Practice
Not Satisfied.
The Board considers that given the current
size of the Board (5) and the fact that the
company only listed at ASX on 1 December
2010 that this function is efficiently achieved
with full Board participation and consequently
no meetings have been held.
8.2
Companies should clearly distinguish the
structure of non-executive directors’
remuneration from that of executive directors
and senior executives.
The structure of Directors’ remuneration is
disclosed in the remuneration report of the
annual report.
8.3
Companies should provide the information
indicated in the Guide to reporting on Principle
8.
The remuneration committee charter is
available at www.predictivediscovery.com.au
in the Corporate Governance policy.
Further information about the Company’s corporate governance practices is set out on the Company’s
website at www.predictivediscovery.com.au.
- 41 -
PREDICTIVE DISCOVERY LIMITED
- 43 -
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEfor the year ended 30 June 201220122011$$NoteFinance income191,196206,112Share based payments(50,253)(261,742)Administrative expenses(1,366,305)(1,256,483)Foreign exchange expense(602,487)-Impairment of exploration(731,847)-Exploration expenditure pre-right to tenure(146,654)(100,142)Profit (loss) before income taxes(2,706,350)(1,412,255)Income tax expense2--Profit (loss) from continuing operations(2,706,350)(1,412,255)Other comprehensive income(198)(93,025)Total comprehensive income for the year(2,706,548)(1,505,280)Profit attibutable to: Members of the parent entity(2,706,548)(1,505,280)(2,706,548)(1,505,280)Basic (loss) per share (cents per share)12(0.023 )(0.018 )Diluted (loss) per share (cents per share)12(0.023 )(0.018 )Consolidated These financial statements should be read in conjunction with the accompanying notes
PREDICTIVE DISCOVERY LIMITED
- 44 -
CONSOLIDATED STATEMENT OF FINANCIAL POSITIONas at 30 June 201220122011Note$$ASSETSCURRENT ASSETSCash and cash equivalents31,063,4725,208,418Trade and other receivables4179,608325,339TOTAL CURRENT ASSETS1,243,0805,533,757NON-CURRENT ASSETSProperty, plant and equipment5526,742287,593Exploration expenditure610,235,1393,925,307TOTAL NON-CURRENT ASSETS10,761,8814,212,900TOTAL ASSETS12,004,9619,746,657LIABILITIESCURRENT LIABILITIESTrade and other payables7734,901792,662Provisions9139,10781,307TOTAL CURRENT LIABILITIES874,008873,969TOTAL LIABILITIES874,008873,969NET ASSETS11,130,9538,872,688EQUITYIssued capital1015,264,18910,349,630Reserves11218,772168,717Accumulated losses(4,352,008)(1,645,659)TOTAL EQUITY11,130,9538,872,688 These financial statements should be read in conjunction with the accompanying notesConsolidated
PREDICTIVE DISCOVERY LIMITED
- 45 -
CONSOLIDATED STATEMENT OF CHANGES IN EQUITYfor the year ended 30 June 20122012FOREIGNSHARE BASEDCURRENCYORDINARYACCUMULATEDPAYMENTTRANSLATIONSHARESLOSSESRESERVERESERVETOTAL$$$$$Balance at 1 July 201110,349,630(1,645,659)261,742(93,025)8,872,688Profit/(loss) attributable to members ofthe parent entity(2,706,348)(2,706,348)Other comprehensive income(198)(198)Total comprehensive income for the year(2,706,348)(198)(2,706,546)Shares issued during the year5,275,2135,275,213Transaction costs(360,655)(360,655)Share-based payments50,25350,253Sub-total4,914,558(2,706,348)50,253(198)2,258,265Balance at 30 June 201215,264,188(4,352,007)311,995(93,223)11,130,9532011FOREIGNSHARE BASEDCURRENCYORDINARYACCUMULATEDPAYMENTTRANSLATIONSHARESLOSSESRESERVERESERVETOTAL$$$$$Balance at 1 July 20101,915,000(233,404)--1,681,5960Profit/(loss) attributable to members ofthe parent entity-(1,412,255)--(1,412,255)Other comprehensive income---(93,025)(93,025)Total comprehensive income for the year-(1,412,255)-(93,025)(1,505,280)Shares issued during the year9,178,400---9,178,400Transaction costs(743,770)---(743,770)Share-based payments--261,742-261,742Sub-total8,434,630(1,412,255)261,742(93,025)7,191,0920Balance at 30 June 201110,349,630(1,645,659)261,742(93,025)8,872,6880 These financial statements should be read in conjuction with the accompanying notes
PREDICTIVE DISCOVERY LIMITED
- 46 -
CONSOLIDATED STATEMENT OF CASH FLOWSfor the year ended 30 June 201220122011Note$$CASH FROM OPERATING ACTIVITIES: GST receipts10,06655,622 Payments to suppliers and employees(1,731,254)(1,028,150)Net cash provided by (used in) operating activities21(1,721,188)(972,528)CASH FLOWS FROM INVESTING ACTIVITIES: Interest received191,196205,362 Purchase of property, plant and equipment(546,851)(291,906) Payments for exploration expenditure(6,973,426)(3,118,899)Net cash provided by (used in) investing activities(7,329,081)(3,205,443)CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issue of shares5,275,2139,050,000 Payment of share issue costs(360,655)(829,894)Net cash from financing activities4,914,5588,220,106OTHER ACTIVITIES:Foreign exchange differences(9,041)(8,661)Net cash used by other activities(9,041)(8,661)Net increase (decrease) in cash held(4,135,711)4,033,474Cash and cash equivalents at beginning of period5,208,2241,174,944Cash and cash equivalents at end of financial period31,063,4725,208,418 These financial statements should be read in conjunction with the accompanying notes
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
This financial report includes the consolidated financial statements and notes of Predictive Discovery
Limited and controlled entities (The Group).
1 SUMMARY OF SINGIFICANT ACCOUNTING POLICIES
Predictive Discovery Limited is a company limited by shares, incorporated and domiciled in Australia.
The financial report is a general purpose financial statement that has been prepared in accordance with
Australian Accounting Standards, Australian Accounting
Interpretations, other authoritative
pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in
a financial report 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. Material accounting policies
adopted in the preparation of this financial report are presented below and have been consistently
applied unless otherwise stated.
The financial report has been prepared on an accruals basis and is based on historical costs, modified,
where applicable, by the measurement at fair value of selected financial assets and financial liabilities.
These financial statements are presented in Australian dollars, rounded to the nearest dollar.
(A)
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements incorporate the assets, liabilities and results of entities
controlled by Predictive Discovery Limited at the end of the reporting period. A controlled
entity is any entity over which Predictive Discovery Limited has the power to govern the
financial and operating policies so as to obtain benefits from the entity's activities. Control will
generally exist when the parent owns, directly or indirectly through subsidiaries, more than half
of the voting power of an entity. In assessing the power to govern, the existence and effect of
holdings of actual and potential voting rights are also considered.
Where controlled entities have entered or left The Group during the year, the financial
performance of those entities are included only for the period of the year that they were
controlled. A list of controlled entities is contained in Note 18 to the financial statements.
As at reporting date, the assets and liabilities of all controlled entities have been incorporated
into the consolidated financial statements as well as their results for the year then ended.
Where controlled entities have entered (left) The Group during the year, their operating results
have been included (excluded) from the date control was obtained (ceased).
In preparing the consolidated financial statements, all inter-group balances and transactions
between entities in The Group have been eliminated on consolidation. Accounting policies of
subsidiaries have been changed where necessary to ensure consistency with those adopted by
the parent entity.
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PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..
(A)
PRINCIPLES OF CONSOLIDATION (continued)
Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly,
to a parent, are shown separately within the Equity section of the consolidated statement of
financial position and consolidated statement of comprehensive income. The non-controlling
interests in the net assets comprise their interests at the date of the original business
combination and their share of changes in equity since that date.
Subsidiaries are accounted for in the parent entity at cost.
Business Combinations
Business combinations occur where an acquirer obtains control over one or more businesses
and results in the consolidation of its assets and liabilities.
A business combination is accounted for by applying the acquisition method, unless it is a
combination involving entities or businesses under common control. The acquisition method
requires that for each business combination one of the combining entities must be identified as
the acquirer (i.e. parent entity). The business combination will be accounted for as at the
acquisition date, which is the dale that control over the acquiree is obtained by the parent
entity. At this date, the parent shall recognise, in the consolidated accounts, and subject to
certain limited exceptions, the fair value of the identifiable assets acquired and liabilities
assumed. In addition, contingent liabilities of the acquiree will be recognised where a present
obligation has been incurred and its fair value can be reliably measured.
The acquisition may result in the recognition of goodwill or a gain from a bargain purchase. The
method adopted for the measurement of goodwill will impact on the measurement of any non-
controlling interest to be recognised in the acquiree where less than 100% ownership interest is
held in the acquiree.
The acquisition date fair value of the consideration transferred for a business combination plus
the acquisition date fair value of any previously held equity interest shall form the cost of the
investment in the separate financial statements. Consideration may comprise the sum of the
assets transferred by the acquirer, liabilities incurred by the acquirer to the former owners of
the acquiree and the equity interests issued by the acquirer.
Fair value uplifts in the value of pre-existing equity holdings are taken to the statement of
comprehensive income. Where changes in the value of such equity holdings had previously
been recognised in other comprehensive income, such amounts are recycled to profit or loss.
Included in the measurement of consideration transferred is any asset or liability resulting from
a contingent consideration arrangement. Any obligation incurred relating to contingent
consideration is classified as either a financial liability or equity instrument, depending upon the
nature of the arrangement. Rights to refunds of consideration previously paid are recognised as
a receivable. Subsequent to initial recognition, contingent consideration classified as equity is
not remeasured and its subsequent settlement is accounted for within equity. Contingent
consideration classified as an asset or a liability is remeasured each reporting period to fair value
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PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..
(A)
PRINCIPLES OF CONSOLIDATION (continued)
Business Combinations (continued)
through the statement of comprehensive income unless the change in value can be identified as
existing at acquisition date.
All transaction costs incurred in relation to the business combination are expensed to the
statement of comprehensive income.
(B)
REVENUE AND OTHER INCOME
Revenue is measured at the fair value of the consideration received or receivable after taking
into account any trade discounts and volume rebates allowed. Any consideration deferred is
treated as the provision of finance and is discounted at a rate of interest that is generally
accepted in the market for similar arrangements. The difference between the amount initially
recognised and the amount ultimately received is interest revenue.
Interest revenue is recognised using the effective interest rate method. The effective interest
rate method uses the effective interest rate which is the rate that exactly discounts the
estimated future cash receipts over the expected life of the financial assets.
All revenue is stated net of the amount of goods and services tax (GST).
(C)
BOROWING COSTS
Borrowing costs directly attributable to the acquisition, construction or production of assets
that necessarily take a substantial period of time to prepare for their intended use or sale, are
added to the cost of those assets, until such time as the assets are substantially ready for their
intended use or sale.
All other borrowing costs are recognised in income in the period in which they are incurred.
(D)
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 the profit or loss is the tax payable on taxable income
calculated using applicable income tax rates enacted, or substantially enacted, as at the end of
the reporting period. Current tax liabilities (assets) are therefore measured at the amounts
expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability
balances during the year as well as unused tax losses.
Current and deferred tax expense (income) is charged or credited directly to equity instead of
the profit or loss when the tax relates to items that are credited or charged directly to equity.
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PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES…..
(D)
INCOME TAX (continued)
Deferred tax assets and liabilities are ascertained based on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the financial
statements. Deferred tax assets also result where amounts have been fully expensed but future
tax deductions are available. No deferred income tax will be recognised from the initial
recognition of an asset or liability, excluding a business combination, where there is no effect on
accounting or taxable 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, based on tax rates enacted or
substantively enacted at the end of the reporting period. 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.
Where temporary differences exist in relation to investments in subsidiaries, branches,
associates, and joint ventures, deferred tax assets and liabilities are not recognised where the
timing of the reversal of the temporary difference can be controlled and it is not probable that
the reversal will occur in the foreseeable future.
Current 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 legally enforceable
right of set-off exists, 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.
(E)
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 year have been measured at the amounts expected to be paid when the
liability is settled. Employee benefits payable later than one year have been measured at
present value of the estimated future cash outflows to be made for those benefits. In
determining the liability, consideration is given to employee wage increases and the probability
that the employee may satisfy vesting requirements. Those cashflows are discounted using
market yields on national government bonds with terms to maturity that match the expected
timing of cashflows.
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PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..
(E)
EMPLOYEE BENEFITS (continued)
Liabilities recognised in respect of employee benefits which are not expected to be settled
within 12 months are measured at 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.
(F)
PROVISIONS
Provisions are recognised when The Group 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.
The liability for long service leave is recognised in current and non-current liabilities, depending
on the unconditional right to defer settlement of the liability for at least 12 months after the
reporting date.
(G)
FOREIGN CURRENCY TRANSACTIONS AND BALANCES
The functional currency of each of The Group's entities is measured using the currency of the
primary economic environment in which that entity operates. The consolidated financial
statements are presented in Australian dollars which is the parent entity's functional and
presentation currency. All other companies within The Group have Australian dollars as their
functional currency.
Foreign currency transactions are translated into functional currency using the exchange rates
prevailing at the date of the transaction. Foreign currency monetary items are translated at the
year-end exchange rate. Non-monetary items measured at historical cost continue to be carried
at the exchange rate at the date of the transaction. Non-monetary items measured at fair value
are reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the
consolidated statement of comprehensive income, except where deferred in equity as a
qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in
equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange
difference is recognised in the consolidated statement of comprehensive income.
The financial results and position of foreign operations whose functional currency is different
from The Group's presentation currency are translated as follows:
•
assets and liabilities are translated at year-end exchange rates prevailing at that reporting
date;
income and expenses are translated at average exchange rates for the period; and
retained earnings are translated at the exchange rates prevailing at the date of the
transaction.
•
•
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PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..
(G)
FOREIGN CURRENCY TRANSACTIONS AND BALANCES (continued)
Exchange differences arising on translation of foreign operations are transferred directly to The
Group's foreign currency translation reserve in the consolidated statement of financial position.
These differences are recognised in the consolidated statement of comprehensive income in the
period in which the operation is disposed.
(H)
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short
term highly liquid investments with original maturities of three months or less, and bank
overdrafts. Bank overdrafts are shown within short term borrowings in current liabilities in the
statement of financial position.
(I)
FINANCIAL INSTRUMENTS
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the
contractual provisions to the instrument. For financial assets, this is the equivalent to the date
that The Group commits itself to either the purchase or sale of the asset (i.e. trade date
accounting
initially measured at fair value plus
transactions 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.
is adopted).Financial
instruments are
Classification and subsequent measurement
Financial instruments are subsequently measured at either of fair value, amortised cost using
the effective interest rate method, or cost. Fair value represents the amount for which an asset
could be exchanged or a liability settled, between knowledgeable, willing parties. Where
available, quoted prices in an active market are used to determine fair value. In other
circumstances, valuation techniques are adopted.
Amortised cost is calculated as:
(a) the amount at which the financial asset or financial liability is measured at initial
recognition;
(b)
less principal repayments;
(c) plus or minus the cumulative amortisation of the difference, if any, between the amount
initially recognised and the maturity amount calculated using the effective interest method;
and
(d)
less any reduction for impairment.
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PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..
(I)
FINANCIAL INSTRUMENTS (continued)
Classification and subsequent measurement ……
The effective interest method is used to allocate interest income or interest expense over the
relevant period and is equivalent to the rate that exactly 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 in profit or loss.
The Group does not designate any interests in subsidiaries, associates or joint venture entities as
being subject to the requirements of accounting standards specifically applicable to financial
instruments.
(i)
Financial assets at fair value through profit or loss
Financial assets are classified at ‘fair value through profit or loss’ when they are either 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.
(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, except for those which are not expected to
mature within 12 months after the end of the reporting period. (All other loans and receivables
are classified as non-current assets).
(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 Group'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, except for those which are
expected to mature within 12 months are the end of the reporting period. (All other
investments are classified as current assets).
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PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..
(I)
FINANCIAL INSTRUMENTS (continued)
Classification and subsequent measurement ……
If during the period The Group sold or reclassified more than an insignificant amount of the held
to maturity investments before maturity, the entire held-to-maturity investments category
would be tainted and reclassified as available for sale.
(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.
Available for sale financial assets are included in non-current assets, except for those which are
expected to mature 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 liabilities (excluding financial guarantees) are subsequently measured at
amortised cost.
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or
the asset is transferred to another party whereby the entity no longer has any significant
continuing involvement in the risks and benefits associated with the asset. Financial liabilities
are derecognised where the related obligations are either discharged, cancelled or expired. The
difference between the carrying value of the financial liability 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.
(J)
PROPERTY, PLANT AND EQUIPMENT
Each class of property, plant and equipment is carried at cost or fair value as indicated, less,
where applicable, any accumulated depreciation and impairment losses.
Plant and Equipment
Plant and equipment are measured on the cost basis.
Depreciation
The depreciable amount of all fixed assets is depreciated on a straight line basis over the asset's
useful life to The Group commencing from the time the asset is held ready for use.
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PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..
(J)
PROPERTY, PLANT AND EQUIPMENT (continued)
Depreciation …..
Leasehold improvements are depreciated over the shorter of either the unexpired period of the
lease or the estimated useful lives of the improvements.
The estimated useful lives used for each class of depreciable assets are:
CLASS OF FIXED ASSET
Camp under construction
USEFUL LIFE
7 - 20 years
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end
of each reporting period.
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 consolidated statement of comprehensive income.
Property, plant and equipment is derecognised and removed from the consolidated statement
of financial position on disposal or when no future economic benefits are expected. Gains and
losses from derecognition are measured as the difference between the net disposal proceeds, if
any, and the carrying amount and are recognised in profit or loss.
Subsequent costs are included in the property, plant and equipment's carrying value or
recognised as a separate asset when it is probable that future economic benefits associated with
the item will be realised and the cost of the item can be measured reliably. All other repairs and
maintenance are recognised in profit or loss.
(K)
EXPLORATION AND DEVELOPMENT EXPENDITURE
Costs Carried Forward
Costs arising from exploration and evaluation activities are carried forward where the rights to
tenure for the area of interest are current and 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.
- 55 -
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..
(L)
IMPAIRMENT OF ASSETS
At each reporting date, The Group assesses whether there is any indication that an asset may be
impaired. The assessment will include considering external sources of information including,
dividends received from subsidiaries, associates or jointly controlled entities deemed to be out
of pre-acquisition profits. 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 value. Any excess of the asset's
carrying value over its recoverable amount is expensed to the consolidated statement of
comprehensive income.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
Where an impairment loss on a revalued asset is identified, this is debited against the
revaluation surplus in respect of the same class of asset to the extent that the impairment loss
does not exceed the amount in the revaluation surplus for that same class of asset.
Non-financial assets, other than inventories, deferred tax assets, assets from employee benefits,
investment properties and deferred acquisition costs, are assessed for any indication of
impairment at the end of each reporting period. Any indication of impairment requires formal
testing of impairment by comparing the carrying amount of the asset to an estimate of the
recoverable amount of the asset. An impairment loss is calculated as the amount by which the
carrying amount of the asset exceeds the recoverable amount of the asset.
Intangible assets with an indefinite useful life and intangible assets not yet available for use are
tested for impairment annually regardless of whether there is any indication of impairment.
The recoverable amount is the greater of the asset's fair value less costs to sell and its value in
use. The asset's value in use is calculated as the estimated future cash flows discounted to their
present value using a pre-tax rate that reflects current market assessments of the time value of
money and the risks associated with the asset. Assets that cannot be tested individually for
impairment are grouped together into the smallest group of assets that generates cash inflows
(the asset's cash generating unit).
Impairment losses are recognised in profit or loss. Impairment losses are allocated first, to
reduce the carrying amount of any goodwill allocated to cash generating units, and then to
other assets of the group on a pro rata basis.
Assets other than goodwill are assessed at the end of each reporting period to determine
whether previously recognised impairment losses may no longer exist or may have decreased.
Impairment losses recognised in prior periods for assets other than goodwill are reversed up to
the carrying amounts that would have been determined had no impairment loss been
recognised in prior periods.
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PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..
(M)
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 Group 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.
(N)
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 Tax 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 consolidated statement of financial position are shown inclusive
of GST.
(O)
LEASES
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership
of the asset, but not the legal ownership that are transferred to entities in The Group, are
classified as finance leases.
Finance leases are capitalised by recording an asset and a liability at the lower of the amounts
equal to the fair value of the leased property or the present value of the minimum lease
payments, including any guaranteed residual values. Lease payments are allocated between the
reduction of the lease liability and the lease interest expense for the period.
Lease payments for operating leases, where substantially all of the risks and benefits remain
with the lessor, are charged as expenses in the periods in which they are incurred.
(P)
EARNINGS PER SHARE
Basic loss per share is calculated as net loss attributable to members of The Group divided by
the weighted average number of ordinary shares. Diluted loss per share is calculated by
adjusting the net loss attributable to members of The Group and the number of shares
outstanding for the effects of all dilutive potential ordinary shares, which include shares
options.
(Q)
CONTRIBUTED EQUITY
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of
new shares or options are shown as a deduction, net of tax, from the proceeds.
(R)
SHARE-BASED PAYMENT TRANSACTIONS
Employees of The Group receive remuneration in the form of share based payment transactions,
whereby employees render services in exchange for equity instruments ("equity settled
transactions").
- 57 -
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..
(R)
SHARE-BASED PAYMENT TRANSACTIONS (continued)
When the goods or services acquired in a share based payment transaction do not qualify for
recognition as assets, they are recognised as expenses.
The cost of equity settled transactions and the corresponding increase in equity is measured at
the fair value of the goods or services acquired. Where the fair value of the goods or services
received cannot be reliably estimated, the fair value is determined indirectly by the fair value of
the equity instruments using the Black Scholes option valuation technique.
Equity-settled transactions that vest after employees complete a specified period of service are
recognised as services are received during the vesting period with a corresponding increase in
equity.
(S)
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
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 Group.
Key estimates – Impairment
The Group assesses impairment at the end of each reporting period by evaluating conditions
specific to The Group that may be indicative of impairment triggers. Recoverable amounts of
relevant assets are reassessed using fair value less cost to sell or value-in-use calculations which
incorporate various key assumptions.
Key judgements – Exploration and Evaluation Expenditure
The Group capitalises expenditure relating to exploration and evaluation where it is considered
likely to be recoverable or where the activities have not reached a stage which permits a
reasonable assessment of the existence of reserves. $10,235,139 has been capitalised as at 30
June 2012 (see not 6). 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 and there are no facts
of circumstances that suggest the carrying amounts of the exploration and evaluation assets
recognised exceed their recoverable amount.
Key Judgements – Share-based payment transactions
The Group measures the cost of equity settled transactions with employees by reference to the
fair value of the equity instruments at the date at which they are granted. The fair value is
determined using the Black Scholes method. The related assumptions are detailed in note 22.
The accounting estimates and assumptions relating to equity-settled share-based payments
would have no impact on the carrying amounts of assets and liabilities within the next annual
reporting period but may impact expenses and equity.
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PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..
(S)
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
Key Judgements - Going Concern
The financial report has been prepared using the going concern basis. The Directors have
determined that as with similar companies, future capital raisings will be required in order to
continue the exploration and development of the company's mining tenements (some subject
to an option payment) to achieve a position where they can prove exploration reserves. The
ability of the company to continue as a going concern is dependent upon the company raising
additional capital sufficient to meet the company's exploration commitments. Should there be
no funding available, exploration of the areas of interest may be put on hold. The recoverability
of the exploration asset is dependent upon the continued exploration of each area of interest.
The Directors have prepared a cash flow forecast for the foreseeable future reflecting this
expectation and their effect upon the company. The achievement of the forecast is dependent
upon the future capital raising, the outcome of which is uncertain.
Key Judgements - Recoverability of Intercompany Loan
Within Non-current assets of the parent entity (see note 24) there is a loan due from the 100%
subsidiary of $9,427,546 which is considered fully recoverable. The recoverability of this loan is
dependent upon the successful development or sale of exploration assets in Burkina Faso.
(T)
ADOPTION OF NEW AND REVISED ACCOUNTING STANDARDS
During the current year the Group 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 124 (Revised)
Application Date of the standard 1 January 2011
Application Date for the Group 1 July 2011
The revised AASB 124 Related Party Disclosures (December 2009) simplifies the definition of a
related party, clarifying its intended meaning and eliminating inconsistencies from the
definition, including:
(a)
The definition now identifies a subsidiary and an associate with the same investor as
related parties of each other
Entities significantly influenced by one person and entities significantly influenced by a
close member of the family of that person are no longer related parties of each other
The definition now identifies that, whenever a person or entity has both joint control
over a second entity and joint control or significant influence over a third party, the
second and third entities are related to each other.
(b)
(c)
- 59 -
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..
(T)
ADOPTION OF NEW AND REVISED ACCOUNTING STANDARDS (continued)
AASB 124 (Revised)…..
A partial exemption is also provided from the disclosure requirements for government-related
entities. Entities that are related by virtue of being controlled by the same government can
provide reduced related party disclosures.
AASB 2009-12
Application Date of the standard 1 January 2011
Application Date for the Group 1 July 2011
Amendments to Australian Accounting Standards
[AASBs 5, 8, 108, 110, 112, 119, 133, 137, 139, 1023 & 1031 and Interpretations 2, 4, 16, 1039 &
1052]
Makes numerous editorial changes to a range of Australian Accounting Standards and
Interpretations.
In particular, it amends AASB 8 Operating Segments to require an entity to exercise judgement
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. It also makes numerous editorial amendments to a range of Australian Accounting
Standards and Interpretations, including amendments to reflect changes made to the text of
IFRS by the IASB.
AASB 2010-4
Application Date of the standard 1 January 2011
Application Date for the Group 1 July 2011
Amendments to Australian Accounting Standards arising from the Annual Improvements
Project
[AASB 1, AASB 7, AASB 101, AASB 134 and Interpretation 13]
Emphasises the interaction between quantitative and qualitative AASB 7 disclosures and the
nature and extent of risks associated with financial instruments.
Clarifies that an entity will present an analysis of other comprehensive income for each
component of equity, either in the statement of changes in equity or in the notes to the
financial statements.
Provides guidance to illustrate how to apply disclosure principles in AASB 134 for significant
events and transactions.
Clarifies that when the fair value of award credits is measured based on the value of the awards
for which they could be redeemed, the amount of discounts or incentives otherwise granted to
customers not participating in the award credit scheme, is to be taken into account.
AASB 2010-5
Application Date of the standard 1 January 2011
Application Date for the Group 1 July 2011
Amendments to Australian Accounting Standards
[AASB 1, 3, 4, 5, 101, 107, 112, 118, 119, 121, 132, 133, 134, 137, 139, 140, 1023 & 1038 and
Interpretations 112, 115, 127, 132 & 1042]
- 60 -
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..
(T)
ADOPTION OF NEW AND REVISED ACCOUNTING STANDARDS (continued)
AASB 2010-5
This Standard makes numerous editorial amendments to a range of Australian Accounting
Standards and Interpretations, including amendments to reflect changes made to the text of
IFRS by the IASB.
These amendments have no major
pronouncements.
impact on the requirements of the amended
AASB 1054
Application Date of the standard 1 July 2011
Application Date for the Group 1 July 2011
Australian Additional Disclosures
This standard is as a consequence of phase 1 of the joint Trans-Tasman Convergence project of
the AASB and FRSB.
This standard, with AASB 2011-1 relocates all Australian specific disclosures from other
standards to one place and revises disclosures in the following areas:
(a)
(b)
(c) Whether the entity is a for-profit or not-for-profit entity
(d) Whether the financial statements are general purpose or special purpose
(e)
(f)
Compliance with Australian Accounting Standards
The statutory basis or reporting framework for financial statements
Audit fees
Imputation credits
AASB 2010-6
Application Date of the standard 1 July 2011
Application Date for the Group 1 July 2011
Amendments to Australian Accounting Standards – Disclosures on Transfers of Financial Assets
[AASB 1 & AASB 7]
The amendments increase the disclosure requirements for transactions involving transfers of
financial assets but which are not derecognised and introduce new disclosures for assets that
are derecognised but the entity continues to have a continuing exposure to the asset after the
sale.
AASB 2010-9
Application Date of the standard 1 July 2011
Application Date for the Group 1 July 2011
Amendments to Australian Accounting Standards – Severe Hyperinflation and Removal of Fixed
Dates for First-time adopters [AASB 1]
In respect of the removal of fixed dates, the amendments provide relief for first-time adopters
of Australian Accounting Standards from having to reconstruct transactions that occurred
before their date of transition to Australian Accounting Standards.
- 61 -
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..
(T)
ADOPTION OF NEW AND REVISED ACCOUNTING STANDARDS (continued)
AASB 2010-9
The amendments in respect of severe hyperinflation provide guidance for entities emerging
from severe hyperinflation either to resume presenting Australian Accounting Standards
financial statements or to present Australian Accounting Standards financial statements for the
first time.
AASB 2011-5
Application Date of the standard 1 July 2011 Application Date for the Group 1 July 2011
Amendments to Australian Accounting Standards – Extending Relief from Consolidation, the
Equity Method and Proportionate Consolidation
[AASB 127, AASB 128 & AASB 131]
This Standard makes amendments to:
(a)
(b)
(c)
AASB 127 Consolidated and Separate Financial Statements
AASB 128 Investments in Associates
AASB 131 Interests in Joint Ventures
to extend the circumstances in which an entity can obtain relief from consolidation, the equity
method or proportionate consolidation, and relates primarily to those applying the reduced
disclosure regime or not-for-profit entities.
(U)
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. The Group has decided against early
adoption of these standards. A discussion of those future requirements and their impact on the
Group follows:
AASB 9 - Financial Instruments
Application Date of the standard 1 January 2013
Application Date for the Group 1 July 2013
AASB 9 includes requirements for the classification and measurement of financial assets
resulting from the first part of Phase 1 of the IASB’s project to replace IAS 39 Financial
Instruments: Recognition and Measurement (AASB 139 Financial Instruments: Recognition and
Measurement).
These requirements improve and simplify the approach for classification and measurement of
financial assets compared with the requirements of AASB 139. The main changes from AASB
139 are described below.
(a)
Financial assets are classified based on (1) the objective of the entity’s business model
for managing the financial assets; (2) the characteristics of the contractual cash flows.
This replaces the numerous categories of financial assets in AASB 139, each of which had
its own classification criteria.
- 62 -
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..
(U)
NEW ACCOUNTING STANDARDS FOR APPLICATION IN FUTURE PERIODS (continued)
AASB 9 – Financial Instruments…..
(b)
(c)
investments
AASB 9 allows an irrevocable election on initial recognition to present gains and losses
on
in other
comprehensive income. Dividends in respect of these investments that are a return on
investment can be recognised in profit or loss and there is no impairment or recycling on
disposal of the instrument.
instruments that are not held for trading
in equity
Financial assets can be designated and measured at fair value through profit or loss at
initial recognition if doing so eliminates or significantly reduces a measurement or
recognition inconsistency that would arise from measuring assets or liabilities, or
recognising the gains and losses on them, on different bases.
AASB 10 - Consolidated Financial Statements
Application Date of the standard 1 January 2013
Application Date for the Group 1 July 2013
AASB 10 establishes a new control model that applies to all entities. It replaces parts of AASB
127 Consolidated and Separate Financial Statements dealing with the accounting for
consolidated financial statements and Interpretation 112 Consolidation – Special Purpose
Entities.
The new control model broadens the situations when an entity is considered to be controlled
by another entity and includes new guidance for applying the model to specific situations,
including when acting as a manager may give control, the impact of potential voting rights and
when holding less than a majority voting rights may give control. This is likely to lead to more
entities being consolidated into the group.
AASB 11 - Joint Arrangements
Application Date of the standard 1 January 2013
Application Date for the Group 1 July 2013
AASB 11 replaces AASB 131 Interests in Joint Ventures and Interpretation 113 Jointly-
controlled Entities – Non-monetary Contributions by Ventures. AASB 11 uses the principle of
control in AASB 10 to define joint control, and therefore the determination of whether joint
control exists may change. In addition AASB 11 removes the option to account for jointly
controlled entities (JCEs) using proportionate consolidation. Instead, accounting for a joint
arrangement is dependent on the nature of the rights and obligations arising from the
arrangement. Joint operations that give the venturers a right to the underlying assets and
obligations themselves is accounted for by recognising the share of those assets and
obligations. Joint ventures that give the venturers a right to the net assets is accounted for
using the equity method. This may result in a change in the accounting for the joint
arrangements held by the group.
- 63 -
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..
(U)
NEW ACCOUNTING STANDARDS FOR APPLICATION IN FUTURE PERIODS (continued)
AASB 12 - Disclosure of Interests in Other Entities
Application Date of the standard 1 January 2013
Application Date for the Group 1 July 2013
AASB 12 includes all disclosures relating to an entity’s interests in subsidiaries, joint
arrangements, associates and structures entities.
New disclosures have been introduced about the judgements made by management to
determine whether control exists, and to require summarised information about joint
arrangements, associates and structured entities and subsidiaries with non-controlling
interests.
AASB 13 – Fair Value Measurement
Application Date of the standard 1 January 2013
Application Date for the Group 1 July 2013
AASB 13 establishes a single source of guidance under Australian Accounting Standards for
determining the fair value of assets and liabilities. AASB 13 does not change when an entity is
required to use fair value, but rather, provides guidance on how to determine fair value under
Australian Accounting Standards when fair value is required or permitted by Australian
Accounting Standards. Application of this definition may result in different fair values being
determined for the relevant assets.
AASB 13 also expands the disclosure requirements for all assets or liabilities carried at fair
value. This includes information about the assumptions made and the qualitative impact of
those assumptions on the fair value determined.
AASB 119 - Employee Benefits
Application Date of the standard 1 January 2013
Application Date for the Group 1 July 2013
The main changes to accounting for defined benefit plans are:
-
to eliminate the option to defer the recognition of gains and losses (the ‘corridor
method’);
requiring remeasurements to be presented in other comprehensive income; and
enhancing the disclosure requirements relating to defined benefit plans for Tier 1
entities. The AASB has provided relief from certain disclosure requirements for entities
that adopt Tier 2 Reduced Disclosure Requirements.
-
-
Interpretation 20 - Stripping the Costs in the Production Phase of a Surface Mine
Application Date of the standard 1 January 2013
Application Date for the Group 1 July 2013
This interpretation applies to stripping costs incurred during the production phase of a surface
mine.
- 64 -
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..
(U)
NEW ACCOUNTING STANDARDS FOR APPLICATION IN FUTURE PERIODS (continued)
AASB 119 - Employee Benefits…..
Interpretation 20 - Stripping the Costs in the Production Phase of a Surface Mine (continued)
Production stripping costs are to be capitalised as part of an asset, if an entity can demonstrate
that it is probable future economic benefits will be realised, the costs can be reliably measured
and the entity can identify the component of an ore body for which access has been improved.
This asset is to be called the “stripping activity asset”.
The stripping activity asset shall be depreciated or amortised on a systematic basis, over the
expected useful life of the identified component of the ore body that becomes more accessible
as a result of the stripping activity. The units of production method shall be applied unless
another method is more appropriate.
Consequential amendments were also made to other standards via AASB 2011-12.
Annual Improvements 2009-2011 Cycle
Application Date of the standard 1 January 2013
Application Date for the Group 1 July 2013
This standard sets out amendments to International Financial Reporting
Standards (IFRSs) and the related bases for conclusions and guidance made during the
International Accounting Standards Board’s Annual Improvements process. These amendments
have not yet been adopted by the AASB.
The following items are addressed by this standard:
IFRS 1 First-time Adoption of International Financial Reporting Standards
•
•
Repeated application of IFRS 1
Borrowing costs
IAS 1 Presentation of Financial Statements
•
Clarification of the requirements for comparative information
IAS 16 Property, Plant and Equipment
•
Classification of servicing equipment
IAS 32 Financial Instruments: Presentation
•
Tax effect of distribution to holders of equity instruments
IAS 34 Interim Financial Reporting
•
Interim financial reporting and segment information for total assets and liabilities
- 65 -
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..
(U)
NEW ACCOUNTING STANDARDS FOR APPLICATION IN FUTURE PERIODS (continued)
AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key
Management Personnel Disclosure Requirements
Application Date of the standard 1 July 2013
Application Date for the Group 1 July 2013
This Amendment deletes from AASB 124 individual key management personnel disclosure
requirements for disclosing entities that are not companies.
AASB 1053 Application of Tiers of Australian Accounting Standards
Application Date of the standard 1 July 2013
Application Date for the Group 1 July 2013
This Standard establishes a differential financial reporting framework consisting of two Tiers of
reporting requirements for preparing general purpose financial statements:
(a)
(b)
Tier 1: Australian Accounting Standards
Tier 2: Australian Accounting Standards – Reduced Disclosure Requirements
Tier 2 comprises the recognition, measurement and presentation requirements of Tier 1 and
substantially reduced disclosures corresponding to those requirements.
The following entities apply Tier 1 requirements in preparing general purpose financial
statements:
(a)
For-profit entities in the private sector that have public accountability (as defined in this
Standard)
The Australian Government and State, Territory and Local Governments
(b)
The following entities apply either Tier 2 or Tier 1 requirements in preparing general purpose
financial statements:
(a)
(b)
For-profit private sector entities that do not have public accountability
All not-for-profit private sector entities
Public sector entities other than the Australian Government and State, Territory and Local
Governments
The Group does not anticipate early adoption of any of the above accounting
standards.
2
INCOME TAX EXPENSE
(A)
THE COMPONENTS OF TAX EXPENSE COMPRISE:
Current tax
Deferred tax
- 66 -
2012
$
2011
$
-
-
-
-
-
-
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
2
INCOME TAX EXPENSE (continued)
(a) Income tax recognised in profit or loss
Tax expense / (revenue) comprises:
Current tax expense / (revenue)
Deferred tax expense / (revenue) relating to the origination and
reversal of temporary differences
Tax Losses Not Recognised
Total tax expense / (revenue)
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:
Profit / (loss) from operations
2012
$
2011
$
(2,670,783)
(1,358,977)
1,892,950
979,673
777,833
379,304
-
-
(2,706,548)
(1,505,280)
Income tax expense (revenue) calculated at 30% (2010: 30%)
(811,964)
(451,584)
Tax Effect of Employee Options
Non-deductable expenses
Tax Losses Not Recognised
Income tax rate
15,076
18,996
72,280
-
777,892
379,304
-
-
The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by the Australian
corporate entities on taxable profits under the Australian tax law. There has been no change in the
corporate tax rate when compared with the previous year.
3
CASH AND CASH EQUIVALENTS
Cash at bank
2012
$
2011
$
1,063,472
5,208,418
1,063,472
5,208,418
Of the cash at bank amount, $10,000 is provided as security to the ANZ Bank for a bank guarantee.
4
TRADE AND OTHER RECEIVABLES
Trade receivables
Other receivables
2012
$
2011
$
90,152
89,456
20,903
304,436
179,608
325,339
- 67 -
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
5
PROPERTY, PLANT AND EQUIPMENT
PLANT AND EQUIPMENT
At cost
Accumulated depreciation
Total plant and equipment
2012
$
2011
$
529,159
287,951
(103,115)
(358)
426,044
287,593
(A) MOVEMENTS IN CARRYING AMOUNTS
Movement in the carrying amounts for each class of property, plant and equipment between the
beginning and the end of the current financial year:
PLANT AND
EQUIPMENT
$
TOTAL
$
287,593
282,107
287,593
282,107
(103,115)
(103,115)
(40,541)
(40,541)
426,044
426,044
7,593
7,593
280,358
280,358
(358)
(358)
287,593
287,593
Balance at 30 June 2012
Balance at the beginning of year
Additions
Depreciation expense
Movement in exchange rates
Balance at 30 June 2012
Balance at 30 June 2011
Balance at the beginning of year
Additions
Depreciation expense
Balance at 30 June 2011
- 68 -
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
6
EXPLORATION, EVALUATION AND DEVELOPMENT ASSETS
Exploration and evaluation expenditure
2012
Balance at beginning of the year
Expenditure incurred
Impairment
Balance at end of the year
2011
Balance at beginning of the year
Expenditure incurred
Balance at end of the year
2012
$
2011
$
10,235,139
3,925,307
10,235,139
3,925,307
EXPLORATION AND
EVALUATION
$
3,925,307
7,041,679
(731,847)
10,235,139
598,939
3,326,368
3,925,307
The recoverability of the carrying amount of the exploration and evaluation assets is dependent on
successful development and commercial exploitation, or alternatively, sale of the respective areas of
interest. It is the Board’s view that PD’s exploration and evaluation assets satisfy AASB6 7.2(b)(ii)
because PD only commenced exploration activities over the past year and those activities have not
reached a stage which permits a reasonable assessment of the existence or otherwise of economically
recoverable reserves.
Active and significant operations have occurred on all permits until the beginning of the wet season
(July) and PD’s budget shows we will be expending some $3m+ on exploration activities in the dry
season (November to June). The budget is split by geographical area and not by area of interest as the
allocation of resources will depend upon findings. However, it is acknowledged that the budget allows
for spending on all areas of interest without exclusion. It is anticipated that all expenditure required by
agreement or permit will be met.
In assessing the recoverability of the carrying amounts, reference is made to Note 1 (S) - Key
Judgements - Exploration and Evaluation Expenditure and Going Concern. The Directors have
determined that as with similar companies, future capital raisings will be required in order to continue
the exploration and development of the company's mining tenements (some subject to an option
payment) to achieve a position where they can prove exploration reserves. Should there be no funding
available, exploration of the areas of interest may be put on hold. The recoverability of the exploration
asset is dependent upon the continued exploration of each area of interest.
- 69 -
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
7
TRADE AND OTHER PAYABLES
CURRENT
Trade payables
Other payables
8 TAX ASSETS AND LIABILITES
(a) Assets
Current
Income tax refundable
Non-current
Deferred tax asset comprises:
Employee Entitlements
Accruals and payables
ASX Listing Costs
Tax Losses
Amount Not Recognised
(b) Liabilities
Current
Income tax liabilities
Less: PAYG instalments paid
Income tax payable
Non-current
Deferred tax liability comprises:
Exploration Expenditure
Amount Not Recognised
Net DTA/DTL
- 70 -
2012
$
2011
$
532,723
307,905
101,480
484,757
634,203
792,662
2012
$
2011
$
-
-
-
-
41,732
-
-
24,392
8,550
2,729
4,267,723
1,596,940
(4,309,455)
(1,632,611)
-
-
-
-
-
-
-
-
(3,070,542)
(1,177,592)
3,070,542
-
1,177,592
-
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
8 TAX ASSETS AND LIABILITES (continued)
2012
$
2011
$
(c) Reconciliations
(i) Gross Movements
The overall movement in the deferred tax balances is as follows:
Opening balance
Underprovision in prior year
Credited / (charge) to the income statement
Amount Not Recognised
Closing balance
(ii) Deferred tax assets
The movement in deferred tax assets for each temporary
difference during the year is as follows:
Employee Entitlements
Opening balance
Credited / (charge) to the income statement
Amount Not Recognised
Closing balance
Provisions
Opening balance
Credited / (charge) to the income statement
Amount Not Recognised
Closing balance
Accruals and payables
Opening balance
Credited / (charge) to the income statement
Amount Not Recognised
Closing balance
Tax Losses
Opening balance
Credited / (charge) to the income statement
Amount Not Recognised
Closing balance
- 71 -
455,019
-
777,833
(1,232,852)
-
72,985
2,729
379,305
(455,019)
-
24,392
-
(24,392)
-
3,847
20,545
(24,392)
-
-
-
-
-
-
-
-
-
8,550
-
(8,550)
-
9,948
(1,398)
(8,550)
-
1,596,940
2,670,783
(4,267,723)
-
237,962
1,358,978
(1,596,940)
-
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
8 TAX ASSETS AND LIABILITES (continued)
ASX Listing Costs
Opening balance
Under provision in prior year
Credited / (charge) to the income statement
Amount Not Recognised
Closing balance
(iii) Deferred tax liability
Exploration Expenditure
Opening balance
Credit / (charge) to the income statement
Amount Not Recognised
Closing balance
2012
$
2011
$
2,729
-
(910)
(1,819)
-
910
2,729
(910)
(2,729)
-
(1,177,592)
-
1,177,592
-
(179,682)
(997,910)
1,177,592
-
The DTL is not recognised as a liability as the future tax benefits are assumed to be available if and
when the deferred tax liability crystalises.
9
PROVISIONS
CURRENT
Employee entitlements
10
ISSUED CAPITAL
125,555,405 (2011: 97,056,681) Ordinary shares
Share issue costs written off against issued capital
- 72 -
2012
$
2011
$
139,107
81,307
139,107
81,307
2012
$
2011
$
16,368,613
11,093,400
(1,104,424)
(743,770)
15,264,189
10,349,630
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
10
ISSUED CAPITAL (continued)
ORDINARY SHARES
2012
NO.
2012
$
2011
NO.
2011
$
At the beginning of the reporting period
97,056,681
11,093,400
92,000,000
1,915,000
Shares issued during the period
Consolidation of shares (1 for 2 basis)
-
-
-
-
-
(46,000,000)
-
-
Investor shares issue
Tenement Purchase
Employee share issue
IPO share issue
Employee allotment
Rights Issues
OPTIONS
-
-
10,500,000
1,050,000
524,590
100,000
436,681
110,000
-
-
-
-
-
-
80,000
8,000
40,000,000
8,000,000
40,000
10,400
27,974,134
5,192,968
-
-
125,555,405 $16,386,368
97,056,681 $11,093,400
(i)
For information relating to Predictive Discovery Limited employee option plan, including details
of options issued, exercised and lapsed during the financial year and the options outstanding at
year end, refer to Note 22.
11 RESERVES
FOREIGN CURRENCY TRANSLATION RESERVE
Exchange differences arising on translation of the foreign controlled entity are recognised in other
comprehensive income foreign currency translation reserve. The cumulative amount is reclassified to
profit or loss when the net investment is disposed of.
OPTION RESERVE
The option reserve records items recognised as expenses on valuation of employee share options.
12 EARNINGS PER SHARE
2012
$
2011
$
Earnings used to calculate basic EPS
(2,706,348)
(1,412,255)
Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS.
- 73 -
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
12 EARNINGS PER SHARE (continued)
2012
NO.
2011
NO.
Weighted average number of ordinary shares outstanding during the
period- Number used in calculating basic EPS
118,702,116
79,737,036
Weighted average number of ordinary shares outstanding during the
year used in calculating dilutive EPS
118,702,116
79,737,036
Diluted earnings per share is the same as basic earnings per share as The Group incurred a loss for the
period and therefore is not considered dilutive.
13 CAPITAL AND LEASING COMMITMENTS
(A)
LEASE COMMITMENTS
Payable - minimum lease payments:
- not later than 12 months
- between 12 months and 5 years
(B) OPTIONS FEE COMMITMENTS
Payable - minimum lease payments:
- not later than 12 months
- between 12 months and 5 years
(C) CAPITAL EXPENDITURE COMMITMENTS
Payable:
- not later than 12 months
- between 12 months and 5 years
- 74 -
2012
$
2011
$
220,486
236,315
427,873
427,873
648,359
664,188
2012
$
2011
$
430,000
250,000
100,000
460,000
530,000
710,000
2012
$
2011
$
72,352
1,578,616
289,410
6,624,871
361,762
8,203,487
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
13 CAPITAL AND LEASING COMMITMENTS (continued)
(D) LICENCE FEE COMMITMENTS
Payable:
- not later than 12 months
- between 12 months and 5 years
2012
$
2011
$
300,000
300,000
1,200,000
1,200,000
1,500,000
1,500,000
14 FINANCIAL RISK MANAGEMENT
The Group's financial instruments consist mainly of deposits with banks, receivables and payables.
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:
Financial Assets
Cash and cash equivalents
Trade and other receivables
Total Financial Assets
Financial Liabilities
Trade and other payables
Total Financial Liabilities
NOTE
2012
$
2011
$
3
4
1,063,261
5,208,418
179,819
325,339
1,243,080
5,533,757
7
634,203
792,662
634,203
792,662
The carrying amounts of these financial instruments approximate their fair values.
FINANCIAL RISK MANAGEMENT POLICIES
Exposure to key financial risks is managed in accordance with the Group’s risk management policy with
the objective to ensure that the financial risks inherent in exploration activities are identified and then
managed or kept as low as reasonably practicable.
The main financial risks that arise in the normal course of business are market risk (including currency
risk, interest rate risk and price risk), credit risk and liquidity risk. Different methods are used to
measure and manage these risk exposures. Liquidity risk is monitored through the ongoing review of
available cash and future commitments for exploration expenditure.
- 75 -
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
14 FINANCIAL RISK MANAGEMENT (continued)
FINANCIAL RISK MANAGEMENT POLICIES…..
Exposure to liquidity risk is limited by anticipating liquidity shortages and ensures capital can be raise in
advance of shortages. Interest rate risk is managed by limiting the amount interest bearing loans
entered into by The Group. It is the Board's policy that no speculative trading in financial instruments be
undertaken so as to limit expose to price risk.
Primary responsibility for identification and control of financial risks rests with the Company Secretary,
under the authority of the Board. The Board is apprised of these risks from time to time and agrees any
policies that may be undertaken to manage any of the risks identified.
Details of the significant accounting policies and methods adopted, including criteria for recognition,
the basis of measurement and the basis on which income and expenses are recognised, in respect of
each financial instrument are disclosed in Note 1 to the financial statements. The carrying values less
the impairment allowance for receivables and payables are assumed to approximate fair values due to
their short term nature. Cash and cash equivalents are subject to variable interest rates.
SPECIFIC FINANCIAL RISK EXPOSURES AND MANAGEMENT
(A)
CREDIT RISK
Exposure to credit risk relating to financial assets arises from the potential non-performance by
counter parties of contract obligations that could lead to a financial loss to The Group.
The Group trades only with recognised, creditworthy third parties.
The Group has no customers and consequently no significant exposure to bad debts or other
credit risks.
With respect to credit risk arising from financial assets, which comprise cash and cash
equivalents and receivables, the exposure to credit risk arises from default of the counter party,
with a maximum exposure equal to the carrying amount of these instruments. At balance date
cash and deposits were held with National Australia Bank.
(B)
LIQUIDITY RISK
Liquidity risk arises from the possibility that The Group might encounter difficulty in settling its
debts or otherwise meeting its obligations related to financial liabilities.
Prudent liquidity risk management implies maintaining sufficient cash reserves to meet the
ongoing operational requirements of the business. It is the Group’s policy to maintain sufficient
funds in cash and cash equivalents. Furthermore, the Group monitors its ongoing exploration
cash requirements and raises equity funding as and when appropriate to meet such planned
requirements. The Group has no undrawn financing facilities. Trade and other payables, the
only financial liability of the Group, are due within 3 months.
The tables below reflect an undiscounted contractual maturity analysis for financial liabilities.
- 76 -
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
14 FINANCIAL RISK MANAGEMENT (continued)
SPECIFIC FINANCIAL RISK EXPOSURES AND MANAGEMENT….
(B)
LIQUIDITY RISK (continued)
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.
Financial liability and financial asset maturity analysis
WITHIN 1 YEAR
1 TO 5 YEARS
TOTAL CONTRACTUAL CASH
FLOW
2012
$
2011
$
2012
$
2011
$
2012
$
2011
$
Financial liabilities due for
payment
Trade and other payables
634,203 792,662
-
Total contractual outflows
634,203 792,662
-
Financial assets - cash flows
realisable
Trade and other receivables
179,819 325,339
Total anticipated inflows
179,819 325,339
-
-
The financial assets and liabilities noted above are interest free.
(C)
MARKET RISK
i.
Interest rate risk
-
-
-
-
634,203 792,662
634,203 792,662
179,819 325,339
179,819 325,339
The Group’s cash flow interest rate risk primarily arises from cash at bank and deposits subject to
market bank rates. At balance date, the Group does not have any borrowings. The Group does not
enter into hedges. An increase/ (decrease) in interest rates by 1% during the whole of the
respective periods would have led to an increase/(decrease) in both equity and losses of less than
$10,000. 1% was thought to be appropriate because it represents four 0.25 basis point rate
rises/falls, which is appropriate in the recent economic climate. The majority of cash held in a cash
management account earns interest income at a rate of 4.5% p.a.
- 77 -
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
14 FINANCIAL RISK MANAGEMENT (continued)
SPECIFIC FINANCIAL RISK EXPOSURES AND MANAGEMENT …..
(C) MARKET RISK (continued)
ii. Foreign exchange risk
Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial
instrument fluctuating due to movement in foreign exchange rates of currencies in which The
Group holds financial instruments which are other than the AUD functional currency of The Group.
Through the purchase of put options, The Group has secured the right to purchase EURO's and US
Dollars at a pre-agreed upon price. At year end, there were no put options over EURO's and US
Dollar outstanding. The options to purchase the foreign currencies expired at various times
between 17 October 2011 and 15 June 2012.
15 OPERATING SEGMENTS
Identification of Reportable Segments
The Group has identified its operating segments based on the internal reports that are reviewed and
used by the Board of Directors (chief operating decision makers) in assessing performance and
determining the allocation of resources.
The accounting policies applied for internal purposes are consistent with those applied in the
preparation of these financial statements.
a)
The following is an analysis of the Group’s revenue and results from operations by reportable
segment.
2012
Revenue
Interest income
Expenses
Share based payments
Administration expenses
FX Expense
Exploration expenditure written
off
Impairment of Exploration
Corporate
$
Gold
Aust
$
Uranium
Aust
$
Gold
Burkina
Faso
$
Other
West
Africa
$
Total
$
191,196
-
(50,253)
(1,121,190)
(602,487)
-
-
-
-
(67,911)
-
-
-
-
-
-
-
191,196
-
(245,115)
-
(20,497)
-
-
-
(58,246)
(50,253)
(1,366,305)
(602,487)
(146,654)
-
-
(731,847)
-
-
(731,847)
Loss before tax
(1,582,734)
(67,911)
(731,847)
(265,612)
(58,246)
(2,706,350)
Current assets
Exploration expenditure
Plant and Equipment
Current liabilities
Net assets
1,014,634
-
5,644
(222,868)
-
317,732
-
-
797,410
317,732
-
228,446
- 9,917,408
420,400
-
(550,443)
-
- 10,015,811
-
1,243,080
- 10,235,140
426,044
-
(773,311)
-
- 11,130,953
- 78 -
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
15 OPERATING SEGMENTS (continued)
Identification of Reportable Segments …..
2011
Revenue
Corporate
$
Gold
Aust
$
Uranium
Aust
$
Gold
Burkina
Faso
$
Other
West
Africa
$
Total
$
Interest income
206,112
-
Expenses
Share based payments
Administration expenses
Exploration expenditure
written off
Loss before tax
(261,742)
(1,256,484)
-
-
-
(26,516)
(1,312,144)
(26,516)
Current assets
Exploration expenditure
Other non-current assets
Current liabilities
5,468,105
-
5,734
(303,609)
-
254,106
-
-
-
-
-
-
-
-
-
206,112
-
-
(40,628)
-
(261,742)
- (1,256,484)
(100,142)
(32,998)
(40,628)
(32,998) (1,412,256)
-
65,652
154,072 3,508,812
281,859
(570,360)
-
-
- 5,533,757
8,318 3,925,308
287,593
(873,969)
-
-
Net assets
5,170,230
254,106
154,072 3,285,963
8,318 8,872,689
The Group operates in three principal geographical areas – Australia (country of domicile), Burkina Faso
and other West African countries.
16
INTERESTS OF KEY MANAGEMENT PERSONNEL
Refer to the Remuneration Report contained in the Directors' Report for details of the remuneration
paid or payable to each member of The Group's key management personnel for the year ended 30 June
2012.
The totals of remuneration paid to key management personnel of the company and The Group during
the year are as follows:
- 79 -
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
16 INTERESTS OF KEY MANAGEMENT PERSONNEL (continued)
KEY MANAGEMENT PERSONNEL OPTIONS AND RIGHTS HOLDINGS
The number of options over ordinary shares held by each key management person of The Group during
the financial year is as follows:
BALANCE AT
BEGINNING
OF PERIOD
GRANTED AS
REMUNERAT-
ION DURING
THE PERIOD
EXERCISED
DURING THE
PERIOD
OTHER
CHANGES
DURING THE
PERIOD
BALANCE AT
END OF
PERIOD
VESTED
DURING THE
PERIOD
VESTED AND
EXERCISABLE
VESTED AND
UNEXERCIS-
ABLE
30 JUNE 2012
Mr Phillip Harman
900,000
Mr Paul Roberts
1,700,000
Dr Thomas Whiting
600,000
Dr Robert Danchin
600,000
Mr Philip Henty
600,000
Mr Ian Hobson
-
-
-
-
-
-
-
David Pascoe
-
500,000
4,400,000
500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
900,000
1,700,000
600,000
600,000
600,000
-
-
-
-
-
-
-
900,000
1,700,000
600,000
600,000
600,000
-
500,000
500,000
500,000
4,900,000
500,000 4,900,000
-
-
-
-
-
-
-
-
BALANCE AT
BEGINNING
OF PERIOD
GRANTED AS
REMUNERAT-
ION DURING
THE PERIOD
EXERCISED
DURING THE
PERIOD
OTHER
CHANGES
DURING THE
PERIOD
BALANCE AT
END OF
PERIOD
VESTED
DURING THE
PERIOD
VESTED AND
EXERCISABLE
VESTED AND
UNEXERCIS-
ABLE
30 JUNE 2011
Mr Phillip Harman
Mr Paul Roberts
Dr Thomas Whiting
Dr Robert Danchin
Mr Philip Henty
Mr Ian Hobson
Mel Drummond
Mrs Lisa Norden
-
-
-
-
-
-
-
-
-
900,000
1,700,000
600,000
600,000
600,000
-
200,000
-
4,600,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
900,000
900,000
900,000
1,700,000 1,700,000 1,700,000
600,000
600,000
600,000
600,000
600,000
600,000
600,000
600,000
600,000
-
-
-
200,000
200,000
200,000
-
-
-
4,600,000 4,600,000 4,600,000
-
-
-
-
-
-
-
-
-
- 80 -
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
16 INTERESTS OF KEY MANAGEMENT PERSONNEL (continued)
KEY MANAGEMENT PERSONNEL SHAREHOLDINGS
The number of ordinary shares in Predictive Discovery Limited held by each key management person of
the Group during the financial year is as follows:
30 June 2012
Mr Phillip Harman
Mr Paul Roberts
Dr Thomas Whiting
Dr Robert Danchin
Mr Philip Henty
Mr Ian Hobson
Mr David Pascoe
30 June 2011
Mr Phillip Harman
Mr Paul Roberts
Dr Thomas Whiting
Dr Robert Danchin
Mr Philip Henty
Mr I Hobson
Mrs Lisa Norden
BALANCE AT
BEGINNING OF
PERIOD
GRANTED AS
REMUNERATION
DURING THE
PERIOD
ISSUED ON
EXERCISE OF
OPTIONS
DURING THE
PERIOD
OTHER
CHANGES
DURING THE
PERIOD
BALANCE AT
END OF PERIOD
1,737,500
3,187,500
937,500
-
5,312,500
50,000
-
11,225,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
217,188
1,954,688
133,000
3,320,500
117,188
1,054,688
-
-
664,063
5,976,563
-
-
50,000
-
1,130,501 12,355,501
GRANTED AS
REMUNERATION
ISSUED ON
EXERCISE OF
OPTIONS
OTHER
CHANGES
DURING THE
YEAR
DURING THE
YEAR
DURING THE
YEAR
BALANCE AT
END OF YEAR
BALANCE AT
BEGINNING OF
YEAR
3,375,000
6,375,000
1,875,000
-
10,625,000
-
1,875,000
24,125,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,637,500)
1,737,500
(3,187,500)
3,187,500
(937,500)
937,500
-
-
(5,312,500)
5,312,500
50,000
50,000
(1,352,500)
522,500
(12,377,500) 11,747,500
- 81 -
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
16 INTERESTS OF KEY MANAGEMENT PERSONNEL (continued)
OTHER KEY MANAGEMENT PERSONNEL TRANSACTIONS
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 20:
Related Party Transactions.
17 AUDITORS’ REMUNERATION
Remuneration of the auditor of the parent entity for:
- Audit services
2012
$
2011
$
41,000
40,000
41,000
40,000
18 CONTROLLED ENTITIES
NAME
COUNTRY OF INCORPORATION
PERCENTAGE
OWNED (%)*
2012
PERCENTAGE
OWNED (%)*
2011
Parent Entity:
Predictive Discovery Limited
Subsidiaries of legal parent entity:
Predictive Discovery SARL
Predictive Discovery Niger SARL
Predictive Discovery Cote D’Ivoire SARL
Birrimian Pty Ltd
Australia
Burkina Faso
Niger
100
100
100
-
Cote D’Ivoire
-
British Virgin Islands 72.1 -
100
* Percentage of voting power is in proportion to ownership
Acquisitions of controlled entities
During the year, 72.1% of Birrimian Pty Limited was acquired by Predictive Discovery Limited as the
result of the Group meeting its expenditure commitments on exploration on the project owned by
Birrimian Pty Limited. Predictive Discovery Cote d’Ivoire and Predictive Discovery Niger SARL, both
100% controlled subsidiaries were established in Cote d’Ivoire and Niger respectively but did not
undertake any activities in the year.
19 CONTINGENT LIABILITIES
There are no material contingent liabilities or contingent assets of The Group at balance date.
- 82 -
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
20 RELATED PARTY TRANSACTIONS
Transactions between related parties are on normal commercial terms and conditions no more
favourable than those available to other parties unless otherwise stated.
Transactions with related parties:
Intercompany Loans
Predictive Discovery Limited has made loans to its subsidiary in the amount of $9,427,546. The loan is
interest free and payable on demand.
Directors’ Remuneration
For information relating to related party transactions with key management personnel during the
financial year, refer to Note 16.
Other Related Party Transactions
Churchill Services Pty Ltd, an entity associated with Ian Hobson, was paid $165,016 for company
secretarial services during the year.
21 CASH FLOW INFORMATION
RECONCILIATION OF CASH FLOW FROM OPERATIONS WITH LOSS AFTER INCOME TAX
Profit (loss) for the year
Non-operating items in profit
Exploration expenditure
Interest income
Non-cash flows in profit
Non-cash based share issues
Share based payments
Depreciation
Foreign exchange (gains)/losses
Write off of exploration expenditure
Changes in assets and liabilities
(Increase)/decrease in receivables
Increase/(decrease) in payables
Increase/(decrease) in provisions
Increase/(decrease) in FX Reserve
- 83 -
2012
$
2011
$
(2,706,350)
(1,412,255)
146,654
(191,195)
-
(206,112)
-
50,253
2,417
-
731,847
128,400
261,742
11,906
8,857
-
167,193
66,807
11,186
-
(506,868)
766,348
68,483
(93,029)
(1,721,188)
(972,528)
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
22 SHARE BASED PAYMENTS
The Group made a share based payment of options to key management personnel. The options were
valued under the Black Scholes option valuation model using the following inputs.
Number of options:
Exercise price:
500,000
$0.31
Risk free interest rate:
4.25%
Share price at date of issue:
$0.20
Expected exercise price:
11 July 2015
Expected volatility
77.6%
Each option was valued at
$0.10
A summary of the movements of all company options issued is as follows:
Options outstanding as at 30 June 2011
Granted
Options outstanding as at 30 June 2012
WEIGHTED
AVERAGE
EXERCISED PRICE
NUMBER
6,000,000
500,000
$0.25
$0.31
6,500,000
$0.26
The weighted average remaining contractual life of options outstanding at year end was 3.14 years.
23 EVENTS AFTER THE END OF THE REPORTING PERIOD
The Group undertook a pro rata non-renounceable rights issue to subscribe for one (1) new fully paid
ordinary share for every five (5) ordinary shares held by Eligible Shareholders at $0.08 cents per share
plus one free attaching option for every two shares to raise up to $2,088,886 before costs of the issue.
The issue closed on 20 July 2012 and the shortfall is to be placed within 3 months of the closing date.
At the date of this report, 9,512,108 have been issued pursuant to the rights issue and the shortfall
placement.
The Group signed an agreement with Stratos Resources Limited (SAT), enabling The Group to move to
100% ownership of Birrimian Pty Ltd (BPL). The Group owns 72.1% of BPL as at 30 June 2012. Subject
to approval by an Extraordinary General Meeting of SAT shareholders, the Group will purchase SAT’s
entire shareholding in BPL for the consideration of 13 million shares in the Company. At the same time,
SAT will make a cash payment to PDI of $140,000 in partial repayment of outstanding cash calls from
the Joint Venture. Also, as part of this transaction, SAT and its Directors are contributing $160,000 to
the shortfall in the Group’s recent entitlement issue which closed on 20 July 2012.
- 84 -
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
24 PARENT ENTITY
The following information has been extracted from the books and records of the parent, Predictive
Discovery Limited and has been prepared in accordance with Accounting Standards.
The financial information for the parent entity, Predictive Discovery Limited has been prepared on the
same basis as the consolidated financial statements except as disclosed below.
Assets
Current assets
Non-current assets
Total Assets
Liabilities
Current liabilities
Non-current liabilities
Total Liabilities
Equity
Issued capital
Accumulated losses
Reserve
Total Equity
Total loss for the period
Total comprehensive income
CONTINGENT LIABILITIES
2012
$
2011
$
989,698
5,468,105
10,686,185
3,845,248
11,675,883
9,313,353
189,408
303,609
-
-
189,408
303,609
15,264,189
10,349,630
(3,997,464)
(1,509,382)
219,750
169,497
11,486,475
9,009,745
(2,488,096)
(1,275,979)
(2,488,096)
(1,275,979)
The parent entity has no material contingent liabilities as at 30 June 2012.
CONTRACTUAL COMMITMENTS
The parent entity has commitments as at 30 June 2012 that are disclosed in Note 13.
RECOVERABILITY OF INTERCOMPANY LOAN
Within Non-current assets is a loan due from the 100% subsidiary of $9,427,546 which is considered
fully recoverable. The recoverability of this loan is dependent upon the successful development or sale
of exploration assets in Burkina Faso.
- 85 -
PREDICTIVE DISCOVERY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2012
25 COMPANY DETAILS
The registered office and principal place of business of the company is:
Predictive Discovery Limited
Level 2, 9 Colin Street
WEST PERTH WA 6005
- 86 -
PREDICTIVE DISCOVERY LIMITED
DIRECTORS’ DECLARATION
The directors of the company declare that:
1.
The financial statements and notes, as set out on pages 13 to 56, are in accordance with the
Corporations Act 2001 and:
(a)
comply with Accounting Standards; and
(b)
give a true and fair view of the financial position as at 30 June 2012 and of the
performance for the year ended on that date of the consolidated group;
2.
The Chief Executive Officer and Chief Financial Officer have each declared that:
(a)
(b)
the financial records of the company for the financial year have been properly
maintained in accordance with section 286 of the Corporations Act 2001;
the financial statements and notes for the financial year comply with the Accounting
Standards; and
(c)
the financial statements and notes for the financial year give a true and fair view.
Note 1 confirms that the financial statements also comply with International Financial
Reporting Standards as issued by the International Accounting Standards Board.
3.
In the directors' opinion, there are reasonable grounds to believe that the company will be able
to pay its debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
Paul Roberts
Managing Director
24 September 2012
- 87 -
PREDICTIVE DISCOVERY LIMITED
ADDITIONAL SHAREHOLDER INFORMATION
IN COMPLIANCE WITH ASX REQUIREMENTS
The additional ASX information is current as at 17 September 2012.
SUBSTANTIAL SHAREHOLDERS
Substantial shareholders as defined by Section 671B of Australian Corporations Law are:
Shareholder name
NATIONAL NOMINEES LIMITED
Number Held
Percentage
8,468,528
6.27%
PARTICULARS OF TWENTY LARGEST SHAREHOLDERS
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Name
Units Held
NATIONAL NOMINEES LIMITED
EQUITY TRUSTEES LIMITED
CITICORP NOMINEES PTY LIMITED
BLACK FIRE MINERALS LTD
PRIVATE EQUITY CAPITAL PTY LTD
DYSPO PTY LTD
EQUITY TRUSTEES LIMITED
PAUL ROBERTS
AFRICAN LION 3 LIMITED
MR SEAGER REX HARBOUR
J P MORGAN NOMINEES AUSTRALIA LIMITED
AGGREGATED CAPITAL PTY LTD
PHILLIP HARMAN
THE HARBOUR FOUNDATION
AFRICAN LION 3 LIMITED
STRATOS RESOURCES LTD
HYDRONOMEES PTY LTD
MR WILLIAM HENRY HERNSTADT
WALOON SECURITIES PTY LTD
FINBARR MURPHY
TOTAL
Balance of Register
Grand TOTAL
8,468,528
4,900,000
4,510,107
4,350,000
4,218,750
4,210,938
4,104,500
3,570,500
3,375,000
3,108,955
2,890,414
2,654,375
2,278,126
2,140,000
1,756,467
1,500,000
1,406,250
1,327,239
1,250,000
1,125,000
63,145,149
71,922,364
135,067,513
%IC
6.27%
3.63%
3.34%
3.22%
3.12%
3.12%
3.04%
2.64%
2.50%
2.30%
2.14%
1.97%
1.69%
1.58%
1.30%
1.11%
1.04%
0.98%
0.93%
0.83%
46.75%
52.25%
100.00%
DISTRIBUTION OF EQUITY SECURITIES
Analysis of numbers of shareholders by size of holding:
Range of Holding – Ordinary Shares
1-1,000
1,001-5,000
5,001-10,000
10,001 - 100,000
100,001 – 9,999,999,999
- 91 -
Holders
14
44
68
395
188
709
Shares
1,821
160,700
530,585
17,798,298
116,576,109
135,067,513
PREDICTIVE DISCOVERY LIMITED
ADDITIONAL SHAREHOLDER INFORMATION
IN COMPLIANCE WITH ASX REQUIREMENTS ……
DISTRIBUTION OF EQUITY SECURITIES (continued)
Unmarketable Parcels
There are 66 holders holding less than a marketable parcel of $500 of ordinary shares at a price of 6.5
cents per share.
RESTRICTED SECURITIES
There are 20,196,875 ordinary shares subject to escrow until 1 December 2012.
UNQUOTED EQUITY SECURITIES
There are 8 holders of 6,000,000 unlisted options expiring 20 August 2015 and exercisable at 25 cents.
Holders of more than 20%
Holder name
PAUL ROBERTS
Number
1,700,000
%
28.3%
There is 1 holder of 500,000 unlisted options expiring 11 July 2015, exercisable at $0.31
Holders of more than 20%
Holder name
DAVID PASCOE
Number
500,000
%
100%
There are 162 holders of 4,756,075 unlisted options with an exercise price of 10 cents to 30 June 2013,
15 cents from 1 July 2013 to 30 June 2014 and 20 cents from 1 July 2014 to the expiry date on 30 June
2015.
Holders of more than 20%
Holder name
N/A
Number
%
USE OF FUNDS
The Company has used the cash and assets in a form readily convertible to cash at the time of re-
admission in a way consistent with its business objectives.
VOTING RIGHTS
Each fully paid ordinary share carries voting rights of one vote per share.
- 92 -
PREDICTIVE DISCOVERY LIMITED
INTERESTS IN MINING TENEMENTS
- 93 -
AUSTRALIAN TENEMENTSNameNumberPercentage InterestLocationWoady CreekEL5314100%Victoria, AustraliaSkiptonEL5172100%Victoria, AustraliaBURKINA FASO TENEMENTSNameNumberPercentage InterestLocationFouliArrêté 2005-11-351/MCE/SG/DGMGC72%Burkina FasoTantiabongouArrêté 2007-019/MCE/SG/DGMGC72%Burkina FasoSirbaArrêté 2005-11-353/MCE/SG/DGMGC72%Burkina FasoMadyabariArrêté 2011-11-352/MCE/SG/DGMGC72%Burkina FasoTyekanyebiArrêté 2010-202/MCE/SG/DGMGC100%Burkina FasoTamfoagou353 (arrêté 2005-061/MCE/SG/DGMGC)100%Burkina FasoTangagariArrêté 2009-068/MCE/SG/DGMGCOption to acquire 95%Burkina FasoKogodouArrêté 2011-11-299/MCE/SG/DGMGCOption to acquire 95%Burkina FasoBoussoumaArrêté 2011-059/MCE/SG/DGMGCOption to acquire 95%Burkina FasoBangabaArrêté 2009-100/MCE/SG/DGMGCOption to acquire 95%Burkina FasoAouraArrêté 2008-023/MCE/SG/DGMGCOption to acquire 95%Burkina Faso