2021 Annual Report ABN 11 127 171 877 Auditor PKF Perth Level 4, 35 Havelock Street West Perth WA 6005 Share Registry Link Market Services Limited Level 4, 152 St Georges Terrace Perth WA 6000 Telephone: +61 8 9211 6670 Email: info@linkmarketservices.com.au ASX Code PDI Corporate Directory Directors Mr Simon Jackson Non-Executive Chairman (appointed 19th October 2021) Mr Andrew Pardey Non-Executive Director Mr Steven Michael Non-Executive Director Mr Paul Roberts Managing Director Company Secretary Mr Ian Hobson Registered Office Suite 8, 110 Hay Street Subiaco WA 6000 Telephone: +61 8 6143 1840 Fax: +61 8 9321 4692 Email: info@predictivediscovery.com Website: www.predictivediscovery.com Postal Address PO Box 1710 West Perth WA 6872 Contents Letter from the Managing Director Review of Operations 2 4 Statement of Changes in Equity Statement of Cash Flows Directors’ Report 18 Notes to the Financial Statements Auditor’s Independence Declaration 29 Directors’ Declaration Statement of Profit or Loss and Other Comprehensive Income Statement of Financial Position 30 31 Independent Auditor’s Report 32 33 34 59 60 Letter from the Managing Director Dear Fellow Shareholders, The last 12 months have been extraordinary for Predictive by any measure. It has been a transformational year for the Company but with some challenges as we balanced our exploration of a once- in-a-decade gold discovery in West Africa with the global pandemic, ensuring our team was able work safely and supporting our local communities on the Bankan Project. The Bankan project now ranks globally as one of the most exciting gold projects both in size and potential. And potential is what the project really represents. While the new MRE represents an important early milestone in the project, the exploration potential is enormous, at depth and along strike of the two known gold deposits, and in the broader area, less than 10% of which has been drill tested so far. On the last day of September this year, our team’s hard work culminated in an impressive maiden Mineral Resource Estimate for the Bankan Gold Project, beating market expectations with an inferred resource of 72.8Mt @ 1.56g/t Au containing 3.65 million ounces of gold within a US$1,800 per ounce constrained pit shell. While the MRE was the key event in September, it marked the end of one of the most extraordinary months in the life of Predictive, with reporting of a successful metallurgical testwork program and a new discovery to the SW of NE Bankan. At the beginning of the year, in July 2020, the Company was coming to grips with the NE Bankan discovery, made only two months previously. From then on, the stream of constant excellent results was a clear harbinger of things to come as the deposit began to reveal itself both along strike and at depth. Wide and continuous zones of gold mineralisation were intersected throughout the year including 51m @ 2.5g/t gold and 54m @ 2.1g/t gold from surface, demonstrating the shallow open pit potential of the project. Deeper drilling demonstrated very broad widths at depth, such as 88m @ 1.8g/t gold and then, on 1 July 2021, revealed the beginnings of the deposit’s high-grade core with a headline intercept of 44m @ 8.0g/t Au. The high-grade core was further confirmed post reporting period with bonanza gold grades returned over broad widths from diamond drillhole BNEDD0088 which returned 49.7m @ 11.7g/t gold from 301m, including 7.0m @ 50.3g/t gold. Leveraging a whole-of-Bankan aeromagnetic survey, regional results from power auger and aircore drill programs on the project to date have yielded high- grade results in multiple locations across the project area, providing opportunities for further large gold discoveries. As such, ongoing regional exploration is a key component of our plans for 2021-22. Corporately, the Company completed two placements, raising more than A$37 million of funds and introducing a number of highly regarded international funds onto our register. The combination of the capital raised and a low discovery cost of A$4 per ounce has resulted in a strong balance sheet that continues to deliver strong results and a platform to grow our resource inventory. We are very proud of our efforts to support our local communities. Predictive has long championed the importance of partnering with local communities to offer new employment, new business opportunities and help in educating their children. We have followed that path again since we started work in Guinea. None of our achievement would have been possible without the efforts of our entire team, building on the Company’s experience throughout West Africa. A special mention is due to the head of our West African exploration programs, Mr Aimé Nganare, who has worked tirelessly in progressing the Bankan Project and our exploration elsewhere in Guinea. I also thank my fellow board members for all their efforts and support during the past year. 2 Predictive Discovery | Annual Report 2021 Finally, I would like to thank the Government and people of Guinea. The Company’s future lies in our connection to that country and we are committed to partnering with the key Government agencies, especially the Ministries of Mines and Environment, to develop a very large new gold mining project at Bankan, delivering great outcomes to the State, communities in our region and to the environment. As Managing Director, it gives me great pleasure to present the 2021 Annual Report for Predictive Discovery Limited, I thank you for your support throughout financial year 2021 and hope that our progress during the forthcoming year will continue to add value to your investment in Predictive. Yours sincerely, Mr Paul Roberts Managing Director 3 Predictive Discovery | Annual Report 2021 The Company has a portfolio of gold projects in Guinea, Cote D’Ivoire and Burkina Faso in West Africa. The Bankan Gold Project is the Company’s flagship project. All of the Company’s exploration focus is now in Guinea as the project areas in Cote D’Ivoire and Burkina Faso are either subject to joint venture or on care and maintenance. The Company’s focus in the 2021 financial year was mainly on the Bankan project but with some work elsewhere on regional Guinea projects, principally Koundian. Very large drilling programs, totalling 2,962 drill holes for 75,564m, were completed during the year in Guinea. These comprised 2,737 power auger holes (totalling 45,987m), 155 reverse circulation (RC) holes (totalling 12,203m), 41 diamond drill (DD) holes (totalling 8,971m) and 29 RC-DD holes (totalling 8,403m). Review of Operations 4 Predictive Discovery | Annual Report 2021> Review of Operations Bankan Project The Bankan Project is located within Guinea’s Siguiri Basin. It contains two greenfields gold discoveries and is the Company’s flagship project. Since the discovery of the NE Bankan gold deposit in April 2020, the Company has completed extensive drilling programs, substantially growing the known gold mineralisation and has made a second gold discovery at Bankan Creek, just 3km from the initial discovery holes. Post-reporting period, on 30 September, 2021, the Company announced a maiden Mineral Resource Estimate (MRE) for both the NE Bankan and Bankan Creek deposits totalling 72.8 million tonnes averaging 1.56g/t Au containing 3.65 million ounces of gold. Figure 1 - Predictive’s Bankan Project and exploration tenure in Guinea, West Africa 5 Predictive Discovery | Annual Report 2021Review of Operations < Bankan Project NE Bankan On 15 April 2020, the Company announced the new gold discovery at NE Bankan. The 2020-21 financial year saw a significant increase in the level of drilling, with the vast majority of RC and DD drilling completed there, all of which contributed towards the MRE reported on 30 September 2021. Drilling during 2020-21 defined an initial gold-mineralised strike length of 1.3km and then progressively drilled the deposit to depth on 80m-spaced cross sections (Figures 2-6). Figure 2 - NE Bankan Drillhole Plan (from Corporate Presentation – 27 July 2021) Infill RC drilling has confirmed a substantial zone of shallow oxide mineralisation at NE Bankan, with deeper DD drilling highlighting very broad widths in fresh rock and excellent hole-to-hole continuity, as well as major depth extensions (see Figures 3-7). Figure 3 - Section 1175180N (from Corporate Presentation – 27 July 2021) 6 Predictive Discovery | Annual Report 2021> Review of Operations Bankan Project Figure 4 - Section 1175100N (from Corporate Presentation – 27 July 2021) Figure 5 - Section 1175020N (from Corporate Presentation – 27 July 2021) 7 Predictive Discovery | Annual Report 2021Review of Operations < Bankan Project Figure 6 - Section 1174940N (from Corporate Presentation – 27 July 2021) Figure 7 - Longitudinal project through NE Bankan (from Corporate Presentation – 27 July 2021) 8 Predictive Discovery | Annual Report 2021> Review of Operations Bankan Project Better intercepts received during the reporting period included: • KKODD0111: 55m at 2.94g/t Au from 97m, including 1m at 46.5g/t Au • KKORC0161: 26m at 21.9g/t gold from 58m (to end of hole), including 6m at 68.0g/t gold from 58m and, 2m at 8.6g/t gold from 72m and, 6m at 17.3g/t gold from 78m (to end of hole) • KKORC0211: 73m at 3.2g/t gold from 9m, including, 5m at 8.5g/t gold from 80m • KKORC0281: 55m at 3.3g/t gold from 4m, including 5m at 5.2g/t gold from 19m, 2m at 7.9g/t gold from 37m, 2m at 6.3g/t gold from 44m, 1m at 14.4g/t gold from 51m, plus 9m at 2.8g/t gold from 81m (EOH) • BNERD0012: 42m @ 2.3 g/t Au from 165m • BNERD0072: 19m @ 4.8m Au from 178m, incl. 6m @ 13.7g/t Au • BNERD0096: 51m @ 1.4g/t Au from 161m, and 14m @ 7.2g/t Au from 217m, incl. 3m @ 24.8g/t Au from 222m, and 1m @12.3g/t Au from 228m • BNERD00743: 44m @ 2.0g/t Au from 310m, 9m @ 1.3g/t Au from 357m, and 6m @ 2.5g/t Au from 448m, incl. 2m @ 6.2g/t Au from 452m (to EOH) The drilling demonstrated an overall increase in gold grades with depth, with especially high-grade intercepts released after the end of the reporting period. Bankan Creek The Company significantly increased drilling at Bankan Creek during 2020-21 in preparation for the maiden Mineral Resource Estimate on the Bankan Creek deposit which was released on 30 September 2021. RC and DD drilling was carried out on 40m spaced lines with a 40m-80m hole spacing along lines3. Mineralisation at Bankan Creek currently extends for approximately 300m along strike and remains open to depth and along strike. Infill drilling returned some excellent results3 with BCKRC0008 returning 36m @ 3.1g/t Au from 14m, including 2m @ 17.3g/t Au from 41m and hole BCKRC0011 returning 45m @ 2.0g/t Au from 11m. Figure 8 - Bankan Creek Drillhole Plan (from ADU Presentation – 2 September 2021) 1 2 3 ASX Announcement 29 October 2020 – Quarterly Activities Report for period ending 30 September 2020 ASX Announcement 30 April 2021 – Quarterly Activities Report for period ending 31 March 2021 ASX Announcement 17 June 2021 - BROAD GOLD INTERCEPTS FROM BANKAN CREEK AND NE BANKAN 9 Predictive Discovery | Annual Report 2021Review of Operations < Bankan Project Better drill intercepts reported during the reporting period include: • BCKDD0014: 10.4m at 2.1g/t Au from 199m, 26m @ 3.1g/t Au from 240m, including 6.8m @ 8.1g/t Au from 242m • BCKDD0025: 40m @ 3.0g/t Au from 104m, including 7m @ 10.2g/t Au from 104m (including 5m @ 14.2g/t Au), 15m @ 2.7g/t Au from 118m • BCKDD00045: 22.8m @ 2.6g/t Au from 10m, including 9.2m @ 5.9g/t Au, 11m @ 4.6g/t Au from 62m • BCKRC00086: 36m @ 3.1g/t Au from 14m (to EOH), incl. 2m @ 17.5g/t Au from 41m • BCKRC00116: 45m @ 2.0g/t Au from 11m Figure 9 - Bankan Creek section BCK14 (from ASX release dated 24 August 2021) ASX Announcement 28 January 2021 - OUTSTANDING, WIDE GOLD INTERCEPT GROWS BANKAN AT DEPTH ASX Announcement 11 February 2021 - HIGH GRADE DRILL RESULTS EXTEND BANKAN CREEK GOLD DISCOVERY TO NORTH ASX Announcement 30 July 2021 – Quarterly Activities Report for period ending 30 June 2021 4 5 6 10 Predictive Discovery | Annual Report 2021> Review of Operations Other projects Koundian, Guinea The Company commenced exploration at the Koundian Project, located 115km east-northeast of the Company’s flagship Bankan Gold Project in Guinea during 2020-21. In May 20217, the Company announced outstanding results from its first program of power auger drilling and rock chip sampling. Power auger drilling from the Koundian Project returned shallow high-grade gold along a corridor of interpreted NE orientated structures: • 6m @ 32.0g/t Au from 4m (to EOH), incl. 4m @ 45.0g/t Au from 4m (KDNAU0473) • 6m @ 9.8g/t Au from 4m (to EOH) (KDNAU0406) • 6m @ 1.3g/t Au from 4m (to EOH) (KDNAU0546) A program of 753 holes, totalling 8,012m, was reported in this first release. The drilling was carried out on a 320m x 80m grid spacing. The auger drilling was designed to test structural targets revealed by the recent aeromagnetic survey plus some other areas of extensive artisanal gold workings. 7 ASX Announcement 31 May 2021 - 6M @ 32G/T GOLD FROM FIRST DRILLING AT KOUNDIAN PROJECT, GUINEA 11 Predictive Discovery | Annual Report 2021Review of Operations < Other Projects The rock chip sampling program returned multiple +10g/t Au values and a peak result of 33.6g/t Au. Both the power auger drilling and rock chip results confirm the presence of widespread high grade gold values on the project area. Figure 10 - Koundian Project, power auger and rock chip sample locations and mapped artisanal workings overlain on greyscale aeromagnetic image 12 Predictive Discovery | Annual Report 2021> Review of Operations Cote D’ivoire Predictive Discovery retains interests in three packages of ground in Cote D’Ivoire: Other Projects Tanga (Glomin) JV Figure 11 - PDI’s project portfolio in Cote D’Ivoire In August 20208, the Company entered into a Joint Venture (JV) with Glomin Services Limited (Glomin) to explore Predictive’s Bocanda Permit and the Issia permit application. Subsequently, control of Glomin passed to Tanga Resources Limited (ASX: TRL) The new JV is advancing exploration on the above permits and applications, with Predictive free carried at 20% until a Mining Lease is granted. Following grant of a Mining Lease, Predictive will have the option to contribute to future expenses including mine development costs or dilute to a 2% Net Smelter Return (NSR) royalty on future gold production. Tanga may, at any time, repurchase from Predictive half of the royalty for a purchase price of US$10,000,000, reducing the royalty to a 1% NSR. If Tanga elects to discontinue work on any of the three permits in the first 4 years from signature of this agreement, the permit in question will be returned to Predictive at no cost. While Tanga is operating, it is responsible for ensuring that the permits and applications are kept in good stead with the Cote d’Ivoire Mines Ministry. 8 ASX Announcement 6 August 2020 - New Joint Venture in Cote d’Ivoire 13 Predictive Discovery | Annual Report 2021Review of Operations < Other Projects Turaco (Manas) JV The Company was in a JV with Resolute Mining at the commencement of the reporting period. In May 20219, the Company announced that Resolute had divested its interest in the JV to Manas Resources Limited and at the same time, Predictive Discovery restructured its interest in the JV. Following the restructure, Predictive was entitled to receive 100 million performance shares in Manas, vesting under certain resource discovery milestones. Importantly, the Company was then no longer responsible for exploration expenditure and joint venture cash contribution. Predictive swapped its 23.5% contributing equity interest in the Cote D’Ivoire joint venture for an 11% free carried equity interest plus the performance shares. The Company is free carried at 11% through to a ‘Decision to Mine’ following grant of a mining permit and completion of a Definitive Feasibility Study. Post-reporting period, Manas underwent a 1 for 10 share reconstruction in the course of changing its name to Turaco Gold (ASX: TCG) and Predictive’s entitlement to performance shares was reduced to 10 million shares based on the same performance criteria. Bobosso Project The Company holds a residual interest in the Bobosso Project, which is owned by Montage Gold Corp. Predictive is entitled to a minimum payment of US$2.15M on first mine development and US$4.30/Ore Reserve Oz Au as defined in a BFS and due upon first production. 9 ASX Announcement 21 May 2021 - PDI Retains Free Carry Interest in Restructure of CDI JV 14 Predictive Discovery | Annual Report 2021> Review of Operations Other Projects Burkina Faso In November 202010, Predictive Discovery announced that it had executed an agreement with Progress Minerals Inc. (Progress), a subsidiary of TSX-listed Montage Gold Corp., in respect of the Company’s Burkina Faso property package, including the 184,000oz Bongou gold deposit11. This saw Predictive’s ownership return to 100% (from a 49% joint venture interest) in the entire Burkina Faso package, creating a far simpler ownership structure, and greater appeal as the Company continues to consider potential divestment opportunities for its Burkina Faso assets. Predictive’s holdings in Burkina Faso are located in the east of the country and cover approximately 90km of strike length of the Samira Hill greenstone belt in eastern Burkina Faso. This belt hosts the 2.5 Moz Samira Hill gold deposit across the border in Niger and contains numerous active artisanal gold mine sites along its length. The Company issued 4,028,477 PDI shares to Progress valued at A$240,000 for the 51% interest acquired. Figure 10 - PDI’s Burkina Faso Project Portfolio 10 ASX Announcement 3 November 2020 - PREDICTIVE CONSOLIDATES OWNERSHIP OF ITS BURKINA FASO PROJECTS 11 ASX Announcement 4 September 2014 - High-Grade Maiden Mineral Resource Estimate at Bongou, Burkina Faso 15 Predictive Discovery | Annual Report 2021Review of Operations < Other Projects Victoria In July 2020, Predictive confirmed its participation in a joint venture with Petratherm Limited (ASX: PTR) and Cape Clear Minerals Pty Ltd (CCM) on the Glenfine Gold Project in Victoria. Predictive previously held a 25% equity over two of the three Exploration Licences in the Glenfine Gold Project (ELs 5534 and 5537) through an unincorporated joint venture with CCM. Under the new JV agreement, PTR had the right to earn an 80% equity in the entire Glenfine Gold Project by expenditure of $3 million, which, if achieved, would leave PDI and CCM jointly holding a 20% equity in the Project. In December 2020, PTR transferred it interest and rights in the Glenfine Gold Project to Outback Goldfields (CSE: OZ) and OZ has been exploring the project since that time. Predictive’s interest in the Glenfine Gold Project dates back to 2012. Given the Company’s focus on West Africa and minority position in the joint venture with CCM, this is a legacy interest for PDI. Corporate Equity Placements The Company completed equity placements totaling A$37.1 million during the reporting period. In October 202012, the Company raised A$10.6 million via a placement to new international institutional investors, major existing shareholders, Board and senior management at A$0.056 per share. Funds were used to accelerate exploration at the Bankan Gold Project in Guinea. A further A$26.5 million was raised in May 202113 from tier-1 North American institutions supported by existing major shareholders. The placement, undertaken at A$0.08 per share was used to fund a 110,000 metre drilling program at the Bankan Gold Project. Compliance Statement Predictive advises that it is not aware of any new information or data that materially affects the exploration results or mineral resource estimate contained in this announcement. 12 ASX Announcement 23 October 2020 - A$10.6M INSTITUTIONAL PLACEMENT TO DRIVE EXPLORATION AT BANKAN GOLD PROJECT DISCOVERY 13 ASX Announcement 11 May 2021 - A$26.5M INSTITUTIONAL PLACEMENT TO FUEL 110,000m DRILLING 16 Predictive Discovery | Annual Report 2021> Review of Operations 17 Predictive Discovery | Annual Report 2021Review of Operations < PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 Directors’ Report DIRECTORS’ REPORT Predictive Discovery Limited (the “Company” or “Predictive”) is a public company incorporated and domiciled in Australia and listed on the Australian Securities Exchange. The directors of the Company present their report on the Group, which comprises Predictive Discovery Limited and its controlled entities, for the year ended 30 June 2021. The names of the directors in office at any time during, or since the end of the year are: NAMES Mr Francis Harper Mr Paul Roberts Mr Steven Michael Mr Andrew Pardey Mr Phillip Jackson POSITION Non-Executive Chairman (Appointed 22 March 2021) Managing Director Non-Executive Director Non-Executive Director (Appointed 22 March 2021) Non-Executive Chairman (Resigned 22 March 2021) 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 – B. Bus FCA ACIS MAICD Mr Hobson is a Fellow Chartered Accountant and Chartered Secretary with 15 years of experience as Company Secretary of ASX listed companies. Mr Hobson is also Company Secretary of Decmil Group Ltd, Province Resources Ltd, Novatti Group Ltd, Dubber Corporation Ltd and DTI Technologies Ltd. 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 $6,622,404 (2020: $2,352,700). This was largely from exploration costs, share of losses of associates and the costs of administering the Group to 30 June 2021. 18 PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 3 Predictive Discovery | Annual Report 2021 PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 DIRECTORS’ REPORT Predictive Discovery Limited (the “Company” or “Predictive”) is a public company incorporated and domiciled in Australia and listed on the Australian Securities Exchange. The directors of the Company present their report on the Group, which comprises Predictive Discovery Limited and its controlled entities, for the year ended 30 June 2021. The names of the directors in office at any time during, or since the end of the year are: NAMES Mr Francis Harper Mr Paul Roberts Mr Steven Michael Mr Andrew Pardey Mr Phillip Jackson Non-Executive Chairman (Appointed 22 March 2021) POSITION Managing Director Non-Executive Director Non-Executive Director (Appointed 22 March 2021) Non-Executive Chairman (Resigned 22 March 2021) 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 – B. Bus FCA ACIS MAICD PRINCIPAL ACTIVITIES Mr Hobson is a Fellow Chartered Accountant and Chartered Secretary with 15 years of experience as Company Secretary of ASX listed companies. Mr Hobson is also Company Secretary of Decmil Group Ltd, Province Resources Ltd, Novatti Group Ltd, Dubber Corporation Ltd and DTI Technologies Ltd. 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 $6,622,404 (2020: $2,352,700). This was largely from exploration costs, share of losses of associates and the costs of administering the Group to 30 June 2021. PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 3 PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 DIRECTORS’ REPORT 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 $23,436,847 from 30 June 2020 to 30 June 2021. This net movement is largely due to the following factors: $28.7m net capital raising; Expenditure on exploring and evaluating the assets in Guinea and Burkina Faso. SIGNIFICANT CHANGES IN STATE OF AFFAIRS No significant changes in the Group’s state of affairs occurred during the financial year. EVENTS AFTER THE END OF REPORTING PERIOD The following events have occurred subsequent to the year ended 30 June 2021: (i) Approval of 8,000,000 options on 9 July 2021, which was issued to brokers on 28 July 2021 (ii) Approval of the 2nd tranche of the May 2021 Placement shares on 9 July 2021, which were issued on 19 July 2021 i.e. 81,580,127 at $0.08 per share. Of this amount, 375,000 shares were issued to Paul Roberts and 187,500 shares were issued to Steven Michael. (iii) The company sold 12.5% of their interest in the Cote D’Ivoire tenements to Turaco Gold, an ASX listed company, in exchange for 10,000,000 performance shares issued on 6 August 2021. (iv) Conversion of 1,438,471 Listed Options to Shares at $0.018 per share on 17 August 2021. (v) On 5 September 2021, there was a Coup D’état in Guinea. While these recent developments are being closely monitored to assess and mitigate impacts to the consolidated entity’s exploration in Guinea, the reason for the coup and early signs from the interim leadership provide reassurance that the impact to the resources sector are likely to be minimal. Therefore, this event does not warrant impairment of the Guinea exploration assets at this time. The Company recognises the current global COVID-19 pandemic may impact on its operations. Specifically, government restrictions may: (i) (ii) prevent Company staff or contractors from carrying out their exploration activities; or impede the supply of equipment or other exploration consumables required to do the exploration work. The nature and extent of the effect of the outbreak on the performance of the Company remains unknown. The Company’s share price may be adversely affected in the short to medium term by the economic uncertainty caused by COVID-19. Further, any governmental or industry measures taken in response to COVID-19 may adversely impact the Company’s operations and are likely to be beyond the control of the Company. The ability to freely move people and equipment to and from exploration projects may cause delays or cost increases. The effects of COVID-19 on the Company's share price may also impede the ability to raise capital, or require the Company to issue capital at a discount, which may in turn cause dilution to shareholders. There has not been any other matter or circumstance arising after the balance date that has significantly affected or could significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years. 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. PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 5 19 Predictive Discovery | Annual Report 2021Directors’ Report < PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 DIRECTORS’ REPORT PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ENVIRONMENTAL ISSUES The Group’s operations are subject to significant environmental regulations under the Commonwealth and State legislation in Australia and under local legislative authorities in Guinea and Burkina Faso. 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 Francis Harper Qualifications Experience Non-Executive Chairman LLB (Hons), BEc Mr Harper is Chairman and a significant shareholder in Tietto Minerals Limited, which is studying development of the expanding 3 million-ounce Abujar Gold Project in Ivory Coast. Prior to that, from 2009 to 2015, he was a major shareholder and Chairman of West African Resources, which recently commissioned the high-grade Sanbrado gold project in Burkina Faso. He was also Chairman of Vital Metals Ltd until 2020 and is a founding director and co-owner of Blackwood Capital since 2002. Blackwood Capital has raised over $1 billion for ASX resources and industrial companies. Prior to this he was an Executive Director of Rothschild Australia and spent 15 years with the NM Rothschild Group in the US, UK and Australia in resources M&A and project finance advice. Interest in Shares and Options (at the date of this report) Directorships held in other listed entities during the three years prior to the current year Shareholding: Nil Option holding: 7,000,000 Tietto Minerals Limited Vital Metals Ltd (resigned August 2020) Mr Paul Roberts Qualifications Experience Managing Director BSc, MSc, FAIG, MGSA Mr Roberts has a long and successful history in mineral 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. Interest in Shares and Options (at the date of this report) Shareholding: 6,349,171 Option holding: 12,500,000 (unlisted) Directorships held in other listed entities during the three years prior to the current year None ACN 127 171 877 DIRECTORS’ REPORT Mr Steven Michael Qualifications Experience Interest in Shares and Options (at the date of this report) year Mr Andrew Pardey Qualifications Experience Non-Executive Director B. Com, CA, MAICD Mr Michael has over 25 years’ experience in the global resources sector specialising in corporate finance and equity capital markets. He is currently a Managing Director at FTI Consulting, an independent global business advisory firm. He has previously worked in the natural resources divisions of Macquarie Bank, Rothschild and Royal Bank of Canada. Mr Michael is also a Non-Executive Director of Tanga Resource Limited (ASX: TRL), and was previously Managing Director of ASX-listed Arrow Minerals Limited (ASX: AMD) which held several gold projects in Burkina Faso. Mr Michael is a Member of the Institute of Chartered Accountants in Australia and is a member of the Australian Institute of Company Directors. Shareholding: 178,580 Option holding: 2,500,000 Non-Executive Director BSc Mr Pardey is a geologist with more than 30 years’ experience covering exploration, project development, construction and operation. From 2015 to 2019, Mr Pardey served as the CEO of the $2 billion LSE/TSX-listed Centamin plc, which owns the major (450,000oz pa) Sukari Gold Mine in Egypt. Prior to being CEO of Centamin, Mr Pardey was a major driving force in bringing Sukari into production, having joined during the transition of the operation from construction into production. Earlier in his career, Mr Pardey also held senior management roles at the Anglogold-Ashanti Siguiri Mine and Nordgold Lefa Mine, both of which are located within Guinea’s Siguiri Basin, which also hosts Predictive’s Bankan Project. Directorships held in other listed entities Arrow Minerals Limited (Resigned February 2020) during the three years prior to the current Tanga Resources Limited (Appointed September 2020) Interest in Shares and Options (at the date of this report) Shareholding: Nil Option holding: 3,500,000 Directorships held in other listed entities Marvel Gold Limited (Appointed June 2020) during the three years prior to the current Tanga Resources Limited (Appointed October 2020) Mr Phillip Jackson Non-Executive Chairman (resigned 22 March 2021) year Qualification Experience BJuris, LLB, MBA, FAICD Phillip Jackson, the Chairman and a Director of the Company, is a barrister and solicitor with over 25 years legal and international corporate experience, especially in the areas of commercial and contract law, mining law and corporate structuring. He has worked extensively in the Middle East, Asia and the United States of America. In Australia, he was formerly a managing legal counsel for a major international mining company, and in private practice specialised in small to medium resource companies. Phillip was managing region legal counsel: Asia-Pacific for a leading oil services company for 13 years. He was General Counsel for a major international oil and gas company. Phillip has been Chairman of Predictive since December 2014. Phillip is also non-executive Chairman of Xantippe Resources Ltd (“Xantippe”), and Anax Metals Limited and is a non-executive director of Scotgold Resources Limited. Interest in Shares and Options (at the date of his resignation) Shareholding: 1,247,834 Option holding: 3,000,000 (unlisted) Directorships held in other listed entities Anax Metals Limited during the three years prior to the current Xantippe Resources Limited year Scotgold Resources Limited PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 6 PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 7 20 Predictive Discovery | Annual Report 2021> Directors’ Report The Group’s operations are subject to significant environmental regulations under the Commonwealth and State legislation in Australia and under local legislative authorities in Guinea and Burkina Faso. 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. PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 DIRECTORS’ REPORT ENVIRONMENTAL ISSUES INFORMATION ON DIRECTORS Mr Francis Harper Qualifications Experience Non-Executive Chairman LLB (Hons), BEc Mr Harper is Chairman and a significant shareholder in Tietto Minerals Limited, which is studying development of the expanding 3 million-ounce Abujar Gold Project in Ivory Coast. Prior to that, from 2009 to 2015, he was a major shareholder and Chairman of West African Resources, which recently commissioned the high-grade Sanbrado gold project in Burkina Faso. He was also Chairman of Vital Metals Ltd until 2020 and is a founding director and co-owner of Blackwood Capital since 2002. Blackwood Capital has raised over $1 billion for ASX resources and industrial companies. Prior to this he was an Executive Director of Rothschild Australia and spent 15 years with the NM Rothschild Group in the US, UK and Australia in resources M&A and project finance advice. Interest in Shares and Options (at the date of this report) Shareholding: Nil Option holding: 7,000,000 Directorships held in other listed entities during the three years prior to the current Tietto Minerals Limited Vital Metals Ltd (resigned August 2020) year Mr Paul Roberts Qualifications Experience Managing Director BSc, MSc, FAIG, MGSA Mr Roberts has a long and successful history in mineral 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. Shareholding: 6,349,171 Option holding: 12,500,000 (unlisted) Interest in Shares and Options (at the date of this report) Directorships held in other listed entities None during the three years prior to the current year PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 DIRECTORS’ REPORT Mr Steven Michael Qualifications Experience Interest in Shares and Options (at the date of this report) Directorships held in other listed entities during the three years prior to the current year Mr Andrew Pardey Qualifications Experience Non-Executive Director B. Com, CA, MAICD Mr Michael has over 25 years’ experience in the global resources sector specialising in corporate finance and equity capital markets. He is currently a Managing Director at FTI Consulting, an independent global business advisory firm. He has previously worked in the natural resources divisions of Macquarie Bank, Rothschild and Royal Bank of Canada. Mr Michael is also a Non-Executive Director of Tanga Resource Limited (ASX: TRL), and was previously Managing Director of ASX-listed Arrow Minerals Limited (ASX: AMD) which held several gold projects in Burkina Faso. Mr Michael is a Member of the Institute of Chartered Accountants in Australia and is a member of the Australian Institute of Company Directors. Shareholding: 178,580 Option holding: 2,500,000 Arrow Minerals Limited (Resigned February 2020) Tanga Resources Limited (Appointed September 2020) Non-Executive Director BSc Mr Pardey is a geologist with more than 30 years’ experience covering exploration, project development, construction and operation. From 2015 to 2019, Mr Pardey served as the CEO of the $2 billion LSE/TSX-listed Centamin plc, which owns the major (450,000oz pa) Sukari Gold Mine in Egypt. Prior to being CEO of Centamin, Mr Pardey was a major driving force in bringing Sukari into production, having joined during the transition of the operation from construction into production. Earlier in his career, Mr Pardey also held senior management roles at the Anglogold-Ashanti Siguiri Mine and Nordgold Lefa Mine, both of which are located within Guinea’s Siguiri Basin, which also hosts Predictive’s Bankan Project. Interest in Shares and Options (at the date of this report) Directorships held in other listed entities during the three years prior to the current year Shareholding: Nil Option holding: 3,500,000 Marvel Gold Limited (Appointed June 2020) Tanga Resources Limited (Appointed October 2020) Mr Phillip Jackson Non-Executive Chairman (resigned 22 March 2021) Qualification Experience BJuris, LLB, MBA, FAICD Phillip Jackson, the Chairman and a Director of the Company, is a barrister and solicitor with over 25 years legal and international corporate experience, especially in the areas of commercial and contract law, mining law and corporate structuring. He has worked extensively in the Middle East, Asia and the United States of America. In Australia, he was formerly a managing legal counsel for a major international mining company, and in private practice specialised in small to medium resource companies. Phillip was managing region legal counsel: Asia-Pacific for a leading oil services company for 13 years. He was General Counsel for a major international oil and gas company. Phillip has been Chairman of Predictive since December 2014. Phillip is also non-executive Chairman of Xantippe Resources Ltd (“Xantippe”), and Anax Metals Limited and is a non-executive director of Scotgold Resources Limited. Interest in Shares and Options (at the date of his resignation) Shareholding: 1,247,834 Option holding: 3,000,000 (unlisted) Directorships held in other listed entities during the three years prior to the current year Anax Metals Limited Xantippe Resources Limited Scotgold Resources Limited PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 6 PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 7 21 Predictive Discovery | Annual Report 2021Directors’ Report < PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 DIRECTORS’ REPORT MEETINGS OF DIRECTORS During the financial year, 28 meetings / circular resolutions of directors (including committees of directors) were held. Attendances by each director at meetings during the year were as follows: Directors' Meetings Circular Resolutions Number eligible to attend Number attended Number eligible to Number attended Director Mr Phillip Jackson Mr Paul Roberts Mr Francis Harper Mr Andrew Pardey Mr Steven Michael 6 8 2 2 8 6 8 2 2 8 attend 14 20 6 6 20 13 19 6 6 19 INDEMNIFYING OFFICERS OR AUDITORS 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 under option, including those options issued during the year and since 30 June 2020 to the date of this report are as follows: Grant Date Date of Expiry Exercise Price Number under Option 24 December 2019 30 June 2020 09 November 2020 09 November 2020 11 December 2020 05 February 2021 14 May 2021 09 July 2021 24 Dec 2022 30 Jun 2023 05 May 2023 05 May 2023 21 Dec 2023 05 May 2023 26 May 2024 28 Jul 2024 $0.0180 $0.1800 $0.0986 $0.0110 $0.1120 $0.0986 $0.0986 $0.0140 TOTAL 84,631,485 7,500,000 15,500,000 2,500,000 8,000,000 25,000,000 10,500,000 8,000,000 161,631,485 During the year ended 30 June 2021 1,800,000 ordinary shares of Predictive were issued on the exercise of options granted at $0.018 per share. PROCEDINGS 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. PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 8 22 Predictive Discovery | Annual Report 2021> Directors’ Report PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 DIRECTORS’ REPORT NON-AUDIT SERVICES The Board of Directors is satisfied that the provision of non-audit services by the auditor during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. Details of the amounts paid to the auditor of the Group for audit and non-audit services provided during the year are set out at note 18. AUDITOR’S INDEPENDENCE DECLARATION The auditor’s independence declaration for the year ended 30 June 2021 has been received and can be found on page 29 of the financial report. PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 DIRECTORS’ REPORT MEETINGS OF DIRECTORS During the financial year, 28 meetings / circular resolutions of directors (including committees of directors) were held. Attendances by each director at meetings during the year were as follows: Director Number eligible to Number attended Number eligible to Number attended attend attend Directors' Meetings Circular Resolutions Mr Phillip Jackson Mr Paul Roberts Mr Francis Harper Mr Andrew Pardey Mr Steven Michael 6 8 2 2 8 INDEMNIFYING OFFICERS OR AUDITORS 6 8 2 2 8 14 20 6 6 20 13 19 6 6 19 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 24 December 2019 30 June 2020 09 November 2020 09 November 2020 11 December 2020 05 February 2021 14 May 2021 09 July 2021 At the date of this report, the unissued ordinary shares of Predictive under option, including those options issued during the year and since 30 June 2020 to the date of this report are as follows: Grant Date Date of Expiry Exercise Price Number under Option 24 Dec 2022 30 Jun 2023 05 May 2023 05 May 2023 21 Dec 2023 05 May 2023 26 May 2024 28 Jul 2024 $0.0180 $0.1800 $0.0986 $0.0110 $0.1120 $0.0986 $0.0986 $0.0140 TOTAL 84,631,485 7,500,000 15,500,000 2,500,000 8,000,000 25,000,000 10,500,000 8,000,000 161,631,485 During the year ended 30 June 2021 1,800,000 ordinary shares of Predictive were issued on the exercise of options granted at $0.018 per share. PROCEDINGS 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. PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 8 PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 9 23 Predictive Discovery | Annual Report 2021Directors’ Report < PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 DIRECTORS’ 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. 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 in past years 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. PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 24 10 Predictive Discovery | Annual Report 2021> Directors’ Report PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 DIRECTORS’ REPORT REMUNERATION REPORT (AUDITED) (continued) 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 Position held during the year ended 30 June 2021 Mr Francis Harper(1) Mr Paul Roberts Mr Andrew Pardey(1) Mr Steven Michael Mr Phillip Jackson(2) Mr Ian Hobson Non-Executive Chairman Managing Director Non-Executive Director Non-Executive Director Non-Executive Chairman Company Secretary Non-salary cash-based incentives % - - - - - - Options/ Rights % 64 59 57 61 69 29 Fixed Salary/Fees % 36 41 43 39 31 71 Total % 100 100 100 100 100 100 (1) (2) Francis Harper and Andrew Pardey were appointed directors on 22 March 2021 Phillip Jackson resigned as a director on 22 March 2021 All non-executive directors are remunerated on a monthly basis with no fixed term or termination benefits. Paul Roberts, Managing Director, was engaged by way of an employment agreement with an annual salary of $275,000 plus superannuation and 6 months’ termination notice period. Ian Hobson, who was appointed company secretary on 4 June 2020, was engaged pursuant to a consultancy agreement at $200/hr with no notice period. PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 DIRECTORS’ 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. of the Company is as follows: The Company’s policy for determining the nature and amount of emoluments of Board members and senior executives 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 in past years 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. PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 10 PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 11 25 Predictive Discovery | Annual Report 2021Directors’ Report < PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES DIRECTORS’ REPORT ACN 127 171 877 PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES DIRECTORS’ REPORT REMUNERATION REPORT (AUDITED) (continued) ACN 127 171 877 DIRECTORS’ REPORT REMUNERATION REPORT (AUDITED) (continued) REMUNERATION DETAILS FOR THE YEAR ENDED 30 JUNE 2021 $ $ $ Salary, Salary, $ Management Management Management - - - - - - - - - - - - - - - - - - - fees and leave Other Shares/ Units Shares/ $ Units Shares/ $ - Units $ Options/ Rights Options/ $ Rights 33,882 Options/ $ 428,848 Rights 33,882 16,941 $ 428,848 150,812 33,882 16,941 102,924 428,848 150,812 - 16,941 102,924 - 150,812 - 43,158 102,924 - - 776,565 43,158 - 43,158 776,565 Total $ Total 53,168 $ 729,973 Total 53,168 29,643 $ 729,973 209,012 53,168 29,643 150,101 729,973 209,012 - 29,643 150,101 - 209,012 - 148,263 150,101 - - 1,320,160 148,263 - 148,263 1,320,160 fees and leave Other - 17,613 Salary, $ - 275,000 fees and leave Other - 17,613 - 12,702 $ - 275,000 - 58,200 - 17,613 - 12,702 - 47,177 - 275,000 - 58,200 - - - 12,702 - 47,177 - - - 58,200 - - 1,670 103,435 - 47,177 - - - - 1,670 514,126 1,670 103,435 - - 1,670 103,435 1,670 514,126 REMUNERATION REPORT (AUDITED) (continued) The following table of benefits and payment details, in respect to the financial year, the components of remuneration REMUNERATION DETAILS FOR THE YEAR ENDED 30 JUNE 2021 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: REMUNERATION DETAILS FOR THE YEAR ENDED 30 JUNE 2021 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 Table of Benefits and Payments for the Period Ended 30 June 2021 The following table of benefits and payment details, in respect to the financial year, the components of remuneration and five company executives receiving the highest remuneration: Pension and for each member of the key management personnel of the Group and, to the extent different, the five Group executives super- Key Table of Benefits and Payments for the Period Ended 30 June 2021 and five company executives receiving the highest remuneration: Personnel annuation Pension and Table of Benefits and Payments for the Period Ended 30 June 2021 super- Key $ Pension and Personnel annuation Mr Francis Harper(1) 1,673 super- Key $ Mr Paul Roberts 26,125 Personnel annuation Mr Francis Harper(1) 1,673 Mr Andrew Pardey(1) - $ Mr Paul Roberts 26,125 Mr Steven Michael - Mr Francis Harper(1) 1,673 Mr Andrew Pardey(1) - Mr Philip Jackson(2) - Mr Paul Roberts 26,125 Mr Steven Michael - Mr David Kelly - Mr Andrew Pardey(1) - Mr Philip Jackson(2) - Mr Bruce Waddell - Mr Steven Michael - Mr David Kelly - Mr Ian Hobson - Mr Philip Jackson(2) - Mr Bruce Waddell - Total Key Management Mr David Kelly - Mr Ian Hobson 27,798 Personnel - Mr Bruce Waddell - Total Key Management (1) Appointed 22 March 2021 Mr Ian Hobson - 27,798 Personnel Table of Benefits and Payments for the Period Ended 30 June 2020 (2) Resigned 22 March 2021 Total Key Management Pension and 27,798 Personnel super- Key Table of Benefits and Payments for the Period Ended 30 June 2020 Personnel annuation Pension and Table of Benefits and Payments for the Period Ended 30 June 2020 super- Key $ Personnel Pension and annuation - Mr Paul Roberts super- Key $ Mr Steven Michael (2) - Personnel annuation Mr Paul Roberts - Mr Philip Jackson(1) - $ Mr Steven Michael (2) - Mr David Kelly (3) 1,412 - Mr Paul Roberts Mr Philip Jackson(1) - Mr Bruce Waddell (4) - Mr Steven Michael (2) - Mr David Kelly (3) 1,412 Mr Ian Hobson (5) - Mr Philip Jackson(1) - Mr Bruce Waddell (4) - Total Key Management Mr David Kelly (3) 1,412 Mr Ian Hobson (5) 1,412 Personnel - Mr Bruce Waddell (4) - Total Key Management (1) Resigned 22 March 2021 Mr Ian Hobson (5) - 1,412 Personnel (2) Appointed 18 December 2019 Total Key Management (3) Resigned 18 December 2019 (1) Resigned 22 March 2021 Personnel (4) Resigned 4 June 2020 (2) Appointed 18 December 2019 (5) Appointed 4 June 2020 (3) Resigned 18 December 2019 (1) Resigned 22 March 2021 (4) Resigned 4 June 2020 (2) Appointed 18 December 2019 (5) Appointed 4 June 2020 (3) Resigned 18 December 2019 (4) Resigned 4 June 2020 (5) Appointed 4 June 2020 Salary, fees and leave Salary, $ fees and leave 205,000 Salary, $ 22,955 fees and leave 205,000 50,000 $ 22,955 14,865 205,000 50,000 117,190 22,955 14,865 12,600 50,000 117,190 14,865 422,610 12,600 117,190 12,600 422,610 776,565 Options/ Rights Options/ $ Rights - Options/ $ - Rights - - $ - - - - - - - - - - - - - - - - - Shares/ Units Shares/ $ Units - Shares/ $ - Units - - $ - - - - - - - - - - - - - - - - Total $ Total 205,000 $ 22,955 Total 205,000 50,000 $ 22,955 16,277 205,000 50,000 117,190 22,955 16,277 12,600 50,000 117,190 16,277 424,022 12,600 117,190 12,600 424,022 Other $ Other - $ - Other - - $ - - - - - - - - - - - - - - - - Management Management Management 1,320,160 424,022 514,126 422,610 1,670 1,412 - - - PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 26 PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 12 12 12 Predictive Discovery | Annual Report 2021> Directors’ Report PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES DIRECTORS’ REPORT DIRECTORS’ REPORT PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES REMUNERATION REPORT (AUDITED) (continued) ACN 127 171 877 ACN 127 171 877 ACN 127 171 877 DIRECTORS’ REPORT REMUNERATION REPORT (AUDITED) (continued) REMUNERATION DETAILS FOR THE YEAR ENDED 30 JUNE 2021 REMUNERATION REPORT (AUDITED) (continued) The following table of benefits and payment details, in respect to the financial year, the components of remuneration REMUNERATION DETAILS FOR THE YEAR ENDED 30 JUNE 2021 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: REMUNERATION DETAILS FOR THE YEAR ENDED 30 JUNE 2021 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 Table of Benefits and Payments for the Period Ended 30 June 2021 The following table of benefits and payment details, in respect to the financial year, the components of remuneration and five company executives receiving the highest remuneration: for each member of the key management personnel of the Group and, to the extent different, the five Group executives Pension and Shares/ Options/ Key Table of Benefits and Payments for the Period Ended 30 June 2021 and five company executives receiving the highest remuneration: Management Salary, super- fees and leave Other annuation Pension and Personnel Table of Benefits and Payments for the Period Ended 30 June 2021 Management Salary, super- Key $ $ $ Management Personnel Mr Francis Harper(1) Key Mr Paul Roberts Personnel Mr Francis Harper(1) Mr Andrew Pardey(1) Mr Paul Roberts Mr Steven Michael Mr Francis Harper(1) Mr Andrew Pardey(1) Mr Philip Jackson(2) Mr Paul Roberts Mr Steven Michael Mr David Kelly Mr Andrew Pardey(1) Mr Philip Jackson(2) Mr Bruce Waddell Mr Steven Michael Mr David Kelly Mr Ian Hobson Mr Philip Jackson(2) Mr Bruce Waddell Total Key Management Mr David Kelly Mr Ian Hobson Personnel Mr Bruce Waddell Total Key Management fees and leave Other 17,613 - Salary, $ 275,000 fees and leave Other $ $ 1,670 514,126 103,435 1,670 1,670 27,798 - 776,565 43,158 1,320,160 148,263 43,158 776,565 148,263 1,320,160 Mr Ian Hobson Personnel Table of Benefits and Payments for the Period Ended 30 June 2020 103,435 514,126 1,670 1,670 27,798 - Total Key Management Pension and Personnel Key Table of Benefits and Payments for the Period Ended 30 June 2020 Management Salary, super- 514,126 1,670 27,798 Personnel fees and leave Other annuation Pension and Table of Benefits and Payments for the Period Ended 30 June 2020 Management Salary, super- Key $ $ $ fees and leave 205,000 Salary, $ 22,955 fees and leave 205,000 50,000 Other Pension and annuation Other $ $ super- $ annuation $ 1,412 Shares/ - Units Shares/ $ Units Shares/ $ Units $ 776,565 Options/ Rights Options/ $ Rights Options/ $ Rights $ Units Shares/ $ Units Shares/ $ - Units $ Pension and annuation 1,673 super- $ 26,125 annuation 1,673 $ 26,125 1,673 26,125 17,613 12,702 $ 275,000 58,200 17,613 12,702 47,177 275,000 58,200 12,702 47,177 - 58,200 103,435 - 47,177 - - - - $ 22,955 14,865 205,000 50,000 117,190 22,955 14,865 12,600 50,000 117,190 14,865 422,610 12,600 117,190 12,600 422,610 422,610 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1,412 1,412 1,412 - 1,412 - 1,412 Rights Options/ $ Rights 33,882 Options/ 428,848 $ Rights 33,882 16,941 $ 428,848 150,812 33,882 16,941 102,924 428,848 150,812 - 16,941 102,924 150,812 43,158 102,924 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Total $ Total 53,168 Total $ 729,973 53,168 29,643 $ 729,973 209,012 53,168 29,643 150,101 729,973 209,012 - 29,643 150,101 209,012 148,263 150,101 - - - - - 1,320,160 Total $ Total 205,000 $ 22,955 Total 205,000 50,000 $ 22,955 16,277 205,000 50,000 117,190 22,955 16,277 12,600 50,000 117,190 16,277 424,022 12,600 117,190 12,600 424,022 424,022 Management Personnel Mr Paul Roberts Key Mr Steven Michael (2) Personnel Mr Paul Roberts Mr Philip Jackson(1) Mr Steven Michael (2) Mr David Kelly (3) Mr Paul Roberts Mr Philip Jackson(1) Mr Bruce Waddell (4) Mr Steven Michael (2) Mr David Kelly (3) Mr Ian Hobson (5) Mr Philip Jackson(1) Mr Bruce Waddell (4) Total Key Management Mr David Kelly (3) Mr Ian Hobson (5) Personnel Mr Bruce Waddell (4) Total Key Management (1) Resigned 22 March 2021 Mr Ian Hobson (5) Personnel (2) Appointed 18 December 2019 Total Key Management (3) Resigned 18 December 2019 (1) Resigned 22 March 2021 (4) Resigned 4 June 2020 Personnel (2) Appointed 18 December 2019 (5) Appointed 4 June 2020 (3) Resigned 18 December 2019 (1) Resigned 22 March 2021 (4) Resigned 4 June 2020 (2) Appointed 18 December 2019 (5) Appointed 4 June 2020 (3) Resigned 18 December 2019 (4) Resigned 4 June 2020 (5) Appointed 4 June 2020 PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 DIRECTORS’ REPORT REMUNERATION REPORT (AUDITED) (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 Expired 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 2021 Mr Francis Harper(1) Mr Paul Roberts Mr Andrew Pardey(1) Mr Steven Michael Mr Philip Jackson(2) Mr Ian Hobson - 7,000,000 - 7,000,000 1,100,000 12,500,000 (1,100,000) - 3,500,000 2,500,000 - 3,000,000 3,000,000 - - - 12,500,000 12,500,000 12,500,000 - - 2,500,000 2,500,000 - (275,000) (3,000,000) - 3,000,000 3,000,000 - 1,375,000 31,500,000 (1,375,000) (3,000,000) 28,500,000 18,000,000 18,000,000 3,500,000 2,500,000 - 3,000,000 - - 275,000 - - - - - - - - - - - - (1) Appointed 22 March 2021 (2) Resigned 22 March 2021 Balance at beginning of period Granted as remunerat- ion during the period Expired 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 2020 Mr Philip Jackson Mr Paul Roberts Mr David Kelly (1) Mr Steven Michael (2) Mr Ian Hobson (3) Mr Eric Moore (4) Mr Bruce Waddell (4) 550,000 3,415,021 550,000 - - 220,000 165,500 4,900,021 - - - - - - - - (275,000) (2,315,021) (275,000) - - - - (2,865,021) - (275,000) - - (220,000) (165,500) (660,500) 275,000 1,100,000 - - - - - 1,375,000 - - - - - - - 275,000 1,100,000 - - - - 1,375,000 - - - - - - - - (1) Resigned 18 December 2019, (2) Appointed 18 December 2019, (3) Appointed 4 June 2020, (4) Resigned 4 June 2020 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: Balance at beginning of period Granted as remuneration during the period Issued on exercise of options during the period Purchased during the period Other changes during the period Balance at end of period 30 June 2021 Mr Francis Harper (1) Mr Paul Roberts Mr Andrew Pardey (1) Steven Michael Ian Hobson Mr Phillip Jackson (2) - 5,259,671 - - 50,880 533,334 5,843,885 (1) Appointed 22 March 2021 (2) Resigned 22 March 2021 - - - - - - - - - - - - - - - 714,500 - 178,580 - 714,500 1,607,580 - - - - - (1,247,834) (1,247,834) - 5,974,171 - 178,580 50,880 - 6,203,631 PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 13 PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 12 12 12 27 Predictive Discovery | Annual Report 2021Directors’ Report < PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 DIRECTORS’ REPORT REMUNERATION REPORT (AUDITED) (continued) KEY MANAGEMENT PERSONNEL SHAREHOLDINGS (CONTINUED) Balance at beginning of period Granted as remuneration during the period Issued on exercise of options during the period Purchased during the period Other changes during the period Balance at end of period 30 June 2020 Mr Phillip Jackson Mr Paul Roberts Mr David Kelly (1) Steven Michael (2) Ian Hobson (3) Mr Eric Moore (4) Mr Bruce Waddell (4) 500,000 3,430,941 225,000 - - - 350,000 4,505,941 - - - - - - - - - 500,000 - - - - - 500,000 33,324 1,328,730 - - 41,280 - - 1,403,334 - - (225,000) - 9,600 - (350,000) (565,400) 533,324 5,259,671 - - 50,880 - - 5,843,875 (1) Resigned 18 December 2019, (2) Appointed 18 December 2019, (3) Appointed 4 June 2020, (4) Resigned 4 June 2020 SECURITIES RECEIVED THAT ARE NOT PERFORMANCE-BASED The options granted to members of key management personnel during the year 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 Options were granted as remuneration during the year to key management personnel and other executives as set out in notes 12 and 16. END OF THE REMUNERATION REPORT Paul Roberts Managing Director 22 September 2021 PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 14 28 Predictive Discovery | Annual Report 2021> Directors’ Report Auditor’s Independence Declaration PKF Perth AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS OF PREDICTIVE DISCOVERY LIMITED In relation to our audit of the financial report of Predictive Discovery Limited for the year ended 30 June 2021, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct. PKF PERTH SHANE CROSS AUDIT PARTNER 22 SEPTEMBER 2021 WEST PERTH WESTERN AUSTRALIA Level 4, 35 Havelock Street, West Perth, WA 6005 PO Box 609, West Perth, WA 6872 T: +61 8 9426 8999 F: +61 8 9426 8900 www.pkfperth.com.au PKF Perth is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms. Liability limited by a scheme approved under Professional Standards Legislation. 50 29 Predictive Discovery | Annual Report 2021 PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES Statement of Profit or Loss and Other ACN 127 171 877 Comprehensive Income STATEMENT OF PROFIT OR LOSS AND For the year ended 30 June 2021 OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2021 Finance income Other income Share based payments Administrative payments Depreciation of fixed assets Foreign exchange gain/(expenses) Employee benefits expense Provision for doubtful debts Share of loss in Associates Gain on acquisition of exploration asset Impairment of exploration expenditure Gain on deconsolidation of subsidiary Exploration expenditure pre-right to tenure Loss before income tax Income tax expense Consolidated Note 2021 $ 2020 $ 4,865 15,037 (1,093,054) (1,132,892) (60,529) 86,126 (518,329) (426,580) - 683 (2,492,232) - (1,005,499) 7,019 - - (900,505) (2,510) (78,381) - - (704,942) - - 10,506 (683,887) (6,622,404) (2,352,700) - - 6 7 2 Loss from continuing operations (6,622,404) (2,352,700) Other comprehensive income Items that may be reclassified to profit or loss Exchange difference on translation of foreign operations 10 948 461 Total comprehensive loss for the year (6,621,456) (2,352,239) Profit attributable to: Members of the parent entity (6,621,456) (2,352,239) (6,621,456) (2,352,239) Basic loss per share (cents per share) Diluted loss per share (cents per share) 11 11 (0.7) (0.7) (0.5) (0.5) The accompanying notes form part of these financial statements PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 30 15 Predictive Discovery | Annual Report 2021 PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 STATEMENT OF FINANCIAL POSITION Statement of Financial Position AS AT 30 JUNE 2021 As at 30 June 2021 Current Assets Cash and cash equivalents Trade and other receivables Total current assets Non-Current Assets Property, plant and equipment Exploration expenditure Investments in associates Total non-current assets Total assets Current Liabilities Trade and other payables Total current liabilities Total liabilities Net Assets Equity Issued capital Reserves Accumulated losses Total Equity The accompanying notes form part of these financial statements. Consolidated Note 2021 $ 2020 $ 3 4 5 6 7 8 22,729,169 232,836 22,962,005 321,176 15,505,090 - 15,826,266 8,639,015 125,538 8,764,553 34,524 5,048,178 - 5,082,702 38,788,271 13,847,255 2,496,890 2,496,890 2,496,890 992,721 992,721 992,721 36,291,381 12,854,534 9 10 71,376,018 1,543,710 (36,628,347) 42,859,342 131,465 (30,136,273) 36,291,381 12,854,534 PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 16 31 Predictive Discovery | Annual Report 2021 Statement of Changes in Equity For the year ended 30 June 2021 1 6 4 , ) 0 0 7 2 5 3 2 ( , , ) 9 3 2 2 5 3 2 ( , - ) 5 2 6 2 4 ( , ) 8 6 8 0 7 7 ( , 0 7 9 , 8 3 1 2 1 , 4 3 5 , 4 5 8 2 1 , 4 3 5 , 4 5 8 2 1 , , ) 4 0 4 2 2 6 6 ( , 8 4 9 , ) 6 5 4 1 2 6 6 ( , - , 3 7 5 8 4 4 4 5 0 , 3 9 0 1 , 0 9 9 , 5 3 8 0 3 , , ) 4 1 3 9 1 3 2 ( , 7 1 1 8 3 , 1 9 2 6 3 , - - - - - - ) 3 0 0 5 2 1 ( , - - , 0 3 3 0 3 1 , 0 3 3 0 3 1 - ) 0 3 3 0 3 1 ( , , 3 7 5 8 4 4 4 5 0 , 3 9 0 1 , - 7 2 6 1 4 5 , , 1 Net cash provided by (used in) operating activities 3 (14,287,908) (3,956,625) 6 9 2 1 8 8 , , 3 , 3 3 3 5 5 2 l a t o T d e s a B e r a h S s t n e m y a P e v r e s e R $ $ e v r e s e R n o i t a l s n a r T y c n e r r u C n g i e r o F s e s s o L d e t a u m u c c A l l a t i p a C d e u s s I Y T I U Q E N I S E G N A H C F O T N E M E T A T S 1 2 0 2 E N U J 0 3 D E D N E R A E Y E H T R O F 32 7 7 8 1 7 1 7 2 1 N C A S E I T I T N E D E L L O R T N O C D N A D E T I M I L Y R E V O C S I D E V I T C D E R P I - 1 6 4 1 6 4 9 9 2 3 4 , $ - - - 5 3 1 1 , ) 5 2 6 2 4 ( , - 8 4 9 8 4 9 5 3 1 1 , - - - - - - , ) 0 0 7 2 5 3 2 ( , ) 6 7 5 , 8 0 9 7 2 ( , , ) 0 0 7 2 5 3 2 ( , - - - 3 0 0 5 2 1 , ) 3 7 2 , 6 3 1 0 3 ( , ) 3 7 2 , 6 3 1 0 3 ( , , ) 4 0 4 2 2 6 6 ( , - , ) 4 0 4 2 2 6 6 ( , - - - - 0 3 3 0 3 1 , , 0 4 2 1 9 4 1 3 , - - - - - ) 8 6 8 0 7 7 ( , 0 7 9 8 3 1 , , 2 1 , 2 4 3 9 5 8 2 4 , , 2 4 3 9 5 8 2 4 , - - - - - - 0 9 9 5 3 8 , , 0 3 , ) 4 1 3 9 1 3 2 ( , $ $ 3 8 0 2 , ) 7 4 3 , 8 2 6 6 3 ( , , 8 1 0 6 7 3 1 7 , : s r e n w o s a y t i c a p a c r i e h t n i s r e n w o h t i w s n o i t c a s n a r T e t a i c o s s a n i e r a h s f o n o i t a n m i i l E s n o i t p o d e r i p x e f o r e f s n a r T l a t i p a c e r a h s f o e u s s I r a e y e h t r o f s s o l e v i s n e h e r p m o c l a t o T e m o c n i e v i s n e h e r p m o c r e h t O D E T A D I L O S N O C r a e y e h t r o f s s o L 9 1 0 2 y l u J 1 t A s t s o c n o i t c a s n a r T 0 2 0 2 e n u J 0 3 t A r a e y e h t r o f s s o L 0 2 0 2 y l u J 1 t A : s r e n w o s a y t i c a p a c r i e h t n i s r e n w o h t i w s n o i t c a s n a r T r a e y e h t r o f s s o l e v i s n e h e r p m o c l a t o T e m o c n i e v i s n e h e r p m o c r e h t O s n o i t p o d e r i p x e f o r e f s n a r T s r e k o r b o t d e u s s i s n o i t p O s t n e m y a p d e s a b - e r a h S l a t i p a c e r a h s f o e u s s I s t s o c n o i t c a s n a r T 1 2 0 2 e n u J 0 3 t A s t n e m e t a t s l a i c n a n i f e s e h t f o t r a p m r o f s e t o n g n i y n a p m o c c a e h T I T R O P E R L A C N A N I F L A U N N A D E T I M I L Y R E V O C S I D E V I T C I D E R P PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2021 Cash flows from operating activities Interest received Government grant received Payments to suppliers and employees Payments for exploration expenditure Cash flows from investing activities Purchase of property, plant and equipment Cash movement on deconsolidation of subsidiary Net cash provided by (used in) investing activities Cash flows from financing activities Proceeds from issue of shares Proceeds on exercise of options Payment for share issue costs Consolidated Note 2021 $ 2020 $ 5,786 - (866,843) (3,095,568) 4,865 15,037 (1,645,956) (12,661,854) (347,181) - (347,181) (15,534) (603) (16,137) 30,563,590 32,394 (1,870,741) 11,581,124 557,846 (700,704) Net cash inflow from financing activities 28,725,243 11,438,266 Net increase (decrease) in cash held Foreign exchange differences Cash and cash equivalents at beginning of financial period 14,090,154 - 8,639,015 7,465,504 462 1,173,049 Cash and cash equivalents at end of the financial period 3 22,729,169 8,639,015 The accompanying notes form part of these financial statements PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 18 Predictive Discovery | Annual Report 2021 PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 Statement of Cash Flows STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2021 For the year ended 30 June 2021 Cash flows from operating activities Interest received Government grant received Payments to suppliers and employees Payments for exploration expenditure Consolidated Note 2021 $ 4,865 15,037 (1,645,956) (12,661,854) 2020 $ 5,786 - (866,843) (3,095,568) Net cash provided by (used in) operating activities 3 (14,287,908) (3,956,625) Cash flows from investing activities Purchase of property, plant and equipment Cash movement on deconsolidation of subsidiary Net cash provided by (used in) investing activities Cash flows from financing activities Proceeds from issue of shares Proceeds on exercise of options Payment for share issue costs (347,181) - (347,181) (15,534) (603) (16,137) 30,563,590 32,394 (1,870,741) 11,581,124 557,846 (700,704) Net cash inflow from financing activities 28,725,243 11,438,266 Net increase (decrease) in cash held Foreign exchange differences Cash and cash equivalents at beginning of financial period 14,090,154 - 8,639,015 7,465,504 462 1,173,049 Cash and cash equivalents at end of the financial period 3 22,729,169 8,639,015 The accompanying notes form part of these financial statements PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 18 33 Predictive Discovery | Annual Report 2021 Notes to the Financial Statements PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 For the year ended 30 June 2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTES TO THE FINANCIAL STATEMENTS This financial report includes the consolidated financial statements and notes of Predictive Discovery Limited and controlled entities (the “Group”). NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Predictive Discovery Limited is a for-profit company limited by shares, incorporated and domiciled in Australia. Basis of preparation 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. The financial statements were authorised for issue, in accordance with a resolution of the directors, on 22 September 2021. The directors have the power to amend and re-issue the financial statements. 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 21 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. 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. PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 34 19 Predictive Discovery | Annual Report 2021 PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (a) Principles of consolidation (continued) 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 date 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 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. Interests in joint arrangements IFRS defines a joint arrangement as one over which two or more parties have joint control, which is the contractually agreed sharing of control over an arrangement. This exists only when the decisions about the relevant activities (being those that significantly affect the returns of the arrangement) require the unanimous consent of the parties sharing control. (i) Joint operations A joint operation is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets and obligations for the liabilities, relating to the arrangement. In relation to its interests in joint operations, the Group recognises its: Assets, including its share of any assets held jointly. Liabilities, including its share of any liabilities incurred jointly. Revenue from the sale of its share of the output arising from the joint operation. Share of the revenue from the sale of the output by the joint operation. Expenses, including its share of any expenses incurred jointly. PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 20 35 Predictive Discovery | Annual Report 2021Notes to the Financial StatementsNotes to the Financial StatementsFor the Year Ended 30 June 2021 PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (c) 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. 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. (d) 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 corporate bonds with terms to maturity that match the expected timing of cashflows. 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. PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 22 37 Predictive Discovery | Annual Report 2021Notes to the Financial Statements Notes to the Financial StatementsFor the Year Ended 30 June 2021 PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (h) Investments and other financial assets (continued) Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of recovering part or all of a financial asset, its carrying value is written off. Financial assets at fair value through profit or loss Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified as financial assets at fair value through profit or loss. Typically, such financial assets will be either: (i) held for trading, where they are acquired for the purpose of selling in the short-term with an intention of making a profit, or a derivative; or (ii) designated as such upon initial recognition where permitted. Fair value movements are recognised in profit or loss. Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income include equity investments which the Group intends to hold for the foreseeable future and has irrevocably elected to classify them as such upon initial recognition. Impairment of financial assets The Group recognises a loss allowance for expected credit losses on financial assets which are either measured at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon the Group's assessment at the end of each reporting period as to whether the financial instrument's credit risk has increased significantly since initial recognition, based on reasonable and supportable information that is available, without undue cost or effort to obtain. Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate. For financial assets measured at fair value through other comprehensive income, the loss allowance is recognised within other comprehensive income. In all other cases, the loss allowance is recognised in profit or loss. (i) 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. 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 Plant and Equipment Useful Life 2 - 10 years The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 24 39 Predictive Discovery | Annual Report 2021Notes to the Financial Statements Notes to the Financial StatementsFor the Year Ended 30 June 2021 PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (k) Impairment of Assets (continued) 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. (l) Associates Associates are entities over which the Group has significant influence but not control or joint control. Investments in associates are accounted for using the equity method. Under the equity method, the share of the profits or losses of the associate is recognised in profit or loss and the share of the movements in equity is recognised in other comprehensive income. Investments in associates are carried in the statement of financial position at cost plus post-acquisition changes in the Group's share of net assets of the associate. Goodwill relating to the associate is included in the carrying amount of the investment and is neither amortised nor individually tested for impairment. Dividends received or receivable from associates reduce the carrying amount of the investment. When the Group's share of losses in an associate equal or exceeds its interest in the associate, including any unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate. The Group discontinues the use of the equity method upon the loss of significant influence over the associate and recognises any retained investment at its fair value. Any difference between the associate's carrying amount, fair value of the retained investment and proceeds from disposal is recognised in profit or loss. (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 Australian 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. PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 26 41 Predictive Discovery | Annual Report 2021Notes to the Financial Statements Notes to the Financial StatementsFor the Year Ended 30 June 2021 PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (r) Critical Accounting Estimates and Judgements (continued) Key Judgements - Recoverability of Intercompany Loan Within non-current assets of the parent entity (see note 23) there is a loan due from the 100% subsidiaries of $17,032,152 is considered fully recoverable. The recoverability of this loan is dependent upon the successful development or sale of exploration assets in Guinea. Key Judgements - Joint arrangements Judgement is required to determine when the Group has joint control, which requires an assessment of the relevant activities and when the decisions in relation to those activities require unanimous consent. The Group has determined that the relevant activities for its joint arrangements are those relating to the operating and capital decisions of the arrangement, such as: the approval the capital expenditure programme for each year, and appointing, remunerating and terminating the key management personnel or service providers of the joint arrangement. The considerations made in determining joint control are similar to those necessary to determine control over subsidiaries. Judgement is also required to classify a joint arrangement. Classifying the arrangement requires the Group to assess their rights and obligations arising from the arrangement. Specifically, it considers: The structure of the joint arrangement – whether it is structured through a separate vehicle When the arrangement is structured through a separate vehicle, the Group also considers the rights and obligations arising from: The legal form of the separate vehicle The terms of the contractual arrangement Other facts and circumstances (when relevant) This assessment often requires significant judgement, and a different conclusion on joint control and also whether the arrangement is a JO or a JV, may materially impact the accounting. The Group has a joint arrangement which is structured through a separate vehicle, being a company structure. This structure, and the terms of the contractual arrangement indicate that the Group has rights to the net assets of the arrangement. Given this, the Group then had to assess the other facts and circumstances relating to this arrangement. After undertaking this assessment, there were a number of indicators for both a joint venture classification and a joint operation classification. Significant judgement was therefore required to determine how these factors would be analysed. The final conclusion was that the arrangement was a joint venture. Key judgements - Coronavirus (COVID-19) pandemic Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have, on the consolidated entity based on known information. This consideration extends to the nature of the products and services offered, customers, supply chain, staffing and geographic regions in which the consolidated entity operates. Other than as addressed in specific notes, there does not currently appear to be either any significant impact upon the financial statements or any significant uncertainties with respect to events or conditions which may impact the consolidated entity unfavourably as at the reporting date Adoption of New and Revised Accounting Standards (s) The Group has adopted all of the new and revised Accounting Standards and Interpretations issued by the Australian Accounting Standards Board that are mandatory for the current reporting period. The adoption of these new and revised Accounting Standards and Interpretations has not resulted in a significant or material change to the Group’s accounting policies. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted by the consolidated entity. PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 28 43 Predictive Discovery | Annual Report 2021Notes to the Financial Statements Notes to the Financial StatementsFor the Year Ended 30 June 2021 PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 3: CASH AND CASH EQUIVALENTS (continued) NOTE 3(b): Reconciliation of loss after income tax to net cash flow from operating activities Operating loss after income tax 2021 $ (6,622,404) 2020 $ (2,352,700) Non-operating items in loss: Exploration expenditure Non-cash flows in loss: Gain on deregistered entity Gain on acquisition of exploration asset Depreciation Foreign exchange (gains)/losses Provision for doubtful debts Share of loss in associates Impairment of exploration expenditure Capitalised exploration expenditure Share based Payment Movement in assets and liabilities: (Increase)/decrease in receivables Increase/(decrease) in payables Net cash outflow from operating activities NOTE 4: TRADE AND OTHER RECEIVABLES Other receivables NOTE 5: PLANT AND EQUIPMENT Plant and Equipment Accumulated depreciation - 683,887 - (683) 60,529 - 426,580 - 2,492,232 (12,707,508) 1,093,054 (533,878) 1,504,170 (14,287,908) (10,506) - 2,510 78,381 - 704,942 - (3,887,128) - (16,306) 840,295 (3,956,625) 232,836 232,836 125,538 125,538 399,396 (78,220) 321,176 52,215 (17,691) 34,524 A reconciliation of the carrying amounts of each class of plant and equipment between the beginning of the current financial year is set out below: Plant and Equipment $ Total $ 2021 Balance at the beginning of year Additions Depreciation expense Balance at the end of the year 2020 Balance at the beginning of year Additions Depreciation expense Balance at the end of the year PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 34,524 347,181 (60,529) 321,176 21,500 15,534 (2,510) 34,524 34,524 347,181 (60,529) 321,176 21,500 15,534 (2,510) 34,524 30 45 Predictive Discovery | Annual Report 2021Notes to the Financial Statements Notes to the Financial StatementsFor the Year Ended 30 June 2021 PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 6: EXPLORATION, EVALUATION AND DEVELOPMENT ASSETS NOTE 7: INVESTMENTS IN ASSOCIATES (continued) Exploration and evaluation expenditure 2021 Balance at beginning of the year Expenditure incurred Expenditure acquired Impairment of capitalised exploration Balance at the end of the year 2020 Balance at beginning of the year Expenditure incurred Expenditure acquired Balance at the end of the year 2021 $ 2020 $ 15,505,090 15,505,090 5,048,178 5,048,178 Exploration and Evaluation $ 5,048,178 12,709,855 239,289 (2,492,232) 15,505,090 $ 1,923,318 3,124,860 - 5,048,178 The Group has capitalised exploration expenditure of $15,505,090 (30 June 2020: $5,048,178). This amount includes costs directly associated with exploration and the purchase of exploration properties. These costs are capitalised as an exploration asset until assessment and / or drilling of the permit is complete and the results have been evaluated. These direct costs include employee remuneration, materials, permit rentals and payments to contractors. The expenditure is carried forward until such a time as the area moves into the development phase, is abandoned or sold. The ultimate recovery of the carrying value of exploration expenditure is dependent upon the successful development and commercial exploitation or, alternatively, sale of the interest in the tenements. The Directors are of the opinion that the exploration expenditure is recoverable for the amount stated in the financial report. At 30 June 2020, the Group held a 49% interest in Burkina Resources Pty Ltd, Predictive Discovery SARL and Progress Minerals SARL which was fully impaired (please refer to note 7). The Group acquired an additional 51% interest in Burkina Resources Pty Ltd, Predictive Discovery SARL and Progress Minerals SARL on 3 November 2020 for consideration of $240,000 which was settled through a share issue. The Group valued the total assets acquired at acquisition to be $1,394. The gain on acquisition was $683, which was 49% of the net assets on acquisition. NOTE 7: INVESTMENTS IN ASSOCIATES During the financial year ended 30 June 2021, the Company acquired additional interests in the companies recognised as associates during the previous financial year. These companies are now subsidiaries of the group (please refer to note 6 and note 21). Information relating to interest in associates that are material to the Group are set out below: Name Country of Incorporation Predictive Discovery SARL Burkina Faso Ownership Interest 2021 100% 2020 49% Summarized Financial Information – Predictive Discovery SARL 2021 $ Summarised statement of financial position Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Net assets Predictive Share of Net Assets Summarised statement of profit or loss and other comprehensive income Revenue Expenses Loss before income tax Income tax expense Loss after income tax Other comprehensive income Total comprehensive loss Reconciliation of the Group’s carrying amount Opening carrying amount Share of loss after income tax Share of movement in foreign exchange translation reserve Closing carrying amount Immaterial Associates Information relating to interest in associates that are material to the Group are set out below: Country of Incorporation Name Australia Burkina Resources Pty Ltd Burkina Faso Burkina Resources SARL Predictive Discovery Cote D’Ivoire SARL Cote D’Ivoire Birriman Pty Ltd Birriman BV SARL Sebba Resources SARL Progress Minerals SARL British Virgin Islands Burkina Faso Burkina Faso Burkina Faso PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 31 PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 2020 $ 1,567,165 - 1,567,165 (613,255) (3,508,577) (4,121,832) (2,554,641) (1,251,774) - (4,080,288) (4,080,288) - (4,080,288) - (4,080,288) 747,567 (704,942) (42,625) - - - - - - - - - - - - - - - - - Ownership Interest 2021 100% 100% 100% 100% 100% 100% 100% 2020 49% 49% 30% 49% 49% 49% 49% 32 47 Predictive Discovery | Annual Report 2021Notes to the Financial Statements Notes to the Financial StatementsFor the Year Ended 30 June 2021 PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 10: 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, refer to Note 12. NOTE 11: EARNINGS PER SHARE Reconciliation of loss Loss used in calculating earnings per share – basic and diluted Net loss for the reporting period 2021 $ 2020 $ (6,622,404) (6,622,404) (2,352,700) (2,352,700) Weighted average number of ordinary shares outstanding during the year used in the calculation of basic and diluted earnings per share 976,478,193 453,203,432 NOTE 12: SHARE BASED PAYMENTS During the year ended 30 June 2021, the Group granted the following options as share-based payment: 40,500,000 unlisted options exercisable at $0.0986 expiring in 2 years as part of the long-term employee incentive plan 2,500,000 unlisted options exercisable at $0.011 expiring in 2.5 years as part of the long-term employee incentive plan 8,000,000 unlisted options exercisable at $0.1120 expiring in 3 years to the brokers 10,500,000 listed options exercisable at $0.0986 expiring in 3 years as part of the long-term employee incentive plan. During the year ended 30 June 2020, the Group granted 7,500,000 unlisted options exercisable at $0.18 expiring in 3 years in lieu of corporate advisory services. At 30 June 2021, the Group has the following share-based payment options on issue: Grant Date 29 Nov 2016 24 Dec 2019 30 Jun 2020 09 Nov 2020 09 Nov 2020 11 Dec 2020 05 Feb 2021 14 May 2021 Expiry Date 29 Nov 2020 24 Dec 2022 30 Jun 2023 05 May 2023 05 May 2023 21 Dec 2023 05 May 2023 26 May 2024 Exercise price $0.3867 $0.0180 $0.1800 $0.0986 $0.011 $0.112 $0.0986 $0.0986 Start of the year Granted during the year Exercised during the year 1,952,500 86,431,485 7,500,000 - - - - - 95,883,985 - 15,500,000 2,500,000 8,000,000 25,000,000 10,500,000 61,500,000 - (1,800,000) - - - - - - (1,800,000) Expired during the year (1,952,500) - - - - - - - (1,952,500) Balance at the end of the year - 84,631,485 7,500,000 15,500,000 2,500,000 8,000,000 25,000,000 10,500,000 153,631,485 Vested and exercisable at the end of the year - 84,631,485 7,500,000 15,500,000 2,500,000 8,000,000 - - 118,131,485 PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 34 49 Predictive Discovery | Annual Report 2021Notes to the Financial Statements Notes to the Financial StatementsFor the Year Ended 30 June 2021 PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 13: 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. The following is an analysis of the Group’s revenue and results from operations by reportable segment. Gold Gold Corporate Burk. Faso Cote D’Ivoire $ $ $ Gold Mali $ Gold Guinea $ Total $ 2021 Revenue Interest income Other income Expenses Administration expenses Depreciation of fixed asset Share based expense FX gain / (loss) Exploration expenditure expensed Impairment of Exploration Provision for doubtful debts Revaluation 4,865 15,037 (1,393,992) (2,568) (1,093,054) (152,194) (1,713) - - 683 - - - - (189,929) (44,036) - - - - - - - - - (2,492,232) - - Loss before tax (2,622,937) (189,929) (2,536,267) Current assets Exploration expenditure Plant and Equipment Intercompany loans Current liabilities Net assets/(liabilities) 21,026,381 - 6,675 16,860,670 (212,617) 37,681,109 27,892 239,289 - (200,681) (25,056) (41,444) 16,672 - - (160,423) (9,009) (152,760) - - - - - - - - - - - - - - - - - - - - 4,865 15,037 (23,264) (57,961) - 238,320 (1,003,786) - (426,580) - (1,273,271) 1,891,060 15,265,801 314,502 (16,499,566) (2,250,209) (1,651,220) (60,529) (1,093,054) 86,126 (1,005,499) (2,492,232) (426,580) 683 (6,622,404) 22,962,005 15,505,090 321,177 - (2,496,891) (1,278,412) 36,291,381 Gold Guinea $ Total $ - 7,019 10,506 Gold Gold Corporate Burk. Faso Cote D’Ivoire $ $ $ Gold Mali $ 7,019 - - 10,506 - - 2020 Revenue Interest income Gain on subsidiary deregistration Expenses Administration expenses FX gain /(loss) Exploration expenditure expensed Share of loss in associates (838,831) (78,381) - (38,950) - (19,564) (25,234) - - - - (3,063) - - (661,260) (903,015) (78,381) (683,887) (704,942) - - - - (704,942) Loss before tax (1,615,135) (48,008) (25,234) (3,063) (661,260) (2,352,700) Current assets Exploration expenditure Plant and Equipment Current liabilities Net assets 8,515,327 - 3,746 (573,849) 7,945,225 10,872 - - (4,054) 6,818 27,560 2,541,607 - (301,495) 2,267,673 6,286 - - - 6,286 204,508 2,506,571 30,778 (113,327) 8,764,553 5,048,178 34,524 (992,724) 2,628,530 12,854,532 PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 36 51 Predictive Discovery | Annual Report 2021Notes to the Financial Statements Notes to the Financial StatementsFor the Year Ended 30 June 2021 PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 14: CAPITAL AND LEASING COMMITMENTS NOTE 16: INTERESTS OF KEY MANAGEMENT PERSONNEL 2021 $ 2020 $ - - - - - 127,001 127,001 - - - 3,601,239 14,404,955 3,339,445 10,152,000 18,006,194 13,484,178 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 2021. The totals of remuneration paid to key management personnel of the company and the Group during the year are as follows: Consolidated Short-term benefits Share based payments Post-employments benefits NOTE 17: RELATED PARTY TRANSACTIONS 2021 $ 514,126 776,565 29,468 1,320,160 2020 $ 422,610 - 1,412 424,022 (i) Capital expenditure commitments are expenditure commitments on exploration permits in Guinea and Burkina Faso. 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 comprised the following: Intercompany Loans Predictive Discovery Limited has made loans to its subsidiaries in the amount of $17,032,152 (2020: $340,363). The loan is interest free and payable on demand. Directors’ Remuneration Refer to Note 16. Other Related Party Transactions Aurora Minerals Limited, an entity of which Mr Phillip Jackson is a director, was paid $483 (2020: $31,615) for administration services, including company secretarial and accounting services. NOTE 18: REMUNERATION OF AUDITORS Remuneration of the auditor of the parent entity for: Moore Stephens Victoria -Other services PKF Perth -Audit services PKF Perth -Other services Consolidated 2021 $ 2020 $ - 57,740 - 57,740 8,000 62,505 - 70,505 (A) OPTIONS FEE COMMITMENTS Payable – minimum lease payments: -not later than 12 months -between 12 months and 5 years -more than 5 years (B) CAPITAL EXPENDITURE COMMITMENTS(i) Payable: -not later than 12 months -not later than 12 months and 5 years -more than 5 years NOTE 15: CONTINGENT ASSETS/LIABILITIES Contingent Assets development phase (2020: $NIL). Contingent Liabilities In respect of the Company’s tenements held at Guinea, value added tax (VAT) will be receivable from the Guinea tax authorities if these tenements have reached the development phase. No asset has been recognised during the financial year, as the receipt of the VAT is not virtually certain as it is not certain if the tenements in Guinea will reach the In respect of the Company’s tenements held at Guinea, value added tax (VAT) may be payable for the period up to December 2020 and for the one month ended June 2021. As this VAT liability is in the process of being assessed by the Guinea tax authorities for the above periods, the magnitude of this liability cannot be determined at the date of this report (2020: $NIL). On acquisition of a 100% interest of PMI BF Holdings Inc. (see note 6 and note 7), the Company entered into Amended and Restated Net Smelter Return (NSR) royalty agreements dated 3 November 2020 in which the Company has obligations for payments and obligations for a 2% NSR over the Burkina Faso properties. PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 37 PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 38 53 Predictive Discovery | Annual Report 2021Notes to the Financial Statements Notes to the Financial StatementsFor the Year Ended 30 June 2021 PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 19: FINANCIAL RISK MANAGEMENT (Continued) 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 Australia and New Zealand Banking Group Limited. (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 6 months. The tables below reflect an undiscounted contractual maturity analysis for financial liabilities. 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 Financial liabilities due for payment Trade and other payables Total contractual outflows Financial assets - cash flows realisable Trade and other receivables Total anticipated inflows Within 1 Year 1 to 5 Years Total Contractual Cash Flow 2021 $ 2020 $ 2021 $ 2020 $ 2021 $ 2020 $ 2,496,890 2,496,890 992,721 992,721 232,836 232,836 125,538 125,538 - - - - - - - - 2,496,890 2,496,890 992,721 992,721 232,836 232,836 125,538 125,538 The financial assets and liabilities noted above are interest free. PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT 40 55 Predictive Discovery | Annual Report 2021Notes to the Financial Statements Notes to the Financial StatementsFor the Year Ended 30 June 2021 PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 171 877 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 20: EVENTS AFTER THE END OF THE REPORTING PERIOD(CONTINUED) The nature and extent of the effect of the outbreak on the performance of the Company remains unknown. The Company’s share price may be adversely affected in the short to medium term by the economic uncertainty caused by COVID-19. Further, any governmental or industry measures taken in response to COVID-19 may adversely impact the Company’s operations and are likely to be beyond the control of the Company. The ability to freely move people and equipment to and from exploration projects may cause delays or cost increases. The effects of COVID-19 on the Company's share price may also impede the ability to raise capital, or require the Company to issue capital at a discount, which may in turn cause dilution to shareholders. There are no matters or circumstances arising for the year which significantly affected or could significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years. NOTE 21: CONTROLLED ENTITIES Parent Entity: Predictive Discovery Limited Subsidiaries of legal parent entity: Predictive Discovery Cote D’Ivoire Pty Ltd Ivoirian Resources Pty Ltd Gayeri Resources Pty Ltd Predictive Discovery Mali Resources Pty Ltd Bougouni Resources Pty Ltd Kenieba Resources Pty Ltd Kita Resources Pty Ltd Burkina Resources Pty Ltd(ii) Tinkisso Pty Ltd Predictive Discovery SARL(ii) Ivoirian Resources SARL Predictive Discovery Niger SARL Gayeri Resources SARL Burkina Resources SARL(ii) Birrimian BV SARL(ii) Sebba Resources SARL(ii) Progress Minerals SARL(ii) Predictive Discovery Mali SARL Kindia Resources SARLU Mamou Resources SARLU Tinkisso Resources SARLU Birrimian Pty Ltd(ii) PMI Burkina Faso (BVI) Inc(ii) BF Progress (BVI) Inc(ii) Country of Incorporation Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Cote D’Ivoire Cote D’Ivoire Niger Burkina Faso Burkina Faso Burkina Faso Burkina Faso Burkina Faso Mali Guinea Guinea Guinea British Virgin Islands British Virgin Islands British Virgin Islands (i) (ii) Percentage of voting power is in proportion to ownership Refer to notes 6 and 7 PREDICTIVE DISCOVERY LIMITED ANNUAL FINANCIAL REPORT Percentage Owned(i) 2021 - 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 2020 - 100% 100% 100% 100% 100% 100% 100% 49% - 30% 100% 100% 100% 49% 49% 49% 49% 100% 100% 100% - 49% 49% 49% 42 57 Predictive Discovery | Annual Report 2021Notes to the Financial Statements Notes to the Financial StatementsFor the Year Ended 30 June 2021 PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 871 877 Directors’ Declaration DIRECTOR’S DECLARATION FOR THE YEAR ENDED 30 JUNE 2020 DIRECTORS’ DECLARATION The directors of the company declare that: 1. 2. The financial statements and notes, as set out on pages 30 to 58, are in accordance with the Corporations Act 2001 and: (a) comply with Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and give a true and fair view of the financial position as at 30 June 2021 and of the performance for the year ended on that date of the consolidated group; (b) The Chief Executive Officer and Chief Financial Officer have each declared that: (a) (b) (c) 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 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 22 September 2021 PREDICTIVE DISCOVERY LIMITED ANNUAL REPORT 44 59 Predictive Discovery | Annual Report 2021 Independent Auditor’s Report PKF Perth INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PREDICTIVE DISCOVERY LIMITED Report on the Financial Report Opinion We have audited the accompanying financial report of Predictive Discovery Limited (the company), which comprises the consolidated statement of financial position as at 30 June 2021, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the company and the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year. In our opinion the accompanying financial report of Predictive Discovery Limited is in accordance with the Corporations Act 2001, including: i) Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2021 and of its performance for the year ended on that date; and ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the consolidated entity in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. Level 4, 35 Havelock Street, West Perth, WA 6005 PO Box 609, West Perth, WA 6872 T: +61 8 9426 8999 F: +61 8 9426 8900 www.pkfperth.com.au PKF Perth is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms. Liability limited by a scheme approved under Professional Standards Legislation. 45 60 Predictive Discovery | Annual Report 2021 PKF Perth Key Audit Matter A key audit matter is a matter that, in our professional judgement, was of most significance in our audit of the financial report of the current year. This matter was addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate audit opinion on this matter. For the matter below, our description of how our audit addressed this matter is provided in that context. 1. Valuation of capitalised exploration expenditure Why significant How our audit addressed the key audit matter As at 30 June 2021 the carrying value of exploration and evaluation assets was $15,505,090 (2020: $5,048,178), as disclosed in Note 6. This represents 40.0% of total assets of the consolidated entity, after an impairment of capitalised exploration expenditure of $2,492,232 had been recorded. The consolidated entity’s accounting policy in respect of exploration and evaluation expenditure is outlined in Note 1(j) with the nature of critical estimates and judgements relating to this balance outlined in Note 1(r). Significant judgement is required: in determining whether facts and circumstances indicate that the exploration and evaluation assets should be tested for impairment in accordance with Australian Accounting Standard AASB 6 Exploration for and Evaluation of Mineral Resources (“AASB 6”); and in determining the treatment of exploration and evaluation expenditure in accordance with AASB 6, and the consolidated entity’s accounting policy. In particular: o whether the particular areas of interest meet the recognition conditions for an asset; and o which elements of exploration and evaluation expenditures qualify for capitalisation for each area of interest. Our work included, but was not limited to, the following procedures: o o interest conducting a detailed review of management’s assessment of trigger events impairment prepared in accordance with AASB 6 including: assessing whether the rights to tenure of the areas of remained current at reporting date as well as confirming that rights to tenure are expected to be renewed for tenements that will expire in the near future; obtaining specific representations with the directors and management as to the status of ongoing exploration programmes for the areas of interest, as well as assessing if there was evidence that a decision had been made to discontinue activities in any specific areas of interest; and obtaining and assessing evidence of the consolidated entity’s future intention for the areas of interest, including reviewing future budgeted expenditure and related work programmes. o of assessment considering whether exploration activities for the areas of interest had reached a stage where a reasonable economically recoverable reserves existed; testing, on a sample basis, exploration and evaluation expenditure incurred during the year for compliance with AASB 6 and the consolidated entity’s accounting policy; and reviewing the impairment calculations provided and related assumptions and disclosures in for accuracy and Notes 1(j), 1(r) and 6 completeness. 46 61 Predictive Discovery | Annual Report 2021Independent Auditor’s Report < PKF Perth Other Information Those charged with governance are responsible for the other information. The other information comprises the information included in the consolidated entity’s annual report for the year ended 30 June 2021, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon, with the exception of the Remuneration Report. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of Directors’ for the Financial Report The Directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the Directors are responsible for assessing the consolidated entity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the consolidated entity or to cease operations, or have no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the consolidated entity’s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors. ‘ Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the consolidated entity’s ability to continue as a going concern. If we conclude that a 47 62 Predictive Discovery | Annual Report 2021> Independent Auditor’s Report PKF Perth material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the consolidated entity to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the consolidated entity to express an opinion on the group financial report. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. 48 63 Predictive Discovery | Annual Report 2021Independent Auditor’s Report < PKF Perth Report on the Remuneration Report Opinion We have audited the Remuneration Report included in the Directors’ Report for the year ended 30 June 2021. In our opinion, the Remuneration Report of Predictive Discovery Limited for the year ended 30 June 2021 complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. PKF PERTH SHANE CROSS AUDIT PARTNER 22 SEPTEMBER 2021 WEST PERTH WESTERN AUSTRALIA 64 49 Predictive Discovery | Annual Report 2021> Independent Auditor’s Report Additional ASX Information Shareholder Information The shareholder information set out below was applicable at 12 October 2021 1. Number and Distribution of Equity Securities The number and class of all securities on issue: ASX Code Number Description PDI PDIOA PDIAM PDIAN PDIAL PDIAP PDIAQ PDIAR 1,355,633,353 Fully Paid Ordinary Shares Quoted 83,070,014 ASX Listed Options expiring 24/12/2022 EX $0.018 40,500,000 Unlisted Options expiring 5/5/2023 EX $0.0986 2,500,000 7,500,000 8,000,000 Unlisted Options expiring 5/5/2023 EX $0.011 Unlisted Options expiring 30/06/2023 EX $0.18 Unlisted Options expiring 21/12/2023 EX $0.112 10,500,000 Unlisted Options expiring 26/05/2024 EX $0.0986 8,000,000 Unlisted Options expiring 28/07/2024 EX $0.14 Distribution of equity securities: Range SHARES (PDI) LISTED OPTIONS (PDIOA) Securities No. of holders Securities No. of holders 100,001 and Over 1,286,344,191 10,001 to 100,000 63,129,608 5,001 to 10,000 1,001 to 5,000 1 to 1,000 4,789,114 1,317,054 53,386 Total 1,355,633,353 Unmarketable Parcels 252,992 831 1,576 585 365 156 3,513 254 81,046,187 1,970,235 48,571 5,000 21 83,070,014 21 54 36 5 1 3 99 3 2. Substantial Shareholders (Ordinary Shares: PDI) Substantial shareholders as defined by Section 671B of Australian Corporations Law are: Name Number of Shares % HSBC Custody Nominees (Australia) Limited Capital Di Limited JP Morgan Nominees Australia Limited 217,099,784 90,000,000 84,950,000 16.01 6.64 6.27 65 Predictive Discovery | Annual Report 2021Additional ASX Information Additional ASX InformationFor the Year Ended 30 June 2021 6. Twenty Largest Option Holders: (PDIOA) Option Holder No. of Options % 1 2 3 4 5 6 7 8 9 10 11 11 11 12 13 14 15 16 16 16 16 16 16 17 18 19 20 20 MR PHILLIP RICHARD PERRY CAPITAL DI LIMITED ROCK THE POLO PTY LTD QUINTERO GROUP LIMITED EMMESS PTY LTD RAM PLATINUM PTY LTD EQUITY TRUSTEES LIMITED JIMZBAL PTY LTD TECHNICA PTY LTD JIMZBAL PTY LTD GOFFACAN PTY LTD GOFFACAN PTY LTD MR JASON MICHAEL BARNETT MR ADAM GARE MR PAUL JOSEPH MASSARA GANDJ WILLIAMSON PTY LTD MR CARMELO STILLISANO MR ARTHUR EDWARD JOHNSON MR ANDREW PETER FISHER D-TECH INVESTORS PTY LTD PAJAL PTY LTD SPURFIRE PTY LTD MR ANDREW PETER FISHER & MRS LORIS JOYCE FISHER MR SHAUN BRENDON ARTHUR SUCKLING CAPITAL DI LIMITED MR MARTIN JAMES HICKLING & MRS JANE FRANCES HICKLING P R PERRY NOMINEES PTY LTD MICJUD PTY LTD 22,684,024 12,500,000 7,644,000 7,500,000 3,500,000 3,452,465 2,500,000 2,000,000 1,500,000 1,340,000 1,000,000 1,000,000 1,000,000 740,000 650,000 574,000 547,536 500,000 500,000 500,000 500,000 500,000 500,000 493,726 480,000 418,000 350,000 350,000 27.31 15.05 9.20 9.03 4.21 4.16 3.01 2.41 1.81 1.61 1.20 1.20 1.20 0.89 0.78 0.69 0.66 0.60 0.60 0.60 0.60 0.60 0.60 0.59 0.58 0.50 0.42 0.42 Total Balance of register 75,223,751 7,846,263 Grand total 83,070,014 90.55 9.45 100.00 7. Unquoted Equity Securities ASX Code No. of holders Number Description Holders of more than 20% PDIAM 10 40,500,000 PDIAN PDIAL PDIAP PDIAQ PDIAR 1 1 2 2 2 2,500,000 7,500,000 8,000,000 10,500,000 8,000,000 Unlisted Options expiring 5/5/2023 EX $0.0986 Unlisted Options expiring 5/5/2023 EX $0.011 P&E Roberts (12,500,000) Mr Steven Michael Unlisted Options expiring Mr Dale Alan Bryan 30/06/2023 EX $0.18 Unlisted Options expiring HSBC Custody Nominees (4,000,000) 21/12/2023 EX $0.112 Zenix Nominees Pty Ltd (4,000,000) Unlisted Options expiring Mr Francis Harper (7,000,000) 26/05/2024 EX $0.0986 Mr Andrew Pardey (3,500,000) Unlisted Options expiring HSBC Custody Nominees (4,000,000) 28/07/2024 EX $0.14 Zenix Nominees Pty Ltd (4,000,000) 67 Predictive Discovery | Annual Report 2021Additional ASX Information Additional ASX InformationFor the Year Ended 30 June 2021 Annual Mineral Resource and Ore Reserve Report Bongou Deposit Burkina Faso As at 30 June 2021 As announced at ASX on 3 November 2020, PDI executed an agreement that saw PDI’s ownership return to 100% (from 49% JV interest) in the entire Burkina Faso tenement package, including the Bongou gold deposit. In accordance with ASX Listing Rule 5.21, PDI reviews and reports its Mineral Resource and ore Reserves at least annually. The date of reporting is 30 June each year, to co-incide with the Company’s end of financial year balance date. If there are any material changes to its Mineral Resources or Ore Reserves over the course of the year, the Company promptly reports those changes. Mineral Resources for the Company’s Bongou Deposit Burkina Faso remain unchanged and are shown in Table 1 below: Bongou Deposit - Burkina Faso Indicated Resources Inferred Resources Total Resources Cut off Million Tonnes Au (g/t) Ounces Million tonnes Au (g/t) Ounces Million tonnes Au (g/t) Ounces 0.4 0.8 2.0 3.0 1.21 1.14 0.64 0.34 2.54 2.67 3.64 99,000 98,000 75,000 4.68 52,000 1.33 1.09 0.49 0.28 2.13 91,000 2.48 86,000 3.90 4.95 61,000 45,000 2.55 2.22 1.13 0.62 2.32 190,000 2.58 184,000 3.75 136,000 4.80 96,000 The governance arrangements and internal controls with respect to estimates of mineral resources include the use of external consultants where needed with input from the Company’s technical staff and reviewed by the Board. Competent Person Statement The information in this report that relates to Exploration to qualify as a Competent Person as defined in the Results is based on information compiled by Mr Paul Australasian Code for Reporting of Exploration Results, Roberts who is a Fellow of the Australian Institute of Mineral Resources and Ore Reserves (2012 Edition). Geoscientists. Mr Paul Roberts is a full time employee Mr Gaze consents to the inclusion of the estimates, of the company and has sufficient experience that is classification and the supporting information in the form relevant to the style of mineralisation and type of deposit and context in which it appears. under consideration to qualify as a Competent Person as defined by the 2012 Edition of the ‘Australasian Code for The Mineral Resource estimates the Bankan Gold Project Reporting of Exploration Results, Mineral Resources and (see ASX release dated 30 September 2021), located Ore Reserves’. Mr Roberts consents to the inclusion in the in Guinea’s Siguiri Basin reported herein are based on report of the matters based on his information in the form information compiled by Mr Phil Jankowski, who is a and context in which it appears. member of The Australasian Institute of Mining and Metallurgy. Mr Jankowski is a full-time employee of CSA The Mineral Resource estimation and classification of Global Pty Ltd and has sufficient experience relevant to Mineral Resources and Exploration Targets for the Bongou the style of mineralisation and type of deposits being deposit Burkina Faso is based on, and fairly represents, considered to qualify as a Competent Person as defined information and supporting documentation compiled by the 2012 Edition of the Australasian Code for Reporting by Mr Richard Gaze. Mr Gaze is a fulltime employee of of Exploration Results, Mineral Resources and Ore Golder Associates Pty Ltd and a Member and Chartered Reserves. Mr Jankowski consents to the inclusion in the Professional of the Australasian Institute of Mining and report of the matters based on his information in the form Metallurgy. Mr Gaze has sufficient experience that is and context in which it appears. relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken 69 Predictive Discovery | Annual Report 2021Additional ASX Information