2017 ANNUAL REPORT
ABN 77 009 241 374
(cid:862)BUILDING A SUCCESSFUL INDONESIAN GOLD COMPANY(cid:863)
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CONTENTS
CONTENTS ........................................................................................................................... 2
CORPORATE DIRECTORY ..................................................................................................... 3
CHAIRMAN(cid:859)S REVIEW .......................................................................................................... 4
REVIEW OF OPERATIONS ..................................................................................................... 5
DIRECTORS(cid:859) REPORT .......................................................................................................... 11
AUDITOR(cid:859)S INDEPENDENCE DECLARATION ...................................................................... 22
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ........ 23
CONSOLIDATED STATEMENT OF FINANCIAL POSITION .................................................... 24
CONSOLIDATED STATEMENT OF CASH FLOWS ................................................................. 25
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ..................................................... 26
NOTES TO THE FINANCIAL STATEMENTS ........................................................................... 27
DIRECTORS(cid:859) DECLARATION ............................................................................................... 62
INDEPENDENT AUDITOR(cid:859)S REPORT TO THE MEMBERS OF SIHAYO GOLD LIMITED ......... 63
ADDITIONAL SHAREHOLDER INFORMATION .................................................................... 67
SUMMARY OF TENEMENTS HELD BY THE GROUP ............................................................. 69
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CORPORATE DIRECTORY
Directors
Misha A Collins C.F.A
(Chairman)
Gavin Caudle
(Non Executive Director)
Stuart Gula
(Non Executive Director)
Malcolm Paterson
(Managing Director)
Daniel Nolan
(Executive Director)
Chief Executive Officer
Malcolm Paterson
Company Secretary
Daniel Nolan
Registered Office
and Business Address
C/-McCullough Robertson
11/66 Eagle St,
Brisbane QLD 4000
Share Registry
Home Exchange
Auditors
Solicitors
Bankers
Telephone:
Facsimile:
E-mail:
Web:
0427 401198
(07) 33993172
sihayogold@sihayogold.com
www.sihayogold.com
Security Transfer Registrars Pty Ltd
770 Canning Highway
Applecross WA 6153
Telephone:
Facsimile:
(08) 9315 2333
(08) 9315 2233
Australian Securities Exchange Limited
Level 40, Central Park
152-(cid:1005)(cid:1009)(cid:1012) St Geo(cid:396)ge(cid:859)s Te(cid:396)(cid:396)a(cid:272)e
Perth WA 6000
Stantons International Audit and Consulting Pty Ltd
Level 2 / 1 Walker Avenue
West Perth WA 6005
Steinepreis Paganin
Level 2, The Read Buildings
West Perth WA 6000
ANZ Banking
111 Eagle St,
Brisbane, QLD. 4000
Sihayo Gold Limited is a company limited by shares, incorporated and domiciled in Australia.
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CHAIRMAN’S REVIEW
Dear Fellow Shareholders,
The past twelve months has marked a period of further significant permitting progress for the Sihayo-Pungkut project
with both forestry and construction permits being approved.
These developments have necessitated a refresh of the feasibility study together with bolstering the executive and
staffing of the company.
Of particular significance to the company has been the appointment of Mr Malcom Paterson to the role of Chief
Executive Officer. Malcolm has been responsible for an innovative development approach to the Mirah project located
in Ce(cid:374)t(cid:396)al Kali(cid:373)a(cid:374)ta(cid:374) (cid:449)hi(cid:272)h has (cid:373)a(cid:454)i(cid:373)ised the use of lo(cid:272)al (cid:396)esou(cid:396)(cid:272)es a(cid:374)d e(cid:454)pe(cid:396)tise, togethe(cid:396) (cid:449)ith a full (cid:862)O(cid:449)(cid:374)e(cid:396)s
Ope(cid:396)ato(cid:396)(cid:863) app(cid:396)oa(cid:272)h that e(cid:374)a(cid:271)led the p(cid:396)oje(cid:272)t to su(cid:272)(cid:272)essful, effi(cid:272)ie(cid:374)tl(cid:455) a(cid:374)d p(cid:396)ofita(cid:271)l(cid:455) ope(cid:396)ate despite some challenging
issues including low head grade, high strip ratio and operation during a period of low prevailing gold and silver prices.
The Sihayo Gold board could clearly see that the template applied to the Mirah Project would fit with the Sihayo-
Pungkut Project and had great potential to improve profitability and return on capital.
Malcolm is now taking a similar approach to the Sihayo-Pungkut project with a refresh of the feasibility study using a
team built with his expert local knowledge and network. The aim is to deliver a larger project, with lower costs but at
comparable upfront capex.
We are somewhat limited in terms of what we can say until the feasibility study refresh is completed, but there is a
great deal of optimism internally about how effective the new approach is likely to be.
I would again like to thank our employees, contractors and my fellow directors for their efforts over the past twelve
months. I would also like to thank our shareholders and particularly our major shareholder for their ongoing support of
the company.
I look forward to the next twelve months and believe we will demonstrate the Sihayo-Pungkut project has an exciting
future with strong potential returns for our shareholders.
Yours Sincerely,
Misha Anthony Collins
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REVIEW OF OPERATIONS
Sihayo Gold Project (75%)
The Siha(cid:455)o Gold P(cid:396)oje(cid:272)t (cid:894)(cid:862)Sihayo(cid:863)(cid:895) is held (cid:271)(cid:455) PT So(cid:396)ik(cid:373)as Mi(cid:374)i(cid:374)g (cid:894)(cid:862)So(cid:396)ik(cid:373)as(cid:863)(cid:895) under a 7th Generation
Co(cid:374)t(cid:396)a(cid:272)t of Wo(cid:396)k (cid:894)(cid:862)COW(cid:863)(cid:895) and is located in Mandailing Natal, North Sumatra, Indonesia.
The COW describes in detail the rights and obligations of both the Company and the Government during the
term of the COW. Our COW is in the first year of construction having completed the three main Indonesian
Government Statutory Permits.
PT Sorikmas Mining is (cid:1011)(cid:1009)% o(cid:449)(cid:374)ed (cid:271)(cid:455) Siha(cid:455)o Gold Li(cid:373)ited (cid:894)(cid:862)Siha(cid:455)o Gold(cid:863)(cid:895) a(cid:374)d (cid:1006)(cid:1009)% (cid:271)(cid:455) PT A(cid:374)eka Ta(cid:373)(cid:271)a(cid:374)g
T(cid:271)k (cid:894)(cid:862)A(cid:374)ta(cid:373)(cid:863)(cid:895). Siha(cid:455)o Gold is responsible for 100% of the exploration and development funding of Sorikmas
until the commencement of production. The funding is by way of loans to Sorikmas and under the terms of
the Loan Agreement, Antam is required to repay its share of loans to Sihayo Gold or other lenders to
Sorikmas, from 80% of its attributable share of available cash flow from production, until its 25% share of the
loans are repaid in full.
Dairi
2.5Mt Zn 1.5Mt Pb
Sihayo Pu(cid:374)gkut
1.4 Moz Au
Te(cid:373)ba(cid:374)g
0.45 Moz Au 5.7
Martabe
8.1 Moz Au 73.8
Way
Li(cid:374)ggo
Po(cid:374)gkor
Mi(cid:374)e
Figure 1: Significant Indonesian mineral deposits including the Sihayo Pungkut Gold Deposit
The current Sihayo JORC Code (2012 Edition) Mineral Resource Estimate, which was revised by Helman &
Scholfield Consultants Pty Ltd (H&SC) in June 2013, stands at 16.9 Mt at 2.6 g/t for 1.4 Moz comprising the
larger Sihayo Resource and the smaller Sambung Resource with approximately 75% of the total resource
contained within the JORC Indicated & Measured Category.1
Indicated and Measured Resources at Sihayo only have been converted to JORC Code (2012 Edition) Ore
Reserves by Entech Pty Ltd containing 7.14Mt at 2.4g/t for 554,000oz.2
1 The Sihayo and Sambung deposits Mineral Resource Estimate was previously announced June 17, 2013 and no
material changes have occurred.
2 The Sihayo Ore Reserve was previously announced January 29, 2014 and no material changes have occurred.
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REVIEW OF OPERATIONS
Sihayo Pungkut – Geology
Siha(cid:455)o is lo(cid:272)ated alo(cid:374)g the T(cid:396)a(cid:374)s Su(cid:373)at(cid:396)a Fault Zo(cid:374)e (cid:894)(cid:862)TSFZ(cid:863)(cid:895) and associated Neogene Magmatic Arc
(cid:894)(cid:862)NMA(cid:863)(cid:895), which is the result of an oblique collision of two tectonic plates and associated subduction. A
complex suite of Permian volcanics and sediments, intruded by Jurassic and Cretaceous intrusive plutons,
subsequently juxtaposed or overlain by Tertiary to recent volcanics, intrusives, and sediments comprises the
broader COW area.
Figure 2 shows the location of the Sihayo - Sambung Resources and key exploration prospects across the
COW that support an opportunity for significant exploration targets for ongoing potential project generation.
In addition to the Sihayo Resource there are over twenty (20) identified prospects of carbonate-hosted gold,
low to intermediate -sulphidation epithermal-vein gold; gold-copper skarn, copper-gold porphyry, and lead-
zinc skarn style mineralisation spread across the highly prospective COW area and these prospects will be
the subject of future exploration activities.
Figure 2: Sihayo Pungkut Gold Project – JORC Resource, key prospects and regional geology
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REVIEW OF OPERATIONS
Resource Estimate
The Sihayo and Sambung Mineral Resource Estimates are based upon review and work undertaken by H&S
Consultants Pty Ltd1. The relevant JORC 2012 Table 1 is available on the Company website.
Resource
Tonnage
(Mt)
Grade Au
(g/t)
Contained Gold
ounces
JORC Classification
Au Cut-off
grade (g/t)
SIHAYO
15.3
SAMBUNG
1.6
TOTAL
16.9
2.7
2.0
2.6
1,322,000
102,000
1,424,000
Measured & Indicated &
Inferred
Measured & Indicated &
Inferred
Measured & Indicated &
Inferred
1.2
1.2
1.2
(cid:862)A(cid:271)o(cid:448)e figures (cid:373)a(cid:455) (cid:374)ot su(cid:373) due to rou(cid:374)di(cid:374)g. Sig(cid:374)ifi(cid:272)a(cid:374)t figures do (cid:374)ot i(cid:373)pl(cid:455) a(cid:374) added le(cid:448)el of pre(cid:272)isio(cid:374)(cid:863)
Table 1: JORC Code (2012 Edition) Mineral Resource Estimate revised by Helman & Scholfield Consultants
Pty Ltd (H&SC) in June 20131
Section 55000E
Figure 3: Sihayo-Sambung Resources Location Plan
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REVIEW OF OPERATIONS
A
B
Figure 5
Figure 4: Geology Cross Section 55000E of Sihayo Resource looking NW
Figure 5: Enlargement of cross section 55000E shows significant gold intercepts.
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REVIEW OF OPERATIONS
Feasibility Study
The Siha(cid:455)o (cid:862)Maide(cid:374)(cid:863) O(cid:396)e Rese(cid:396)(cid:448)e a(cid:374)d Feasi(cid:271)ilit(cid:455) Stud(cid:455) (cid:272)o(cid:373)pletio(cid:374) (cid:449)as a(cid:374)(cid:374)ou(cid:374)(cid:272)ed o(cid:374) Ja(cid:374)ua(cid:396)(cid:455) (cid:1006)(cid:1013), (cid:1006)(cid:1004)(cid:1005)(cid:1008) a(cid:374)d
no material changes have occurred to date.
Indicated and Measured Resources have been converted to Probable and Proved Ore Reserves by Entech Pty
Ltd. The relevant JORC 2012 Table 1 is available on the Company website.
Resource
Tonnage (Mt)
Grade Au
(g/t)
Contained Gold
ounces
Resource Category
SIHAYO
TOTAL
2.43
4.71
7.14
2.4
2.4
2.4
90,000
363,000
Proved
Probable
554,000
Proved & Probable
(cid:862)Calculations have been rounded to the nearest 1,000t, 0.1 g/t grade and 1,000oz metal(cid:863)
Table 2: JORC Code (2012 Edition) Sihayo Ore Reserves prepared by Entech Pty Ltd (January 2014)2
The January 2014 Feasibility Study was based on a gold price of $1400/oz, which proved to be optimistic in
the ensuing period and reduced the capacity to attract funding to complete the project.
An update of the Feasibility Study is presently underway to include several significant changes to improve
the project economics, including:
Doubling the production rate to 80,000 – 100,000 oz per year,
Reducing tailings and waste disposal costs by backfilling mined out pits,
Owner operation for mining, drilling and laboratory service,
Simplified plant design to reduce capital,
Inclusion of cyanide recovery and detox technology using the RECYN process to reduce operating
costs.
The updated study is expected to be completed by December 2017.
Permitting and Approvals
The status of the COW is now in the first year of construction and the Company expects to complete
construction within the permitted three year period providing the updated FS is successful.
The three key Indonesian Government approvals, Feasibility Study, AMDAL (Environmental) and Forestry are
now complete, although updates or Addendums will be required to comply with the proposed changes.
Corporate Social Responsibility (CSR) Programmes
Ahead of the potential project development the Company has continued to engage local Stakeholders
associated with Government permitting and approvals.
As the project progress into construction and operation, the Company remains committed to the delivery of
CSR programs in line with our Strategy.
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REVIEW OF OPERATIONS
Other Projects
India – Diamond Exploration (9-10%)
No progress was made during the year in resolving the legal status of the tenements.
Mount Keith Gold Project – Western Australia (2% net smelter royalty)
No mining was undertaken on the project during the year.
Mulgabbie Gold Project – Western Australia (2% net smelter royalty)
No mining was undertaken on the project during the year.
Competent Persons Statements
Sihayo Resource
Information that relates to Mineral Resource Estimates at the Sihayo project is based on information compiled by or under the supervision of Mr
Robert Spiers, who was an independent consultant and Director of H&S Consultants to Sorikmas Mining Ltd. Mr Spiers has sufficient experience which
is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as an
Independent Competent Person as defined in the 2012 editio(cid:374) of the (cid:858)Australasia(cid:374) Code for Reporti(cid:374)g of E(cid:454)ploratio(cid:374) Results, Mi(cid:374)eral Resour(cid:272)es a(cid:374)d
Ore Reser(cid:448)es(cid:859) a(cid:374)d a(cid:374) I(cid:374)depe(cid:374)de(cid:374)t Qualified Perso(cid:374) as defi(cid:374)ed i(cid:374) the Ca(cid:374)adia(cid:374) Natio(cid:374)al I(cid:374)stru(cid:373)e(cid:374)t (cid:1008)(cid:1007)-101 (standards of Disclosure for Mineral
Projects). Mr Spiers is a Member of the Australian Institute of Geoscientists and a full time employee of H&S Consultants. Mr Spiers consents to the
inclusion in the report of the matters based on his information in the form and context in which it appears.
The Sihayo deposit was estimated by H&S Consultants using Ordinary Kriging constrained by mineralisation envelopes prepared using a nominal 0.3g/t
gold (cid:272)ut‐off grade as put forth (cid:271)(cid:455) the Sorik(cid:373)as Mi(cid:374)i(cid:374)g Ltd. A do(cid:449)(cid:374)-hole intercept length of 1m was adopted for modelling and the primary block
dimensions used in the Sihayo model were 12.5m EW by 12.5m NS by 2.5m vertical. Bulk density was estimated as an attribute of the modelling
process and was assigned to the modelling data prior to modelling via a matrix which characterised bulk density based on sample lithological
attributes and oxidation state from a data set of 609 bulk density determinations. Historical bulk density sampling outcomes were not employed.
Sambung Resource
Information that relates to Mineral Resource Estimates at the Sambung project is based on information compiled by or under the supervision of Mr
Luke A Burlet, who is an independent consultant and Director of H&S Consultants to Sorikmas Mining Ltd. Mr Burlet has sufficient experience which is
relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as an Independent
Competent Person as defined in the 2012 editio(cid:374) of the (cid:858)Australasia(cid:374) Code for Reporti(cid:374)g of E(cid:454)ploratio(cid:374) Results, Mi(cid:374)eral Resour(cid:272)es a(cid:374)d Ore Reser(cid:448)es(cid:859)
and an Independent Qualified Person as defined in the Canadian National Instrument 43-101 (standards of Disclosure for Mineral Projects). Mr Burlet
is a Member of the Australian Institute of Geoscientists and a full time employee of H&S Consultants. Mr Burlet consents to the inclusion in the report
of the matters based on his information in the form and context in which it appears.
Sihayo Reserve
Information that relates to Ore Reserves at Sihayo is based on information compiled by or under the supervision of Mr Shane McLeay, who is a
Principal Mining Engineer at Entech Pty Ltd and provided to PT Sorikmas Mining. Mr McLeay has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as an Independent Competent Person as
defined in the 2012 editio(cid:374) of the (cid:858)Australasia(cid:374) Code for Reporti(cid:374)g of E(cid:454)ploratio(cid:374) Results, Mi(cid:374)eral Resour(cid:272)es a(cid:374)d Ore Reser(cid:448)es(cid:859). Mr McLeay is a Fellow
of the Australasian Institute of Mining and Metallurgy and a full time employee of Entech Pty Ltd. Mr McLeay consents to the inclusion in the report of
the matters based on his information in the form and context in which it appears.
Note
All statements in this report, other than statements of historical facts that address future timings, activities, events and developments that the
Company expects, are forward looking statements. Although Sihayo Gold Limited, its subsidiaries, officers and consultants believe the expectations
expressed in such forward looking statements are based on reasonable expectations, investors are cautioned that such statements are not guarantees
of future performance and actual results or developments may differ materially from those in the forward looking statements. Factors that could
cause actual results to differ materially from forward looking statements include, amongst other things commodity prices, continued availability of
capital and financing, timing and receipt of environmental and other regulatory approvals, and general economic, market or business conditions.
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DIRECTORS’ REPORT
You(cid:396) di(cid:396)e(cid:272)to(cid:396)s p(cid:396)ese(cid:374)t thei(cid:396) (cid:396)epo(cid:396)t o(cid:374) the (cid:272)o(cid:374)solidated e(cid:374)tit(cid:455) (cid:272)o(cid:374)sisti(cid:374)g of Siha(cid:455)o Gold Li(cid:373)ited (cid:894)(cid:862)Siha(cid:455)o
Gold(cid:863), or(cid:863) the Co(cid:373)pa(cid:374)(cid:455)(cid:863)(cid:895) a(cid:374)d the e(cid:374)tities it (cid:272)o(cid:374)t(cid:396)olled at the e(cid:374)d of, o(cid:396) du(cid:396)i(cid:374)g the (cid:455)ea(cid:396) e(cid:374)ded (cid:1007)(cid:1004) Ju(cid:374)e 2017
(cid:894)(cid:862)the (cid:396)epo(cid:396)ti(cid:374)g pe(cid:396)iod(cid:863)(cid:895).
DIRECTORS
The following persons were directors of Sihayo Gold during the financial year and up to the date of this
report:
Misha Collins - Chairman
Gavin Caudle - Non Executive Director
Stuart Leslie Gula - Non Executive Director (Resigned as Chief Executive Officer & Managing Director on 14
February 2017)
Daniel Garry Nolan - Executive Director, Chief Financial Officer, Company Secretary
Malcolm Paterson - Managing Director& Chief Executive Officer (Effective from 01 June 2017)
PRINCIPAL ACTIVITIES
The principal activities of the consolidated entity during the course of the financial year were the continuing
development of the Sihayo Pungkut Gold project. There were no significant changes in the nature of those
activities during the financial year.
DIVIDENDS
No dividends have been paid or declared since the end of the previous financial year and no dividend is
recommended in respect of this financial year.
REVIEW OF OPERATIONS
The review of operations is detailed at pages 5-10
OPERATING RESULTS
During the financial year the consolidated entity incurred a consolidated operating loss after income tax of
$1,315,522 (2016: $2,542,637).
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There have been no significant changes in the state of affairs of the consolidated entity for the 2017 financial
year.
EMPLOYEES
The consolidated entity employed 25 employees as at 30 June 2017 (2016: 24 employees)
CORPORATE STRUCTURE
The Company has 1,699,740,648 ordinary shares on issue as at the date of this report.
The corporate group consists of the parent entity Sihayo Gold Limited, its 100% owned subsidiaries Inland
Goldmines Pty Ltd, Excelsior Resources Pty Ltd, Oropa Technologies Pty Ltd, Oropa Indian Resources Pty Ltd,
Oropa Exploration Pty Ltd and Aberfoyle Pungkut Investments Pte Ltd.
Aberfoyle Pungkut Investments Pte Ltd holds a 75% interest in PT Sorikmas Mining, with an Indonesian
Government mining company PT Aneka Tambang Tbk holding the remaining 25%.
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DIRECTORS’ REPORT
LIKELY FUTURE DEVELOPMENTS
Details of important developments occurring in this current financial year have been covered in the review
of operations.
Further information on likely developments in the operations of the consolidated entity and the expected
results have not been included in this report because the directors believe it would be likely to result in
unreasonable prejudice to the consolidated entity.
FINANCIAL POSITION
The net assets of the consolidated entity as at 30 June 2017 are $12,313,327 (2016: $8,387,484).
ENVIRONMENTAL REGULATION
The consolidated entity has assessed whether there are any particular or significant environmental
regulations which apply. It has determined that the risk of non-compliance is low, and has not identified any
compliance breaches during the year.
INFORMATION ON DIRECTORS
Details of the directors of the Company in office at the date of this report are:
Misha A Collins
Chairman
Experience and expertise
Mr Collins has 20 years of experience in financial markets with particular emphasis on gold and mining
business analysis and evaluation. Mr Collins was employed by BT Funds Management for an 11 year period
as an equity analyst covering both domestic and international markets together with the formulation of
capital market strategies and commodity forecasting. Mr Collins currently operates his own investment and
technical consulting business and acts as Adviser to a Malaysian based Gold and Silver investment fund.
Mr Collins holds a Bachelor of Engineering in Metallurgy, graduating with First Class Honours from the RMIT
University, a Graduate Certificate in Banking and Finance from Monash University and a Graduate Diploma in
Applied Finance and Investment from the Financial Services Institute of Australia. He also completed the CFA
program with the US based CFA Institute and has been awarded the Chartered Financial Analyst designation
(CFA).
Directorships of Other ASX Listed Companies
None
Former ASX Listed Companies Directorships in last 3 years
Ask Funding Limited
Special responsibilities
Audit Committee chairman
Interests in shares and options
23,766,404 ordinary shares in Sihayo Gold Limited
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DIRECTORS’ REPORT
Gavin Caudle
(Non Executive Director)
Experience and expertise
Mr Caudle has over 25 years experience in the finance and investment sectors in Australia, Singapore and
Indonesia. Starting his career at Arthur Andersen Australia, he eventually became a partner based in the
Jakarta office. He joined Citigroup in 1998 in Indonesia and held positions as Head of Mergers & Acquisition
and Head of Private Equity at Citigroup and Country Head of the Investment Bank at Salomon Smith Barney.
Since 2003, together with his partners, Gavin has developed numerous successful businesses including
Tower Bersama Group (a listed telecommunications infrastructure business), Merdeka Copper & Gold (an
Indonesian listed mining Company and Provident Agro (a listed plantation business) with assets valued at
more than $4 billion today.
Gavin and his partners bring substantial expertise in dealing with all business aspects in Indonesia, most
importantly for Sihayo being:
Track record of raising more than US$3 billion of senior, mezzanine and equity capital over the past
10 years; and
Expertise in dealing with forestry issues through the ownership of a substantial plantation business.
Expertise in dealing with mining related issues through the ownership of substantial shareholdings in
Sumatra Copper and Gold Limited, Finders Resources Limited and PT Merdeka Copper Gold Tbk.
Directorships of Other ASX Listed Companies
Sumatra Copper and Gold Limited
Finders Resources Limited
Former ASX Listed Companies Directorships in last 3 years
No former directorships
Special responsibilities
Audit Committee member
Interests in shares and options
6,613,984 ordinary shares (held directly)
481,358,480 ordinary shares (held indirectly)
Stuart Leslie Gula
(Non Executive Director)
Experience and expertise
Mr Gula has over 25 years management experience in the mining sector in Australia, North America, Africa
and Asia. Among many other achievements, his experience includes successful construction completion,
commissioning and production of two gold projects in China and Africa and has successfully participated in
varied levels of management on feasibility studies for many other projects. Prior to joining Sihayo Gold, he
held the position of Group General Manager, Mining - North America for Nyrstar. Nyrstar is a European
based integrated metals and mining company with a market capital in excess of USD 1 billion. Mr Gula holds
a Bachelors degree in Engineering (mining major) and a Masters of Business Administration (Technology
Management).
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DIRECTORS’ REPORT
Information on Directors (continued)
Directorships of Other ASX Listed Companies
None
Former ASX Listed Companies Directorships in last 3 years
No former directorships
Interests in shares and options
1,033,269 ordinary shares (held indirectly)
Malcolm Paterson (appointed on 01 June 2017)
BSc. (Hons) Eng. Met., F. Aus IMM
(Chief Executive Officer & Managing Director of Sihayo Gold Limited)
Malcolm has over forty-five years post graduate experience in the international minerals industry in project
development, operations, engineering and company management.
Prior to joining Sihayo he was CEO of PT Kasongan Bumi Kencana (KBK), part of the Pelsart Group. This
position involved rebuilding the company organisation structure and management systems to provide the in-
house capability to develop and operate mining projects. The Mirah Gold/Silver Project was successfully
commissioned in 2012 and further projects are in the development stage, including the remake of the Mt.
Muro Project, presently being commissioned.
Malcolm was also responsible for the establishment of Green Gold Technology, a company specialising in
Resin technology for the recycling of cyanide and detoxification of gold plant tailings.
Directorships of Other ASX Listed Companies
None
Former ASX Listed Companies Directorships in last 3 years
No former directorships
Interests in shares and options
None
Daniel Garry Nolan
(Executive Director, Chief Financial Officer, Company Secretary)
The company secretary is Mr Daniel Garry Nolan. Mr Nolan was appointed to the position of company
secretary on 1 July 2011. Mr Nolan has worked in finance and accounting for more than 30 years. He has
held senior finance positions in Australia, Cambodia, Vietnam and Indonesia. Immediately before joining
Sihayo he held senior management roles in the Saratoga Group in Indonesia. Prior to that, he was a senior
finance executive at Telstra for 10 years in Australia, Cambodia and Indonesia. Mr Nolan holds a Bachelor of
Business from Monash University and a Certificate in Governance and Risk Management from The
Governance Institute of Australia
Interests in shares and options
4,350,919 ordinary shares (held indirectly)
14 | P a g e
DIRECTORS’ REPORT
Information on Directors (continued)
MEETINGS OF DIRECTORS
The following tables set out the number of meetings of the Company's directors held during the year ended
30 June 2017, and the number of meetings attended by each director. (Note that meeting attendance may
have been completed via telephone conferencing).
Di(cid:396)e(cid:272)to(cid:396)s(cid:859) (cid:373)eeti(cid:374)g:
M Collins
Gavin Caudle
S Gula
D Nolan
M Paterson
Audit committee meeting:
M Collins
Gavin Caudle
D Nolan
Number eligible
to attend
3
3
3
3
1
Number eligible
to attend
2
2
2
Number
Attended
3
3
3
3
1
Number
Attended
2
2
2
15 | P a g e
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
The full board of Sihayo Gold act as as the Remuneration Committee at the date of this report
The responsibilities and functions of the Remuneration Committee are as follows:
1) (cid:396)e(cid:448)ie(cid:449) the (cid:272)o(cid:373)petiti(cid:448)e(cid:374)ess of the Co(cid:373)pa(cid:374)(cid:455)(cid:859)s e(cid:454)e(cid:272)uti(cid:448)e (cid:272)o(cid:373)pe(cid:374)satio(cid:374) p(cid:396)og(cid:396)a(cid:373)s to e(cid:374)su(cid:396)e:
(a)
(b)
(c)
the attraction and retention of corporate officers;
the (cid:373)oti(cid:448)atio(cid:374) of (cid:272)o(cid:396)po(cid:396)ate offi(cid:272)e(cid:396)s to a(cid:272)hie(cid:448)e the Co(cid:373)pa(cid:374)(cid:455)(cid:859)s (cid:271)usi(cid:374)ess o(cid:271)je(cid:272)ti(cid:448)es; a(cid:374)d
the alignment of the interests of key leadership with the long-term interests of the
Co(cid:373)pa(cid:374)(cid:455)(cid:859)s sha(cid:396)eholde(cid:396)s.
2) review trends in management compensation, oversee the developemnt of new compensation plans
and, when necessary, approve the revision of existing plans;
3) review the performance of executive management;
4) review and approve Chairperson and Chief Executive Officer goals and objectives, evaluate
Chairperson and Chief Executive Officer performance in light of these corporate objectives,
and set Chairperson and Chief Executive Officer compensation levels consistent with Company
philosophy;
5) approve the salaries, bonus and other compensation for all senior executives, the committee will
recommend appropriate salary, bonus and other compensation to the Board for approval;
6) review and approve compensation packages for new corporate officers and termination packages
for corporate officers as requested by management;
7) review and approve the awards made under any executive officer bonus plan, and provide an
appropriate report to the Board;
8) review and make recommendations concerning long-term incentive compensation plans, including
the use of share options and other equity-based plans. Except as otherwise delegated by the Board,
the (cid:272)o(cid:373)(cid:373)ittee (cid:449)ill a(cid:272)t o(cid:374) (cid:271)ehalf of the Boa(cid:396)d as the (cid:862)Co(cid:373)(cid:373)ittee(cid:863) esta(cid:271)lished to administer equity-
based and employee benefit plans, and as such will discharge any responsibilities imposed on the
committee under those plans, including making and authorising grants, in accordance with the terms
of those plans; and
9) review periodi(cid:272) (cid:396)epo(cid:396)ts f(cid:396)o(cid:373) (cid:373)a(cid:374)age(cid:373)e(cid:374)t o(cid:374) (cid:373)atte(cid:396)s (cid:396)elati(cid:374)g to the Co(cid:373)pa(cid:374)(cid:455)(cid:859)s pe(cid:396)so(cid:374)(cid:374)el
appointments and practices.
Principles used to determine the nature and amount of remuneration
Non-executive directors receive fees in cash. The fees are fixed and approved by shareholders.
Where non-executive directors provide services in their area of expertise they receive payment at
normal commercial rates.
There are no executives (other than directors) with authority for strategic decision making and
management.
The remuneration of the directors is not linked directly to the performance of the Company.
16 | P a g e
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (continued)
Details of remuneration
Details of the remuneration of key management personnel and related parties of Sihayo Gold Limited,
including their personally related entities are set out below for the year ended 30 June 2017. There have
been no changes to the below named key management personnel since the end of the reporting period
unless noted :
2017
Short-term
Post Employment
Long Term
Equity
Name
M Collins
G Caudle
D Nolan
S Gula
M Paterson
Cash
Salary &
Fees
Non
Monetary
Benefits
65,000
45,000
36,000
233,753
35,000
414,753
2,220
1,537
410
7,984
1,195
13,346
Super-
annuation
Retirement
Benefits
Incentive
Plans
LSL
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Share
based
payment
-
-
-
-
-
-
Total
$
67,220
46,537
36,410
241,737
36,195
428,099
Total
Remuneration
represented
by options
-
-
-
-
-
-
(a) $ 65,000 in directors fees was paid to M Collins as at 30 June 2017.
(b) $ 326,250 in directors fees was payable as at 30 June 2017 to G Caudle for fees for the year ended 30
June 2017 and in lieu of previous years directors fees.
(c) $ 36,000 salary was paid to D Nolan for the year ended 30 June 2017.
(d) $ 233,753 salary was paid to Stuart Gula for the year ended 30 June 2017. He resigned on 14 February
2017.
(e) $ 35,000 salary was paid to Malcolm Paterson for the year ended 30 June 2017. He was appointed on
01 June 2017.
(f) $13,346 non monetary benefit is related to Director and Officers Liability Insurance.
2016
Short-term
Post Employment
Long Term
Equity
Name
M Collins
G Caudle
D Nolan
S Gula
Cash
Salary &
Fees
Non
Monetary
Benefits
65,000
45,000
36,000
367,504
513,504
1,565
1,084
265
8,148
11,062
Super-
annuation
Retirement
Benefits
Incentive
Plans
LSL
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Share
based
payment
-
-
-
-
-
Total
$
66,565
46,084
36,265
375,652
524,566
Total
remuneration
represented
by options
-
-
-
-
-
(a) $ 65,000 in directors fees was paid to M Collins as at 30 June 2016.
(b) $ 281,250 in directors fees was payable as at 30 June 2016 to G Caudle for fees for the year ended 30
June 2016 and in lieu of previous years directors fees.
(c) $ 36,000 salary was paid to D Nolan for the year ended 30 June 2016.
(d) $ 367,504 salary was paid to Stuart Gula for the year ended 30 June 2016.
(e) $11,062 non monetary benefit is related to Director and Officers Liability Insurance.
17 | P a g e
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (continued)
No options granted as part of remuneration during the years ended 30 June 2017 and 30 June 2016.
There were no shares issued on exercise of compensation options (Consolidated) for the years ended 30
June 2017 or 30 June 2016.
Option holdings of key management personnel
The number of options over ordinary shares in the Company held during the financial year by each director
of Sihayo Gold Limited, including their personally-related entities, are set out below.
30 June 2017
M Collins
S Gula
D Nolan
G Caudle
M Paterson
Balance at
beginning of
year
1 July 16
-
-
-
-
-
-
30 June 2016
M Collins
S Gula
D Nolan
G Caudle
Balance at
beginning
of year
1 July 15
-
1,000,000
-
-
1,000,000
Granted as
remuneration
Options
exercised
Net change
other
Balance at
end of year
30 June 17
Vested at 30 June 2017
Total
Exercisable
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Granted as
remuneration
Options
exercised
Net change
other
Balance at
end of year
30 June 16
-
-
-
-
-
-
-
-
-
-
-
(1,000,000)*
-
-
(1,000,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Vested at 30 June 2016
Total
Exercisable
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
*These options expired on 1 October 2015
Shareholdings of Key Management Personnel
The number of shares held in the Company during the financial year by each key management personnel of
Sihayo Gold Limited, including their personally-related entities, are set out below:
Balance
1 July 16
Granted as
On exercise
Net change
Balances as at date of
remuneration
of options
other
resignation/ termination
Balance
30 June 17
Ord
Pref
Ord
Pref
Ord
Pref
Ord
Pref
Ord
Pref
Ord
14,529,574
155,435,368
133,269
4,250,919
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
20,161,830
-
332,537,096
900,000
100,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
34,691,404
487,972,464
1,033,269
4,350,919
-
30 June
2017
M Collins
G Caudle
S. Gula
D. Nolan
M. Paterson
18 | P a g e
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (continued)
Balance
1 July 15
Granted as
remuneration
On
exercise
of options
Net
change
other
Balances as at date of
resignation/
termination
Balance
30 June 16
Ord
Pref
Ord
Pref
Ord
Pref
Ord
Pref
Ord
Pref
Ord
14,529,574
155,435,368
133,269
4,250,919
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14,529,574
155,435,368
133,269
4,250,919
30 June
2016
M Collins
G Caudle
S. Gula
D. Nolan
DIRECTORS AGREEMENTS
Whilst no formal agreements have been entered into between the Company or previous agreements have
expired and each of its Directors excluding Malcolm Paterson, annual Director remuneration, as disclosed
below, has been Board approved. Mal(cid:272)ol(cid:373) Pate(cid:396)so(cid:374)(cid:859)s te(cid:396)(cid:373)s a(cid:374)d (cid:272)o(cid:374)ditio(cid:374)s a(cid:396)e detailed i(cid:374) his e(cid:373)plo(cid:455)(cid:373)e(cid:374)t
agreement dated 28/05/2017.
Name
Remuneration Per Annum (AUD) plus Allowance
Misha Collins
Stuart Leslie Gula
Daniel Garry Nolan
Gavin Caudle
65,000
45,000
36,000
45,000
Malcolm Pate(cid:396)so(cid:374) (cid:449)as appoi(cid:374)ted as Chief E(cid:454)e(cid:272)uti(cid:448)e Offi(cid:272)e(cid:396) & Ma(cid:374)agi(cid:374)g Di(cid:396)e(cid:272)to(cid:396) (cid:271)(cid:455) G(cid:396)oup(cid:859)s su(cid:271)sidia(cid:396)(cid:455) PT
Sorikmas Mining on 1 June 2017. As per his employment contract his gross annual salary is $ 420,000 per
annum with 3 month notice of termination by either party.
The company shall issue 50 million options after 6 months of appointment date. The options will be
exercisable at AUD 0.03 and will vest as follows:
10 million will vest upon financial close of project financing and construction commencement of the
Sihayo Pungkut Project; and
40 million at project completion of the Sihayo Pungkut Project
END OF REMUNERATION REPORT
Directors and Officers Insurance
During the year $ 13,346 was paid for Directors and officeholders insurance, covering all directors and
officeholders.
The liabilities insured are costs and expenses that may be incurred in defending civil or criminal proceedings
that may be brought against the officers in their capacity as officers of entities in the consolidated entity.
19 | P a g e
DIRECTORS’ REPORT
SHARES UNDER OPTION
Unissued ordinary shares of Sihayo Gold Limited under option at the date of this report are as follows:
As at the end of the reporting period, there were no listed options for Sihayo Gold Ltd shares on the
Australian Securities Exchange.
WORKING CAPITAL LOAN
Total working capital loan from Provident Minerals Ltd was USD 200,000 with 10% interest per annum
accrued daily and compunded monthly.
PROCEEDINGS ON BEHALF OF COMPANY
No person entitled to exercise any of the options has any right, by virtue of the options, to participate in any
share issue of any other body corporate.
The names of all persons who currently hold options, granted at any time, are entered in the register kept by
the Company pursuant to Section 216C of the Corporations Act 2001 and the register may be inspected free
of charge.
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the
Company for all or part of these proceedings.
The Company was not party to any such proceedings during the year.
On 21 September 2017, the Company announced that the Prospectus had been sent to Shareholders to issue
a maximum of 154,521,879 shares to raise AUD $2,163,306. The offer was made as a non-renounceable
entitlement issue of one (1) share for every eleven (11) shares held by Shareholders registered at the Record
Date at an issue price of $0.014 per Share. All the shares offered under the prospectus will rank equally with
the shares on issue at the date of the prospectus.
The funds raised from the Offer are planned to be used in accordance with the table set out below:
Item
Proceeds of the Offer
1.
2.
3.
4.
Expenses of the Offer
Repayment of loans
Feasibility Study Review
Working Capital
Total
Full Subscription
($)
130,859
264,852
1,503,019
264,578
2,163,306
%
6.05%
12.24%
69.48%
12.23%
100%
CORPORATE GOVERNANCE
The Co(cid:373)pa(cid:374)(cid:455)(cid:859)s Co(cid:396)po(cid:396)ate Go(cid:448)e(cid:396)(cid:374)a(cid:374)(cid:272)e State(cid:373)e(cid:374)t is lo(cid:272)ated at the Co(cid:373)pa(cid:374)(cid:455)(cid:859)s We(cid:271)site:
http://www.sihayogold.com/view/about-us/corporate-governance
20 | P a g e
DIRECTORS’ REPORT
NON-AUDIT SERVICES
There were no non-audit services undertaken by Stantons International during the financial year.
A (cid:272)op(cid:455) of the audito(cid:396)(cid:859)s i(cid:374)depe(cid:374)de(cid:374)(cid:272)e de(cid:272)la(cid:396)atio(cid:374) as (cid:396)e(cid:395)ui(cid:396)ed u(cid:374)de(cid:396) se(cid:272)tio(cid:374) (cid:1007)(cid:1004)(cid:1011)C of the Corporations Act
2001 is set out on page 22.
Signed in accordance with a resolution of the Board of Directors.
Misha Anthony Collins
Chairman
29 September 2017
21 | P a g e
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2017
Notes
3
5
3(a)(i)
3(a)(ii)
3(a)(ii)
6(a)(ii)
3(a)
3(b)
Other revenue
Total revenue
Corporate secretarial expenses
Depreciation and amortisation
Employee benefits expense
External consultancy expenses
Insurance expense
Rental expense
Finance costs
Gain on Derivative Liability
Travel and entertainment expenses
Provision for impairment of
capitalised exploration and
evaluation costs
Other expenses
Loss before income tax
Income tax expense
Net loss
Other comprehensive income
Items that will never be classified
to profit or loss
Items that may be classified to
profit or loss
Movement in foreign currency
translation reserve
Other comprehensive loss for the
year, net of tax
Total comprehensive (loss) for the
year
Loss after income tax attributable
to:
Members of Sihayo Gold Limited
Non controlling interest
Comprehensive loss after income
tax attributable to:
Members of Sihayo Gold Limited
Non controlling interest
Basic/diluted loss per share in cents
20
2017
$
2016
$
528
528
(49,430)
(57,736)
(607,933)
(604,998)
(3,375)
(2,291)
(96,935)
725,554
(21,779)
-
(597,127)
(1,315,522)
-
(1,315,522)
-
(453,255)
(453,255)
(1,768,777)
(875,503)
(440,019)
(1,315,522)
(567,588)
(1,201,189)
(1,768,777)
(0.06)
767
767
(57,204)
(145,078)
(471,371)
(318,011)
(14,813)
(2,373)
(483,085)
(36,574)
-
(1,014,895)
(2,542,637)
-
(2,542,637)
-
(3,297,439)
(3,297,439)
(5,840,076)
(813,033)
(1,729,604)
(2,542,637)
(4,045,049)
(1,795,027)
(5,840,076)
(0.07)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjuction with the
accompanying notes.
23 | P a g e
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017
Notes
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Other assets
Property, plant and equipment
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Borrowings
Provisions
Other liabilities
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
SHAREHOLDERS’ EQUITY
Parent entity interest:
Contributed equity
Reserves
Accumulated losses
Total parent entity interest
Non-controlling interest in controlled
entities
19
4
6
5
7
9
8
8
2017
$
834,757
203,125
1,037,882
2016
$
27,720
290,042
317,762
12,878,780
83,964
12,962,744
13,295,317
145,337
13,440,654
14,000,626
13,758,416
862,800
261,510
26,900
57,516
1,208,726
645,898
4,214,663
26,900
57,920
4,945,381
478,573
478,573
425,551
425,551
1,687,299
5,370,932
12,313,327
8,387,484
10
11(a)
11(b)
18(b)
107,220,628
13,377,103
(99,144,809)
21,452,922
(9,139,595)
101,526,008
13,069,188
(98,269,306)
16,325,890
(7,938,406)
TOTAL SHAREHOLDERS’ EQUITY
12,313,327
8,387,484
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
24 | P a g e
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2017
Notes
Consolidated
2017
$
2016
$
(1,495,623)
(1,598,698)
528
767
19(b)
(1,495,095)
(1,597,931)
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to creditors and suppliers &
employees
Interest received
NET CASH FLOWS (USED) IN OPERATING
ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant &
equipment
NET CASH RECEIVED / (USED) IN INVESTING
ACTIVITIES
CASH FLOWS RECEIVED FROM FINANCING
ACTIVITIES
Proceeds from issue of shares
Repayment of borrowings
Proceeds from borrowings
Proceeds from convertible notes
Payment of unmarketable securities
Cost of shares issue
NET CASH FLOWS RECEIVED FROM FINANCING
ACTIVITIES
Net increase/ (decrease) in cash and cash
equivalents held
Effects of exchange rate changes on cash
Cash and cash equivalents at the beginning of
the financial year
-
-
5,976,981
(3,625,538)
233,454
-
(404)
(282,361)
2,302,132
807,037
-
27,720
-
-
-
466,908
1,119,429
(1,690)
-
1,584,647
(13,284)
-
41,004
27,720
Cash and cash equivalents at the end of the
financial year
19
834,757
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
25 | P a g e
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2017
$
Share Capital
& shares to
be issued
$
Options &
Equity
Reserve
$
FX Reserve
$
Accum Losses
$
Non
Controlling
Interest
$
Total
Balance as at 1.7.15
101,446,160
2,380,395
13,920,809
(97,456,273)
(6,143,379)
14,147,712
Total comprehensive
loss for the year
Other comprehensive
income:
Movement in foreign
currency translation
reserve
Total comprehensive
loss
Issue of shares (net of
transactions costs)
-
-
-
79,848
-
-
-
-
-
(813,033)
(1,729,604)
(2,542,637)
(3,232,016)
-
(65,423)
(3,297,439)
(3,232,016)
(813,033)
(1,795,027)
(5,840,076)
-
-
-
79,848
Balance at 30.06.16
101,526,008
2,380,395
10,688,793
(98,269,306)
(7,938,406)
8,387,484
Balance at 1.7.16
101,526,008
2,380,395
10,688,793
(98,269,306)
(7,938,406)
8,387,484
Total Comprehensive
loss for the year
Other comprehensive
loss:
Movement in foreign
currency translation
reserve
Total comprehensive
loss
Issue of shares (net of
transaction costs)
-
-
-
5,694,620
-
-
-
-
-
(875,503)
(440,019)
(1,315,522)
307,915
-
(761,170)
(453,255)
307,915
(875,503)
(1,201,189)
(1,768,777)
-
-
-
5,694,620
Balance at 30.06.17
107,220,628
2,380,395
10,996,708
(99,144,809)
(9,139,595)
12,313,327
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes
26 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements are general purpose financial statements that have been prepared in accordance
with Accounting Standards of the Australian Accounting Standards Board and the Corporations Act 2001.
The financial statements cover Sihayo Gold Limited and its controlled entities, and has authorised for issue in
accordance with a resolution of the Directors on 29 September 2017. Sihayo Gold Limited is a listed public
company, incorporated and domiciled in Australia.
The following is a summary of the material accounting policies adopted by the group in the preparation of
the financial report. The accounting policies have been consistently applied, unless otherwise stated.
Basis of Preparation
Statement of compliance
The financial report is a general purpose financial report which has been prepared in accordance with
Australian Accounting Standards (AASBs) and the Corporations Act 2001. The consolidated financial report of
the Group also complies with International Financial Reporting Standards and interpretations adopted by the
International Accounting Standards Board.
New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations issued by the AASB which are
not yet mandatorily applicable to Sihayo Group have not been applied in preparing these consolidated
financial statements. Those which may be relevant to the Group are set out below. Sihayo Group does not
plan to adopt these standards early.
Certain new accounting standards and interpretations have been published that are not mandatory for 30
June 2017 (cid:396)epo(cid:396)ti(cid:374)g (cid:455)ea(cid:396). The g(cid:396)oup(cid:859)s assess(cid:373)e(cid:374)t of the i(cid:373)pa(cid:272)t of these (cid:374)e(cid:449) sta(cid:374)da(cid:396)ds a(cid:374)d i(cid:374)te(cid:396)p(cid:396)etatio(cid:374)s
is set out below:
AASB 9 Financial Instruments and associated Amending Standards (applicable for annual
reporting period commencing 1 January 2018)
The Standard will be applicable retrospectively (subject to the comment on hedge accounting
below) and includes revised requirements for the classification and measurement of financial
instruments, revised recognition and derecognition requirements for financial instruments and
simplified requirements for hedge accounting.
Key changes made to this standard that may affect the Group on initial application include
certain simplifications to the classification of financial assets, simplifications to the accounting of
embedded derivatives, and the irrevocable election to recognise gains and losses on investments
in equity instruments that are not held for trading in other comprehensive income.
The directors anticipate that the adoption of AASB 9 will not have a material impact on the
G(cid:396)oup(cid:859)s fi(cid:374)a(cid:374)(cid:272)ial i(cid:374)st(cid:396)u(cid:373)e(cid:374)ts).
27 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
AASB 15: Revenue from Contracts with Customers (applicable to annual reporting periods
commencing on or after 1 January 2018)
When effective, this Standard will replace the current accounting requirements applicable to
revenue with a single, principles-based model. Except for a limited number of exceptions,
including leases, the new revenue model in AASB 15 will apply to all contracts with customers as
well as non-monetary exchanges between entities in the same line of business to facilitate sales
to customers and potential customers.
The core principle of the Standard is that an entity will recognise revenue to depict the transfer
of promised goods or services to customers in an amount that reflects the consideration to
which the entity expects to be entitled in exchange for the goods or services. To achieve this
objective, AASB 15 provides the following five-step process:
- identify the contract(s) with a customer;
- identify the performance obligations in the contract(s);
- determine the transaction price;
- allocate the transaction price to the performance obligations in the contract(s); and
- recognise revenue when (or as) the performance obligations are satisfied.
This Standard will require retrospective restatement, as well as enhanced disclosures regarding
revenue.
Although the directors anticipate that the adoption of AASB 15 may have an impact on the
Group's financial statements, it is impracticable at this stage to provide a reasonable estimate of
such impact.
AASB 16: Leases (applicable to annual reporting periods commencing on or after 1 January
2019).
When effective, this Standard will replace the current accounting requirements applicable to
leases in AASB 117: Leases and related interpretations. AASB 16 introduces a single lessee
accounting model that eliminates the requirement for leases to be classified as either operating
leases or finance leases. Lessor accounting remains similar to current practice.
28 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The main changes introduced by the new Standard are as follows:
-
recognition of the right-to-use asset and liability for all leases (excluding short term leases
with less than 12 months of tenure and leases relating to low value assets);
- depreciating the right-to-use assets in line with AASB 116: Property, Plant and Equipment in
profit or loss and unwinding of the liability in principal and interest components;
-
-
-
inclusion of variable lease payments that depend on an index or a rate in the initial
measurement of the lease liability using the index or rate at the commencement date;
application of a practical expedient to permit a lessee to elect not to separate non-lease
components and instead account for all components as a lease; and
additional disclosure requirements.
The transitional provisions of AASB 16 allow a lease to either retrospectively apply the Standard
to comparatives in line with AASB 108 or recognise the cumulative effect of retrospective
application as an adjustment to opening equity at the date of initial application.
The directors anticipate that the adoption of AASB 16 will not have a material impact on the
G(cid:396)oup(cid:859)s (cid:396)e(cid:272)og(cid:374)itio(cid:374) of leases and disclosures.
AASB 2014-10: Amendments to Australian Accounting Standards – Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture (applicable to annual reporting periods
commencing on or after 1 January 2018).
This Standard amends AASB 10: Consolidated Financial Statements with regards to a parent
losi(cid:374)g (cid:272)o(cid:374)t(cid:396)ol o(cid:448)e(cid:396) a su(cid:271)sidia(cid:396)(cid:455) that is (cid:374)ot a (cid:862)(cid:271)usi(cid:374)ess(cid:863) as defi(cid:374)ed i(cid:374) AASB (cid:1007): Business
Combinations to an associate or joint venture and requires that:
-
a gain or loss (including any amounts in other comprehensive income (OCI)) be recognised
o(cid:374)l(cid:455) to the e(cid:454)te(cid:374)t of the u(cid:374)(cid:396)elated i(cid:374)(cid:448)esto(cid:396)(cid:859)s i(cid:374)te(cid:396)est i(cid:374) that asso(cid:272)iate o(cid:396) joi(cid:374)t (cid:448)e(cid:374)tu(cid:396)e;
the remaining gain or loss be eliminated against the carrying amount of the investment in
that associate or joint venture; and
any gain or loss from remeasuring the remaining investment in the former subsidiary at fair
(cid:448)alue also (cid:271)e (cid:396)e(cid:272)og(cid:374)ised o(cid:374)l(cid:455) to the e(cid:454)te(cid:374)t of the u(cid:374)(cid:396)elated i(cid:374)(cid:448)esto(cid:396)(cid:859)s i(cid:374)te(cid:396)est i(cid:374) the
associate or joint venture. The remaining gain or loss should be eliminated against the
carrying amount of the remaining investment.
-
-
Although the directors anticipate that the adoption of AASB 2014-10 may have an impact on the
Group's financial statements, it is impracticable at this stage to provide a reasonable estimate of
such impact.
29 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Other standards not yet applicable
There are no other standards that are not yet effective and that would be expected to have a
material impact on the entity in the current or future reporting periods and on foreseeable
future transactions
New and amended standards adopted by the Group
The group has considered the implications of new and amended Accounting Standards applicable for annual
reporting periods beginning after 1 January 2016 but determined that their application to the financial
statements is either not relevant or not material.
a) Going Concern
The financial statements have been prepared on a going concern basis which the directors believe to be
appropriate. The directors are confident that the Group will be able to maintain sufficient levels of working
capital to continue as a going concern and continue to pay its debts as and when they fall due.
For the year ended 30 June 2017, the Group incurred a loss before tax of $1,315,522 (2016: loss of
$2,542,637) and has a working capital deficit of $170,844 (2016: $4,627,619). The Group has cash and cash
equivalents of $834,757 (2016:27,720) and current liabilities of $1,208,726 which includes borrowings of
$261,510.
The financial report has been prepared on the going concern basis, which contemplates continuity of normal
business activities and realisation of assets and settlement of liabilities in the ordinary course of business.
The G(cid:396)oup(cid:859)s a(cid:271)ilit(cid:455) to (cid:272)o(cid:374)ti(cid:374)ue as a goi(cid:374)g (cid:272)o(cid:374)(cid:272)ern is dependent upon it maintaining sufficient funds for its
ope(cid:396)atio(cid:374)s a(cid:374)d (cid:272)o(cid:373)(cid:373)it(cid:373)e(cid:374)ts. The Di(cid:396)e(cid:272)to(cid:396)s (cid:272)o(cid:374)ti(cid:374)ue to (cid:271)e fo(cid:272)used o(cid:374) (cid:373)eeti(cid:374)g the G(cid:396)oup(cid:859)s (cid:271)usi(cid:374)ess
objectives and is mindful of the funding requirements to meet these objectives. The Directors consider the
basis of going concern to be appropriate for the following reasons:
•
•
•
The current cash of the Group relative to its fixed and discretionary commitments;
The (cid:272)o(cid:374)ti(cid:374)ge(cid:374)t (cid:374)atu(cid:396)e of (cid:272)e(cid:396)tai(cid:374) of the G(cid:396)oup(cid:859)s p(cid:396)oje(cid:272)t e(cid:454)pe(cid:374)ditu(cid:396)e (cid:272)o(cid:373)(cid:373)it(cid:373)e(cid:374)ts;
The ability of the Group to terminate certain agreements without any further on-going obligation
beyond what has accrued up to the date of termination;
The underlying prospects for the Group to raise funds from the capital markets; and
The fact that future exploration and evaluation expenditure are generally discretionary in nature (ie.
at the discretion of the Directors having regard to an assessment of the progress of works
undertaken to date and the prospects for the same). Subject to meeting certain expenditure
commitments, further exploration activities may be slowed or suspended as part of the
(cid:373)a(cid:374)age(cid:373)e(cid:374)t of the G(cid:396)oup(cid:859)s (cid:449)o(cid:396)ki(cid:374)g (cid:272)apital.
•
•
30 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
a) Going Concern (continued)
The Directors are confident that the Group can continue as a going concern and as such are of the opinion
that the financial report has been appropriately prepared on a going concern basis.
Should the Group be unable to undertake the initiatives disclosed above, there is uncertainty which may cast
doubt as to whether or not the Group will be able to continue as a going concern and whether it will realise
its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the
financial statements.
The financial statements do not include any adjustments relating to the recoverability and classification of
recorded asset amounts nor to the amounts and classification of liabilities that might be necessary should
the Group not continue as a going concern.
b) Principles of Consolidation
The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by
Sihayo Gold Limited and all of the subsidiaries. Subsidiaries are entities the parent controls. The parent
controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through its power over the entity. A list of the subsidiaries is
provided in Note 18.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the
Group from the date on which control is obtained by the Group. The consolidation of a subsidiary is
discontinued from the date that control ceases. Intercompany transactions, balances and unrealised gains or
losses on transactions between Group entities are fully eliminated on consolidation. Accounting policies of
subsidiaries have been changed and adjustments made where necessary to ensure uniformity of the
accounting policies adopted by the Group.
E(cid:395)uit(cid:455) i(cid:374)te(cid:396)ests i(cid:374) a su(cid:271)sidia(cid:396)(cid:455) (cid:374)ot att(cid:396)i(cid:271)uta(cid:271)le, di(cid:396)e(cid:272)tl(cid:455) o(cid:396) i(cid:374)di(cid:396)e(cid:272)tl(cid:455), to the G(cid:396)oup a(cid:396)e p(cid:396)ese(cid:374)ted as (cid:862)(cid:374)o(cid:374)
controlling interests". The Group initially recognises non-controlling interests that are present ownership
interests in subsidiaries and are entitled to a proportionate share of the subsidiary's net assets on liquidation
at either fair value or at the non-controlling interests' proportionate share of the subsidiary's net assets.
Subsequent to initial recognition, non-controlling interests are attributed their share of profit or loss and
each component of other comprehensive income. Non-controlling interests are shown separately within the
equity section of the statement of financial position and statement of comprehensive income.
c) Business Combinations
The purchase method of accounting is used to account for business combinations regardless of whether
equity instruments or other assets are acquired. The cost of a business combination is measured as the fair
value of the assets given, shares issued or liabilities incurred or assumed at the date of exchange and the
amount of any non-controlling interest in the acquiree. For each business combination, the acquirer
measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the
acquiree's identifiable net assets. Acquisition-related costs are expensed as incurred.
31 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
c) Business Combinations (continued)
Where equity instruments are issued in a business combination, the fair value of the instruments is their
published market price as at the date of exchange unless, in rare circumstances, it can be demonstrated that
the published price at the date of exchange is an unreliable indicator of fair value and that other evidence
and valuation methods provide a more reliable measure of fair value.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling
i(cid:374)te(cid:396)est. The e(cid:454)(cid:272)ess of the (cid:272)ost of the (cid:271)usi(cid:374)ess (cid:272)o(cid:373)(cid:271)i(cid:374)atio(cid:374) o(cid:448)e(cid:396) the fai(cid:396) (cid:448)alue of the G(cid:396)oup(cid:859)s sha(cid:396)e of the
identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of
the net assets acquired, the difference is recognised directly in the Statement of Comprehensive Income, but
only after a reassessment of the identification and measurement of the net assets acquired.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer's previously
held equity interest in the acquiree is remeasured at fair value as at the acquisition date through profit or
loss.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are
dis(cid:272)ou(cid:374)ted to thei(cid:396) p(cid:396)ese(cid:374)t (cid:448)alue as at the date of e(cid:454)(cid:272)ha(cid:374)ge. The dis(cid:272)ou(cid:374)t (cid:396)ate used is the e(cid:374)tit(cid:455)(cid:859)s
incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an
independent financier under comparable terms and conditions.
d) Income Tax
The charge for current income tax expenses is based on the profit for the year adjusted for any non-
assessable or disallowed items. It is calculated using tax rates that have been enacted or are substantively
enacted by the balance sheet date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.
No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding
business combination, where there is no effect on accounting or taxable profit or loss.
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be
available against which deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the
assumption that no adverse change will occur in income tax legislation and the anticipation that the
economic entity will derive sufficient future assessable income to enable the benefit to be realised and
comply with the conditions of deductibility imposed by the law.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised
or liability is settled. Deferred tax is credited in the statement of comprehensive income except where it
relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly
against equity.
32 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
e) Property, Plant & Equipment
Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any
accumulated depreciation and impairment losses.
Plant and equipment
Property, plant and equipment are measured on the cost basis less depreciation and impairment losses.
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of
the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected
net cash flows that will be received from the assets employment and subsequent disposal. The expected net
cash flows have been discounted to their present values in determining recoverable amounts
Depreciation
The depreciable amount of all Property, Plant and Equipment (other than Leasehold Improvements and
certain plant and equipment which are based on the prime cost method) is based on the diminishing value
method over their useful lives to the Company commencing from the time the assets are held ready for use.
The depreciation rates used for plant and equipment vary between 2.5% and 40%.
The assets(cid:859) (cid:396)esidual (cid:448)alues a(cid:374)d useful li(cid:448)es a(cid:396)e (cid:396)e(cid:448)ie(cid:449)ed, a(cid:374)d adjusted if appropriate, at each balance sheet
date.
A(cid:374) asset(cid:859)s (cid:272)a(cid:396)(cid:396)(cid:455)i(cid:374)g a(cid:373)ou(cid:374)t is (cid:449)(cid:396)itte(cid:374) do(cid:449)(cid:374) i(cid:373)(cid:373)ediatel(cid:455) to its (cid:396)e(cid:272)o(cid:448)e(cid:396)a(cid:271)le a(cid:373)ou(cid:374)t if the asset(cid:859)s (cid:272)a(cid:396)(cid:396)(cid:455)i(cid:374)g
value is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains
and losses are included in the statement of comprehensive income.
f) Acquistion of Assets
The purchase method of accounting is used for all acquisitions of assets regardless of whether shares or
other assets are acquired. Cost is determined as the fair value of the assets given up, shares issued or
liabilities undertaken at the date of acquisition plus costs incidental to the acquisition. Where shares are
issued in an acquisition, the value of the shares is determined having reference to the fair value of the assets
or net assets acquired, including goodwill or discount on acquisition where applicable.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are
discounted to their present value as at the date of the acquisition. The discount rate used is the rate at
which a similar borrowing could be obtained under comparable terms and conditions.
g) Exploration and Evaluation Expenditure
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable
area of interest. These costs are only carried forward to the extent that they are expected to be recouped
through the successful development of the area or where activities in the areas have not yet reached a stage
that permits reasonable assessment of the existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which
the decision to abandon the area is made.
33 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
g) Exploration and Evaluation Expenditure (continued)
When production commences, the accumulated costs for the relevant area of interest are amortised over
the life of the area according to the rate of depletion of the economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to
carry forward costs in relation to that area of interest.
h) Financial Instruments
Recognition
Financial instruments are initially measured at cost on trade date, which includes transaction costs, when
the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are
measured as set out below.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market and are stated at amortised cost using the effective interest rate method.
Financial liabilities
Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal
payments and amortisation.
Fair value
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are
applied to dete(cid:396)(cid:373)i(cid:374)e the fai(cid:396) (cid:448)alue fo(cid:396) all u(cid:374)listed se(cid:272)u(cid:396)ities, i(cid:374)(cid:272)ludi(cid:374)g (cid:396)e(cid:272)e(cid:374)t a(cid:396)(cid:373)(cid:859)s le(cid:374)gth t(cid:396)a(cid:374)sa(cid:272)tio(cid:374)s,
reference to similar instruments and option pricing models.
Impairment
At each reporting date, the group assesses whether there is objective evidence that a financial instrument
has been impaired. Impairment losses are recognised in the statement of comprehensive income.
i)
Impairment of Assets
At each reporting date, the group reviews the carrying values of its tangible and intangible assets to
determine whether there is any indication that those assets have been impaired.
If such an indication exists, the recoverable amount of the asset, bei(cid:374)g the highe(cid:396) of the asset(cid:859)s fai(cid:396) (cid:448)alue
less (cid:272)osts to sell a(cid:374)d (cid:448)alue i(cid:374) use, is (cid:272)o(cid:373)pa(cid:396)ed to the asset(cid:859)s (cid:272)a(cid:396)(cid:396)(cid:455)i(cid:374)g (cid:448)alue. A(cid:374)(cid:455) e(cid:454)(cid:272)ess of the asset(cid:859)s
carrying value over its recoverable amount is expensed to the statement of comprehensive income.
j)
Interests in Joint Arrangements
Joint arrangements represent the contractual sharing of control between parties in a business venture
where unanimous decisions about relevant activities are required.
Separate joint venture entities providing joint venturers with an interest to net assets are classified as a
"joint venture" and accounted for using the equity method.
34 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
j)
Interests in Joint Arrangements (continued)
Joint venture operations represent arrangements whereby joint operators maintain direct interests in each
asset and exposure to each liability of the arrangement. The Group's interests in the assets, liabilities,
revenue and expenses of joint operations are included in the respective line items of the consolidated
financial statements.
Gains and losses resulting from sales to a joint operation are recognised to the extent of the other parties'
interests. When the Group makes purchases from a joint operation, it does not recognise its share of the
gains and losses from the joint arrangement until it resells those goods/assets to a third party.
k) Functional and Presentation Currency
The fu(cid:374)(cid:272)tio(cid:374)al (cid:272)u(cid:396)(cid:396)e(cid:374)(cid:272)(cid:455) of ea(cid:272)h of the g(cid:396)oup(cid:859)s e(cid:374)tities is (cid:373)easu(cid:396)ed usi(cid:374)g the (cid:272)u(cid:396)(cid:396)e(cid:374)(cid:272)(cid:455) of the p(cid:396)i(cid:373)a(cid:396)(cid:455)
economic environment in which that entity operates. The consolidated financial statements are presented
i(cid:374) Aust(cid:396)alia(cid:374) dolla(cid:396)s (cid:449)hi(cid:272)h is the pa(cid:396)e(cid:374)t e(cid:374)tit(cid:455)(cid:859)s fu(cid:374)(cid:272)tio(cid:374)al a(cid:374)d p(cid:396)ese(cid:374)tatio(cid:374) (cid:272)u(cid:396)(cid:396)e(cid:374)(cid:272)(cid:455).
l) Foreign Currency Transactions and Balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at
the date of the transaction. Foreign currency monetary items are translated at the year end exchange rate.
Non-monetary items measured at historical costs continue to be carried at the exchange rate at the date of
the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date
when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the statement of
comprehensive income, except where deferred in equity as a qualifying cashflow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity to
the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is
recognised in the statement of comprehensive income.
m) Group Companies
The financial results and position of foreign operations whose functional currency is different from the
g(cid:396)oup(cid:859)s p(cid:396)ese(cid:374)tatio(cid:374) (cid:272)u(cid:396)(cid:396)e(cid:374)(cid:272)(cid:455) a(cid:396)e t(cid:396)a(cid:374)slated as follo(cid:449)s:
Assets and Liabilities are translated at year-end exchange rates prevailing at that reporting date.
Income and expenses are translated at average exchange rates for the period.
Exchange rate differe(cid:374)(cid:272)es a(cid:396)isi(cid:374)g o(cid:374) t(cid:396)a(cid:374)slatio(cid:374) of fo(cid:396)eig(cid:374) ope(cid:396)atio(cid:374)s a(cid:396)e t(cid:396)a(cid:374)sfe(cid:396)(cid:396)ed di(cid:396)e(cid:272)tl(cid:455) to the g(cid:396)oup(cid:859)s
foreign currency translation reserve in the statement of financial position. These differences are recognised
in the statement of comprehensive income in the period in which the operation is disposed.
n) Revenue
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the
financial assets. Revenue from the sale of assets is recognised at the date that the contract is entered into.
All revenue is stated net of the amount of goods and services tax (GST)
35 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
o) Employee Benefits
P(cid:396)o(cid:448)isio(cid:374) is (cid:373)ade fo(cid:396) the g(cid:396)oup(cid:859)s lia(cid:271)ilit(cid:455) fo(cid:396) e(cid:373)plo(cid:455)ee (cid:271)e(cid:374)efits a(cid:396)isi(cid:374)g f(cid:396)o(cid:373) se(cid:396)(cid:448)i(cid:272)es rendered by employees
to balance date. 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, plus related on-costs. Employee benefits
payable later than one year have been measured at the present value of the estimated future cash outflows
to be made for those benefits.
p) Provisions
Provisions are recognised when the group has a legal or constructive obligation, as a result of a past event,
for which it is probable that an outflow of economic benefits will result and that outflow can be reliably
measured.
q) Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short term highly
liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are
shown within short term borrowings in current liabilities on the statement of financial position.
r) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST is
not recoverable from the Australian Taxation Office. In these circumstances the GST is recognised as part of
the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the
statement of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of
investing and financing activities, which are disclosed as operating cash flows.
s) Share Based Payment Transactions
The group provides benefits to the directors and senior executives in the form of share-based payment
t(cid:396)a(cid:374)sa(cid:272)tio(cid:374)s, (cid:449)he(cid:396)e(cid:271)(cid:455) se(cid:396)(cid:448)i(cid:272)es a(cid:396)e (cid:396)e(cid:374)de(cid:396)ed i(cid:374) e(cid:454)(cid:272)ha(cid:374)ge fo(cid:396) sha(cid:396)es o(cid:396) (cid:396)ights o(cid:448)e(cid:396) sha(cid:396)es (cid:894)(cid:858)e(cid:395)uit(cid:455) settled
t(cid:396)a(cid:374)sa(cid:272)tio(cid:374)s(cid:859)(cid:895).
The cost of these equity settled transactions with directors is measured by reference to the fair value at the
date at which they are granted. The fair value is determined by an external valuer using the Black- Scholes
model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than
conditions linked to the price of the shares of Sihayo Gold Limited.
36 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
s) Share Based Payment Transactions (continued)
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over
the period in which the market conditions are fulfilled.
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date
reflects (i) the extent to which the vesting period has expired and (ii) the number of awards that in the
opinion of the directors will ultimately vest. The opinion is formed on the best available information at
balance date. No adjustment is made for the likelihood of market performance conditions being met as the
effect of these conditions is included in the determination of fair value at grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is
conditional upon market condition.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the
terms had not been modified. In addition, an expense is recognised for any increase in the value of the
transaction as a result of the modification, as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and
any expense not yet recognised for the award is recognised immediately. However, if a new award is
substituted for the cancelled award, and designated as a replacement award on the date that it is granted,
the cancelled and new award are treated as if they were a modification of the original award, as described in
the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation
of earnings per share.
t) Trade and Other Receivables
CURRENT
All trade debtors are recognised at the amounts receivable as they are due for settlement no more than 30
days from the date of recognition. Collectability of trade debtors is reviewed on an ongoing basis. Debts
which are known to be uncollectible are written off. A provision for doubtful debts is raised when some
doubt as to collection exists and in any event when the debt is more than 60 days overdue.
u) Trade and Other Receivables
NON-CURRENT
All debtors that are not expected to be received within 12 months of reporting date are included in non-
current receivables. Collectability of non-current receivables is reviewed on an ongoing basis. Debts which
are known to be uncollectible are written off. A provision for doubtful debts is raised when some doubt as to
collection exists.
v) Trade and Other Creditors
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the
end of the financial year and which are unpaid. The amounts are unsecured and are usually paid within 30
days of recognition
37 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
w) Operating Leases
Operating lease payments are charged to the Statement of comprehensive income in the periods in which
they are incurred, as this represents the pattern of benefits derived from the leased assets.
x) Significant Accounting Judgements, Estimates and Assumptions
Significant accounting judgements
I(cid:374) the p(cid:396)o(cid:272)ess of appl(cid:455)i(cid:374)g the G(cid:396)oup(cid:859)s a(cid:272)(cid:272)ou(cid:374)ti(cid:374)g poli(cid:272)ies, (cid:373)a(cid:374)age(cid:373)e(cid:374)t has (cid:373)ade the follo(cid:449)i(cid:374)g judge(cid:373)e(cid:374)ts,
apart from those involving estimations, which have the most significant effect on the amounts recognised in
the financial statements:
Exploration and evaluation assets
The G(cid:396)oup(cid:859)s a(cid:272)(cid:272)ou(cid:374)ti(cid:374)g poli(cid:272)(cid:455) fo(cid:396) e(cid:454)plo(cid:396)atio(cid:374) a(cid:374)d e(cid:448)aluatio(cid:374) e(cid:454)pe(cid:374)ditu(cid:396)e is set out a(cid:271)o(cid:448)e. The appli(cid:272)atio(cid:374)
of this policy necessarily requires management to make certain estimates and assumptions as to future
events and circumstances, in particular, the assessment of whether economic quantities of reserves are
found. Any such estimates and assumptions may change as new information becomes available.
Significant accounting estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and
assumptions of future events. The key estimates and assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting
period are:
Recovery of deferred assets
Deferred tax assets are recognised for deductible temporary differences when management considers that it
is probable that future taxable profits will be available to utilise those temporary differences.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of
the equity instruments at the date at which they are granted. The Group measures the cost of cash-settled
share-based payments at fair value at the grant date using the Black-Scholes model taking into account the
terms and conditions upon which the instruments were granted.
y) Segment Reporting
The Group determines and presents operating segments based on the information that internally is provided
to the Ma(cid:374)agi(cid:374)g Di(cid:396)e(cid:272)to(cid:396), (cid:449)ho is the G(cid:396)oup(cid:859)s (cid:272)hief ope(cid:396)ati(cid:374)g de(cid:272)isio(cid:374) (cid:373)ake(cid:396). A(cid:374) ope(cid:396)ati(cid:374)g seg(cid:373)e(cid:374)t is a
component of the Group that engages in business activities from which it may earn revenues and incur
e(cid:454)pe(cid:374)ses, i(cid:374)(cid:272)ludi(cid:374)g (cid:396)e(cid:448)e(cid:374)ues a(cid:374)d e(cid:454)pe(cid:374)ses that (cid:396)elate to t(cid:396)a(cid:374)sa(cid:272)tio(cid:374)s (cid:449)ith a(cid:374)(cid:455) of the G(cid:396)oup(cid:859)s othe(cid:396)
(cid:272)o(cid:373)po(cid:374)e(cid:374)ts. All ope(cid:396)ati(cid:374)g seg(cid:373)e(cid:374)ts(cid:859) ope(cid:396)ati(cid:374)g (cid:396)esults a(cid:396)e (cid:396)egula(cid:396)l(cid:455) (cid:396)e(cid:448)ie(cid:449)ed (cid:271)(cid:455) the Ma(cid:374)agi(cid:374)g Di(cid:396)e(cid:272)to(cid:396) to
make decisions about resources to be allocated to the segment and assess its performance.
Unless stated otherwise, all amounts reported to the Board of Directors as the chief decision maker with
respect to operating segments are determined in accordance with accounting policies that are consistent to
those adopted in the annual financial statements of the Group.
38 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
y) Segment Reporting (continued)
Intersegment loans payable and receivable are initially recognised at the consideration received net of
transaction costs. If intersegment loans receivable and payable are not on commercial terms, these are not
adjusted to fair value on market interest rates.
2. RISK MANAGEMENT
(a) Interest rate risk
The Co(cid:374)solidated E(cid:374)tit(cid:455) a(cid:374)d the Co(cid:373)pa(cid:374)(cid:455)(cid:859)s e(cid:454)posu(cid:396)e to i(cid:374)te(cid:396)est (cid:396)ate (cid:396)isk, is the (cid:396)isk that a fi(cid:374)a(cid:374)(cid:272)ial
i(cid:374)st(cid:396)u(cid:373)e(cid:374)t(cid:859)s (cid:448)alue (cid:449)ill flu(cid:272)tuate as a (cid:396)esult of (cid:272)ha(cid:374)ges i(cid:374) (cid:373)a(cid:396)ket i(cid:374)te(cid:396)est (cid:396)ates a(cid:374)d the effe(cid:272)ti(cid:448)e (cid:449)eighted
average interest rate on classes of financial assets and liabilities. The Consolidated Entity and the Company
do not have a major exposure in this area as the interest rate earned on deposited funds does not vary
greatly from month to month.
Consolidated Entity
2017
Financial Assets
Cash and cash
equivalents
Trade and other
receivables
Deposits
Total Financial
Assets
Financial Liabilities
Trade and other
payables
Borrowings
Other
Total Financial
Liabilities
Floating
Interest
Rate
Fixed interest rate maturing in
1 year
or less
1 to 5
years
More than
5 years
Non
interest
bearing
$
$
$
$
$
Total
carrying
amount at
balance
sheet
$
Applicable
interest rate
on 30 June
%
834,757
-
-
834,757
-
-
-
-
-
-
6,602
6,602
-
-
-
-
-
261,510
-
261,510
-
-
-
-
-
-
-
-
-
-
-
-
-
834,757
192,472
-
192,472
6,602
0.0%
-
4%
192,472
1,033,831
862,800
-
57,516
862,800
261,510
57,516
-
10%
-
920,316
1,181,826
39 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
2. RISK MANAGEMENT (continued)
Consolidated Entity
2016
Floating
Interest
Rate
Fixed interest rate maturing in
1 year
or less
1 to 5
years
More than
5 years
Non
interest
bearing
$
$
$
$
$
Total
carrying
amount at
balance
sheet
$
Applicable
interest rate
on 30 June
%
Financial Assets
Cash and cash
equivalents
Trade and other
receivables
Deposits
Total Financial
Assets
Financial Liabilities
Trade and other
payables
Borrowings
Other
Total Financial
Liabilities
27,720
-
-
27,720
-
4,214,663
-
4,214,663
(b) Credit risk exposures
-
-
-
-
-
-
-
-
-
41,071
41,071
-
-
-
-
-
-
-
-
-
-
-
-
-
27,720
144,209
-
144,209
41,071
2.1%
-
4%
144,209
213,000
645,898
-
57,920
645,898
4,214,663
57,920
-
6.45%
-
703,818
4,918,481
The consolidated entity and the Company has no significant concentrations of credit risk. The maximum
exposure to credit risk at balance date is the carrying amount (net of provision of doubtful debts) of those
assets as disclosed in the statement of financial position and note 21.
As the consolidated entity and Company does not presently have any debtors arising from sales, lending,
significant stock levels or any other credit risk, a formal credit risk management policy is not maintained.
(c) Foreign currency risk management
The Consolidated Entity and the Company is exposed to fluctuations in foreign currencies arising from costs
incurred at overseas mineral exploration tenements. To mitigate this risk the Company holds cash in the
currency in which it forecasts the costs will be incurred.
40 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
2. RISK MANAGEMENT (continued)
(d) Liquidity risk
Liquidity risk is the risk that the Consolidated Entity and the Company will not be able to meet its financial
obligations as they fall due. Financial obligations of the Consolidated Entity and the Company consist of
trade creditors and other payables.
The Company has not conducted a sensitivity analysis on credit or interest rate risk as the amounts are not
considered significant.
3. REVENUE
Revenue from the operating activities
Interest
3(a) LOSS BEFORE INCOME TAX
Net Expenses
The loss before income tax includes the following expenses:
(i) Expenses:
Depreciation
Rental expenses
(ii) Finance costs and movements in derivative liability
Finance costs
Gain on Derivative Liability
Consolidated
2017
$
2016
$
528
528
767
767
Consolidated
2017
$
57,736
2,291
60,027
96,935
(725,554)
(628,619)
2016
$
145,078
2,373
147,451
483,085
-
483,085
41 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
3(b) INCOME TAX EXPENSE
Consolidated
2017
2016
$
$
Loss from ordinary activities before income tax expense
(1,315,522)
(2,542,637)
(i) Prima facie tax benefit on loss from ordinary activities @27.5%
(2016: 28.5%)
(361,769)
(724,652)
Tax effects of amounts which are not deductible (taxable)
In calculating taxable income:
Provisions
Non assessable (income) / expenses
Provision for impairment of VAT receivable
Movement in unrecognised temporary
Difference
Tax effect of current year tax losses for which
no deferred tax asset has been recognised
Income tax expense
(ii) Unrecognised temporary differences
Deferred Tax Assets (at 27.5%) (2016: 28.5%)
Carried forward revenue tax losses
Carried forward capital tax losses
Black hole expenditure
12,972
(199,527)
-
(548,324)
8,550
137,679
-
(578,423)
(68,896)
(64,021)
617,220
-
642,444
-
8,326,240
958,469
177,154
9,461,863
8,484,226
993,322
158,593
9,636,141
42 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
3(b) INCOME TAX EXPENSE (continued)
This benefit for tax losses will only be obtained if:
(i)
(ii)
(iii)
(iv)
the consolidated entity derives future assessable income of a nature and of an amount sufficient to
enable the benefit from the deductions for the losses to be realised, or
the losses are transferred to an eligible entity in the consolidated entity, and
the consolidated entity continues to comply with the conditions for deductibility imposed by tax
legislation; and
no changes in tax legislation adversely affect the consolidated entity in realising the benefit from the
deductions for the losses.
4. TRADE AND OTHER RECEIVABLES
CURRENT
Other debtors and prepayments
NON CURRENT
VAT receiveable
Provision for impairment
Consolidated
2017
$
2016
$
203,125
203,125
290,042
290,042
2,166,660
(2,166,660)
-
3,228,165
(3,228,165)
-
VAT receiveables will be recoverable from the Indonesian Goverment once production commences. At 30
June 2017 VAT receiveables has been fully provided for.
As the reporting date, none of the other debtors were past due or impaired.
Other debtors
These amounts generally arise from transactions outside the usual operating activities of the consolidated
entity and are non-interest bearing. The other debtors do not contain any impaired receivables.
43 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
5. PROPERTY, PLANT AND EQUIPMENT
NON-CURRENT
Land at Cost
Plant and equipment, at cost
Less: accumulated depreciation
Motor vehicles, at cost
Less: accumulated depreciation
Office equipment, at cost
Less: accumulated depreciation
Total property, plant and equipment
Consolidated
2017
$
2016
$
69,186
71,292
351,658
(350,984)
362,366
(350,089)
674
12,277
117,663
(112,077)
5,586
716,849
(708,331)
8,518
83,964
121,246
(104,980)
16,266
738,676
(693,174)
45,502
145,337
Reconciliations
Reconciliations of the carrying amounts of each class of property, plant and equipment at the beginning and
end of the current financial year are set out below:
2017
Consolidated
Carrying amount at
1 July 2016
Effect of foreign currency
translation
Additions
Disposal
Depreciation expense
Carrying amount at
30 June 2017
Land at
Cost
$
Leasehold
Improve.
$
Plant &
Equipment
$
Motor
Vehicles
$
Office
Equipment
$
Total
$
71,292
(2,106)
-
-
-
69,186
-
-
-
-
-
-
12,277
16,266
45,502
145,337
(108)
(391)
(1,032)
(3,637)
-
-
(11,495)
(10,289)
(35,952)
(57,736)
674
5,586
8,518
83,964
44 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
5. PROPERTY, PLANT AND EQUIPMENT (continued)
2016
Consolidated
Land at
Cost
$
Leasehold
Improve.
$
Plant &
Equipment
$
Motor
Vehicles
$
Office
Equipment
$
Total
$
Carrying amount at
1 July 2015
Effect of foreign currency
translation
Additions
Write-offs & reclassification
Depreciation expense
Carrying amount at
30 June 2016
69,005
2,287
-
-
-
71,292
-
-
-
-
-
-
53,092
28,468
128,395
278,960
2,364
1,129
5,675
11,455
-
-
(43,179)
-
-
(13,331)
-
-
(88,568)
-
-
(145,078)
12,277
16,266
45,502
145,337
6. OTHER ASSETS
NON CURRENT
Deposits
Capitalised mineral exploration costs
Consolidated
2017
$
2016
$
6,602
12,872,178
12,878,780
41,071
13,254,246
13,295,317
6.a.(i) Deposits
Deposits of $6,602 includes nil security deposit for office (2016: USD $ 10,471 of security deposit
included)
6.a.(ii) Mining Exploration and Evaluation Expenditure
Opening Balance
Additions during the year
Change arising from foreign currency movement
Provision for Impairment
Write Offs
Closing Balance
Consolidated
2017
$
13,254,246
-
(382,068)
-
-
12,872,178
2016
$
16,626,287
-
(3,372,041)
-
-
13,254,246
The Management believe that the carrying a(cid:373)ou(cid:374)t of the G(cid:396)oup(cid:859)s (cid:272)apitalised e(cid:454)pe(cid:374)ditu(cid:396)e a(cid:374)d e(cid:448)aluatio(cid:374)
costs exceed its recoverable amount and therefore no further impairment charge is required as at 30 June
2017.
The estimated impairment will be reviewed and revised in future periods in alignment with movements in
the gold price and any changes in the projected cost profile of the Sihayo Pungkut project.
45 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
7. TRADE AND OTHER PAYABLES
There are no trade payables past due.
The normal credit from suppliers is 30-
60 days
8. PROVISIONS
CURRENT
Employee Entitlements
NON CURRENT
Employee Entitlements and Other
Provisions
Employee Numbers
Average number of employees during
the financial year
9. BORROWINGS
Consolidated
2017
$
2016
$
862,800
645,898
Consolidated
2017
$
2016
$
26,900
26,900
26,900
26,900
478,573
425,551
478,573
425,551
25
24
Consolidated
2017
$
2016
$
Working capital (i)
261,510
536,985
Convertible note liabilities (ii)
Embedded derivatives (iii)
-
-
2,735,677
942,001
261,510
4,214,663
i.
The funds are borrowed from Provident Minerals Pte Ltd. Interest of 10% is charged on the loan.
Gavin Caudle is a director of Sihayo Gold and Provident Minerals and the loan is therefore a
related party transaction. Final maturity date is 30 June 2017 or any other date mutually agreed
between the parties.
46 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
9. BORROWINGS (continued)
ii.
In 2016 financial year, Sihayo Gold issued two series of convertible notes as follows:
a. Provident Note:
The terms of the convertible notes were as follows:
i. Issue date: 03 July 2015
ii. Maturity date: (cid:1009).(cid:1004)(cid:1004) p(cid:373) Aust(cid:396)alia(cid:374) Easte(cid:396)(cid:374) Sta(cid:374)da(cid:396)d Ti(cid:373)e (cid:894)(cid:858)AEST(cid:859)(cid:895) o(cid:374) the first
anniversary of the initial drawdown date or such other date agreed by the parties
iii. Principal amount: USD $500,000
iv. Share price: $0.009
v. Loan facility fee: USD 15,000 (representing 3% of the pricipal amount and is
capitalised on initial drawdown and will form part of the principal amount)
vi. Availability of Loan facility: Draw down available during the period of 3 July 2015 to
30 June 2016
vii. Conversion price: AUD /USD conversion provided by the RBA for the preceeding day
the conversion note is given @70% of the 10 day volume weight average price
(VWAP) price also taken from the preceeding date from when the conversion note is
given.
viii. Interest: Coupon payment of 7% payable annually
ix. The Lender may elect to have the Outstanding Sum repaid to the Lender (In whole
or part) by the issue to the Lender of Conversion Shares
b. Saratoga Note:
The terms of the convertible notes were as follows:
Issue date: 04 November 2015
i.
ii. Maturity date: (cid:1009).(cid:1004)(cid:1004)p(cid:373) Aust(cid:396)alia(cid:374) Easte(cid:396)(cid:374) Sta(cid:374)da(cid:396)d Ti(cid:373)e (cid:894)(cid:858)AEST(cid:859)(cid:895) on the first
anniversary of the initial drawdown date or such other date agreed by the parties
iii. Principal amount: USD $500,000
iv. Share price: $0.011
v. Loan facility fee: USD 15,000 (representing 3% of the pricipal amount and is
capitalised on initial drawdown and will form part of the principal amount)
vi. Availability of Loan facility: Draw down available during the period of 26 October
2015 to 30 June 2016
vii. Conversion price: AUD /USD conversion provided by the RBA for the preceeding day
the conversion note is given @70% of the 10 day volume weight average price
(VWAP) price also taken from the preceeding date from when the conversion note is
given.
viii. Interest: Coupon payment of 7% payable annually
ix. The Lender may elect to have the Outstanding Sum repaid to the Lender (in whole or
in part) by the issue to the Lender of Conversion Shares
47 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
9. BORROWINGS (continued)
The embedded derivatives liability at the reporting date arising from the above Convertible Notes are as
follows:
Provident
Note
Saratoga
Note
Series Two
(Saratoga)
Series Three
(Provident)
Total
691,182
691,182
691,182
691,182
$0.010
$0.010
$0.010
$0.010
1.59%
100%
1.59%
100%
1.59%
100%
1.59%
100%
$0.0073
$0.0115
$0.0093
$0.0104
94,651,438
59,889,571
74,320,645
66,356,700
$0.0031
$0.0049
$0.0007
$0.0045
$296,255
$293,874
$54,430
$297,442
$942,001
Value of note
in AUD
(at 30 June
2016)
Underlying
security spot
price
Risk free rate
Volatility
Conversion
price (70% of
average
VWAP)
Number of
shares
Value per
Note (Intrisic
Value)
Total value of
the derivative
Liability
The convertible note Liabilities at the reporting date arising from the above
Provident
Note
Saratoga
Note
Series Two
(Saratoga)
Series Three
(Provident)
Total
Total value of
debt liability
$729,465
$676,145
$675,321
$654,746
$2,735,677
48 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
10. CONTRIBUTED EQUITY
Issued Capital
Fully paid – ordinary shares
1,699,740,648 (2016: 1,136,037,339)
Consolidated
2017
$
2016
$
107,220,628
101,526,008
107,220,628
101,526,008
Movements in ordinary share capital of the Company during the past 2 years were as follows:
Number of Shares
$
01/07/2015
14/06/2016
30/06/2016
06/07/2016
08/09/2016
07/03/2017
26/05/2017
30/06/2017
Opening Balance
Conversion
Shares issue costs
Balance at 30 June 2016
Shares issued
Shares issued
Shares issued
Shares issued
Shares issue costs
Balance at 30 June 2017
1,125,968,164
10,069,175
-
1,136,037,339
88,832,675
361,554,591
30,483,509
82,832,534
-
1,699,740,648
101,446,160
79,848
-
101,526,008
888,327
3,615,546
396,286
1,076,823
(282,362)
107,220,628
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in
proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary
shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to
one vote.
Options over ordinary shares
There is no option as at 30 June 2017 (2016: nil).
49 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
Consolidated
2017
$
2016
$
Note
11. RESERVES AND ACCUMULATED LOSSES
(a) Reserves
Share based payment reserve (i)
Foreign currency translation reserve (ii)
(i) Option Premium Reserve
Balance at the beginning of the financial year
Options issued during the year
Balance at the end of the financial year
2,380,395
10,996,708
13,377,103
2,380,395
10,688,793
13,069,188
2,380,395
-
2,380,395
2,380,395
-
2,380,395
Options
There is no outstanding balance of options as at 30 June 2017.
(ii) Foreign Currency Reserve
Balance at the beginning of the financial year
Movement for the year
Balance at the end of the financial year
Consolidated
2017
$
2016
$
10,688,793
307,915
10,996,708
13,920,809
(3,232,016)
10,688,793
(b) Accumulated Losses
Balance at the beginning of the financial year
Net losses attributable to members of
Sihayo Gold Limited
(98,269,306)
(97,456,273)
(875,503)
(813,033)
Balance at the end of the financial year
(99,144,809)
(98,269,306)
50 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
12. PARENT ENTITY DISCLOSURE NOTE
FINANCIAL POSITION
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net Assets Deficiency
Equity
Issued capital
Accumulated losses
Reserves
Option reserve
Total Equity
FINANCIAL PERFORMANCE
Loss for the year
Other comprehensive income
Total comprehensive Loss
Parent
2017
$
610,580
122,814
733,394
804,212
-
804,212
2016
$
28,275
122,814
151,089
4,647,631
-
4,647,631
(70,818)
(4,496,542)
107,220,630
(109,768,543)
101,526,010
(108,499,650)
2,477,095
2,477,098
(70,818)
(4,496,542)
(1,268,893)
-
(1,268,893)
(2,243,907)
-
(2,243,907)
The parent entity did not enter into any guarantees in relation to the debts of its subsidiaries for 2016 or
2017.
The parent entity did not have any contingent liabilities for 2016 or 2017.
51 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
13. KEY MANAGEMENT PERSONNEL DISCLOSURE
Names and Positions held of parent entity key management personnel in office at any time during the
financial year are:
Key Management Personnel
Misha Collins
Gavin Caudle
Stuart Gula
Malcolm Paterson
Daniel Nolan
There are no executives (other than those listed above) with authority for strategic decision and
management.
Chairman
Non Executive Director
Non Executive Director
Managing Director & CEO
Company Secretary, Chief Financial Officer & Executive Director
Compensation for Key Management Personnel
Short-term employee benefits
Non monetary benefit
Post employment benefits
Share based payments
14. REMUNERATION OF AUDITORS
Remuneration for audit or review of the financial
reports of the parent entity or any entity in the
consolidated entity
Stantons International
Subsidiary Auditor
2017
$
414,753
13,346
-
-
Consolidated
2016
$
513,504
11,062
-
-
428,099
524,566
Consolidated
2017
$
2016
$
40,062
34,927
74,989
36,028
32,971
68,999
52 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
15. CONTINGENT ASSETS AND LIABILITIES
There are no other contingent liabilities and contingent assets as at 30 June 2017.
16. RELATED PARTIES
Directors and specified executives
Dis(cid:272)losu(cid:396)es (cid:396)elati(cid:374)g to di(cid:396)e(cid:272)to(cid:396)s a(cid:374)d spe(cid:272)ified e(cid:454)e(cid:272)uti(cid:448)es a(cid:396)e set out i(cid:374) the di(cid:396)e(cid:272)to(cid:396)(cid:859)s (cid:396)epo(cid:396)t a(cid:374)d as detailed
in note 13.
Wholly-owned Group
The wholly-owned group consists of Sihayo Gold Limited and its wholly-owned subsidiaries Inland Goldmines
Pty Limited, Excelsior Resources Pty Limited, Oropa Technologies Pty Limited, Oropa Indian Resources Pty
Limited and Oropa Exploration Pty Limited.
Sihayo Gold Limited owns 100% of the shares in Aberfoyle Pungkut Investments Pte Ltd (API). API holds a
75% interest in PT Sorikmas Mining, with the Indonesian Government mining company, P.T. Aneka Tambang
holding the remaining 25%.
Transactions between Sihayo Gold Limited and related parties in the wholly-owned group during the year
ended 30 June 2017 consisted of loans on an interest free basis with no fixed term and no specific
repayment arrangements. Sihayo Gold Limited reversed provision for doubtful debts of $680,169 due to the
movement in loan balance in its accounts for the year ended 30 June 2017 (2016: $ 3,543,355) in relation to
the loans made to its subsidiaries. No other amounts were included in the determination of operating loss
before tax of the parent entity that resulted from transactions with related parties in the group.
Other related parties
Aggregate amounts receivable from related parties in the wholly owned group at balance date were as
follows:
Non-current receivables
Provision for doubtful debts
Parent Entity
2017
$
2016
$
93,200,268
(93,200,268)
93,880,437
(93,880,437)
-
-
53 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
17. EXPENDITURE COMMITMENTS
Exploration Commitments
In order to maintain current rights of tenure to exploration tenements, the Company and consolidated entity
were previously required to outlay lease rentals and to meet the minimum expenditure requirements of the
Mines Departments.
PT Sorikmas Mining Commitments
Under the Contract of Work (CoW), the Company was required to spend certain minimum expenditures in
respect of the contract area for the General Survey Period and Exploration Period as follows:
General survey period
Exploration period
US$ / km2
100
1,100
As at 30 June 2017, PT Sorikmas Mining had fulfilled its expenditure commitments in respect of the General
Survey Period and Exploration Period.
Operating Leases – Rent
The company currently has no operating leases as at 30 June 2017
Other Commitments
The Company currently has no other commitments as at 30 June 2017
Capital Commitments
There were no outstanding capital commitments not provided for in the financial statements of the
Company as at 30 June 2017 or 30 June 2016.
Other Commitments
Parent Entity
Sihayo Gold Limited
Project
Mt Keith
Controlled Entities:
Excelsior Resources Pty Limited
Project
Mulgabbie
Principal
Activities
Interest
2017
Interest
2016
Mineral
2% Royalty
2% Royalty
exploration
Principal
Activities
Interest
2017
Interest
2016
Mineral
2% Royalty
2% Royalty
exploration
54 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
18. INVESTMENTS IN CONTROLLED ENTITIES
Controlled Entities:
Class of
Shares
Cost of Pare(cid:374)t E(cid:374)tity’s
Equity Holding
Investment
2017
$
2016
$
2017
2016
Inland Goldmines Pty Limited
(incorporated in Australia)
Excelsior Resources Pty Limited
(incorporated in Australia)
Oropa Technologies Pty Ltd
(incorporated in Australia)
Oropa Indian Resources Pty
Limited (incorporated in
Australia)
Oropa Exploration Pty Limited
(incorporated in Australia)
Aberfoyle Pungkut Investments
Pte Ltd(a) (incorporated in
Singapore)
PT Sorikmas Mining (b)
(incorporated in Indonesia)
Ordinary
583,942
583,942
100%
100%
Ordinary
1,062,900
1,062,900
100%
100%
Ordinary
Ordinary
Ordinary
1
1
1
1
1
1
100%
100%
100%
100%
100%
100%
Ordinary
697,537
697,537
100%
100%
-
-
75%
75%
2,344,382
2,344,382
(a) When Sihayo Gold Limited issued 9,259,259 shares as consideration for exercising the option to
acquire 100% of the shares in Aberfoyle Pungkut Indonesia Pte Ltd, it was assigned the vendors
receivables from Aberfoyle Pungkut Investments Pte Ltd and PT Sorikmas Mining. This reduced the
cost of the investment in Aberfoyle Pungkut Investments Pte Ltd.
(b) Aberfoyle Pungkut Investments Pte Ltd holds a 75% interest in PT Sorikmas Mining, with an
Indonesian Government mining company PT Aneka Tambang holding the remaining 25%. The non-
controlling interest in PT Sorikmas Mining equates to 25% of the nets liabilities of PT Sorikmas
Mining of USD $28,107,785 being AUD $9,139,595 as at 30 June 2017 (2016: AUD $7,938,406).
55 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
19. NOTES TO THE STATEMENT OF CASH FLOWS
Cash at Bank
Consolidated
2017
$
2016
$
834,757
27,720
(a) Reconciliation of Cash and Cash Equivalents
For the purposes of the Statement of Cash Flows cash includes cash and cash equivalents on hand and at call
deposits with banks, and investments in money market instruments net of outstanding bank overdrafts.
It includes $25,898 held in trust.
(b) Reconciliation of operating loss after income tax
to net cash flow from operating activities
Consolidated
2017
$
2016
$
Operating (loss) after income tax
(1,315,522)
(2,542,637)
Non Cash Items
Depreciation
Loss on Derivative Valuation
Convertible note finance charge
Change in operating assets and liabilities:
(Increase) / decrease in trade and other receivables
Increase in payables
Increase / (decrease) in provisions
Increase in inventory
57,736
(725,554)
96,935
121,385
216,902
53,023
-
145,078
-
483,085
103,377
258,864
(46,514)
816
Net cash (outflow) from operating activities
(1,495,095)
(1,597,931)
56 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
20. EARNINGS PER SHARE
(a) Basic and diluted loss per share (in cents)
(b) Weighted average number of shares outstanding
during the year used in the calculation of basic earnings
per share
Consolidated Entity
2017
2016
(0.06)
(0.07)
1,533,172,344
1,126,408,347
As the company made a loss for the year, diluted earnings per share is the same as basic earnings per share.
21. FINANCIAL INSTRUMENTS
Net Fair Value of Financial Assets and Liabilities
The net fair value of financial assets and financial liabilities of the Company approximates their carrying
value. The Group holds the following financial instruments:
Financial Assets
Cash and cash equivalents
Trade and other receivables
Security deposits
Total Financial Assets
Financial Liabilities
Trade and other payables
Loan Payable
Convertible notes & Derivatives
Other liabilities
Consolidated
2017
$
2016
$
834,757
192,472
6,602
1,033,831
27,720
143,413
41,071
212,204
Consolidated
2017
$
2016
$
862,800
261,510
-
57,516
645,898
536,985
3,677,678
57,920
Total Financial Liabilities
1,181,826
4,918,481
57 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
21. FINANCIAL INSTRUMENTS (continued)
Credit Risk
The Co(cid:373)pa(cid:374)(cid:455)(cid:859)s (cid:373)a(cid:454)i(cid:373)u(cid:373) e(cid:454)posu(cid:396)e to (cid:272)(cid:396)edit (cid:396)isk at the (cid:396)epo(cid:396)ti(cid:374)g date (cid:449)as as detailed (cid:271)elo(cid:449):
Financial Assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Security deposits
Total Financial Assets
Impairment Losses
Consolidated
2017
$
2016
$
834,757
203,125
-
6,602
1,044,484
27,720
290,042
-
41,071
358,833
At 30 June 2017 and 30 June 2016, no additional impairment was made in relation to VAT receivables,
however there was a reversal of prior impairment provision. The Company does not have any material credit
risk exposure to any single debtor or group of debtors under financial instruments entered by the economic
entity.
Foreign currency risk management
The consolidated entity and company undertake certain transactions denominated in foreign currencies,
hence exposures to exchange rate fluctuations arise. Sihayo Gold Limited has opened a US Bank Account to
manage exchange rate fluctuations.
The carrying amount of the consolidated e(cid:374)tit(cid:455)(cid:859)s foreign currency denominated assets and liabilities at the
reporting date in Australian dollars is as follows:
Australian Dollars
Liabilities
Assets
2017
$
376,292
2016
$
269,526
2017
$
435,556
2016
$
291,139
58 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
21. FINANCIAL INSTRUMENTS (continued)
The table below details financial assets and liabilities of the consolidated entity exposed to foreign currency
risk.
Cash and cash equivalents
SGD
USD
Other Receivables
USD
Trade and other payables
SGD
USD
Consolidated
2017
$
2016
$
6
592,214
67
1,357
146,372
215,077
5,000
285,680
5,000
196,707
Sensitivity Analysis
The table below summarises the impact of a 10 percent weakening/strengthening of the Australian dollar
against the US dollar and the Singaporean dollar in the movement of the financial assets and liabilities listed
in the previous table.
Impact on post-tax profit and accumulated
losses
AUD / USD
AUD / USD
SGD / USD
SGD / USD
Impact on equity reserve only
USD
USD
SGD
SGD
AUD
+10%
-10%
+10%
-10%
AUD
+10%
-10%
+10%
-10%
Consolidated
2017
$
2016
$
59,982
(59,554)
(471)
472
6,626
(6,871)
(317)
637
Consolidated
2017
2016
6,634
(6,205)
(471)
472
6,626
(6,871)
(317)
637
59 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
22. EVENTS OCCURRING AFTER REPORTING DATE
On 21 September 2017, the Company announced that the Prospectus had been sent to Shareholders to issue
a maximum of 154,521,879 shares to raise AUD $2,163,306. The offer was made as a non-renounceable
entitlement issue of one (1) share for every eleven (11) shares held by Shareholders registered at the Record
Date at an issue price of $0.014 per Share. All the shares offered under the prospectus will rank equally with
the shares on issue at the date of the prospectus.
The funds raised from the Offer are planned to be used in accordance with the table set out below:
Item
Proceeds of the Offer
1.
2.
3.
4.
Expenses of the Offer
Repayment of loans
Feasibility Study Review
Working Capital
Total
Full Subscription
($)
130,859
264,852
1,503,019
264,578
2,163,306
%
6.05%
12.24%
69.48%
12.23%
100%
23. SEGMENT INFORMATION
Primary reporting – geographical segments
The geographical segments of the consolidated entity are as follows:
Revenue by geographical region
Revenue attributable to the Group disclosed below, based on where the revenue is generated from:
Australia
Africa
South East Asia
India
Other foreign countries
Total revenue
30 June 2017
$
30 June 2016
$
528
-
-
-
-
528
767
-
-
-
-
767
60 | P a g e
NOTES TO THE FINANCIAL STATEMENTS
For The Year Ended 30 June 2017
23. SEGMENT INFORMATION (continued)
Segment result by geographical region
Australia
Africa
South East Asia
India
Total Expenses
Segment Result
30 June 2017
$
271,076
(717)
(1,586,084)
(325)
(1,316,050)
30 June 2016
$
(811,632)
(742)
(1,730,709)
(321)
(2,543,404)
(1,315,522)
(2,542,637)
Assets by geographical region
The location of segment assets by geographical location of the assets is disclosed below:
Australia
Africa
South East Asia
India
Total Assets
30 June 2017
$
1,586,096
21,493
12,393,035
2
14,000,626
30 June 2016
$
149,433
21,650
13,587,331
2
13,758,416
Liabilities by geographical region
The location of segment liabilities by geographical location of the assets is disclosed below:
Australia
Africa
South East Asia
India
Total Liabilities
30 June 2017
$
(804,211)
-
(883,088)
-
(1,687,299)
30 June 2016
$
4,647,634
-
723,298
-
5,370,932
61 | P a g e
DIRECTORS’ DECLARATION
DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of Sihayo Gold Limited, I state that:
1. In the opinion of the directors:
(a) The fi(cid:374)a(cid:374)(cid:272)ial state(cid:373)e(cid:374)ts, (cid:374)otes a(cid:374)d the additio(cid:374)al dis(cid:272)losu(cid:396)es i(cid:374)(cid:272)luded i(cid:374) the di(cid:396)e(cid:272)to(cid:396)s(cid:859) (cid:396)epo(cid:396)t
designated as audited, of the Company and of the consolidated entity are in accordance with the
Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the Co(cid:373)pa(cid:374)(cid:455)(cid:859)s a(cid:374)d (cid:272)o(cid:374)solidated e(cid:374)tit(cid:455)(cid:859)s fi(cid:374)a(cid:374)(cid:272)ial positio(cid:374) as at (cid:1007)(cid:1004)
June 2017 and of their performance for the year ended on that date; and
complying with Accounting Standards and Corporations Regulations 2001; and
(b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
(c) The financial report also complies with International Financial Reporting Standards as disclosed in Note
1.
2. This declaration has been made after receiving the declarations required to be made to the directors in
accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2017.
On behalf of the Board
Misha Anthony Collins
Chairman
29 September 2017
62 | P a g e
ADDITIONAL SHAREHOLDER INFORMATION
The following additional information dated 20 September 2017 is provided in compliance with the
requirements of the Australian Securities Exchange Limited.
1
(a)
(b)
(c)
2
DISTRIBUTION OF LISTED ORDINARY SHARES AND OPTIONS
Analysis of numbers of shareholders by size of holding.
Distribution
Units
No. of
shareholders
% off issued
Capital
1-1000
1,001-5,000
5,001-10,000
10,001-100,000
100,001 and above
Total
116
73
45
239
238
711
30,602
185,116
351,171
11,438,020
0.00%
0.01%
0.02%
0.67%
1,687,735,739
99.29%
1,699,740,648
100.00%
There were 189 shareholders holding less than a marketable parcel.
The percentage of the total of the twenty largest holders of ordinary shares was
TWENTY LARGEST SHAREHOLDERS AND OPTION HOLDERS
No. Of shares
Names
%
PROVIDENT MINERALS PTE
HSBC CUSTODY NOM AUST
PT SARATOGA INVESTAMA
GOLDSTAR MINING ASIA
LION SELECTION GRP LTD
CITICORP NOM PL
GOLDSTAR ASIA MINING
NATIONAL NOM LTD
DBS VICKERS SEC SINGAPORE
FATS PL
YAW CHEE SIEW
ASIA LION LTD
PT SARATOGA INVESTAMA
JP MORGAN NOM AUST LTD
INSIGHT CAPITAL MGMT
LEONG CAROLINE
BUTLER DAVID ROBERT
PETTERSSON BRADLEY JOHN
PT TEKNOLOGI RISET
GLOBAL
BJARNASON JON NICOLAI H
Total
481,358,840
287,998,379
198,126,817
90,728,760
46,616,412
45,712,955
41,030,239
34,207,583
32,054,117
31,712,787
31,515,151
30,122,242
28,420,378
22,861,655
21,436,655
16,500,000
15,639,499
15,425,000
14,545,455
10,714,286
1,496,727,210
28.32%
16.94%
11.66%
5.34%
2.74%
2.69%
2.41%
2.01%
1.89%
1.87%
1.85%
1.77%
1.67%
1.35%
1.26%
0.97%
0.92%
0.91%
0.86%
0.63%
88.06%
67 | P a g e
ADDITIONAL SHAREHOLDER INFORMATION
3
SUBSTANTIAL SHAREHOLDERS
A(cid:374) e(cid:454)t(cid:396)a(cid:272)t f(cid:396)o(cid:373) the Co(cid:373)pa(cid:374)(cid:455)(cid:859)s (cid:396)egiste(cid:396) of su(cid:271)sta(cid:374)tial sha(cid:396)eholde(cid:396)s is set out (cid:271)elo(cid:449):
Ordinary Shares Held
Name
Percentage
__________________________________________________________________________________
Number
Provident Minerals Pte Ltd
HSBC Custody Nom Aust Ltd
PT Saratoga Investama
Goldstar Mining Asia
4
VOTING RIGHTS
481,358,480
287,998,379
198,126,817
90,728,760
28.32%
16.94%
11.66%
5.34%
The Company's share capital is of one class with the following voting rights:
(a)
Ordinary Shares
On a show of hands every shareholder present in person or by proxy shall have one vote and upon a poll
each share shall have one vote.
(b)
Options
The Company's options have no voting rights.
5
RESTRICTED SECURITIES
There are no ordinary shares on issue that have been classified by the Australian Securities Exchange
Limited, Perth as restricted securities.
6
SECURITIES EXCHANGE LISTING
Sihayo Gold Limited shares are listed on the Australian Securities Exchange Limited. The home exchange is
the Australian Securities Exchange (Perth) Limited.
68 | P a g e
Approval
Date
Expiry
Area
Equity
%
SUMMARY OF TENEMENTS HELD BY THE GROUP
FOR THE YEAR ENDED 30 JUNE 2017
Project Name Tenement
Date
OROPA INDIAN RESOURCES
INDIA
Block D-7
PT SORIKMAS MINING
INDONESIA
Pungkut
96PK0042
SIHAYO GOLD LIMITED
WESTERN AUSTRALIA
Mt. Keith
M53/490
M53/491
22.01.00
N/A
4,600km2
31.05.96
N/A
66,200ha
11.06.04
11.06.04
10.06.25
10.06.25
582ha
621ha
EXCELSIOR RESOURCES PTY LTD
Mulgabbie
PL28/1078
PL28/1079
PL28/1080
PL28/1081
PL28/1082
ML28/364
22.09.08
22.09.08
22.09.08
22.09.08
22.09.08
25.03.09
21.09.12
21.09.12
21.09.12
21.09.12
21.09.12
Gullewa
M59/394
NOTES
(1)
(2)
Option to increase interest to 18%
2% net smelter royalty
24.03.30
54.3ha
98.0ha
143.7ha
140.7ha
191.4ha
120.0ha
200.0
9(1)
75
0(2)
0(2)
0(2)
0(2)
0(2)
0(2)
0(2)
0(2)
0 (3)
69 | P a g e