REG - SolGold PLC - Final Results <Origin Href="QuoteRef">SOLG.L</Origin> - Part 4
14/09/2017 07:58
- Part 4: For the preceding part double click ID:nRSN7272Qc
and exchange differences arising on translation of investments, such as equities, classified as
available-for-sale financial assets, are recognised in other comprehensive income and accumulated in a separate reserve
within equity. Amounts are reclassified to profit or loss when the associated assets are sold or impaired.
(ii) Share option reserve
The share-based payments reserve is used to recognise:
· the grant date fair value of options issued to employees but not exercised.
· the grant date fair value of shares issued to employees.
(iii) Change in proportionate interest reserve
This reserve is used to record the differences which may arise as a result of transactions with non-controlling interests
that do not result in a loss of control.
(iv) Foreign currency translation reserve
Exchange differences arising on translation of foreign controlled entities are recognised in other comprehensive income and
accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit or loss when the net
investment is disposed of.
Notes to the financial statements
For the year ended 30 June 2017
NOTE 1 ACCOUNTING POLICIES (Continued)
(y) Changes in accounting policies
New standards and amendments in the year
The following were amendments to published standards and interpretations to existing standards effective in the year and
adopted by the Group. These new standards and interpretations had no effect on reported results, financial position or
disclosure in the financial statements:
· Annual Improvements to IFRSs - 2012 - 2014 Cycle
· IAS 27 - Amendment - Equity method in separate financial statements
· IAS 16 & 38 - Amendments - clarification of acceptable methods of depreciation and amortisation
New standards and interpretations not yet adopted
The Group has elected not to early adopt the following revised and amended standards, which are not yet mandatory in the
EU. The list below includes only standards and interpretations that could have an impact on the Consolidated Financial
Statements of the Group.
Effective period commencing on or after
IFRS 9 Financial instruments 1 Jan 2018
IFRS 15 Revenue from contracts with customers 1 Jan 2018
IFRS 16 1 Leases 1 Jan 2019
IAS 12 1 Amendment - Recognition of deferred tax assets for unrealised losses 1 Jan 2017
IAS 7 1 Amendment - Disclosure initiative 1 Jan 2017
IFRS 2 1 Amendment - Classification and measurement of share based payment transactions 1 Jan 2018
1 Not yet adopted by the European Union
IFRS 9 Financial instruments
The complete standard was issued in July 2014 including the requirements previously issued and additional amendments. The
new standard replaces IAS 39 and includes a new expected loss impairment model, changes to the classification and
measurement requirements of financial assets as well as to hedge accounting. The new standard becomes effective for
financial years beginning on or after 1 January 2018. The Group will assess the impact on its Consolidated Financial
Statements during the financial year ending 30 June 2018.
IFRS 15 Revenue from contracts with customers
The new standard was issued in May 2014. IFRS 15 is intended to introduce a single framework for revenue recognition and
clarify principles of revenue recognition. This standard modifies the determination of when to recognise revenue and how
much revenue to recognise. The new standard becomes mandatory for financial years beginning on or after 1 January 2018.
The effect will be assessed and disclosure will be made once the Group has assessed the impact of applying IFRS 15. The
adoption of this standard is not expected to have a material impact in the future periods until the Group commences
generating revenues from its exploration projects.
IFRS 16 Leases
The new standard was issued in January 2016 replacing the previous leases standard, IAS 17 Leases, and related
Interpretations. IFRS 16 establishes the principles for the recognition, measurement, presentation and disclosure of leases
for the customer ('lessee') and the supplier ('lessor'). IFRS 16 eliminates the classification of leases as either
operating or finance as is required by IAS 17 and, instead, introduces a single lessee accounting model requiring a lessee
to recognise assets and liabilities for all leases unless the underlying asset has a low value or the lease term is twelve
months or less. This new standard applies to annual reporting periods beginning on or after 1 January 2019 subject to EU
endorsement. The Group has reviewed its arrangements in place and has concluded that the adoption of this standard is not
expected to have a material impact in the future periods.
Notes to the financial statements
For the year ended 30 June 2017
NOTE 2 SEGMENT REPORTING
The Group determines and separately reports operating segments based on information that is internally provided to the
Board of Directors, who are the Group's chief operating decision makers.
The Group has outlined below the separately reportable operating segments, having regard to the quantitative threshold
tests provided in IFRS 8, namely that the relative revenue, asset or profit / (loss) position of the operating segment
equates to 10% or more of the Group's respective total. The Group reports information to the Board of Directors along
company lines. That is, the financial position of SolGold and each of its subsidiary companies is reported discreetly,
together with an aggregated Group total. Accordingly, each company within the Group that meets or exceeds the threshold
tests outlined above is separately disclosed below. The financial information of the subsidiaries that do not exceed the
thresholds outlined above, and is therefore not reported separately, is aggregated as Other Subsidiaries.
30 June 2017 Finance Income Total Income Loss for the year Assets Liabilities Share Based Payments Non-current asset additions
A$ A$ A$ A$ A$ A$ A$
Cascabel project * - - (546,315) 49,132,923 1,783,879 - 16,590,892
Other Ecuadorian projects - - (6,487) 3,355,760 186,211 - 3,355,760
Queensland projects 30 30 (2,692) 12,466,324 8,408 - 484
Solomon Island projects 39 39 (31,942) 29,406 - - -
Corporate - - (3,912,536) 101,729,194 762,677 2,239,533 12,944,385
Total 69 69 (4,499,972) 166,713,607 2,741,175 2,239,533 32,891,521
30 June 2016 Finance Income Total Income Loss for the year Assets Liabilities Share Based Payments Non-current asset additions
A$ A$ A$ A$ A$ A$ A$
Cascabel project * - - (1,715,278) 26,258,208 2,427,185 - 10,281,591
Queensland projects 419 419 (361,012)) 12,326,275 97,184 - 25,980
Solomon Island projects 166 166 (5,102) 88,394 - - -
Corporate - - (3,641,730 4,827,223 5,994,396 - 670,178
Total 585 585 (5,723,122) 43,500,100 8,518,765 - 10,977,749
* The Cascabel project is held the subsidiary Exploraciones Novomining S.A. which is 15% owned by a non-controlling
interest. See further details of the subsidiary in note 9.
Geographical information
Non-current assets 2017A$ 2016A$
UK - -
Australia 24,726,686 11,570,970
Solomon Islands - -
Ecuador 51,366,835 31,631,030
76,093,521 43,202,000
The Group had no revenue during the current and prior year.
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2017
NOTE 3 OPERATING LOSS
Group2017A$ Group2016A$
The operating loss is stated after charging (crediting)
Auditors' remuneration:
Amounts received or due and receivable by BDO (UK) for:
The audit of the company's annual accounts 117,627 36,735
Amounts received or due and receivable by related practices of BDO (UK) for:
The audit of subsidiary undertakings 79,714 62,939
Depreciation 36,713 14,519
Foreign exchange (gains)/losses 1,032,010 (129,619)
Share based payments 2,239,533 -
NOTE 4 STAFF NUMBERS AND COSTS
Group2017 Group2016 Company2017 Company2016
Corporate finance and administration 17 11 12 7
Technical 238 108 3 2
255 119 15 9
The aggregate payroll costs of these persons were as follows:
Group2017A$ Group2016A$ Company2017A$ Company2016A$
Wages and salaries 4,997,169 2,833,769 1,240,536 850,352
Contributions to superannuation 511,976 235,414 54,320 47,615
Share based payments 2,239,533 - 2,239,533 -
Total staff costs 7,748,678 3,069,183 3,534,389 897,967
Included within total staff costs is A$5,002,689 (2016: A$2,192,934) which has been capitalised as part of deferred
exploration costs.
Notes to the financial statements
For the year ended 30 June 2017
NOTE 5 REMUNERATION OF KEY MANAGEMENT PERSONNEL
Basic Annual SalaryA$ Other Benefits1A$ PensionsA$ Total RemunerationA$
2017
Directors
Nicholas Mather (highest paid director) 416,667 - - 416,667
Brian Moller 50,000 - - 50,000
Robert Weinberg2 50,000 - - 50,000
John Bovard2 50,000 - - 50,000
Scott A Caldwell 39,028 - - 39,028
Craig Jones 16,667 - - 16,667
Other Key Management Personnel3 956,524 181,473 52,144 1,190,141
Total paid to Key Management Personnel 1,578,886 181,473 52,144 1,812,503
Other staff and contractors 4,040,645 2,058,061 459,832 6,558,537
Total 5,619,531 2,239,534 511,976 8,371,040
1 Other Benefits represents the fair value of the share options granted during the year based on either the Black-Scholes
model or Monte Carlo Simulation considering the effects of the vesting conditions.
2. During the year Mr Robert Weinberg and Mr John Bovard exercised a total of 1,760,000 options granted under the employee
share option plan (2016: nil). The nominal gain on the date of exercise of the share options was A$465,399.
3 Other Key Management Personnel consist of the aggregated remuneration of Karl Schlobohm (Company Secretary), Priy
Jayasuriya (Chief Financial Officer), Jason Ward (Chief Geologist), Benn Whistler (Technical Geologist) and Lazaro
Roque-Albelo (Latin Affairs Manager).
Basic Annual SalaryA$ Other BenefitsA$ PensionsA$ Total RemunerationA$
2016
Directors
Nicholas Mather (highest paid director) 150,000 - - 150,000
Brian Moller 50,000 - - 50,000
Robert Weinberg 50,000 - - 50,000
John Bovard 33,333 - - 33,333
Other Key Management Personnel1 670,807 - 20,498 691,305
Total paid to Key Management Personnel 954,140 - 20,498 974,638
Other staff and contractors 2,212,962 - 214,916 2,427,878
Total 3,117,102 - 235,414 3,352,516
1. Other Key Management Personnel consist of the aggregated remuneration of Karl Schlobohm (Company Secretary), Priy
Jayasuriya (Chief Financial Officer), Jason Ward (Chief Geologist), Benn Whistler (Technical Geologist) and Lazaro
Roque-Albelo (Latin Affairs Manager).
During the year, A$52,144 employer's social security costs (2016: A$20,498) were paid in respect of remuneration for key
management personnel.
Notes to the financial statements
For the year ended 30 June 2017
NOTE 6 FINANCE INCOME AND COSTS
Group2017A$ Group2016A$
Interest income 69 585
Finance income 69 585
Interest cost (73,502) (237,433)
Finance costs (73,502) (237,433)
NOTE 7 TAX EXPENSE
Factors affecting the tax charge for the current year
The tax credit for the period is lower than the credit resulting from the application of the standard rate of corporation
tax in Australia of 30% (2016: 30%) being applied to the loss before tax arising during the year. The differences are
explained below.
Group2016A$ Group2016A$
Tax reconciliation
Loss before tax (8,323,050) (5,723,122)
Tax at 30% (2016: 30%) (2,496,915) (1,716,937)
Add (less) tax effect of:
Permanent differences 670,818 31,773
Derecognise (Recognise) prior year losses (1,983,330) 1,728,826
Other (13,651) (43,663)
Income tax expense (benefit) on loss (3,823,078) -
Components of tax expense / (benefit) on other comprehensive income comprise of:
Valuation gains on available for sale investments 3,823,078 -
Income tax expense (benefit) on other comprehensive income 3,823,078 -
Factors that may affect future tax charges
The Group has carried forward tax losses of approximately A$86.2 million (2016: A$65.7 million). These losses may be
deductible against future taxable income dependent upon the on-going satisfaction by the relevant Group Company of various
tax integrity measures applicable in the jurisdiction where the tax loss has been incurred. The jurisdictions in which tax
losses have been incurred include Australia, Ecuador and the Solomon Islands. Tax losses in Australia can be carried
forward indefinitely while in Ecuador, tax losses may be carried forward and offset against profits in the following five
years, provided that the amount offset does not exceed 25% of the year's profits.
NOTE 8 LOSS PER SHARE
2017A$ 2016A$
(a) Earnings
Earnings used to calculate basic and diluted earnings per share (4,499,972) (5,723,122)
Number of shares Number of shares
(b) Weighted average number of shares
Used in calculating basic EPS 1,330,798,371 839,995,115
Weighted average number of dilutive options 15,415,281 -
Weighted average number of ordinary shares and potential ordinary shares used in calculating dilutive EPS 1,346,213,652 839,995,115
Notes to the financial statements
For the year ended 30 June 2017
NOTE 9 INVESTMENTS IN SUBSIDIARY UNDERTAKINGS
Country of incorporation and operation Registered Address Principal activity SolGold plc'seffective interest
2017 2016
Australian Resources Management (ARM) Pty Ltd Australia Level 27, 111 Eagle StreetBrisbane, QLD, 4000Australia Exploration 100% 100%
Acapulco Mining Pty Ltd Australia Level 27, 111 Eagle StreetBrisbane, QLD, 4000Australia Exploration 100% 100%
Central Minerals Pty Ltd Australia Level 27, 111 Eagle StreetBrisbane, QLD, 4000Australia Exploration 100% 100%
Solomon Operations Ltd SolomonIslands c/- Morris & Sojnocki Chartered Accountants1st FloorCity Centre Building, Mendana Avenue, HoniaraSolomon Islands Exploration 100% 100%
Honiara Holdings Pty Ltd Australia Level 27, 111 Eagle StreetBrisbane, QLD, 4000Australia Exploration 100% 100%
Guadalcanal Exploration Pty Ltd Australia Level 27, 111 Eagle StreetBrisbane, QLD, 4000Australia Exploration 100% 100%
Exploraciones Novomining S.A. Ecuador Av. 12 De Octubre N26-97 Y Abraham Lincoln Torre 1492 Oficina 505 Piso 5QuitoEcuador Exploration 85%* 85%*
Carnegie Ridge Resources S.A Ecuador Av. 12 De Octubre N26-97 Y Abraham Lincoln Torre 1492 Oficina 505 Piso 5QuitoEcuador Exploration 100% 100%
Green Rock Resources S.A Ecuador Av. 12 De Octubre N26-97 Y Abraham Lincoln Torre 1492 Oficina 505 Piso 5QuitoEcuador Exploration 100% 100%
Valle Rico Resources S.A. Ecuador Av. 12 De Octubre N26-97 Y Abraham Lincoln Torre 1492 Oficina 505 Piso 5QuitoEcuador Exploration 100% 100%
Cruz Del Sol S.A Ecuador Av. 12 De Octubre N26-97 Y Abraham Lincoln Torre 1492 Oficina 505 Piso 5QuitoEcuador Exploration 100% 100%
* Details of the individual financials of ENSA are included in note 2 segmental reporting in the Cascabel segment.
Notes to the financial statements
For the year ended 30 June 2017
NOTE 9 INVESTMENTS IN SUBSIDIARY UNDERTAKINGS (continued)
Investment in subsidiary undertakings
SharesA$ LoansA$ TotalA$
Cost
Balance at 1 July 2015 14,004,879 65,732,064 79,736,943
Acquisitions and advances in the year - 9,753,226 9,753,226
Balance at 30 June 2016 14,004,879 75,485,290 89,490,169
Acquisitions and advances in the year 4,208 24,152,857 24,157,066
Balance at 30 June 2017 14,009,087 99,638,147 113,647,235
Amortisation and impairment losses
Balance at 30 June 2015 (5,016,948) (44,340,394) (49,357,342)
Provision for impairment - - -
Balance at 30 June 2016 (5,016,948) (44,340,394) (49,357,342)
Provision for impairment - - -
Balance at 30 June 2017 (5,016,948) (44,340,394) (49,357,342)
Carrying amounts
Balance at 30 June 2015 8,987,931 21,391,670 30,379,601
Balance at 30 June 2016 8,987,931 31,144,896 40,132,827
Balance at 30 June 2017 8,992,139 55,297,753 64,289,892
NOTE 10 INVESTMENTS
(a) Investments accounted for as available-for-sale assets
Group Company
2017A$ 2016A$ 2017A$ 2016A$
Movements in available-for-sale assets
Opening balance at 1 July 1,622,712 896,197 1,617,132 894,192
Additions - 535,905 - 532,330
Fair Value adjustment through other comprehensive income 12,743,593 190,610 12,743,593 190,610
14,366,304 1,622,712 14,360,725 1,617,132
Available for sale financial assets comprise an investment in the ordinary issued capital of Cornerstone Capital Resources
Inc., listed on the Toronto Venture Exchange ("TSXV") and an investment in the ordinary issued capital of Aus Tin Mining
Ltd, a company listed on the Australian Securities Exchange.
(b) Fair value
Fair value hierarchy
The following table details the consolidated entity's assets and liabilities, measured or disclosed at fair value, using a
three level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2017
NOTE 10 INVESTMENTS (continued)
The fair values of financial assets and financial liabilities approximate their carrying amounts principally due to their
short-term nature or the fact that they are measured and recognised at fair value.
The following table represents the Group's financial assets and liabilities measured and recognised at fair value.
A$ A$ A$ A$
Level 1 Level 2 Level 3 Total
2017
Available for sale financial assets 14,360,725 - - 14,360,725
2016
Available for sale financial assets 1,622,712 - - 1,622,712
The available for sale financial assets are measured based on the quoted market prices at 30 June.
NOTE 11 PROPERTY, PLANT AND EQUIPMENT
Group Company
Land and Buildings Plant and Equipment Motor Vehicles Office Equipment Furniture & Fittings Total Total
A$ A$ A$ A$ A$ A$ A$
Cost
Balance 1 July 2015 - 282,607 266,845 151,975 60,346 761,773 58,179
Effect of foreign exchange on opening balance - 4,783 5,258 1,936 1,029 13,006 -
Additions - 28,294 - 17,478 22,887 68,659 6,343
Disposals - - - - - - -
Balance 30 June 2016 - 315,684 272,103 171,389 84,262 843,438 64,522
Effect of foreign exchange on opening balance - (6,311) (5,984) (2,545) (1,857) (16,697) -
Additions 194,440 426,762 587,227 201,184 178,414 1,588,027 215,748
Disposals - - - - - - -
Balance 30 June 2017 194,440 736,135 853,346 370,028 260,819 2,414,768 280,270
Depreciation and impairment losses
Balance 1 July 2015 - (126,605) (91,005) (100,931) (23,334) (341,875) (47,061)
Effect of foreign exchange on opening balance - (682) (637) (779) (130) (2,228) -
Depreciation charge for the year - (3,358) (5,088) (4,373) (1,700) (14,519) (8,012)
Depreciation capitalised to exploration - (43,259) (38,999) (22,984) (4,174) (109,416)) -
Disposals - - - - - - -
Balance 30 June 2016 - (173,904) (135,729) (129,067) (29,338) (468,038) (55,073)
Effect of foreign exchange on opening balance - 1,764 1,908 1,579 262 5,513 -
Depreciation charge for the year - (29,625) (397) (5,544) (1,147) (36,713) (35,855)
Depreciation capitalised to exploration - (47,314) (40,809) (26,299) (23,171) (137,593) -
Disposals - - - - - - -
Balance 30 June 2017 - (249,079) (175,027) (159,331) (53,394) (636,831) (90,926)
Carrying amounts
At 30 June 2015 - 156,002 175,840 51,044 37,012 419,898 11,118
At 30 June 2016 - 141,780 136,374 42,322 54,924 375,400 9,449
At 30 June 2017 194,440 487,056 678,319 210,697 207,425 1,777,937 189,342
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2017
NOTE 12 INTANGIBLE ASSETS
Group deferred exploration costsA$ Company deferred exploration costsA$
Cost
Balance 1 July 2015 80,923,925 -
Additions - expenditure 11,886,195 -
Balance 30 June 2016 92,810,120 -
Additions - expenditure 18,660,501 -
Balance 30 June 2017 111,470,621 -
Impairment losses
Balance 1 July 2015 (50,175,202) -
Impairment charge (1,555,004) -
Balance 30 June 2016 (51,730,206) -
Impairment charge (17,310) -
Balance 30 June 2017 (51,747,516) -
Carrying amounts
At 30 June 2015 30,748,723 -
At 30 June 2016 41,079,914 -
At 30 June 2017 59,723,105 -
Impairment loss
A decision was made to expense A$17,310 (2016: A$1,555,004) for exploration expenditure associated with other tenements
that were surrendered or lapsed during the year. A detailed assessment of the carrying values of deferred exploration
costs is provided below.
Cascabel Project (85% Ownership)
In Ecuador, the group is advancing the Cascabel project, whilst continuing to pursue its strategy to become a globally
important copper company by expanding the Company's copper-gold exploration portfolio in Ecuador.
At Cascabel, the benefits of corporate deals with Newcrest Mining Ltd and Maxit Capital LP were realised with exploration
fully funded for the next 18 months as drilling continued to expand the growing world class deposit at Alpala. A review of
drilling results has clarified world class intersections at updated metal prices, and geology Model analysis is constantly
improving drill targeting capabilities.
Drilling to date has not yet constrained the rich Alpala copper-gold deposit, and the deposit continues to grow with each
drill hole. Alpala alone is emerging as a Tier 1 copper project with high average grades in both copper and gold. The
project will also enjoy the support of the surrounding 14 identified targets, with drill testing at Aguinaga and other high
priority targets planned for the coming year.
The Company is currently directing drilling capability and operations currently to the collection of drill data to be used
in the delivery of a Maiden Inferred Resource Estimate late December 2017. SolGold is also commencing planning for the
collection of necessary data to complete a preliminary economic assessment by end 2018.
There are no indicators of impairment for the aggregate carrying value of A$44.66 million.
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2017
NOTE 12 INTANGIBLE ASSETS (continued)
SolGold 100% owned Projects
New Concessions Granted for 100% SolGold Ecuador Subsidiaries
Country wide generative work in order to acquire top quality projects in this emerging mining country. The group holds 36
project areas, comprising 38 tenements granted to SolGold's four local subsidiary companies at 30 June 2017. These
tenements cover the targets previously identified in the study of potential prospective porphyry centres throughout the
northern Andean copper belt in Ecuador. Teams of Company geologists are on the ground throughout Ecuador conducting initial
baseline data collection and identifying prospective targets for follow-up exploration. Subsequent to 30 June 2017,
SolGold subsidiaries were granted an additional 21 tenements and they currently hold 59 granted tenements for 2,496 km2, in
addition to the Company's world class Cascabel porphyry project.
Each of SolGold's four subsidiary companies has a team of geologists on the ground carrying out reconnaissance field
mapping and rock chip sampling programs as well as evaluating several outcropping mineralised targets. The teams are
focussed on first pass exploration on the Porvenir, San Antonio, Sharug, Machos, Agustin and Rio Amarillo projects.
Initial mapping campaigns have been very encouraging with widespread areas of hydrothermal alteration identified which are
considered highly prospective for porphyry and epithermal style mineralisation. Initial rock chip samples taken of altered
outcrops have returned values as high as 12% Cu. Regional geology teams are commencing systematic stream sediment sampling
and panned concentrate programs over the prospective tenements. From the stream and panned concentrate results, gridded
soil programs will be planned to identify targets to be drilled in due course.
The new Ecuadorean projects have a carrying value of A$2.65 million at 30 June 2017 and are considered to be unimpaired.
Acapulco Mining Projects
Acapulco has three granted tenements across Queensland. The granted tenements comprise of 232 sub-blocks (circa 718km2).
Extensive airborne magnetic and electromagnetic surveys have been conducted over some of the tenements, together with
detailed stream sediment sampling, soil sampling, rock chip sampling and geological mapping programs. Furthermore, since
May 2006 a total of 288 holes, equivalent to 24,895.8m have been drilled on the tenements.
Drill testing of porphyry style copper-gold mineralisation at the Normanby Project, in northern Queensland commenced in
early July. A total of 518m of RC drilling from 7 RC drill holes and 89.2m of diamond coring from 1 drill holes was
completed at the time of writing. A significant vertical mineralised structure was intersected in holes MFT19, and MFT17,
and a separate shallow dipping zone of mineralisation was also discovered in holes MFT24 and MFT014. Assay results remain
pending.
The objective has been to step-out from areas of known gold mineralisation so that resources can be defined and enlarged,
with the objective of defining a maiden resource. The Company is seeking a joint venture partner to further progress these
projects.
There are no indicators of impairment for the aggregate carrying value of A$8.79 million.
Central Minerals Projects
Central Minerals comprises of seven granted tenements which is comprised of 280 sub-blocks (circa 886km2).
Extensive airborne magnetic surveys have been conducted over the area, together with detailed soil and rock chip sampling,
trenching, mapping programs and an induced polarisation geophysical survey. Since October 2007, a total of 473 holes,
equivalent to 58,886.6m, have been drilled on the tenements.
On 23 May 2012, SolGold announced an updated indicated and inferred combined resource at Rannes at an 0.3 g/t Au cut-off of
18.7 million tonnes at 0.92 g/t gold equivalent (gold + silver) for 550,000 ounces of gold equivalent (296,700 ounces of
gold and 10,139,000 ounces of silver; values rounded). The resource at a 0.5 g/t Au cut-off is 12.23 million tonnes at
0.60g/t gold and 23.18g/t silver; for 237,240 ounces Au and 9,105,072 ounces Ag (using a gold to silver ratio of 1:50).
Several other prospects exist that contain known gold mineralisation that has not yet been included in the resource
estimate. The Company is seeking a JV partner to progress drilling on the Rannes project tenements.
There are no indicators of impairment for the aggregate carrying value of A$3.62 million.
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2017
NOTE 13 LOAN RECEIVABLES AND OTHER NON-CURRENT ASSETS
Group2017A$ Group2016A$ Company2017A$ Company2016A$
Security bonds 226,175 123,974 90,137 -
226,175 123,974 90,137 -
Security bonds relate to cash security held against office premises, Level 27, 111 Eagle St, Brisbane, Queensland
Australia, cash security held by Queensland Department of Natural Resources and Mines against Queensland exploration
tenements held by the Group and on cash backed bank guarantees held by the Ecuadorian Ministry of Environment against
Ecuadorian exploration tenements held by the Group.
NOTE 14 DEFERRED TAXATION
Recognised deferred tax assets and liabilities
Group 2017 Opening balance A$ Net charged to income A$ Net charged to other comprehensive incomeA$ Net charged to equity A$ Net movement on unwind / transferA$ Closing balance A$
Recognised deferred tax assets
Carried forward tax losses 9,341,373 6,886,258 - - - 16,227,631
Accruals / provisions - 314,852 - - - 314,852
Potential benefit 9,341,373 7,201,110 - - - 16,542,483
Recognised deferred tax liabilities
Available for sale financial assets - - (3,823,078) - - (3,823,078)
Exploration and evaluation assets (9,341,373) (3,378,032) - - - (12,719,405)
Potential benefit (9,341,373) (3,378,032) (3,823,078) - - (16,542,483)
Net deferred taxes - 3,823,078 (3,823,078) - - -
Deferred tax assets not recognised
Unused tax losses 11,655,562 (4,954,152) - - - 6,701,410
Unused capital losses - - - - - -
Temporary differences1 12,107,126 - - - - 12,107,126
Tax benefit 7,128,806 (1,486,246) - - - 5,642,561
1 Exploration expenditure incurred in the Solomon Islands that has been expensed. This is expenditure is deductible over 5
years from when production commences.
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2017
NOTE 14 DEFERRED TAXATION (continued)
Recognised deferred tax assets and liabilities (continued)
Group 2016 Opening balance A$ Net charged to income A$ Net charged to other comprehensive incomeA$ Net charged to equity A$ Net movement on unwind / transferA$ Closing balance A$
Recognised deferred tax assets
Carried forward tax losses 6,767,671 2,573,702 - - - 9,341,373
Accruals / provisions - - - - - -
Potential benefit 6,767,671 2,573,702 - - - 9,341,373
Recognised deferred tax liabilities
Available for sale financial assets - - - - - -
Exploration and evaluation assets (6,767,671) (2,573,702) - - - (9,341,373)
Potential benefit (6,767,671) (2,573,702) - - - (9,341,373)
Net deferred taxes - - - - - -
Deferred tax assets not recognised
Unused tax losses 10,175,920 1,479,642 - - - 11,655,562
Unused capital losses - - - - - -
Temporary differences1 12,712,206 (605,080) - - - 12,107,126
Tax benefit 6,866,438 262,369 - - - 7,128,807
1 Exploration expenditure incurred in the Solomon Islands that has been expensed. This is expenditure is deductible over 5
years from when production commences.
Company 2017 Opening balance A$ Net charged to income A$ Net charged to other comprehensive incomeA$ Net charged to equity A$ Net movement on unwind / transferA$ Closing balance A$
Recognised deferred tax assets
Carried forward tax losses - 3,823,078 - - - 3,823,078
Accruals / provisions - - - - - -
Potential benefit - 3,823,078 - - - 3,823,078
Recognised deferred tax liabilities
Available for sale financial assets - - (3,823,078) - - (3,823,078)
Exploration and evaluation assets - - - - - -
Potential benefit - - (3,823,078) - - (3,823,078)
Net deferred taxes - - - - - -
Deferred tax assets not recognised
Unused tax losses 11,525,379 (900,807) - - - 10,624,572
Unused capital losses - - - - - -
Temporary differences - - - - - -
Tax benefit 3,457,614 (270,242) - - - 3,187,372
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2017
NOTE 14 DEFERRED TAXATION (continued)
Recognised deferred tax assets and liabilities (continued)
Company 2016 Opening balance A$ Net charged to income A$ Net charged to other comprehensive incomeA$ Net charged to equity A$ Net movement on unwind / transferA$ Closing balance A$
Recognised deferred tax assets
Carried forward tax losses - - - - - -
Accruals / provisions - - - - - -
Potential benefit - - - - - -
Recognised deferred tax liabilities
Available for sale financial assets - - - - - -
Exploration and evaluation assets - - - - - -
Potential benefit - - - - - -
Net deferred taxes - - - - - -
Deferred tax assets not recognised
Unused tax losses 10,045,737 1,479,642 - - - 11,525,379
Unused capital losses - - - - - -
Temporary differences - - - - - -
Tax benefit 3,013,721 443,893 - - - 3,457,614
The deferred tax asset in respect of these items has not been recognised as future taxable profit is not anticipated within
the foreseeable future.
NOTE 15 OTHER RECEIVABLES AND PREPAYMENTS
Group2017A$ Group2016A$ Company2017A$ Company2016A$
Other receivables 1,086,332 203,169 689,248 168,353
Prepayments 90,920 - 90,920 -
Other current assets 130,092 - - -
1,307,344
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