DGR GLOBAL LIMITED — Interim / Quarterly Report 2018

Mar 13, 2018

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DGR GLOBAL LIMITED AND CONTROLLED ENTITIES ACN 052 354 837

FINANCIAL REPORT

FOR THE HALF-YEAR ENDED 31 DECEMBER 2017

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Corporate Information

DIRECTORS

William Stubbs (Chairman) Nicholas Mather (Managing Director) Brian Moller Vincent Mascolo Ben Cleary

COMPANY SECRETARY

Karl Schlobohm

REGISTERED OFFICE AND PRINCIPAL BUSINESS OFFICE

DGR Global Limited Level 27 111 Eagle Street Brisbane QLD 4000 Phone: + 61 7 3303 0680 Fax: +61 7 3303 0681

SOLICITORS

Hopgood Ganim Level 8, Waterfront Place 1 Eagle Street Brisbane QLD 4000

SHARE REGISTER

Link Market Services Limited Level 21, 10 Eagle Street Brisbane QLD 4000 Telephone: +61 7 3320 2235 Facsimile: +61 7 3228 4999

AUDITORS

BDO Audit Pty Ltd Level 10, 12 Creek Street Brisbane QLD 4000

COUNTRY OF INCORPORATION Australia

STOCK EXCHANGE LISTING

Australian Securities Exchange ASX Code: DGR

INTERNET ADDRESS

www.dgrglobal.com

AUSTRALIAN BUSINESS NUMBER

ABN 67 052 354 837

DGR Global Limited annual report for the year ended 31 December 2017

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Directors' Report

Your Directors submit the financial report of the consolidated entity for the half-year ended 31 December 2017.

DIRECTORS

The names of persons who held office during or since the end of the half-year:

William Stubbs (Non-Executive Chairman) Nicholas Mather (Managing Director and Chief Executive Officer) Brian Moller (Non-Executive Director) Vincent Mascolo (Non-Executive Director) Ben Cleary (Non-Executive Director) – appointed 25 October 2017

REVIEW OF OPERATIONS

The profit after income tax for the half year ended 31 December 2017 was $575,301 (31 December 2016: profit of $4,874,777).

DGR Global’s business is resource-project generation and discovery across a range of commodities, including copper, gold, nickel, cobalt, lithium, tin, iron ore, titanium, bauxite, coal, oil and gas. The group focuses on delivering value through discovery of ore bodies by the application of innovative exploration techniques and reassessment strategies of existing pre-development projects and to new greenfields areas. DGR Global is generating and developing several independently funded and managed resource companies in order to progress each of these projects. The company also maintains its cornerstone investor position in subsidiaries that move to listing on a recognised stock exchange.

The DGR business model has been soundly endorsed by the best performing hedge fund in the world for 2016, with Tribeca Investment Partners providing up to $10 million in converting note funding to further develop the resources company creation business[1] .

Exploration and Development of Subsidiaries

During the half-year the group was strongly focused on advancing exploration projects within the parent and subsidiary companies. Field reconnaissance programs including mapping, soil, stream and rock sampling, and reverse circulation and diamond core drilling were undertaken.

Significant activities which occurred during the half-year included:

In association with Armour Energy Limited, DGR secures an 83.18% interest in a highly prospective oil project in the Kanywayaba Block, Uganda[2] .

Auburn Resources Limited (63%) – formerly Archer Resources

• Rejuvenation as a zinc-copper-gold-nickel-cobalt company, with fundraising planned for advancement towards ultimate listing.

• Potential for world class copper gold discoveries at Mt Abbot, Calgoa and Three Sisters Projects and large sulphide nickel cobalt copper discoveries near Hawkwood[3] .

• Exploration target defined for the Ban Ban Zinc Project following 3D modelling and reinterpretation of historical drilling data along with a soil sampling program.

Pinnacle Gold Pty Ltd (94%)

• Five (5) EPMs held over prospective gold targets situated between the former Black Jack and Mt Leyshon Mines near Charters Towers, Qld.

Coolgarra Minerals Pty Ltd (100%)

• Four (4) granted EPMs and 1 EPM application for gold, nickel, cobalt and antimony in North Queensland.

Investments

Armour Energy Limited (22.57%) – ASX: AJQ

• The LPG system of the Kincora Gas Plant has been successfully recommissioned and the whole plant is now fully operational. Gas from existing production wells is being processed and sold, and LPG and condensate production has commenced[4] .

• Fully underwritten 1 for 6 rights issue @ 7.6 cents per share successfully completed[5] .

• Awarded further Roma Shelf petroleum acreage near the Kincora plant[6] .

• Government of Uganda issues Armour an Exploration Licence over the highly prospective Kanywataba Block in the Albertine Graben, Uganda. Less than 40% of the Albertine Graben has been subjected to exploration to date where 101 wells of approximately 115 wells drilled have encountered hydrocarbons[7] .

• Holds highly prospective whole basin oil and gas positions in Northern Territory and North West Qld covering 139,000 km[2] , and a track record of exploration success.

• Wholly owned subsidiary Ripple Resources Pty Ltd emerges as a highly prospective lead-zinc explorer with extensive tenure in Northern Australia.

DGR Global Limited annual report for the year ended 31 December 2017

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REVIEW OF OPERATIONS (CONTINUED)

SolGold plc (13.47%) – LSE: SOLG

• Focus on high grade world class copper gold porphyry system at Cascabel in Ecuador. Cascabel is close to the capital and ports, is at low elevation, and has adequate water supplies and access to power.

• JORC compliant Alpala Maiden Mineral Resource Estimate released at the end of the quarter – refer SolGold LSE and TSX announcement for details[8] .

• Further significant long high grade drill intersections were announced to the market during the last quarter and can be viewed on the SolGold company website. Twelve ( 12 ) drilling rigs now operating at Cascabel[9] .

• Substantial treasury built to accelerate drilling and exploration after capital raisings that brought significant new shareholders on to the register. Most recent private placement raised £45 million[10] .

• SolGold granted 77 new Mineral Concessions in Ecuador (held in 4 wholly owned subsidiaries) to become the dominant explorer[11] .

• Extensive high grade copper, gold and zinc mineralisation already discovered in outcrops on several concessions in Southern Ecuador, particularly at the La Hueca Project[12] .

IronRidge Resources Limited (24.4%) – LSE: IRR

• Completed acquisition of 100% of Tekton Minerals Pte. Ltd which has exclusive rights to an extensive land package and associated major new gold discovery in Chad , Central Africa[32] .

• Multiple gold intersections in trenching and gold in-soil anomalies defined at the Echbara prospect in Chad, only 25km from the Dorothe Project[14] .

• The multiple high grade gold intersections returned from fresh rock trenches at the Dorothe project, Chad during the previous quarter being followed up with an extensive expanded and in-fill exploration program that commenced in late November[15] .

• JV Agreement finalised with Gail Exploration in Cote d’Ivoire granting the company exclusive rights over a granted license covering 385 km[2] that is highly prospective for gold. The area is contiguous to 3 existing applications previously secured by the company and provides access to over 70 km strike of very prospective geology[16] .

• Multiple high-grade lithium pegmatite trenching and rock chip sampling results received for the Ewoyaa and Abonku prospects within the Mankessim licence area in Ghana , West Africa. A senior Ghanian geologist has been recruited to head up further exploration including a drilling programme[17] .

• Retaining highly prospective hematite rich iron targets evident in Tchibanga and Belinga Sud licence areas in Gabon – total tenure 5,400 km[2] . Tchibanga is less than 70 km from the port of Mayumba.

• Wholly owned subsidiary Eastern Exploration Pty Ltd discovers high grade Direct Shipping Ore (DSO) bauxite mineralisation at the Monogorilby project in Queensland, Australia and announces JORC compliant inferred maiden resource estimate[18] .

• Further high grade bauxite discovered, and two new bauxite target areas defined at Koko , 25km north-west of Monogorilby[19] .

• Initial drilling program at the May Queen gold prospect near Mongorilby confirms historical data and delivers multiple significant gold intersections[20] . Fresh field reconnaissance confirms historic gold extensions at May Queen[19] .

Dark Horse Resources Limited (19.44%) – ASX: DHR

• Executed the acquisition and transfer agreements for the PROAR portfolio of gold prospective properties in Argentina. These are all located within the Deseado Massif which hosts numerous low sulphidation, epithermal deposits (including 6 operating mines), and includes a prospect adjacent the company’s Los Domos Gold project[21] .

• Completed the first stage lithium exploration (mapping and sampling of surface and underground workings) of the Las Tapias mine, with assay results confirming the lithium richness of the Las Tapias pegmatite[21] .

• Extensive pegmatite features discovered by remote sensing interpretation across a further 4 project areas in the company’s lithium tenement package[23] .

• Following completion of the sale of subsidiary NavGas Pty Ltd (includes 6 PELAs in South Australia and ATP 1183 on the Roma Shelf in Qld.) to Lakes Oil NL (LKO), DHR now holds 9.2 billion shares in LKO as well as 40,000 Convertible Notes.

Aus Tin Mining Limited (21.57%) – ASX: ANW

• Becomes the second listed tin producer listed on the ASX with resumption of tin production at the Granville Tin Project in Tasmania. First tin concentrate sales announced 6 October[24] .

• Maiden JORC resource estimate confirms Taronga as a world class tin project. The details of the resource (79% indicated) can be viewed on the ASX or on the company website.

• Metallurgical flow sheet completed for Taronga pre-feasibility study. Ore described as coarse grained, having simple metallurgy, and highly amenable to pre-concentration.

• Advancement of the Taronga Project with commitment to Stage 1 Development comprising trial mining and pilot plant operations approved by the Glen Innes Severn Council on 21 December[25] .

• New drilling program commenced early December to test extensions to cobalt mineralisation below the historic Smiths Mine at Mt Cobalt, west of Gympie. Initial test results are expected in the first quarter of 2018[26] .

DGR Global Limited annual report for the year ended 31 December 2017

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REVIEW OF OPERATIONS (CONTINUED)

Corporate

• Supported associated companies with loans on commercial terms.

• Advancement of new development projects in Australia, Africa and the Americas focussed on base metals, gold, cobalt, lithium, bauxite, oil and gas.

Footnotes:

1DGR ASX Releases 22/8 and 25/10/17 2AJQ ASX Release 14/9/17 3DGR ASX Releases 3/7 and 5/7/17 4AJQ ASX Releases 29/9/17 and 2/1/18 5AJQ ASX Releases 14/9 and 18/10/17 6AJQ ASX Release 30/10/17 7AJQ ASX Release 19/9/17 8SOLG LSE/TSX Release 3/1/18 9SOLG LSE/TSX Release 22/12/17 10SOLG LSE/TSX Releases 16/6 and 8/11/17 11SOLG LSE/TSX Releases 29/8 and 28/11/17 12SOLG LSE/TSX Releases 31/10, 28/11,20/12/17 13IRR LSE:AIM Release 5/9/17 14IRR LSE:AIM Release 2/11/17 15IRR LSE:AIM Releases 21/9 and 23/11/17 16IRR LSE:AIM Release 14/11/17 17IRR LSE:AIM Release 9/11/17 18IRR LSE:AIM Release 20/7/16 19IRR LSE:AIM Release 24/11/17 20IRR LSE:AIM Releases 20/9, 22/9, 4/11/16 21DHR ASX Release 6/10/17 22DHR ASX Releases 8/11 and 7/12/17 23DHR ASX Release 16/11/17 24ANW ASX Release 6/10/17 25ANW ASX Release 22/12/17 26ANW ASX Releases 12/12, 19/12, 21/12/17

The current aggregate market value of DGR’s listed assets may be represented as follows:

Investment	Number of Shares	Number of Options	**Market Value# **
		/ Warrants	A$
		(unlisted)
SolGoldplc	204,151,800	-	79,962,783
Dark Horse Resources Ltd	311,242,864	-	5,913,614
IronRidge Resources Ltd	68,522,667	-	29,212,693
Aus Tin MiningLtd	360,833,715	-	8,660,009
Lakes Oil Resources Ltd	408,065,120	-	816,130
Armour EnergyLtd	90,899,712	-	7,999,175
Total market value of DGR Global’s
listed assets			132,564,404
Total DGR Global shares on issue		-	613,181,877
Value attributable to each DGR
share			$0.216

Market value represents the market quoted price for listed investments at 2 March 2018. No value has been attributable to the options or prospects in development.

EVENTS SUBSEQUENT TO BALANCE SHEET DATE

On 12 February 2018, 3,000,000 unlisted $0.20 options expiring 12 February 2021 were issued under the employee share option scheme.

The Directors are not aware of any other events since 31 December 2017 that impact upon the financial report as at 31 December 2017.

DGR Global Limited annual report for the year ended 31 December 2017

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AUDITOR’S INDEPENDENCE DECLARATION

The auditor’s independence declaration, under section 307C of the Corporations Act 2001, is set out on page 7 for the half-year ended 31 December 2017.

This report is signed in accordance with a resolution of the Board of Directors.

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Nicholas Mather Managing Director

Brisbane Date: 14 March 2018

Competent Persons Statement

The information herein that relates to Exploration Results is based on information compiled by Nicholas Mather B.Sc. (Hons) Geol., who is a Member of The Australian Institute of Mining and Metallurgy. Mr Mather is employed by Samuel Capital Pty Ltd which provides certain consultancy services including the provision of Mr Mather as the Managing Director of DGR Global Limited (and a Director of DGR Global Limited’s subsidiaries).

Mr Mather has more than five years’ experience which is relevant to the style of mineralisation and type of deposit being reported and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves’ (the JORC Code). This public report is issued with the prior written consent of the Competent Person(s) as to the form and context in which it appears.

DGR Global Limited annual report for the year ended 31 December 2017

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Tel: +61 7 3237 5999 Fax: +61 7 3221 9227 www.bdo.com.au

Level 10, 12 Creek St Brisbane QLD 4000 GPO Box 457 Brisbane QLD 4001 Australia

DECLARATION OF INDEPENDENCE BY D P WRIGHT TO THE DIRECTORS OF DGR GLOBAL LIMITED

As lead auditor for the review of DGR Global Limited for the half-year ended 31 December 2017, I declare that, to the best of my knowledge and belief, there have been:

1. No contraventions of the auditor independence requirements of the Corporations Act 2001 relation to the review; and

2. No contraventions of any applicable code of professional conduct in relation to the review.

This declaration is in respect of DGR Global Limited and the entities it controlled during the period.

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D P Wright Director

BDO Audit Pty Ltd

Brisbane, 14 March 2018

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DGR Global Limited annual report for the year ended 31 December 2017 7
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BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.

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Consolidated Statement of Profit or Loss and Other Comprehensive Income for the half-year ended 31 December 2017

	Consolidated
Note	6 Months to 31 December 2017 6 Months to 31 December 2016
	$ $
Revenue and other income Revenue 2 Other income 2 Total revenue and other income Exploration costs written off Finance costs Employee benefits expenses Depreciation expenses Legal expenses Administration and consulting expenses Share of profits (losses) of associates 6 Share based payments employment expense Movement in fair value of Convertible note liability Profit/ (loss) before income tax Income tax (expense)/benefit 3 Profit / (loss) for the period Other comprehensive income Items that will not be reclassified to profit or loss Net fair value gains (losses) on financial assets at fair value through other comprehensive income Share of associates other comprehensive income Tax effect of net fair value gains (losses) on financial assets at fair value through other comprehensive income 3 Other comprehensive income for the period, net of tax Total comprehensive income for the period Profit / (loss) for the period attributable to: Members of the parent company Non-controlling interests Total comprehensive income for the period attributable to: Members of the parent company Non-controlling interests	923,125 2,000,697 7,477,011 9,120,718
	8,400,136 11,121,415
	(118,561) (144,616) (303,179) (252,097) (1,095,246) (1,007,900) (15,102) (19,288) (17,061) (32,967) (967,148) (647,083) (3,212,416) (1,818,044) (844,806) - (122,764) -
	1,703,853 7,199,420 (1,128,552) (2,324,643)
	575,301 4,874,777
	(30,057,776) 70,340,855 - 345,776 9,017,333 (21,102,231)
	(21,040,443) 49,584,400
	(20,465,142) 54,459,177
	568,192 7,109 4,932,636 (57,859)
	575,301 4,874,777
	(20,472,251) 7,109 54,517,036 (57,859)
	(20,465,142) 54,459,177
	2017 Cents 2016 Cents
Earnings per share Basic earnings per share 4 Diluted earnings per share 4	0.1 0.9 0.1 0.8

The consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the notes to the financial statements.

DGR Global Limited annual report for the year ended 31 December 2017

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Consolidated Statement of Financial Position as at 31 December 2017

	Consolidated
	31 December 30 June
	2017 2017
Note	$ $
CURRENT ASSETS Cash and cash equivalents Trade and other receivables Other current assets Total Current Assets NON-CURRENT ASSETS Other financial assets 5 Investments accounted for using the equity method 6 Property, plant and equipment Exploration and evaluation assets Loans with related parties 7 Total Non-Current Assets TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Income tax payable Total Current Liabilities NON-CURRENT LIABILITIES Other financial liabilities 8 Deferred tax liabilities 3 Provisions Total Non-Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 9 Reserves Accumulated losses Equity attributable to members of the parent entity Non-controlling interests TOTAL EQUITY	4,967,256 1,361,255 1,332,734 889,274 82,429 24,977 6,382,419 2,275,506 121,998,645 150,213,824 24,256,787 17,035,638 430,245 446,085 6,333,180 4,428,211 25,531 2,057,799 153,044,388 174,181,557 159,426,807 176,457,063 1,077,035 1,018,538 - 399,159 1,077,035 1,417,697 8,207,764 - 31,065,750 39,101,489 1,089,554 1,089,554 40,363,068 40,191,043 41,440,103 41,608,740 117,986,704 134,848,323 33,545,921 30,787,204 98,592,163 118,787,800 (14,658,515) (15,226,707) 117,479,569 134,348,297 507,135 500,026 117,986,704 134,848,323

The consolidated statement of financial position should be read in conjunction with the notes to the financial statements.

DGR Global Limited annual report for the year ended 31 December 2017

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Consolidated Statement of Cash Flows for the half-year ended 31 December 2017

	Consolidated
Note	6 months to 31 December 6 months to 31 December
	2017 2016
	$ $
CASH FLOWS FROM OPERATING ACTIVITIES Receipts in the course of operations Payments to suppliers and employees Interest received Interest and other costs of finance paid Realised foreign exchange gains Income tax paid Net cash outflow from operating activities 12 CASH FLOWS FROM INVESTING ACTIVITIES Payments for property, plant and equipment Payments for investments in associates Payments for investments in convertible notes Payments for exploration and evaluation assets Net loans to related parties Net cash (outflow)/inflow from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares Share issue costs Proceeds from borrowings Costs of borrowings Net cash (outflow)/inflow from financing activities Net increase/(decrease) in cash held Cash at 1 July Cash at 31 December	417,819 330,073 (2,141,049) (1,685,466) 35,140 186,959 (61,207) (252,097) 13,232 - (546,114) -
	(2,282,179) (1,420,531)
	- (11,943) (3,611,705) - - (367,500) (2,070,612) (537,185) 966,780 (1,303,475)
	(4,715,537) (2,220,103)
	2,773,550 830,000 (14,833) (7,751) 8,085,000 2,999,766 (240,000) -
	10,603,717 3,822,015
	3,606,001 181,381 1,361,255 531,101
	4,967,256 712,482

The consolidated statement of cash flows should be read in conjunction with the notes to the financial statements.

DGR Global Limited annual report for the year ended 31 December 2017

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Consolidated Statement of Changes in Equity for the half-year ended 31 December 2017

	Issued Capital Accumulated Losses	Share Based Payment Reserve	Financial Assets Reserve	Change in Proportionate Interest Reserve	Profit Reserve	Total Non- controlling Interests Total Equity $ $ $ 43,520,712 582,979 44,103,691 4,932,636 (57,859) 4,874,777 49,584,400 - 49,584,400 54,517,036 (57,859) 54,459,177 830,000 - 830,000 (41,743) - (41,743) 98,826,005 525,120 99,351,125 (2,196,943) (25,094) (2,222,037) 36,689,112 - 36,689,112 34,492,169 (25,094) 34,467,075 1,015,200 - 1,015,200 14,923 - 14,923 - - - 134,348,297 500,026 134,848,323 568,192 7,109 575,301 (21,040,443) - (21,040,443) (20,472,251) 7,109 (20,465,142) 2,773,550 - 2,773,550 (14,833) - (14,833) 844,806 - 844,806 117,479,569 507,135 117,986,704
	$ $	$	$	$	$
At 1 July 2016 Net profit (loss) for the period Other comprehensive income Total comprehensive income for the period Exercise of options Share issue costs, net of tax At 31 December 2016 Net profit (loss) for the period Other comprehensive income Total comprehensive income for the period Exercise of options Share issue costs, net of tax Transfers to profit reserves At 30 June 2017 Net profit (loss) for the period Other comprehensive income Total comprehensive income for the period Exercise of options Share issue costs, net of tax Share based payments At 31 December 2017	28,968,824 (14,515,534) - 4,932,636 - -	6,898,865 - -	(1,166,243) - 49,584,400	17,927,599 - -	5,407,201 - -
	- 4,932,636 830,000 - (41,743) -	- - -	49,584,400 - -	- - -	- - -
	29,757,081 (9,582,898)	6,898,865	48,418,157	17,927,599	5,407,201
	- (2,196,943) - -	- -	- 36,689,112	- -	- -
	- (2,196,943) 1,015,200 - 14,923 - - (3,446,866)	- - - -	36,689,112 - - -	- - - -	- - - 3,446,866
	30,787,204 (15,226,707)	6,898,865	85,107,269	17,927,599	8,854,067
	- 568,192 - -	- -	- (21,040,443)	- -	- -
	- 568,192 2,773,550 - (14,833) - - -	- - - 844,806	(21,040,443) - - -	- - - -	- - - -
	33,545,921 (14,658,515)	7,743,671	64,066,826	17,927,599	8,854,067

The consolidated statement of changes in equity should be read in conjunction with the notes to the financial statements.

DGR Global Limited annual report for the year ended 31 December 2017

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2017

1. Summary of Significant Accounting Policies

Corporate information

The financial report of DGR Global Limited and its controlled entities (the “Group”) for the half year ended 31 December 2017 was authorised for issue in accordance with a resolution of the Directors on 14 March 2018. DGR Global Limited is a public company limited by shares that is incorporated and domiciled in Australia.

Basis of preparation of half-year financial statements

This general purpose financial report for the half-year ended 31 December 2017 has been prepared in accordance with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001 .

The half-year financial report does not include all notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report.

It is recommended that the half-year financial report be read in conjunction with the annual report for the year ended 30 June 2017 and considered together with any public announcement made by DGR Global Limited during the half-year ended 31 December 2017 in accordance with the continuous disclosure obligations of the ASX listing rules.

The accounting policies and methods of computation are the same as those adopted in the most recent annual financial report.

Going concern

The half-year report has been prepared on a going concern basis which contemplates the continuity of normal business activities and the realisation of assets and discharge of liabilities in the ordinary course of business.

For the period ended 31 December 2017 the group generated a consolidated profit of $575,301 and incurred operating cash outflows of $2,282,179. As at 31 December 2017 the group had cash and cash equivalents of $4,967,256, net current assets of $5,305,383 and net assets of $117,986,704.

Together with the convertible note funding, current related party loans and DGR’s ability to sell down investments in listed entities, the Directors consider it appropriate to prepare the financial statements on a going concern basis.

Comparatives

When required by Accounting Standards, comparatives have been adjusted to conform to changes in presentation for the current half-year.

DGR Global Limited annual report for the year ended 31 December 2017

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2017

2. Profit / (Loss) Profit (loss) before income tax has been determined after: Revenue Interest Management fees Total revenue Other income Foreign exchange gains Reversal of impairment of investment in associates Gain on sale of land Fair value movement on convertible notes Other income Total other income 3. Income Tax (a) Components of tax expense/(benefit) in profit or loss comprise: Current tax Deferred tax Components of tax expense/(benefit) in other comprehensive income comprise: Deferred tax (b) The prima facie tax on profit / (loss) before income tax is reconciled to the income tax expense/(benefit) as follows: Prima facie tax on profit / (loss) before income tax at 30% (2016: 30%) Add tax effect of: Permanent differences Other Derecognise tax losses Income tax expense/(benefit) Amounts recognised directly in equity: Net deferred tax – debited (credited) directly to equity	6 Months to 31 December 2017 6 Months to 31 December 2016 $ $ 125,125 1,202,697 798,000 798,000 923,125 2,000,697 13,232 - 5,617,282 9,106,644 - 10,000 1,842,597 3,900 4,074 7,477,011 9,120,718
	6 Months to 31 December 2017 6 Months to 31 December 2016
	$ $
	146,957 - 981,595 2,324,643
	1,128,552 2,324,643
	(9,017,333) 21,102,231
	(9,017,333) 21,102,231
	511,156 2,159,826 635,888 (71) (18,492) 47,122 - 117,766
	1,128,552 2,324,643
	- 33,992
	- 33,992

DGR Global Limited annual report for the year ended 31 December 2017

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2017

3. Income Tax (continued)

(c) Recognised deferred tax assets and liabilities

31 December 2017	Opening balance $ Net charged to income $ Net charged to other comprehensive income $ Net charged to other equity $ Closing balance $
Deferred tax asset Carried forward tax losses Accruals/provisions Capital raising costs expensed Borrowing costs Investment in associates AFS revaluation Deferred tax liability Financial assets at fair value through other comprehensive income Financial assets through profit and loss Related party loans Investment in associates Exploration and evaluation assets Property Plant and Equipment Net deferred tax recognised Deferred tax assets not recognised Unused tax losses Unused capital losses Temporary differences Tax benefit at 30%	1,716,256 358,035 - - 2,074,291 164,945 53,935 - - 218,880 83,964 (19,312) - - 64,652 - 54,000 - - 54,000 372,124 (372,124) - - - 405,059 - (282,640) - 122,420
	2,742,348 74,534 (282,640) - 2,534,243
	(36,024,310) - 9,299,973 - (26,724,337) - (332,757) - - (332,757) (110,011) 110,011 - - - (4,313,454) (730,233) - - (5,043,687) (1,328,463) (103,150) - - (1,431,613) (67,599) - - - (67,599)
	(41,843,837) (1,056,129) 9,299,973 - (33,599,993)
	(39,101,489) (981,595) 9,017,333 - (31,065,750)
	1,762,042 (16,984) - - 1,745,059 67,848 - - - 67,848 - - - - -
	548,967 (5,095) - - 543,872

DGR Global Limited annual report for the year ended 31 December 2017

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2017

3. Income Tax (continued)

(c) Recognised deferred tax assets and liabilities (continued)

30 June 2017	Opening balance $ Net charged to income $ Net charged to other comprehensive income $ Net charged to other equity $ Closing balance $
Deferred tax asset Carried forward tax losses Accruals/provisions Capital raising costs expensed Investment in associates AFS revaluation Deferred tax liability Financial assets at fair value through other comprehensive income Related party loans Investment in associates Exploration and evaluation assets Property Plant and Equipment Net deferred tax recognised Deferred tax assets not recognised Unused tax losses Unused capital losses Temporary differences Tax benefit at 30%	1,688,228 28,028 - - 1,716,256 66,006 98,939 - - 164,945 139,454 (55,490) - - 83,964 287,567 84,557 - - 372,124 789,759 (546,483) 161,783 - 405,059
	2,971,014 (390,451) 161,783 - 2,742,348
	(1,050) 1,113,374 (37,136,634) - (36,024,310) (214,473) 104,462 - - (110,011) (2,394,836) (1,918,619) - - (4,313,454) (1,546,658) 218,195 - - (1,328,463) (67,599) - - - (67,599)
	(4,224,616) (482,588) (37,136,634) - (41,843,837)
	(1,253,602) (873,039) (36,974,849) - (39,101,489)
	1,447,350 314,693 - - 1,762,042 67,848 - - - 67,848 - - - - -
	454,559 94,408 - - 548,967

DGR Global Limited annual report for the year ended 31 December 2017

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2017

3. Income Tax (continued)

In order to recoup carried forward losses in future periods, either the Continuity of Ownership Test (COT) or Same Business Test must be passed. The majority of losses are carried forward at 31 December 2017 under COT.

Deferred tax assets which have not been recognised as an asset, will only be obtained if:

• (i) the Company derives future assessable income of a nature and of an amount sufficient to enable the losses to be realised;

• (ii) the Company continues to comply with the conditions for deductibility imposed by the law; and

• (iii) no changes in tax legislation adversely affect the Company in realising the losses.

4. Earnings Per Share

Calculation of basic and diluted earnings per share is in accordance with AASB 133 Earnings per Share.

	6 Months to	6 Months to
	31 December	31 December
	2017	2016
	$	$
Earnings in cents per ordinary share:
Basic earnings (loss) per share – cents	0.1	0.9
Diluted earnings (loss) per share – cents	0.1	0.8
Net profit (loss) used in calculating basic and diluted earnings per share	568,192	4,932,636
	Number	Number
Weighted average number of ordinary shares used in the calculation of
Basic earnings per share	585,431,331	553,074,500
Diluted earnings per share	585,431,331	598,624,500

The 36,875,000 options and 40,000,000 convertible notes on issue at 31 December 2017 are out of the money are considered nondilutive. These out of the money options and convertible notes may become dilutive in the future.

DGR Global Limited annual report for the year ended 31 December 2017

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2017

5. Other Financial Assets

Financial assets at fair value through other comprehensive income Cash on deposit held as security Security bonds Convertible notes		31 December 2017 $ 30 June 2017 $ 108,465,167 138,522,943 314,000 314,000 1,203,765 1,203,765 12,015,713 10,173,116 121,998,645 150,213,824 138,522,943 10,789,985 - 726,130 - 6,150,834 - (2,392,367) (30,057,776) 123,248,361
Financial assets at fair value through other comprehensive income
Balance at beginning of reporting period
Additions - cash
Additions – loan/debtor conversions
Disposal of financial assets at fair value through other comprehensive income
Fair Value adjustment through other comprehensive income
Balance at end of reporting period		108,465,167 138,522,943

Financial assets at fair value through other comprehensive income comprise an investment in the ordinary issued capital of SolGold plc, listed on the London Stock Exchange and the Toronto Stock Exchange (“TSX”), an investment in the ordinary issued capital of Lions Gate Metals Inc, listed on the Toronto Stock Exchange (“TSX”), an investment in the ordinary issued capital of Aus Tin Mining Ltd a company listed on the Australian Securities Exchange and an investment in the ordinary issued capital of Lakes Oil NL a company listed on the Australian Securities Exchange.

Classification of assets at fair value through other comprehensive income

For equity securities that are not held for trading, the Company has made an irrevocable election at initial recognition to recognise changes in fair value through other comprehensive income rather than profit or loss. These securities are presented separately in the statement of financial position.

Cash on deposit held as security

Cash on deposit held as security is held in a term deposit account restricted under a bond with the Department of Natural Resources and Mining as security for rehabilitation works required.

Security bonds

Security bonds are held with the Department of Natural Resources and Mining as security for rehabilitation works required.

Convertible notes

Opening balance at beginning of reporting period Additions – Armour Energy Convertible notes Additions – Lakes Oil NL Convertible notes Additions – Conversion of Armour Energy Convertible note interest Fair Value movement Closing balance at end of reporting period	31 December 2017 $ 30 June 2017 $
	- 10,173,116 9,400,000 - 367,500 733,407 405,616 1,109,190 -
	12,015,713 10,173,116

DGR Global Limited annual report for the year ended 30 June 2017

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2017

5. Other Financial Assets (continued)

Convertible notes (continued)

On 16 December 2016, DGR Global subscribed for $9.4 million worth of Convertible Notes in Armour Energy, in part repayment of the Bridging Finance Facility, the key terms of the notes are as follows:

• Issue Price: Face value of $0.11 per Convertible Note

• Interest Rate: 15% per annum

• Interest Payments: Interest paid half yearly in arrears and the interest may be paid in certain circumstances at Armour’s election by the issue of further Convertible Notes

• Maturity Date: 30 September 2019

• Conversion Terms: Convertible at any time at the Convertible Note holder’s election into one ordinary share in Armour subject to usual adjustment mechanisms in certain circumstances.

On 5 April 2017 interest accrued on the Armour Energy convertible notes to 31 March 2017 of $405,616 was paid via the issue of additional convertible notes at Armour Energy’s election. On 5 October 2017, interest accrued on the Armour Energy convertible notes to 30 September 2017 of $733,407 was paid via the issue of additional convertible notes at Armour Energy’s election.

Additionally, during the financial year ended 30 June 2017 DGR subscribed for $367,500 worth of Convertible Notes in Lakes Oil. The key terms of the notes are as follows:

• Issue Price: Face value of $10 per Convertible Note

• Interest Rate: 10%

• Interest Payments: Interest is payable half yearly at the rate of 50 cents per Note

• Maturity Date: 31 May 2018

• Conversion Terms: Each holder of Notes can elect to convert the Notes early by notice to Lakes Oil with effect from 30 November 2016, 31 May 2017 or 30 November 2017 (Early Conversion Dates).

6. Investments Accounted for Using the Equity Method

Name Country of incorporation and principle place of business Principle Activity Shares Ownership Interest	Carrying Amount
31 December 2017 % 30 June 2017 %	31 December 2017 $ 30 June 2017 $
Armour Energy Ltd Australia Oil & Gas Exploration ORD 23% 22% Dark Horse Resources Ltd Australia Mineral Exploration ORD 19% 24% IronRidge Resources Ltd Australia Mineral Exploration ORD 24% 26%	8,635,473 5,253,500 3,073,270 1,867,429 12,548,044 9,914,709
	24,256,787 17,035,638

DGR Global Limited annual report for the year ended 30 June 2017

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2017

6. Investments Accounted for Using the Equity Method (continued)

(A) Movements during the period in equity accounted investments		31 December 2017 $		30 June 2017 $
Balance at beginning of reporting period		17,035,638		9,340,496
Additional investment - shares		4,816,283		1,581,601
Share of associates profits (losses) after income tax		(3,212,416)		(2,912,545)
Share of associates other comprehensive income		-		-
Net reversal of impairment		5,617,282		9,026,086
Balance at end of reporting period		24,256,787		17,035,638

Net reversal of impairment relates to the investments in Dark Horse Resources Ltd, Armour Energy Ltd and IronRidge Resources Ltd. At 30 June 2017 the share price of Dark Horse Resources Ltd, Armour Energy Ltd and IronRidge Resources Ltd was $0.006, $0.07 and £0.3525, respectively. At 31 December 2017 the share price of Dark Horse Resources Ltd and Armour Energy Ltd had risen to $0.017, $0.095 respectively whereas the share price of IronRidge Resources Ltd has fallen to £0.2725. The investments in Dark Horse Resources Ltd and Armour Energy Ltd have been written up to the lower of fair value, less costs to sell or the equity accounted value, while the investment in IronRidge Ltd has been impaired following the recognition of the Groups share of losses.

(B) Fair value of investments in associates with published price quotations		31 December 2017 $		30 June 2017 $
Fair value of investment in Armour Energy Ltd		8,635,473		5,253,500
Fair value of investment in Dark Horse Resources Ltd		5,291,129		1,867,457
Fair value of investment in IronRidge Resources Ltd		32,268,437		37,140,658
		46,195,039		44,261,615

DGR Global Limited annual report for the year ended 30 June 2017

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2017

6. Investments Accounted for Using the Equity Method (continued)

(C) Summarised financial information of associates

The results of the Group’s associates and its aggregated assets (including goodwill) and liabilities are as follows:

Ownership interest %	Current assets $ Non-current assets $ Current liabilities $ Non-current liabilities $ Revenues $ Profit/loss $ Other comprehensive income
31 December 2017 Armour Energy Ltd 23% Dark Horse Resources Ltd 19% IronRidge Resources Ltd 24% 30 June 2017 Armour Energy Ltd 22% Dark Horse Resources Ltd 24% IronRidge Resources Ltd 26%	6,744,901 88,068,126 8,897,676 39,591,116 3,112,680 (8,352,878) - 1,795,300 11,034,420 1,855,987 1,931 21,086 (1,793,328) - 13,986,068 16,636,563 593,959 - 3,623 (4,009,507) -
	22,526,269 115,739,109 11,347,622 39,593,047 3,137,389 (14,155,713) -
	9,474,792 82,260,100 6,872,650 35,811,227 618,276 (11,474,692) - 307,749 10,248,410 1,467,151 1,931 9,369,133 4,086,495 - 2,511,290 9,786,242 868,144 - 4,228 (5,227,753) -
	12,293,831 102,294,752 9,207,945 35,813,158 9,991,637 (12,615,950) -

DGR Global Limited annual report for the year ended 31 December 2017

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2017

6. Investments Accounted for Using the Equity Method (continued)

(D) Reconciliation of the carrying amount of the Group’s investment in associates

Opening carrying amount Share of profits (loss) after tax Share of other comprehensive income Additional investment (Impairment)/reversal Closing carrying amount	Armour Energy Ltd Dark Horse Resources Ltd IronRidge Resources Ltd
	31 December 2017 $ 30 June 2017 $ 31 December 2017 $ 30 June 2017 $ 31 December 2017 $ 30 June 2017 $
	5,253,500 4,127,750 1,867,429 567,684 9,914,709 4,645,062 (1,885,505) (2,562,901) (348,541) 993,835 (978,370) (1,343,479) - - - - - - 1,204,578 - - 1,581,601 3,611,705 - 4,062,900 3,688,651 1,554,382 (1,275,691) - 6,613,126
	8,635,473 5,253,500 3,073,270 1,867,429 12,548,044 9,914,709

(E) Reconciliation of the share of net assets to the carrying amount of the Group’s investment in associates

Share of net assets Goodwill Net impairment Closing carrying amount	Armour Energy Ltd Dark Horse Resources Ltd IronRidge Resources Ltd
	31 December 2017 $ 30 June 2017 $ 31 December 2017 $ 30 June 2017 $ 31 December 2017 $ 30 June 2017 $
	10,456,825 10,957,997 2,132,418 2,491,564 7,327,373 3,009,358 16,338,068 16,517,823 940,852 930,247 5,220,671 6,905,351 (18,159,420) (22,222,320) - (1,554,382) - -
	8,635,473 5,253,500 3,073,270 1,867,429 12,548,044 9,914,709

DGR Global Limited annual report for the year ended 31 December 2017

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2017

7. Loans with related parties

Armour Energy Ltd1 Others	Opening balance at 30 June 2017 $ Advances – cash and capitalised interest $ Repayments – cash $ Equity conversions $ Convertible note conversions $ Closing balance at 31 December 2017 $
	2,057,799 58,228 (1,000,000) (1,116,027) - - - 25,531 - - - 25,531
	2,057,799 83,759 (1,000,000) (1,116,027) - 25,531

Loan with Armour Energy Ltd

On 30 September 2015, DGR Global Ltd executed an unsecured loan agreement with Armour Energy Ltd for the provision of $15 million. The original term of the facility was through to 31 March 2016. Provision was made in the agreement for Armour to seek, up to a, 12 month extension only on the basis it is able to provide the following:

• a first ranking security and mortgage over unsecured Surat Basin Assets and a fixed and floating charge over the assets of Armour and subsidiaries and the assets of those subsidiaries;

• the grant of a 0.5 per cent gross sales royalty over production from the Surat Basin Assets;

• the grant of 50,000,000 options; and

• a right to convert no more than 50% of any part of the drawn part of the facility to share equity in Armour at any time, at 90% of the preceding 10 day volume weighted average in accordance with the provisions of the Corporations Act and ASX Listing Rules but subject to Armour having a right if conversion is requested to repay the funding early.

On 28 October 2015, the amount of the facility was increased from $15 million to $19 million and all other material terms remained the same.

The interest rate on the facility is 22 per cent per annum on an unsecured basis, but in the event the funding becomes secured the rate reduces to 15 per cent per annum. On 18 January 2016, the bridging loan facility offered by DGR Global to Armour Energy was secured under documents executed between the parties. Accordingly, the interest rate was reduced from 22% to 15% per annum.

8. Other financial liabilities

Convertible notes Related party loans Movements in carrying value Opening balance Face value of convertible notes issued Movement in fair value Closing balance	31 December 2017 $ 30 June 2017 $
	8,122,764 - 85,000 -
	8,207,764 -
	31 December 2017 $ 30 June 2017 $
	- - 8,000,000 - 122,764 -
	8,122,764 -

DGR Global Limited annual report for the year ended 30 June 2017

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2017

8. Other financial liabilities (continued)

The principal terms of the convertible notes are as follows:

Number of notes issued: 40,000,000

Issue price: Face value of $0.20 per convertible note Interest rate: 12% per annum Interest payments: Interest paid quarterly in arrears. Interest is payable as cash in the first year, and at DGR’s election in the second year, either as cash or by way of an issue of securities. If interest in the second year is met via the issue of securities, this can either be notes of the same series, or (at Tribeca’s election) DGR shares priced at the higher of 80% of VWAP, 20 cents, or 70% of NTA based on a marked to market assessment of the value of DGR’s assets from time to time.

Maturity date: 24 October 2019 Conversion terms: Convertible at any time at the Convertible Note holder’s election into one ordinary share in DGR subject to usual adjustment mechanisms in certain circumstances

Security: Unsecured

9. Issued Capital

. Issued Capital
613,181,877 (30 June 2017: 570,511,877) fully paid ordinary shares Share issue costs	31 December 2017 $ 30 June 2017 $
	35,004,941 32,231,391 (1,459,020) (1,444,187)
	33,545,921 30,787,204

Ordinary shares participate in dividends and the proceeds on winding up the Company. At shareholder meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on show of hands.

There is no par value or authorised capital.

(a) Ordinary Shares Opening balance 24 October 20161 2 November 20162 30 November 20163 16 January 20174 17 January 20175 22 March 20176 29 March 20177 6 April 20178 18 April 20179 28 April 201710 4 May 201711 17 May 201712 22 May 201713 29 May 201714 2 August 2017 29 September 2017 27 November 2017 Closing balance	31 December 2017 Number 30 June 2017 Number 31 December 2017 $ 30 June 2017 $
	570,511,877 550,881,877 32,231,391 30,386,191 - 2,000,000 130,000 - 2,000,000 130,000 - 4,750,000 570,000 - 2,000,000 130,000 - 400,000 26,000 - 215,000 13,975 - 665,000 43,225 - 2,000,000 130,000 - 500,000 60,000 - 500,000 60,000 - 500,000 60,000 - 500,000 60,000 - 666,667 80,000 - 2,933,333 352,000 2,000,000 - 130,000 - 17,720,000 - 1,151,800 - 22,950,000 - 1,491,750 -
	613,181,877 570,511,877 35,004,941 32,231,391

DGR Global Limited annual report for the year ended 30 June 2017

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2017

9. Issued Capital (continued

(a) Ordinary Shares (continued)

1 On 24 October 2016, 2,000,000 ordinary $0.065 shares were issued pursuant to the exercise of ESOP options.

2 On 2 November 2016, 2,000,000 ordinary $0.065 shares were issued pursuant to the exercise of underwriter options.

3 On 30 November 2016, 4,750,000 ordinary $0.12 shares were issued pursuant to the exercise of director options.

4 On 16 January 2017, 2,000,000 $0.065 ordinary shares were issued upon the exercise of options.

5 On 17 January 2017, 400,000 $0.065 ordinary shares were issued upon the exercise of options.

6 On 22 March 2017, 215,000 $0.065 ordinary shares were issued upon the exercise of options.

7 On 29 March 2017, 665,000 $0.065 ordinary shares were issued upon the exercise of options.

8 On 6 April 2017, 2,000,000 $0.065 ordinary shares were issued upon the exercise of options.

9 On 18 April 2017, 500,000 $0.12 ordinary shares were issued upon the exercise of options.

10 On 28 April 2017, 500,000 $0.12 ordinary shares were issued upon the exercise of options.

11 On 4 May 2017, 500,000 $0.12 ordinary shares were issued upon the exercise of options.

12 On 17 May 2017, 500,000 $0.12 ordinary shares were issued upon the exercise of options.

13 On 22 May 2017, 666,667 $0.12 ordinary shares were issued upon the exercise of options.

14 On 29 May 2017, 2,933,333 $0.12 ordinary shares were issued upon the exercise of options.

15 On 2 August 2017, 2,000,000 $0.065 ordinary shares were issued upon the exercise of options.

16 On 29 September 2017, 17,720,000 $0.065 ordinary shares were issued upon the exercise of options. 17 On 27 November 2017, 22,950,000 $0.065 ordinary shares were issued upon the exercise of options.

(b) Options

As at 31 December 2017, there were 36,875,000 unissued ordinary shares of DGR Global Ltd under option, held as follows:

Options on Issue in DGR Global Ltd	Number	Exercise	Expiry
		Price
Unlisted employee options	19,375,000	$0.20	8/11/20
Unlisted Director options	17,500,000	$0.20	28/11/20

During the half year 19,270,000 unlisted $0.065 employee options and 22,950,000 unlisted $0.065 Director options were exercised.

10. Contingent Liabilities and Contingent Assets

There are no contingent liabilities or contingent assets at 31 December 2017.

DGR Global Limited annual report for the year ended 30 June 2017

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2017

11. Segment Reporting

The group reports information to the board of Directors along company lines. That is, the financial position of DGR Global Limited 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 relevant threshold tests is separately disclosed below. The financial information of the subsidiaries that do not exceed the thresholds and are therefore not reported separately, are aggregated as Others.

31 December 2017	DGR Global	Archer Resources	Others	Total
	$	$	$	$
(i) Segment performance
Revenue
External revenue	923,125	-	-	923,125
Inter-segment revenue	-	-	-	-
Total segment revenue	923,125	-	-	923,125
Reconciliation of segment revenue to group revenue
Other income	7,477,011	-	-	7,477,011
Total group revenue				8,400,136
Segment net profit (loss) before tax	(570,177)	19,675	(150,511)	(701,013)
Reconciliation of segment result to group net profit / loss before tax
Share of losses of associates				(3,212,416)
Reversal of impairment of investment in associate				5,617,282
Net profit before tax				1,703,853

DGR Global Limited annual report for the year ended 31 December 2017

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2017

11. Segment Reporting (continued)

31 December 2016	DGR Global	Archer Resources	Others	Total
	$	$	$	$
(i) Segment performance
Revenue
External revenue	2,000,697	-	-	2,000,697
Inter-segment revenue	-	-	-	-
Total segment revenue	2,000,697	-	-	2,000,697
Reconciliation of segment revenue to group revenue
Other income				14,074
Reversal of impairment of investment in associates				9,106,644
Total group revenue				11,121,415
Segment net profit (loss) before tax	67,925	(156,706)	(399)	(89,180)
Reconciliation of segment result to group net profit / loss before tax
Share of losses of associates				(1,818,044)
Reversal of impairment of investment in associate				9,106,644
Net profit before tax				7,199,420

DGR Global Limited annual report for the year ended 31 December 2017

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2017

11. Segment Reporting (continued)

(ii) Segment assets
31 December 2017	DGR Global	Archer Resources	Others	Total
	$	$	$	$
Segment assets	162,575,302	1,988,273	361,270	164,924,845
Reconciliation of segment assets to group assets
Inter-segment receivables and investments eliminations				(5,498,038)
Total group assets				159,426,807

30 June 2017	DGR Global	Archer Resources	Others	Total
	$	$	$	$
Segment assets	179,605,592	1,793,261	443,066	181,841,919
Reconciliation of segment assets to group assets
Inter-segment receivables and investments eliminations				(5,384,856)
Total group assets				176,457,063

All segment asset additions occur in Australia.

DGR Global Limited annual report for the year ended 31 December 2017

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2017

12. Cash flow information

2. Cash flow information
Profit/(loss) after tax Depreciation Exploration and evaluation assets written off Share based payments expense Share of associates losses Reversal of impairment of investment in associate Movement in fair value of convertible note liability Movement in fair value of convertible note receivable Changes in operating assets and liabilities, net of the effects of purchase and disposal of subsidiaries: -(Increase)/decrease in trade and other receivables -(Increase)/decrease in other assets -Increase/(decrease) in tax payable -Increase/(decrease) in deferred tax liabilities -Increase/(decrease) in trade and other payables Non-cash investing and financing activities Conversion of loans with related parties for convertible notes Conversion of interest with related parties for convertible notes Conversion of loans with related parties for shares Conversion of debtors for shares	31 December 2017 $ 31 December 2016 $
	575,301 4,874,777 15,102 19,288 118,561 144,616 844,806 - 3,212,416 1,818,044 (5,617,282) (9,106,644) 122,764 - (1,109,190) - (441,143) (1,053,499) (53,911) 9,544 (399,159) - 981,597 2,358,635 (532,041) (485,292)
	(2,282,179) (1,420,531)
	- (9,400,000) 733,407 - - (5,700,000) - (360,834)

13. 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.

• (a) The following table presents the Group’s assets and liabilities measured and recognised at fair value at 31 December 2017 and 30 June 2017:

	Level 1	Level 2		Level 3	Total
	$	$		$	$
31 December 2017
Financial assets at fair value through OCI	108,465,167		-	-	108,465,167
Convertible note receivable	367,500		-	11,648,213	12,015,713
Convertible note payable	-		-	8,122,764	8,122,764
30 June 2017
Financial assets at fair value through OCI	138,522,943		-	-	138,522,943
Convertible note receivable	367,500		-	9,805,616	10,173,116

The financial assets at fair value through other comprehensive income and certain convertible note receivables are measured based on the quoted market prices at 31 December 2017 and 30 June 2017. The fair value of the remaining financial instruments is determined using discounted cash flow analysis.

DGR Global Limited annual report for the year ended 31 December 2017

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2017

13. Fair Value (continued)

• (b) The following table summarises the quantitative information about the significant unobservable inputs used in level 3 fair value measurements:

Description	Fair value at	Unobservable	Range of	Relationship of unobservable
	reporting date	Inputs*	inputs	inputs to fair value
	$
31 December 2017
Convertible note receivable	11,648,213	Share price	50%	Lower volatility (-10 bps)
		volatility		would increase FV by
				$471,352; higher volatility
				(+10 bps) would decrease FV
				by $460,873.
		Risk-	7%	Lower discount rate (-100
		adjusted		bps) would increase FV by
		discount rate		$59,838; higher discount rate
				(+100 bps) would decrease FV
				by $60,439.
Convertible note payable	8,122,764	Share price	60%	Higher volatility (+10 bps)
		volatility		would increase FV by
				$116,321; lower volatility
				(+10 bps) would decrease FV
				by $104,333.
		Risk-free	1.96%	Lower discount rate (-25 bps)
		interest rate		would increase FV by $26,225;
				higher discount rate (+25 bps)
				would decrease FV by
				$130,696.
30 June 2017
Convertible note receivable	9,805,616	Share price	50%	Lower volatility (-10 bps)
		volatility		would increase FV by
				$427,273; higher volatility
				(+10 bps) would decrease FV
				by $341,818.
		Risk-	7%	Lower discount rate (-100
		adjusted		bps) would increase FV by
		discount rate		$149,264; higher discount
				rate (+100 bps) would
				decrease FV by$145,795.

• There were no significant inter-relationships between unobservable inputs that materially affect fair values.

• (c) The following table presents the Group’s assets and liabilities which are not carried at fair value at 31 December 2017 and 30 June 2017 wherein their carrying values do not approximate their fair value at 31 December 2017 and 30 June 2017:

	Level 1	Level 2		Level 3		Carrying
						value
	$	$		$		$
31 December 2017
Investments accounted for using the equity method	46,195,038		-		-	24,256,787
30 June 2017
Investments accounted for usingthe equitymethod	44,261,615		-		-	17,035,638

The investments accounted for using the equity method displayed above are measured based on the quoted market prices at 31 December 2017 and 30 June 2017.

DGR Global Limited annual report for the year ended 31 December 2017

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2017

14. Share based payments

The fair values of options granted in the period ending 31 December 2017 were calculated by using a Black-Scholes options pricing model applying the following inputs:

	DGR Global Ltd DGR Global Ltd
	ESOP Underwriter Options
Exercise price Life of the option Underlying share price Expected share price volatility Risk free interest rate Number of options issued Fair value (black-scholes) per option Total value of options issued	$0.20 $0.20 3 years 3 years $0.10 $0.10 61.364% 61.364% 1.94% 1.89% 19,375,000 17,500,000 $0.023 $0.023
	$444,407 $400,399

Expected share price volatility was estimated based on historical share price volatility.

15. Events After Balance Sheet Date

On 12 February 2018, 3,000,000 unlisted $0.20 options expiring 12 February 2021 were issued under the employee share option scheme.

The Directors are not aware of any other events since 31 December 2017 that impact upon the financial report as at 31 December 2017.

DGR Global Limited annual report for the year ended 31 December 2017

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Directors' Declaration

In accordance with a resolution of the Directors of DGR Global Limited, I state that:

In the opinion of the Directors:

1. The attached financial report and notes of the consolidated entity are in accordance with the Corporations Act 2001 , including:

2. (a) Giving a true and fair view of the financial position as at 31 December 2017 and the performance for the half-year ended on that date of the consolidated entity; and

3. (b) Complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

4. There are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

On behalf of the board

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Nicholas Mather Managing Director

Brisbane Date: 14 March 2018

DGR Global Limited annual report for the year ended 31 December 2017

31

Tel: +61 7 3237 5999 Level 10, 12 Creek St Fax: +61 7 3221 9227 Brisbane QLD 4000 www.bdo.com.au GPO Box 457 Brisbane QLD 4001 Australia

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INDEPENDENT AUDITOR’S REVIEW REPORT

To the members of DGR Global Limited

Report on the Half-Year Financial Report

Conclusion

We have reviewed the half-year financial report of DGR Global Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 31 December 2017, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the halfyear then ended, and notes comprising a statement of accounting policies and other explanatory information, and the directors’ declaration.

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of the Group is not in accordance with the Corporations Act 2001 including:

• (i) Giving a true and fair view of the Group’s financial position as at 31 December 2017 and of its financial performance for the half-year ended on that date; and

• (ii) Complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

Directors’ responsibility for the Half-Year Financial Report

The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including giving a true and fair view of the Group’s financial position as at 31 December 2017 and its financial performance for the half-year ended on that date and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of the Group, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

32

DGR Global Limited annual report for the year ended 31 December 2017

BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.

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A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Group, would be in the same terms if given to the directors as at the time of this auditor’s review report.

BDO Audit Pty Ltd

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D P Wright Director

Brisbane, 14 March 2018

DGR Global Limited annual report for the year ended 31 December 2017

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BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.