DGR GLOBAL LIMITED — Interim / Quarterly Report 2019

Mar 14, 2019

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DGR GLOBAL LIMITED AND CONTROLLED ENTITIES ACN 052 354 837

FINANCIAL REPORT

FOR THE HALF-YEAR ENDED 31 DECEMBER 2018

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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

HopgoodGanim Lawyers 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

AUDITOR

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 financial report for the half-year ended 31 December 2018

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Directors' Report

Your Directors submit the financial report of the consolidated entity for the half-year ended 31 December 2018.

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)

REVIEW OF OPERATIONS

The loss after income tax for the half year ended 31 December 2018 was $603,449 (31 December 2017: profit of $575,301).

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 the discovery of ore bodies by the application of innovative exploration techniques and reassessment strategies of existing pre-development projects and 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 $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 advanced its 83.18% interest in a highly prospective oil project in the Kanywayaba Block, Uganda[2] .

Albatross Bauxite Pty Ltd (100%)

• Surrender of the last bauxite EPM following initial exploration results. Two new EPM applications over lithium and caesium pegmatites in Southern Queensland have been granted during the half year.

Auburn Resources Limited (49.42%)

• Developing as a nickel-copper-cobalt-gold-zinc company, with fundraising and exploration undertaken for advancement towards ultimate listing.

• Potential for world class copper gold discoveries at Mt Abbot, Calgoa and Marodian 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%)

• Five (5) granted EPMs and 1 EPM application for gold, nickel, cobalt and antimony in North Queensland.

DGR Global Limited financial report for the half-year ended 31 December 2018

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Investments

SolGold plc (11.11%) – LSE/TSX: 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 hydropower.

• Updated NI 43-101 compliant Alpala Mineral Resource Estimate released in November 2018 doubles the initial estimate reported less than 12 months ago – refer SolGold website for details[4] .

• Over 160,000 metres of drilling now completed, with further significant long, high grade drill intersections announced to the London and Toronto Stock Exchanges during the quarter. These can be viewed on the SolGold company website. Twelve (12) drilling rigs have been operating at Cascabel[5] .

• Sampling and mapping continued across SolGold’s additional 72 wholly owned Mineral Concessions in Ecuador to remain the dominant explorer in the country.

• Extensive high grade copper and gold mineralisation already discovered in outcrops on several concessions in Southern Ecuador, particularly at the La Hueca, Timbara and Porvenir Projects[6] . High grade epithermal gold mineralisation discovered at the Blanca and Cisne Loja Project[7] .

• Fresh discovery at Porvenir Target 15[8] .

• SolGold raises £45m at 45p per share from BHP[9] .

Armour Energy Limited (22.02%) – ASX: AJQ

• The LPG system of the Kincora Gas Plant has been successfully recommissioned and the whole plant is fully operational. Gas, LPG and condensate from existing production wells has been processed and sold for the last twelve months[10] .

• Awarded further Roma Shelf petroleum acreage near the Kincora plant during the quarter[11] .

• 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[12] .

• Armour receives cost contribution grant up to $6 million to enable accelerated drilling of three production wells at Kincora under the Federal Government Gas Acceleration Program (GAP)[13] .

• Initial production from the first well under the GAP initiative, Myall Creek 4A , commenced during the quarter, and the second well Myall Creek 5A was drilled and cased for future production[14] .

• Armour progressed to firm contracted gas supply agreement with APLNG[15] .

• 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.

IronRidge Resources Limited (22.18%) – LSE: IRR

• Primary focus on gold (in Chad and Ivory Coast ) and lithium (in Ghana and Ivory Coast ) now firmly established with extensive tenement packages secured in all three countries.

• Recent market update highlighted the major new gold discovery at the Dorothe Project and nearby Ouchar and Echbara licence areas in Chad, gold projects in Ivory Coast, and lithium projects with proven big, high grade lithium spodumene pegmatites in Ghana and Ivory Coast[16] .

• 8,000 metre RC drilling program at the Ewoyaa lithium pegmatite project in Ghana has been completed, and assay results indicate high grades over significant intervals[17] .

• IronRidge raises £5.4m at 20p per share for development of gold and lithium projects[18] .

• 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.

Dark Horse Resources Limited (16.73%) – ASX: DHR

• Focussed on gold and developing a lithium spodumene business in Argentina.

• Commercially disappointing results from the drilling program in the environs of the Las Tapias Mine (lithium) leads to a diversification of focus in the company’s Argentinian lithium business[19] .

• Initial assay results from the extensive field exploration programme over the Santa Cruz gold projects reveals encouraging gold and silver results on several tenements[20] .

• Following 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 held 9.6 billion shares in LKO at the end of the period.

• Legal due diligence progressing on the exclusivity agreement executed to acquire the highly prospective San Jorge Lithium Brine Project in Argentina[21] .

DGR Global Limited financial report for the half-year ended 31 December 2018

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Aus Tin Mining Limited (18.24%) – ASX: ANW

• High grade cobalt results from drilling at Mt Cobalt west of Gympie, Qld. Initial target zone 350m long and 25m wide open at depth[22] .

• Field reconnaissance locates historic workings and weathered host rock 190m south of the earlier target. Rock chip samples submitted for assay. Preliminary metallurgical testwork highlights the potential to beneficiate target zone material[32] .

• Based on new geophysics data a drilling program is underway at Pembroke adjacent to Mt Cobalt[24] .

• Significant progress at the Granville Tin Project in Tasmania and civil works well advanced for Level 2 operations[25] .

• August 2013 JORC resource estimate confirmed 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.

• Further successful ore sorting trial for Taronga Tin utilizing X-Ray Transmission technology on different ore size ranges ore completed during the quarter[26] .

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, 5/7/17, 8/11/18 4SOLG LSE & TSX Release 20/11/18 5SOLG LSE & TSX Releases 5/10, 13/11/18 6SOLG LSE & TSX Releases 24/2, 25/5/18

• 8SOLG LSE & TSX Release 2/1/19 SOLG LSE & TSX Release 2/1/19

7SOLG LSE & TSX Releases 20/3, 7/6, 18/7/18 8SOLG LSE & TSX Release 2/1/19 SOLG LSE & TSX Release 2/1/19 9SOLG LSE & TSX Releases 16/10, 8/11/18 10AJQ ASX Releases 21/1, 12/2/18 11AJQ ASX Releases 15/11, 21/12/18 12AJQ ASX Release 19/9/17 13AJQ ASX Releases 28/3, 29/6/18 14AJQ ASX Releases 8/10, 1,12,21,27/11,13/12/18 15AJQ ASX Release 6/12/18 16IRR LSE:AIM Releases 2/5, 16/8, 24/9/18 17IRR LSE:AIM Releases 8/10, 20/11, 10/12/18 18IRR LSE:AIM Release 21/11/18 19DHR ASX Releases 9/10, 12/11/18 20DHR ASX Releases 5/9, 12/11/18 21DHR ASX Releases 5/9, 12/11/18 22ANW ASX Releases 23/1, 16/2/18 23ANW ASX Releases 5/3, 14/3/18 24ANW ASX Releases 4/10, 2/11, 9/11/18 25ANW ASX Releases 12/4, 19/12/18 26ANW ASX Releases 2/7, 24/10/18

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	-	140,580,253
Dark Horse Resources Ltd	330,613,371	-	1,322,453
IronRidge Resources Ltd	68,522,667	-	24,901,501
Aus Tin MiningLtd	360,833,715	-	5,051,672
Lakes Oil Resources Ltd	742,159,370	-	742,159
Armour Energy Ltd	111,899,712	-	8,840,077
Total market value of DGR Global’s
listed assets			181,438,116
Total DGR Global shares on issue		-	613,181,877
Value attributable to each DGR
share			$0.296

Market value represents the market quoted price for listed investments at 4 March 2019. No value has been attributable to the options or prospects in development.

DGR Global Limited financial report for the half-year ended 31 December 2018

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EVENTS AFTER REPORTING PERIOD

The Directors are not aware of any events since 31 December 2018 that impact upon the financial report as at 31 December 2018.

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 2018.

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

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Nicholas Mather Managing Director

Brisbane Date: 15 March 2019

Competent Person’s 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 financial report for the half-year ended 31 December 2018

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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 2018, 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.

D P Wright

Director

BDO Audit Pty Ltd

Brisbane, 15 March 2019

DGR Global Limited financial report for the half-year ended 31 December 2018

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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 2018

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Consolidated
6 Months to 6 Months to
Note 31 December 31 December
2018 2017
$ $
Revenue and other income
Revenue 2
798,000 798,000
Other income 2
2,473,380 7,602,136
Total revenue and other income
3,271,380 8,400,136
Exploration costs written off
(18,500) (118,561)
Finance costs
(539,547) (303,179)
Employee benefits expenses (1,080,977) (1,095,246)
Depreciation expenses (13,800) (15,102)
Legal expenses (16,357) (17,061)
Administration and consulting expenses
(956,354) (967,148)
Share of profits (losses) of associates 6
(1,709,989) (3,212,416)
Share based payments employment expense
(46,189) (844,806)
Movement in fair value of Convertible note liability (290,649) (122,764)
Movement in fair value of Convertible note asset -
(224,313)
Profit/ (loss) before income tax (1,625,295) 1,703,853
Income tax (expense)/benefit 3
1,021,846 (1,128,552)
Profit / (loss) for the period
(603,449) 575,301
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 46,475,214 (30,057,776)
Share of associates other comprehensive income (45,021) -
Tax effect of net fair value gains (losses) on financial assets at fair
3
value through other comprehensive income (13,929,297) 9,017,333
Other comprehensive income for the period, net of tax 32,500,896 (21,040,443)
Total comprehensive income for the period 31,897,447 (20,465,142)
Profit / (loss) for the period attributable to:
Members of the parent company (598,042) 568,192
Non-controlling interests (5,407) 7,109
(603,449) 575,301
Total comprehensive income for the period attributable to:
Members of the parent company 31,902,854 (20,472,251)
Non-controlling interests (5,407) 7,109
31,897,447 (20,465,142)
2018 2017
Cents Cents
Earnings per share
Basic earnings per share 4 (0.1) 0.1
Diluted earnings per share 4 (0.1) 0.1
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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 financial report for the half-year ended 31 December 2018

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Consolidated Statement of Financial Position as at 31 December 2018

Note	Consolidated
	31 December 30 June
	2018 2018
	$ $
CURRENT ASSETS Cash and cash equivalents Trade and other receivables Other current assets Current tax 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 Total Non-Current Assets TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Total Current Liabilities NON-CURRENT LIABILITIES Deferred tax liabilities 3 Other financial liabilities Provisions Total Non-Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 8 Reserves Accumulated losses Equity attributable to members of the parent entity Non-controlling interests TOTAL EQUITY	1,638,085 2,841,511 1,367,362 1,483,286 - 39,710 12,488 5,101 3,017,935 4,369,608 155,074,522 108,812,320 20,000,322 17,991,832 417,718 426,731 8,118,887 6,572,307 183,611,449 133,803,190 186,629,384 138,172,798 1,850,115 1,461,117 1,850,115 1,461,117 37,202,395 24,287,557 10,090,553 7,939,904 1,100,937 1,089,554 48,393,885 33,317,015 50,244,000 34,778,132 136,385,384 103,394,666
	33,545,921 33,545,921 117,463,776 84,650,218 (15,890,131) (15,292,089) 135,119,566 102,904,050 1,265,818 490,616 136,385,384 103,394,666

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

DGR Global Limited financial report for the half-year ended 31 December 2018

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Consolidated Statement of Cash Flows for the half-year ended 31 December 2018

	Consolidated 6 months to 31 6 months to 31 December December 2018 2017 $ $ 706,101 417,819 (1,809,673) (2,141,049) 805,779 35,140 (237,081) (61,207) (751) 13,232 - (546,114) (535,625) (2,282,179) (10,500) (4,792) - (2,100,000) (3,611,705) (1,077,326) (2,070,612) - 966,780 (3,192,618) (4,715,537) - 2,773,550 - (14,833) 584,817 - 2,000,000 8,085,000 (60,000) (240,000) 2,524,817 10,603,717 (1,203,426) 3,606,001 2,841,511 1,361,255 1,638,085 4,967,256
Note
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/(losses) Income tax paid Net cash outflow from operating activities 11 CASH FLOWS FROM INVESTING ACTIVITIES Security deposit (payment)/refunds Payments for property, plant and equipment Payments for investments in associates 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 the issue of shares in subsidiaries to non- controlling interests Proceeds from borrowings Costs of borrowings Net cash (outflow)/inflow from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at 1 July Cash and cash equivalents at 31 December

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

DGR Global Limited financial report for the half-year ended 31 December 2018

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Consolidated Statement of Changes in Equity for the half-year ended 31 December 2018

	Total Equity Non- controlling Interests Total Profit Reserve roportionat Interest Reserve Change in P e Financial Assets Reserve Share Based Payment Reserve Issued Capital Accumulated Losses
	$ $ $ $ $ $ $ $ $
At 1 July 2017 Net profit (loss) for the period Other comprehensive income Total comprehensive income for the period Transactions with owners in their capacity as owners Exercise of options Share issue costs, net of tax Share based payments At 31 December 2017 Net profit (loss) for the period Other comprehensive income Total comprehensive income for the period Transactions with owners in their capacity as owners Exercise of options Share issue costs, net of tax Share based payments At 30 June 2018 Net profit (loss) for the period Other comprehensive income Total comprehensive income for the period Transactions with owners in their capacity as owners Issue of shares to non-controlling interests Share based payments At 31 December 2018	30,787,204 (15,226,707) 6,898,865 85,107,269 17,927,599 8,854,067 134,348,297 500,026 134,848,323 - 568,192 - - - - 568,192 7,109 575,301 - - - (21,040,443) - - (21,040,443) - (21,040,443)
	- 568,192 - (21,040,443) - - (20,472,251) 7,109 (20,465,142)
	2,773,550 - - - - - 2,773,550 - 2,773,550 (14,833) - - - - - (14,833) - (14,833) - - 844,806 - - - 844,806 - 844,806
	33,545,921 (14,658,515) 7,743,671 64,066,826 17,927,599 8,854,067 117,479,569 507,135 117,986,704
	- (633,574) - - - - (633,574) (16,519) (650,093) - - - (14,038,856) - - (14,038,856) - (14,038,856)
	- - (633,574) - - - (14,038,856) - - - - - (14,672,430) - (16,519) - (14,688,949) - - - - - - - - - - - - 96,911 - - - 96,911 - 96,911
	33,545,921 (15,292,089) 7,840,582 50,027,970 17,927,599 8,854,067 102,904,050 490,616 103,394,666
	- (598,042) - - - - (598,042) (5,407) (603,449) - - - 32,500,896 - - 32,500,896 - 32,500,896
	- - (598,042) - - - 32,500,896 - - 266,473 - - 31,902,854 266,473 (5,407) 780,609 31,897,447 1,047,082 - - 46,189 - - - 46,189 - 46,189 33,545,921 (15,890,131) 7,886,771 82,528,866 18,194,072 8,854,067 135,119,566 1,265,818 136,385,384

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

DGR Global Limited financial report for the half-year ended 31 December 2018

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2018

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 2018 was authorised for issue in accordance with a resolution of the Directors on 15 March 2019. 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 2018 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 2018 and considered together with any public announcement made by DGR Global Limited during the half-year ended 31 December 2018 in accordance with the continuous disclosure obligations of the ASX listing rules.

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 2018 the Group generated a consolidated loss of $603,449 and incurred operating cash outflows of $535,625. As at 31 December 2018 the Group had cash and cash equivalents of $1,638,085, net current assets of $1,167,820 and net assets of $136,385,384.

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.

Significant accounting policies

The group has applied the same accounting policies and methods of computation in its interim consolidated financial statements as in its 2018 annual financial statements, except for those that relate to new standards and interpretations effective for the first time for periods beginning on (or after) 1 January 2018, and will be adopted in the 2019 annual financial statements.

The group has adopted AASB 15 Revenue from Contracts with Customers from 1 July 2018 which did not have any impact on the 31 December 2017 comparative results. In the previous years, the group derived its revenue from providing management services to its affiliated entities. Revenue from providing management services is recognised in the accounting period in which the services are rendered.

DGR Global Limited financial report for the half-year ended 31 December 2018

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2018

2. Revenue and Other Income

Profit (loss) before income tax has been determined after: Revenue Management fees Total revenue Other income Interest Foreign exchange gains Reversal of impairment of investment in associates 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% (2017: 30%) Add tax effect of: Permanent differences Other Derecognise tax losses Income tax expense/(benefit) Less tax effect of: Recognition of prior year losses Other Income tax expense/(benefit)	6 Months to 31 6 Months to 31
	December December
	2018 2017
	$ $
	798,000 798,000 798,000 798,000
	805,779 125,125 - 13,232 1,663,500 5,617,282 - 1,842,597 4,101 3,900 2,473,380 7,602,136
	6 Months to 31 6 Months to 31
	December 2018 December 2017
	$ $
	(7,387) 146,957 (1,014,460) 981,595 (1,021,846) 1,128,552
	(13,929,297) (9,017,333)
	(13,929,297) (9,017,333)
	(487,589) 511,156 21,481 635,888 2,731 (18,492) 2,455 - (460,922) 1,128,552 (197,873) - (363,051) - (1,021,846) 1,128,552

DGR Global Limited financial report for the half-year ended 31 December 2018

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2018

3. Income Tax (continued)

(c) Recognised deferred tax assets and liabilities

31 December 2018	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 Other temporary differences Deferred tax liability Financial assets at fair value through other comprehensive income Convertible note 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%	2,357,452 896,588 - - 3,254,040 241,430 (15,080) - - 226,350 106,627 (19,800) - - 86,827 - 68 - - 68
	2,705,509 861,776 - - 3,567,285
	(21,732,550) - (13,942,803) - (35,675,353) - (179,381) - - (179,381) (4,322,261) 620,543 13,506 - (3,688,211) (870,656) (288,480) - - (1,159,136) (67,599) - - - (67,599)
	(26,993,066) 152,682 (13,929,297) - (40,769,680)
	(24,287,557) 1,014,458 (13,929,297) - (37,202,395)
	1,790,677 8,183 - - 1,798,860 67,848 - - - - - - 67,848 -
	557,558 2,455 - - 560,013

DGR Global Limited financial report for the half-year ended 31 December 2018

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2018

3. Income Tax (continued)

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

30 June 2018	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%	1,716,256 641,196 - - 2,357,452 164,945 76,485 - - 241,430 83,964 22,663 - - 106,627 372,124 (372,124) - - - 405,059 - (405,059) - -
	2,742,348 368,220 (405,059) - 2,705,509
	(36,024,309) (1,308,596) 15,600,355 - (21,732,550) (110,011) 110,011 - - - (4,313,455) (8,806) - - (4,322,261) (1,328,462) 457,806 - - (870,656) (67,599) - - - (67,599)
	(41,843,837) (749,585) 15,600,355 - (26,993,066)
	(39,101,489) (381,365) 15,195,296 - (24,287,557)
	1,762,042 28,635 - - 1,790,677 67,848 - - - 67,848 - - - - -
	548,967 8,590 - - 557,558

DGR Global Limited financial report for the half-year ended 31 December 2018

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2018

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 2018 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)	0.1
Diluted earnings (loss) per share – cents	(0.1)	0.1
Net profit (loss) used in calculating basic and diluted earnings per share	(598,042)	568,192
	Number	Number
Weighted average number of ordinary shares used in the calculation of
Basic earnings per share	613,181,877	585,431,331
Diluted earnings per share	613,181,877	585,431,331

The 42,075,000 options and 50,000,000 convertible notes on issue at 31 December 2018 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 financial report for the half-year ended 31 December 2018

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2018

5. Other Financial Assets

Financial assets at fair value through other comprehensive income Convertible notes Cash on deposit held as security Security bonds Financial assets at fair value through other comprehensive income Balance at beginning of reporting period Additions Additions – conversion of Lakes Oil NL convertible notes Investments accounted for using the equity method initially recognised at fair value Fair Value adjustment through other comprehensive income Balance at end of reporting period		31 December 2018 30 June 2018 $ $ 142,587,267 96,115,003 10,951,055 11,175,368 314,000 314,000 1,222,200 1,207,949 155,074,522 108,812,320 96,115,003 138,522,943 - 406,030 - 367,500 - 7,469,829 46,472,264 (50,651,299) 142,587,267 96,115,003

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 (“LSE”) and Toronto Stock Exchange (“TSX”), an investment in the ordinary issued capital of Block X Capital Inc, listed on the TSX, an investment in the ordinary issued capital of Aus Tin Mining Ltd a company listed on the Australian Securities Exchange, an investment in the ordinary issued capital of Lakes Oil NL a company listed on the Australian Securities Exchange and an investment in the ordinary issued capital of Dark Horse Resources Ltd 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 Conversion of Lakes Oil NL convertible notes into ordinary shares Closing balance at end of reporting period	31 December 2018 30 June 2018
	$ $
	11,175,368 10,173,116 - - - - - 733,407 (224,313) 636,345 - (367,500) 10,951,055 11,175,368

DGR Global Limited financial report for the half-year ended 31 December 2018

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2018

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 30 June 2018 2018 % %	31 December 2018 $ 30 June 2018 $
Armour Energy Ltd Australia Oil & Gas Exploration IronRidge Resources Ltd Australia Mineral Exploration ORD 22% 22% ORD 22% 26%	10,070,974 7,635,576 9,929,348 10,356,256
	20,000,322 17,991,832

DGR Global Limited financial report for the half-year ended 31 December 2018

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2018

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

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----- Start of picture text -----

(A) Movements during the period in equity accounted investments 31 December 2018 30 June 2018
$ $
Balance at beginning of reporting period 17,991,832 17,035,638
Additional investment 2,100,000 4,816,283
- -
Disposal of investment
Share of associates profits (losses) after income tax (1,709,989) (6,236,853)
Share of associates other comprehensive income (45,021) 376,703
Net reversal of impairment 1,663,500 4,991,112
Reclassification on loss of significant influence to financial assets
classified at fair value through other comprehensive income–
derecognised carrying amount - (2,991,051)
Balance at end of reporting period 20,000,322 17,991,832
----- End of picture text -----

Net reversal of impairment relates to the investment in Armour Energy Ltd. At 30 June 2018 the share price of Armour Energy Ltd was $0.084. At 31 December 2018 the share price of Armour Energy Ltd had risen to $0.09. The investment in Armour Energy Ltd has 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 Group’s share of losses for the period.

(B) Fair value of investments in associates with published price quotations	30 June 2018 $ 31 December 2018 $
Fair value of investment in Armour Energy Ltd Fair value of investment in IronRidge Resources Ltd	10,070,974 7,635,576 19,597,618 34,095,692 29,668,592 41,731,268

DGR Global Limited financial report for the half-year ended 31 December 2018

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2018

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 2018 Armour Energy Ltd 22% IronRidge Resources Ltd 22% 30 June 2018 Armour Energy Ltd 22% Dark Horse Resources Ltd* - IronRidge Resources Ltd 26%	16,175,580 100,626,534 53,178,205 11,805,884 13,115,698 (5,285,774) (745,620) 12,486,133 22,028,544 1,588,448 - 45,766 (2,462,228) 537,304
	28,661,713 122,655,078 54,766,653 11,805,884 13,161,464 (7,748,002) (208,316)
	9,037,623 92,483,704 10,543,173 46,132,323 14,748,819 (11,557,788) 1,487,500 - - - - 23,214 (2,216,375) - 9,208,488 16,890,343 1,452,776 - 52,648 (13,191,397) 176,843
	18,246,111 109,374,047 11,995,949 46,132,323 14,801,467 (24,749,185) 1,664,343

• Transferred to financial assets carried at fair value through other comprehensive income. The profit/loss and other comprehensive income represent results up to the date of loss of significant influence on 19 April 2018.

DGR Global Limited financial report for the half-year ended 31 December 2018

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2018

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 Reclassification to financial assets at fair value through Other Comprehensive Income Closing carrying amount	Armour Ene rgy Ltd Dark Horse Resources Ltd IronRidge Reso urces Ltd
	31 December 30 June 31 December 30 June 31 December 30 June
	2018 2018 2018 2018 2018 2018
	$ $ $ $ $ $
	7,635,576 5,253,500 - 1,867,429 10,356,256 9,914,709 (1,163,918) (2,592,947) - (430,762) (546,071) (3,213,146) (164,184) 333,715 - - 119,163 42,988 2,100,000 1,204,578 - - - 3,611,705 1,663,500 3,436,730 - 1,554,383 - - - - (2,991,050) - -
	10,070,974 7,635,576 - - 9,929,348 10,356,256

• (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 Ene rgy Ltd Dark Horse Resources Ltd IronRidge Reso urces Ltd
	31 December 30 June 31 December 30 June 31 December 30 June
	2018 2018 2018 2018 2018 2018
	$ $ $ $ $ $
	11,410,329 10,060,995 - - 7,303,038 6,003,258 15,782,736 16,360,171 - - 2,626,310 4,352,998 (17,122,091) (18,785,590) - - - -
	10,070,974 7,635,576 - - 9,929,348 10,356,256

DGR Global Limited financial report for the half-year ended 31 December 2018

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2018

7. Other financial liabilities

. 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 2018 $ 30 June 2018 $
	10,090,553 7,799,904 - 140,000 10,090,553 7,939,904
	31 December 30 June
	2018 2018
	$ $
	7,799,904 - 2,000,000 8,000,000 290,649 (200,096) 10,090,553 7,799,904

On 26 September 2018, DGR Global Ltd reached an agreement with Tribeca Investment Partners for a series of amendments to the terms of the $10 million convertible note funding arrangements. DGR Global subsequently drew down on the remaining $2 million during the half year ended 31 December 2018.

The principal terms of the amended convertible notes are as follows:

Number of notes issued: 50,000,000

Issue price: Face value of $0.20 per convertible note Interest rate: 12% per annum Interest payments: Interest is payable in cash and is paid quarterly in arrears. Maturity date: 26 September 2020 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: Secured

DGR Global Limited financial report for the half-year ended 31 December 2018

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2018

8. Issued Capital

613,181,877 (30 June 2018: 613,181,877) fully paid ordinary shares Share issue costs	35,004,941 35,004,941 (1,459,020) (1,459,020) 33,545,921 33,545,921 30 June 2018 $ 31 December 2018 $

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 2 August 2017(1) 29 September 2017(2) 27 November 2017(3) Closing balance	31 December 30 June 31 December 30 June
	2018 2018 2018 2018
	Number Number $ $
	613,181,877 570,511,877 35,004,941 32,231,391 - 2,000,000 - 130,000 - 17,720,000 - 1,151,800 - 22,950,000 - 1,491,750
	613,181,877 613,181,877 35,004,941 35,004,941

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

2 On 29 September 2017, 17,720,000 $0.065 ordinary shares were issued upon the exercise of options.

3 On 27 November 2017, 22,950,000 $0.065 ordinary shares were issued upon the exercise of options.

(b) Options

As at 31 December 2018, there were 42,075,000 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
Unlisted employee options	3,000,000	$0.20	12/02/21
Unlisted employee options	1,000,000	$0.20	12/02/21
Unlisted employee options	1,200,000	$0.20	12/02/21

During the half year there were no options exercised.

9. Contingent Liabilities and Contingent Assets

There are no contingent liabilities or contingent assets at 31 December 2018.

DGR Global Limited financial report for the half-year ended 31 December 2018

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2018

10. 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.

	DGR Global	Auburn	Others	Total
31 December 2018		Resources
	$	$	$	$
(i) Segment performance
Revenue
External revenue	798,000	-	-	798,000
Inter-segment revenue	-	-	-	-
Total segment revenue	798,000	-	-	798,000
Reconciliation of segment revenue to group revenue
Other income	2,473,380	-	-	2,473,380
Total group revenue				3,271,380
Segment net profit (loss) before tax	(1,544,219)	(10,437)	(24,150)	(1,578,806)
Reconciliation of segment result to group net profit / loss before tax
Share of losses of associates				(1,709,989)
Reversal of impairment of investment in associate				1,663,500
Net profit before tax				(1,625,295)

DGR Global Limited financial report for the half-year ended 31 December 2018

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2018

10. Segment Reporting (continued)

	DGR Global	Auburn	Others	Total
31 December 2017		Resources
	$	$	$	$
(i) Segment performance
Revenue
External revenue	798,000	-	-	798,000
Inter-segment revenue	-	-	-	-
Total segment revenue	798,000	-	-	798,000
Reconciliation of segment revenue to group revenue
Other income	7,602,136	-	-	7,602,136
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 financial report for the half-year ended 31 December 2018

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2018

10. Segment Reporting (continued)

(ii) Segment assets

31 December 2018	DGR Global	Auburn Resources	Others	Total
	$	$	$	$
Segment assets	189,032,023	2,813,520	1,049,792	192,895,335
Reconciliation of segment assets to group assets
Inter-segment receivables and investments eliminations				(6,265,951)
Total group assets				186,629,384

30 June 2018	DGR Global	Auburn Resources	Others	Total
	$	$	$	$
Segment assets	141,174,358	2,225,907	502,171	143,902,436
Reconciliation of segment assets to group assets
Inter-segment receivables and investments eliminations				(5,729,638)
Total group assets				138,172,798

All segment asset additions occur in Australia.

DGR Global Limited financial report for the half-year ended 31 December 2018

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2018

11. 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 in subsidiaries Conversion of debtors for shares in subsidiaries	31 December 31 December
	2018 2017
	$ $
	(603,449) 575,301 13,800 15,102 18,500 118,561 46,189 844,806 1,709,989 3,212,416 (1,663,500) (5,617,282) 290,649 122,764 224,313 9,475 (1,109,190) (441,143) 39,710 (53,911) - (399,159) (1,010,463) 981,597 389,162 (532,041) (535,625) (2,282,179)
	- - - 733,407 140,000 - 322,265 -

12. 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 2018 and 30 June 2018:

	Level 1	Level 2		Level 3	Total
	$	$		$	$
31 December 2018
Financial assets at fair value through OCI	142,587,267		-	-	142,587,267
Convertible note receivable	-		-	10,951,055	10,951,055
Convertible note payable	-		-	10,090,553	10,090,553
30 June 2018
Financial assets at fair value through OCI	96,115,003		-	-	96,115,003
Convertible note receivable	-		-	11,175,368	11,175,368
Convertible note payable	-		-	7,799,904	7,799,904

The financial assets at fair value through other comprehensive income are measured based on the quoted market prices at 31 December 2018 and 30 June 2018. Convertible note receivables are determined using discounted cash flow analysis. Convertible note payables are based on the binomial tree valuation model. There are no transfers between the fair value hierarchy levels during the period ended 31 December 2018.

DGR Global Limited financial report for the half-year ended 31 December 2018

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2018

12. 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 2018
Convertible note receivable	10,951,055	Share price	54%	Lower volatility (-10 bps)
		volatility		would increase FV by
				$288,337; higher volatility
				(+10 bps) would decrease FV
				by $294,861.
		Risk-	22%	Lower discount rate (-100
		adjusted		bps) would increase FV by
		discount rate		$73,251; higher discount rate
				(+100 bps) would decrease FV
				by $72,700.
Convertible note payable	10,090,553	Share price	62%	Higher volatility (+10 bps)
		volatility		would increase FV by
				$154,147; lower volatility
				(+10 bps) would decrease FV
				by $152,232.
		Risk-free	1.86%	Lower discount rate (-25 bps)
		interest rate		would increase FV by $29,770;
				higher discount rate (+25 bps)
				would decrease FV by
				$28,832.
30 June 2018
Convertible note receivable	11,175,368	Share price	55%	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.
Convertible note payable	7,799,904	Share price	60%	Higher volatility (+10 bps)
		volatility		would increase FV by
				$103,257; lower volatility
				(+10 bps) would decrease FV
				by $78,915.
		Risk-free	1.96%	Lower discount rate (-25 bps)
		interest rate		would increase FV by $23,820;
				higher discount rate (+25 bps)
				would decrease FV by
				$20,224.

• 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 2018 and 30 June 2018 wherein their carrying values do not approximate their fair value at 31 December 2018 and 30 June 2018:

31 December 2018		Level 1 $		Level 2 $		Level 3 $		Carrying value $
Investments accounted for using the equity method		29,668,592		-		-		20,000,322
30 June 2018
Investments accounted for usingthe equitymethod		41,731,267		-		-		17,991,832

The investments accounted for using the equity method displayed above are measured based on the quoted market prices at 31 December 2018 and 30 June 2018.

DGR Global Limited financial report for the half-year ended 31 December 2018

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2018

13. Share based payments

The fair values of options granted in the period ending 31 December 2018 were calculated by using a Black-Scholes options pricing model applying the following inputs:

	DGR Global Ltd
	ESOP
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 2.29 years $0.145 60.204% 1.97% 1,200,000 $0.038 $46,189

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.

14. Commitments, Contingent Assets and Liabilities

There are no significant changes to commitments and contingencies disclosed in the most recent annual financial report.

15. Related Party Disclosures

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

(a) Parent and ultimate controlling entity

• (i) The parent entity and ultimate controlling entity is DGR Global Ltd which is incorporated in Australia.

• (b) Transactions with Key Management Personnel

• (i) Mr Brian Moller (a Director), is a partner in the firm HopgoodGanim Lawyers. Hopgood Ganim Lawyers were paid $10,864 (2017: $45,795) for the provision of legal services to the Group during the year. The services were based on normal commercial terms and conditions. At 31 December 2018 there was a balance of $700 owing (2017: $1,540) included within current liabilities.

• (ii) Mr Greg Runge, during the prior financial year advanced DGR Global subsidiary Auburn Resources Ltd an unsecured loan of $100,000 (2017: Nil). There was no interest payable on the advance. During the period ended 31 December 2018 the loan was converted in full to equity in Auburn Resources Ltd at $0.10 per share.

• (iii) Mr Neil Wilkins, during the financial year advanced DGR Global subsidiary Auburn Resources Ltd an unsecured loan of $40,000 (2017: Nil). There was no interest payable on the advance. During the period ended 31 December 2018 the loan was converted in full to equity in Auburn Resources Ltd at $0.10 per share.

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Notes to the Consolidated Financial Statements for the half-year ended 31 December 2018

15. Related Party Disclosures (continued)

(c) Transactions with related parties

• (i) DGR Global Ltd has a commercial agreement with Armour Energy Ltd, for the provision of administrative services. In consideration for the provision of the services, Armour Energy Ltd pays DGR Global Ltd a monthly management fee. For the period ended 31 December 2018 $228,000 (2017: $228,000) was paid or payable to DGR Global Ltd for the provision of the services. The total amount receivable at 31 December 2018 was $96,900 (2017: $42,680).

• (ii) DGR Global Ltd has a commercial agreement with Aus Tin Mining Ltd for the provision of administrative services. In consideration for the provision of the Services, Aus Tin Mining Ltd pays DGR Global Ltd a monthly management fee. For the period ended 31 December 2018 $96,000 (2017: $96,000) was paid or payable to DGR Global Ltd for the provision of the Services. The total amount receivable at 31 December 2018 was $509,863 (2017: $320,394).

• (iii) DGR Global Ltd has a commercial agreement with Dark Horse Resources Ltd, for the provision of administrative services. In consideration for the provision of the services, Dark Horse Resources Ltd pays DGR Global Ltd a monthly management fee. For the period ended 31 December 2018 $150,000 (2017: $150,000) was paid or payable to DGR Global Ltd for the provision of the services. The total amount receivable at 31 December 2018 was $16,586 (2017: $284,378).

• (iv) DGR Global Ltd has a commercial agreement with IronRidge Resources Ltd for the provision of administrative services. In consideration for the provision of the Services, IronRidge Resources Ltd pays DGR Global Ltd a monthly management fee. For the period ended 31 December 2018 $144,000 (2017: $144,000) was paid or payable to DGR Global for the provision of the Services. The total amount receivable at 31 December 2018 was $20,604 (2017: $56,540).

• (v) DGR Global Ltd has a commercial agreement with SolGold Plc, for the provision of administrative services. In consideration for the provision of the services, SolGold Plc pays DGR Global Ltd a monthly management fee. For the year ended 31 December 2018 $180,000 (2017: $180,000) was paid or payable to DGR Global Ltd Ltd for the provision of the services. The total amount receivable at 31 December 2018 was $71,813 (2017: $70,638).

15. Events After Balance Sheet Date

The Directors are not aware of any events since 31 December 2018 that impact upon the financial report as at 31 December 2018.

DGR Global Limited financial report for the half-year ended 31 December 2018

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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 2018 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: 15 March 2019

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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 2018, 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 2018 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 2018 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.

DGR Global Limited financial report for the half-year ended 31 December 2018

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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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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

D P Wright Director

Brisbane, 15 March 2019

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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.