PREDICTIVE DISCOVERY LIMITED — Annual Report 2010

Nov 29, 2010

Predictive Discovery Pty Ltd
ABN 11 121 171 877

Financial Report
for the period ended
30 June 2009

Contents

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Directors' Report
Income Statement
Statement of Changes in Equity
Balance Sheet
Statement of Cash Flows
Notes to the Financial Statements
Directors' Declaration

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Directors' Report

The Directors present their report together with the financial report of Predictive Discovery Pty Ltd (the company) for the financial period from 1 July 2008 to 30 June 2009.

Directors and Company Secretary

The Directors and Secretary at any time during or since the end of the financial period are:

Mr Phil Harman, Chairman & Non Executive Director (appointed 12 February 2008) Phil Harman is currently the Chairman of Gippsland Offshore Petroleum and the Managing Director of Gravity Diamonds. Formerly Chief Geophysicist of BHP Billiton, he was responsible for commercialising the Falcon™ technology out of BHP Billiton and now has substantial experience in senior positions in the junior exploration sector, all highly relevant experience to the pmd*CRC's commercialisation strategy.

Mr Paul Roberts, Managing Director/CEO (appointed 28 April 2009)

Paul Roberts has a long and successful history in mineral exploration management and mine geology both in Australia and overseas. He was responsible for discovery of the Henty gold deposit and major extensions to the St Dizier tin deposit both in Tasmania, as well as resource evaluations of the Kuridala coppergold deposit in North Queensland, the Bongara zinc deposit in Peru and a number of gold deposits in the Cue and Meekatharra Districts in Western Australia. In addition, he led the pmd*CRC's research effort from 2002 to 2007, and therefore has a deep understanding of practical application of the PD Technology to mineral exploration. From June 2007 to January 2008, Mr Roberts was responsible for all of CSIRO's mineral exploration-related research under the umbrella of the Minerals Down Under National Research Flagship, a program with an annual budget in excess of A\$20 million. Consequently, he possesses a strong understanding of current trends in exploration innovation which he combines with extensive industry experience.

Dr Tom Whiting, Non Executive Director (appointed 1 July 2008)

Tom Whiting is currently a consultant, having retired from BHP Billiton last year after a distinguished career covering 30 years. He is a widely respected explorer with profound insights on the need for innovation in the mineral exploration sector to return to the discovery success rates of earlier decades. Dr Whiting was Vice President of Minerals Exploration for BHP Billiton from 2000 to 2004. Earlier in his career, he led the use of innovative reconnaissance airborne geophysical techniques which led to the discovery of the Cannington lead-zinc-silver mine in North Queensland and the development and deployment of the FALCON system, the world's first airborne gravity gradiometer.

Dr Bobby Danchin, Non Executive Director (appointed 11 April 2008)

Bobby Danchin is currently non-executive director of Cluff Gold plc and Mineral Deposits Limited. Both companies are currently bringing gold mines into production in West Africa. Formerly Dr Danchin was CEO of Anglo American plc's Exploration and Acquisitions Division and has a detailed understanding of the mineral exploration business. He has excellent contacts and reputation, particularly among the African mineral exploration community.

Mr Phil Henty, Non Executive Director (appointed 16 July 2009)

Phil Henty has extensive experience in the Australian securities markets. He has worked for nearly thirty years in the stockbroking and investment markets. His experience covers the equities, derivatives and fixed interest markets and most aspects of the securities industry from dealing and advice through to management, capital raising, investment management and private investment.

Mrs Lisa Norden, Company Secretary (appointed 7 March 2008)

Lisa Norden is a CPA qualified accountant with 20 years experience in mining, service and research sectors. Her qualifications include: AICD Company Directors course, Graduate Diploma in Corporate Governance, CPA Australia, and Bachelor of Business (Accounting).

Directors' Meetings

The number of Directors' meetings and number of meeting attended by each of the Directors during the financial period are:

Directors	Board Meeting 26 Sep 2008	General Meeting 10 Nov 2008	Board Meeting 28 Apr 2009
Mr Phil Harman	Present	Present	Present
Dr Tom Whiting	Present	Present	Present
Dr Bobby Danchin	Present	Present	Present
Mr Paul Roberts*	In Attendance	Present	In Attendance

*Mr Paul Roberts was appointed a Director on April 28, 2009, effective at the conclusion of that meeting.

Registered Office

The School of Earth Sciences The University of Melbourne Victoria 3010

Principal Activities

Predictive Discovery is an exploration company that seeks to use a new technologybased approach to make large high value mineral discoveries. Its initial focus is on discovering high value gold deposits in West Africa and Australia.

Operating and Financial Review

The company has sourced revenue from a sponsorship agreement with Ausmodel Pty Ltd and commercial contracts. Project generation and exploration are currently being funded by investors.

The company was in the process of establishing a wholly owned subsidiary, Predictive Discovery SARL, in Burkina Faso, West Africa at 30 June 2009.

Company's Results

The company had a net loss of \$54,617 for the period. The company has not engaged auditors at this stage.

Events Subsequent to Balance Date

In the opinion of the Directors, there has not arisen in the interval between the end of the financial period and the date of this report any item, transaction or event of a material or unusual nature likely to affect significantly the operation of the company, the results of those operations, or the state of affairs of the company, in future financial years.

Likely Developments

In the opinion of the Directors there are no likely developments at the date of this report that would significantly affect the future operation of the company, the results of those operations, or the state of affairs of the company.

Indemnification and Insurance of Officers

The company holds current policies for directors & officers insurance and public liability.

Since incorporation, the company has not indemnified or made a relevant agreement for indemnifying against a liability any person who is or has been an officer of the company.

During or since the end of the financial period the company has not entered into any insurance contracts insuring the company director against a liability arising as a result of work performance in their capacity as a director.

Mr Phil Harman Chairman

Dated at Melbourne this 28th day of July 2009.

Income Statement

Predictive Discovery Pty Ltd

Income Statement For the period ended 30 June 2009

	\$AUD 2009	SAUD 2008
Revenue	172,194	77,106
Expenses
Management	63,464	52476
Insurance	9,431	9,924
Consultants	86.129	8,000
Legal	4.879	5,130
Office	16,327	1.182
Data	5.091
Travel	41,490	235
Results from Operating Activities	(54.617)	159

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Statement of Changes in Equity

Predictive Discovery Pty Ltd

Statement of Changes in Equity For the period ended 30 June 2009

	2009
	\$AUD
Opening Balance 1 July 2008	3.819
Investor Funds	315,000
Net Profit for the Period	(54 617)
Closing Balance 30 June 2009	264,202
	2008
	\$AUD
Opening Balance 1 July 2007
Ausmodel Advance	3,660
Net Profit for the Period	159
Closing Balance 30 June 2008	3.819

Predictive Discovery Pty Ltd ABN 11 121 171 877

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Balance Sheet

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Predictive Discovery Pty Ltd

Balance Sheet

For the period ended 30 June 2009

	SAUD 2009	\$AUD 2008
Current Assets
Cash	262,397	11,279
Trade Receivables	22,200
Total Current Assets	284,597	11,279
Current Liabilities
Trade Payables	20,395	7,460
Total Current Liabilities	20,395	7.460
Net Assets	264,202	3,819
Equity
Shareholders Funds	315,000
Retained Earnings	(50,798)	3,819
Total Equity	264,202	3.819

Statement of Cash Flows

Predictive Discovery Pty Ltd

Statement of Cash Flows For the period ended 30 June 2009

	\$AUD 2009	\$AUD 2008
Cash Flows from Operating Activities
Cash Receipts	151,569	88,067
Interest Received	3.068	159
Cash Payments	(218, 519)	(76, 947)
Net Cash from Operating Activities	(63, 882)	11.279
Cash Flow from Financing Activities
Shareholders Funds	315,000
Net Cash from Financing Activities	315,000
Net Increase in Cash	251,118	11,279
Cash at Beginning of Period	11,279
Cash at End of Period	262,397	11.279

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Notes to the Financial Statements

1. Significant Accounting Policies

The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards and the Corporations Act 2001.

The financial report is presented in Australian dollars and includes the wholly owned subsidiary Predictive Discovery SARL.

Transactions in foreign currencies are translated to Australian dollars at exchange rates at the dates of the transactions. The monetary assets are translated to Australian dollars at exchange rates at the date of the transfer, and do not recognize foreign currency gain or loss. The value held in foreign currency is not a material amount.

Potential income tax credits and foreign VAT credits are not recognized on the balance sheet.

Revenue, expenses, receivables and payables are recognized net of goods and services tax. GST is remitted quarterly on a cash basis.

2. Financial Risk Management

The company has exposure to credit, liquidity and market risk. These risks are managed by the Directors by maintaining a minimum supply of funds in the offshore bank account, and depositing the majority of funds in Australian currency in a commercial Australian bank. The company monitors its cash flow requirements and typically ensures that it has sufficient cash on demand to meet expected operational expenses.

3. Related Party Disclosure

The following transactions with related parties occurred during the year:

Managing Director Fee	\$63,463
Fractore consulting	\$22,000
Company Secretarial Fee	\$3.513
Director's consulting	\$3,022

Directors' Declaration

In the opinion of the Directors of Predictive Discovery Pty Ltd:

(a) The financial statements and notes are in accordance with the Corporations Act 2001, including:

• giving a true and fair view of the company's financial position as at 30 June 2009 $\bullet$ and of its performance, for the financial period ended on that date; and
• complying with Australian Accounting Standards and the Corporations $\bullet$ Regulations 2001; and

(b) the financial report also complies with International Financial Reporting Standards; and

(c) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of the Directors:

Mr Phil Harman Chairman

Dated at Melbourne this 28th day of July 2009.