PREDICTIVE DISCOVERY LIMITED

==> picture [149 x 72] intentionally omitted <==

ABN 11 127 171 877

CORPORATE DIRECTORY

DIRECTORS

Mr Phillip Harman BSc (Hons), MAusIMM, MAICD (Chairman) Mr Paul Roberts BSc, MSc, FAIG, MGSA Mr Philip Henty BA Acc, Dip SIA, F Fin Mr Tim Markwell BSc (Hons), GradDipAppFin, MAusIMM – (appointed 11 September 2013) Dr Thomas Whiting BSc (Hons), PhD, Grad Dip Fin, MASDEG, MAICD – (resigned 21 May 2013) Dr Robert Danchin BSc, BSc (Hons), MSc, PhD, FAusIMM – (resigned 21 May 2013)

COMPANY SECRETARY

Mr Ian Hobson BBus, FCA, ACIS

REGISTERED OFFICE

Level 2, 9 Colin Street WEST PERTH WA 6005 Postal Address: PO Box 1710 WEST PERTH WA 6872 T: +61 8 9216 1000 E: [email protected] W: www.predictivediscovery.com

AUDITORS

Nexia ASR Level 14, 440 Collins Street MELBOURNE VIC 3000

SHARE REGISTER

Link Market Services Limited Ground Floor, 178 St Georges Terrace PERTH WA 6000 T: +61 8 9211 6670 E: [email protected]

SOLICITORS

Corrs Chambers Westgarth 240 St George’s Terrace PERTH WA 6000

BANKERS

Australian and New Zealand Banking Group Limited 1275 Hay Street WEST PERTH WA 6005

HOME EXCHANGE

Australian Securities Exchange, Perth 2 The Esplanade PERTH WA 6000 ASX Code: PDI

PREDICTIVE DISCOVERY LIMITED

TABLE OF CONTENTS
CHAIRMAN’S REPORT	1
REVIEW OF OPERATIONS	2 ‐ 20
DIRECTORS’ REPORT	21 ‐ 30
CORPORATE GOVERNANCE STATEMENT	31 ‐3 4
AUDITOR’S INDEPENDENCE DECLARATION	35
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	36
CONSOLIDATED STATEMENT OF FINANCIAL POSITION	37
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	38
CONSOLIDATED STATEMENT OF CASH FLOWS	39
NOTES TO THE FINANCIAL STATEMENTS	40 ‐ 80
DIRECTORS’ DECLARATION	81
INDEPENDENT AUDITOR’S REPORT	82 ‐ 84
ADDITIONAL SHAREHOLDER INFORMATION	85 ‐ 86
INTERESTS IN MINING TENEMENTS	87

PREDICTIVE DISCOVERY LIMITED

30 JUNE 2013

CHAIRMAN’S REPORT

Dear Fellow Shareholder,

Predictive Discovery Limited (‘PDI’) has had a very successful year. Our work in Burkina Faso is bearing fruit with the exciting new discovery at the Bongou prospect in our Bonsiega tenements. Following the early discovery holes in 2012, further drilling has given us some of the highest grades and widths seen anywhere in Eastern Burkina Faso with intersections such as:

48m at 4.3g/t from 34m including 16m at 9.7g/t,
26m at 6.9g/t including 16m at 8.9 g/t and
10m at 7.4 g/t.

Bongou was highlighted as a high priority target by the company’s unique structural analysis technology, even though sampling of the artisanal workings returned low grades. The mineralisation at Bongou is hosted in an altered microgranite, a different setting to most other orogenic gold systems. The controls and limits on the system are yet to be defined and will form the basis of the next drilling campaign. In addition several new targets have been discovered under shallow cover within a few hundred metres of Bongou.

The Bongou discovery has additional significance for PDI. It occurs on a major north east trending structure that persists along the length of our Bonsiega tenements. Further similar settings along this structure provide a focus for future exploration, in my view considerably upgrading the potential of the whole package.

Other highlights for the year have included further encouraging results from the Bangaba permit, both at Tambiri and Solna, and the acquisition of the Bira prospect in the north of the Bonsiega tenements where past exploration has defined coherent gold mineralisation over more than 500m. I have also been encouraged by the results we received from preliminary metallurgical test work on samples from a number our prospects which showed that in all likelihood none of our high grade prospects contain refractory gold.

More recently the exploration team has acquired new tenements in Cote D’Ivoire. Over the past few years PDI has identified a number of high priority prospects and targets. These applications are in response to the considerable improvement in the political and working environment in Cote D’Ivoire following years of unrest.

During the year PDI has taken steps to curtail its costs in response to the current market environment. Our exploration program has become more focused and the number of staff in Burkina Faso and Australia has been reduced. Two of our founding directors, Dr Bobby Danchin and Dr Tom Whiting have retired from the board. Their involvement with PDI goes back to before the very beginning of the company and I thank them for their contribution over a long period of time. Both Bobby and Tom remain keenly interested in PDI’s progress.

On behalf of all of the shareholders thank you to Paul and the exploration team in Burkina Faso and Australia for a great year in the face of challenging market conditions. To me their success demonstrates the substance of our programs and our approach.

Finally a big thank you to you, the shareholders, for your support over the last year. PDI has an excellent portfolio of projects led by Bongou and I look forward to an exciting year ahead.

==> picture [104 x 29] intentionally omitted <==

Phillip Harman CHAIRMAN

‐ 1 ‐

PREDICTIVE DISCOVERY LIMITED

REVIEW OF OPERATIONS…..

30 JUNE 2013

REVIEW OF OPERATIONS

HIGHLIGHTS

Predictive Discovery Limited ( PDI ) carried out a substantial and successful exploration program in 2012‐ 2013.

Significant achievements included:

High grade drill intercepts from the Bongou, Solna, Tambiri and Madyabari Prospects in Burkina Faso, including:
Bongou:
- 48m at 4.3g/t Au from 34m including 16m at 9.7g/t Au
- 26m at 6.9g/t Au from 111m including 16m at 8.9g/t Au
- 10m at 7.4g/t Au from 47m
Solna:
- 2m at 26g/t Au from 70m
- 2m at 12g/t Au from 12m
Tambiri:
- 4m at 6.1g/t Au from 83m
Madyabari:
- 3m at 8.3g/t Au from 23m including 1m at 23g/t Au
Completion of a large exploration program in Burkina Faso involving 4,700m of reverse circulation ( RC ) and 4,400m of power auger drilling, 242 line km of ground magnetics and induced polarization geophysical surveys and 129 km[2] of geological mapping.
Excellent gold recoveries from preliminary metallurgical testwork on four prospects in Burkina Faso, including Bongou.
Grant of the Bira exploration permit within the Bonsiega Project, including a prospect drilled by Anglo American in the late 1990’s with excellent drill results.
Grant of two exploration permits in Cote D’Ivoire with three permit applications pending. These include the well mineralised Kokumbo permit, near the Bonikro Gold Mine. If PDI obtains all three of the applications, it will hold 1,700km[2] of highly prospective exploration ground in Cote D’Ivoire.

‐ 2 ‐

PREDICTIVE DISCOVERY LIMITED

REVIEW OF OPERATIONS…..

30 JUNE 2013

INTRODUCTION

PDI is e x ploring fo r large, hi g h value g o ld deposits i n West Afri c a. The Co m pany’s proj e ct focus is on 12 gol d explorati o n permits in Burkina Faso, West Africa, coveri n g a total a r ea of 1,533 k m[2] . Within those a r eas, PDI h as concentr a ted its drilling program s in the east of the coun t ry on a seri e s of prospe c ts.

The Co m pany also has a gr o wing ground position in Cote D’Iv o ire; at pres e nt 790 km [2] is held in granted ex p loration permits and a further 9 2 0 km[2] is un d er application.

P D I’s exploration str a tegy begins with i d entification of high p r iority regi o ns within w ell mineralised terrai n s using a n alyses of c o untry‐scale geophysi c al, geolo g ical and m ineral depo s it data. Gr o und‐based work then i n volves ext e nsive geo p hysical su r veys and g e ological m a pping, foll o wed by ge o chemistry a n d drilling.

P D I’s Predict o re® technol o gy plays a c ritical role i n identifying high priorit y targets at all scales ‐ from country scale area s election to d rill target p r ioritisation.

BURKINA FASO GOLD PROJECTS

B u rkina Faso is a landloc k ed country , bounded t o the south b y Ghana, C o te D’Ivoire , Togo and B e nin, to the west by M a li and to t h e east by Niger (Figure 1). Gold mining in th e past was c o nfined to artisanal mining and one s u bstantial m ining oper a tion at Po u ra in the w est of the country which closed in 1999.

BACKGROUND

PDI’s Bu r kina Faso projects a r e all located within the Birimian g old belts i n West Afri c a. These belts contain n u merous go l d ore depo s its (Figure 1), many of w h ich are in production.

==> picture [8 x 307] intentionally omitted <==

==> picture [51 x 62] intentionally omitted <==

==> picture [52 x 62] intentionally omitted <==

==> picture [51 x 62] intentionally omitted <==

==> picture [52 x 62] intentionally omitted <==

==> picture [51 x 62] intentionally omitted <==

==> picture [52 x 62] intentionally omitted <==

==> picture [23 x 103] intentionally omitted <==

==> picture [51 x 62] intentionally omitted <==

==> picture [52 x 62] intentionally omitted <==

==> picture [51 x 62] intentionally omitted <==

==> picture [52 x 62] intentionally omitted <==

==> picture [51 x 62] intentionally omitted <==

==> picture [52 x 62] intentionally omitted <==

==> picture [23 x 103] intentionally omitted <==

==> picture [51 x 62] intentionally omitted <==

==> picture [52 x 62] intentionally omitted <==

==> picture [51 x 62] intentionally omitted <==

==> picture [52 x 62] intentionally omitted <==

==> picture [51 x 62] intentionally omitted <==

==> picture [52 x 62] intentionally omitted <==

==> picture [51 x 63] intentionally omitted <==

==> picture [52 x 63] intentionally omitted <==

==> picture [51 x 63] intentionally omitted <==

==> picture [52 x 63] intentionally omitted <==

==> picture [51 x 63] intentionally omitted <==

==> picture [52 x 63] intentionally omitted <==

==> picture [23 x 103] intentionally omitted <==

==> picture [51 x 62] intentionally omitted <==

==> picture [52 x 62] intentionally omitted <==

==> picture [51 x 62] intentionally omitted <==

==> picture [52 x 62] intentionally omitted <==

==> picture [51 x 62] intentionally omitted <==

==> picture [52 x 62] intentionally omitted <==

Figure 1: M a p of the Biri m ian Gold Bel t showing ma j or mines and PDI project l o cation areas.

‐ 3 ‐

PREDICTIVE DISCOVERY LIMITED

30 JUNE 2013

REVIEW OF OPERATIONS…..

In the pa s t nine year s , however, t here has been a strong resurgence in explora t ion and mine develop m ent, stimulated espe c ially by the release o f new minin g regulation s in 2003. The Taparko, Mana, Kals a ka, Inata, Essakane, Bi s sa and You g a gold min e s are now in producti o n. Of these , the large s t known d e posits are at Mana and Essakane . In addition, exploration results a nnounced by Orbis Gold Limited (Natougou and Na b anga), A m pella Mining Limited ( Batie West), Gryphon Minerals L td (Banfora) , Roxgold Resources (Yaramok o ), Golden Rim Res o urces (Netiana), Volta Resource s Inc. (Ki a ka), True Gold Mining (Karma) and Ore z one Gold Corporati o n (Bombor e ) suggest that more gol d mines will be develope d in future years.

g o ld targets.

I n common w ith other W est African countries, t h e Government has th e right to t a ke a free c a rried interest of 10% in any ore deposit that is b r ought into p roduction. Gold minin g royalties r a nge from 3 % to 5% d e pending o n the gold p r ice. The r a te of corporate tax for mining c o mpanies is 17.5%. Discussions be t ween the Government and the m ining indu s try about p o ssible cha n ges to the Mining Ac t and the t a xation cod e have been ongoing for the past y e ar but no d e cisions hav e yet been m ade.

I n Burkina Fa s o, PDI hol d s rights to e xplore 12 g r anted expl o ration per m its coveri n g a total a r ea of 1,533 km[2] . A thirt e enth permit, Bassieri, c o vering an additional 7 4 km[2] , is clos e to grant. T h e bulk of the teneme n t area is contained in n i ne permits known as the Bonsiega permit g r oup in the S amira Hill greenstone belt (Figure 2 ) . A second important focus for th e Company is the Bangaba permit in t he Sebba Belt nearby t o the north (Figure 2).

Some of t hese prosp e cts have g o ld grades w ell above t h e West A frican average, nota b ly Yaramok o , Nabanga, Natougou and Netia n a, indicatin g that Bur k ina Faso h as signific a nt potential for high grade, low cos t ounces wh i ch supports PDI’s own s harp focus on high grade

==> picture [41 x 72] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [52 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [52 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [52 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [5 x 285] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [52 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [52 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [52 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [41 x 72] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [52 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [52 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [52 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [41 x 72] intentionally omitted <==

==> picture [51 x 57] intentionally omitted <==

==> picture [52 x 57] intentionally omitted <==

==> picture [51 x 57] intentionally omitted <==

==> picture [52 x 57] intentionally omitted <==

==> picture [51 x 57] intentionally omitted <==

==> picture [52 x 57] intentionally omitted <==

==> picture [51 x 57] intentionally omitted <==

==> picture [41 x 72] intentionally omitted <==

==> picture [51 x 57] intentionally omitted <==

==> picture [52 x 57] intentionally omitted <==

==> picture [51 x 57] intentionally omitted <==

==> picture [52 x 57] intentionally omitted <==

==> picture [51 x 57] intentionally omitted <==

==> picture [52 x 57] intentionally omitted <==

==> picture [51 x 57] intentionally omitted <==

Figure 2: L o cation of PD I ’s Burkina Fa s o permits, hi g hlighting pr o spects teste d in 2012‐13. N ote that the nearby oper a ting Samira H ill gold mine in Niger cont a ins resource s , reserves an d past produc t ion of 2.5 mil l ion ounces (s o urce: www. s emafo.com).

‐ 4 ‐

PREDICTIVE DISCOVERY LIMITED

30 JUNE 2013

REVIEW OF OPERATIONS…..

The Com p any’s obje c tive in Bur k ina Faso is to discover a large r e source/reserve invent o ry with an average g r ade excee d ing 2g/t A u capable o f supporti n g a majo r gold mining operatio n .

High gra d e gold re s ults have b een obtained from dr i lling on a number of prospe c ts, including Bongou, So l na and Ta m biri (Figure 2). The Company’s im m ediate focus is on th e se higher gr a de prospec t s , in partic u lar Bongou.

BONSIEGA PERMIT GROUP

BACKGROUND

ElDore Joint V enture by w hich PDI fir s t earned a 60% stake a nd then inc r eased its p e rcentage t o 72% t h rough ad d itional e x ploration e x penditure. In 2012 ‐ 13, PDI signed an a g reement w ith Strato s Resources Limited ( A SX: SAT; fo r merly ElDor e Mining Co r poration Limited) to purchase t he remaining 28% t h rough a tr a nsaction in which SAT provided $ 3 00,000 in p artial re‐p a yment of c ash calls a n d received 13 million P DI shares. T he other t h ree agree m ents are o p tion deals w ith local b u sinessmen in which P D I is earnin g either a 9 5 % or 100% equity thro u gh a series of option p a yments.

I n earlier exploration, P D I discovere d a series The Bo n siega Per m it Group covers ni n e o f laterally extensive power au g er gold explorati o n permits t o talling 1,0 4 5 km[2] in ar e a g e ochemical anomalies, s ome of w h ich were with app r oximately 1 00km of st r ike length in t e sted with large reverse circula t ion (RC) the sam e greenstone belt whi c h hosts t h e d r illing progr a ms. A seri e s of prosp e cts were Samira Hill Mine in N iger (Figur e 2). A ten t h d i scovered c o ntaining o r e grade a n d width permit, B assieri, wh i ch covers a n addition a l g o ld intercep t s. These include Bong o u, Dave, 74km[2] , is close to being granted . Most of t h e F o uli, Laterit e Hill, Tamb o ana and Pr o spect 71. permits contain ar t isanal wor k ings and/ o r I n 2012‐13, P DI focused most of its attention significan t gold geochemical ano m alies. o n the higher grade p rospects, e specially The Bonsiega permit s were acqu i red either b y B o ngou. Sev e ral other areas were al s o tested direct application in PDI’s nam e or throu g h d u ring the y ear with R C drilling, bedrock four sep a rate agree m ents with third partie s . s a mpling and / or ground g eophysics i n order to Four of t h e permits w ere acquire d through t h e e n large the p r ospect pipeline.

==> picture [45 x 64] intentionally omitted <==

==> picture [52 x 64] intentionally omitted <==

==> picture [51 x 64] intentionally omitted <==

==> picture [52 x 64] intentionally omitted <==

==> picture [51 x 64] intentionally omitted <==

==> picture [45 x 63] intentionally omitted <==

==> picture [52 x 63] intentionally omitted <==

==> picture [51 x 63] intentionally omitted <==

==> picture [52 x 63] intentionally omitted <==

==> picture [51 x 63] intentionally omitted <==

==> picture [45 x 63] intentionally omitted <==

==> picture [52 x 63] intentionally omitted <==

==> picture [51 x 63] intentionally omitted <==

==> picture [52 x 63] intentionally omitted <==

==> picture [51 x 63] intentionally omitted <==

==> picture [45 x 63] intentionally omitted <==

==> picture [52 x 63] intentionally omitted <==

==> picture [51 x 63] intentionally omitted <==

==> picture [52 x 63] intentionally omitted <==

==> picture [51 x 63] intentionally omitted <==

Fi g ure 3: Prosp e ct locations a nd geology o f the Laterite Hill Gold Fiel d , South‐West Bonsiega pr o ject

‐ 5 ‐

PREDICTIVE DISCOVERY LIMITED

REVIEW OF OPERATIONS…..

30 JUNE 2013

BONGOU PROSPECT (PDI 100%)

The Bon g ou Prospe c t is locate d within t h e Laterite H ill Gold Fiel d in Eastern Burkina Fa s o (Figure 3 ) . It covers a rtisanal w o rkings in t h e form of a n irregular open pit a pproximate l y 150m long and 50m w ide. Past exploration b y PDI inclu d ed rock chi p sampling, t renching and one RC d r ill hole in 2 0 11‐12 whi c h intersect e d 54m at 2.1g/t Au from 36m incl u ding 20m a t 4.8g/t A u . A large program o f explorati o n commen c ed on th e Bongou Prospect in Novemb e r 2012.

Geological m apping, r o ck chip s ampling, t r enching an d re‐logging o f the initial drill hole l e d to a r e vised geol o gical interpretation s h owing that gold miner a lisation is c ontained w ithin an int e nsely silicifi e d, quartz v e ined and p y ritic microgranite intru s ion (Figure 4 ).

Bongou RC Drilling

R C drilling a t Bongou in 2011‐12 produced a s e ries of excellent gold in t ercepts including:

BNGRC010: 48m at 4.3g/t Au from 34m
BNGRC014: 26m at 6.9g/t Au from 111m

Work pr o grams at B o ngou itself a nd along t h e Bongou structural t rend (Figu r e 3) duri n g 2012‐13 consisted of 3,149m of RC drillin g , 528 po w er auger geochemical drill hol e s totalling 2,477m, 8 1 line km of ground geophysi c al surveys (magnetics and induc e d polarisati o n), 224 soil samples a nd 182m o f trenches.

BNGRC004: 10m at 7.4g/t Au from 47m
BNGRC003: 102m at 1.1g/t Au from 4m
• BNGRC002: 70m at 1.2g/t Au from 62m (stopped in minerali s ation)

==> picture [436 x 309] intentionally omitted <==

Figure 4: S ilicified, qua r tz‐veined, go l d‐mineralise d microgranit e in contact w ith foliated gabbro or ma fi c volcanics in Bongou o pen pit. Mr S eye Kote, PDI’s Chief Geol o gist in Burkina Faso, in th e foreground.

‐ 6 ‐

PREDICTIVE DISCOVERY LIMITED

30 JUNE 2013

REVIEW OF OPERATIONS…..

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [9 x 168] intentionally omitted <==

==> picture [29 x 84] intentionally omitted <==

==> picture [41 x 167] intentionally omitted <==

==> picture [51 x 167] intentionally omitted <==

==> picture [52 x 167] intentionally omitted <==

==> picture [51 x 167] intentionally omitted <==

==> picture [24 x 167] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [29 x 85] intentionally omitted <==

==> picture [52 x 57] intentionally omitted <==

==> picture [51 x 57] intentionally omitted <==

==> picture [52 x 57] intentionally omitted <==

==> picture [51 x 57] intentionally omitted <==

Fi g ure 5a and 5 b : Bongou Cr o ss Sections ( a ) Left ‐ throu g h RC drill ho l es BNGRC00 2 and BNGRC 0 14, (b) R i ght ‐ throug h RC drill hole B NGRC010. N o vertical ex a ggeration. S e e Figure 6 fo r drill hole loc a tions.

Nearly all of the gold mineralisa t ion consists of altered microgranit e , with h igher gra d es located close its nor t hern conta c t with gab b ro (Figure 5 a and 5b).

BNGRC014: 16m at 8.9 g/t Au
BNGRC004: 7m at 10.1g/t Au
BNGRC001: 6m at 11.8g/t Au

At a 3g/t Au cut‐off, there are n ow four, h i gh grade int e rcepts, all l o cated in th i s near‐cont a ct position, and apparently correla t ing with e a ch other:

L o wer grad e gold mi n eralisation with an a v erage gra d e of appr o ximately 1 g/t Au is l o cated adjac e nt to and t o the south o f the high g r ade zone ( F igures 5a and 5b). The total true w idth of the g old mineral i sed zone is u p to 50m.

• BNGRC010: 16m at 9.7g/t Au

==> picture [41 x 70] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [43 x 70] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [41 x 70] intentionally omitted <==

==> picture [43 x 70] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [41 x 70] intentionally omitted <==

==> picture [43 x 70] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [41 x 69] intentionally omitted <==

==> picture [43 x 69] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

Fig u re 6: Plan vi e w of drilling, Bongou Pros p ect.

‐ 7 ‐

PREDICTIVE DISCOVERY LIMITED

30 JUNE 2013

REVIEW OF OPERATIONS…..

Bongou Regional Exploration B o ngou mine r alised zone and remain s untested b y drilling ( F igure 7). T esting of t wo other PDI’s pr o gram of geological mapping, ground t a rgets alon g strike alo n g the maj o r Bongou geophysi c s and power auger geochemi c al F a ult Zone ( Figure 8) i s largely i n complete sampling generat e d a n ew targ e t, b e cause of t h e presence of thick, w e t alluvium approximately 400m north‐west of the Bongou a n d/or rugg e d terrain. R AB testing of these artisanal workings, w ith a peak v alue of 4.8 g /t t a rgets will b e required in the next field season. Au. The a nomaly co v ers a larger area than the

==> picture [25 x 116] intentionally omitted <==

==> picture [28 x 116] intentionally omitted <==

==> picture [52 x 59] intentionally omitted <==

==> picture [51 x 59] intentionally omitted <==

==> picture [52 x 59] intentionally omitted <==

==> picture [51 x 59] intentionally omitted <==

==> picture [52 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [52 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [25 x 117] intentionally omitted <==

==> picture [28 x 117] intentionally omitted <==

==> picture [52 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [52 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [52 x 59] intentionally omitted <==

==> picture [51 x 59] intentionally omitted <==

==> picture [52 x 59] intentionally omitted <==

==> picture [51 x 59] intentionally omitted <==

Figure 7: Po w er auger go l d geochemis t ry contour pl a n. Note size o f Bongou go l d mineralise d zone for co m parison wit h size of the d i scovered gol d anomalies. P ower auger s amples were collected at the interf a ce between t h e overlying c over and the weathered b e drock and analy s ed by for go l d by AAS at SGS in Ouaga d ougou.

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [38 x 74] intentionally omitted <==

==> picture [43 x 74] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [38 x 74] intentionally omitted <==

==> picture [43 x 74] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [38 x 75] intentionally omitted <==

==> picture [43 x 75] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

Figure 8: Re g ional geolo g ical map of t h e area near B ongou show i ng location o f two target zones (red d a shed line elli p ses) 4km an d 10km north ‐ east of the B o ngou artisa n al workings.

‐ 8 ‐

PREDICTIVE DISCOVERY LIMITED

30 JUNE 2013

REVIEW OF OPERATIONS…..

Bongou Metallurgical Test Work

A program of preliminary metallurgical test work was carried out with the aim of providing an indication of potential gold recovery by standard CIL treatment. One sample was submitted for metallurgical test work, weighing 20kg, obtained from seven RC drill holes. The test work was carried out at SGS’s Perth laboratories under the supervision of Coffey Mining. A mineralogical study was also carried out by Roger Townend and Associates.

All of the sampled intervals in the Bongou composite sample were of primary (not oxidised) mineralisation. A 500g screen fire assay of the composite sample at SGS in Perth gave a head grade of 2.92g/t (per tonne of ore) Au and a multi‐element ICP analysis indicated low levels of potentially deleterious elements (e.g. arsenic and antimony).

The sample was ground to 75 microns and subjected to a standard cyanide leach test over 72 hours. Gold recovery was 94% at the end of the test with 90% recovered in the first four

hours (Figure 9). Cyanide and lime consumption were 2.0kg/t and 0.3kg/t respectively. Cyanide consumption was not optimised and is expected to decrease considerably in future testing when oxygen levels are increased to the levels expected in a commercial CIP plant.

OTHER DRILLING PROGRAMS

LATERITE HILL GOLD FIELD (PDI 100%)

PDI completed two RC drilling programs, totalling 1,590m, at Prospect 71 and the Madyabari artisanal site during the 2012‐13 year.

PROSPECT 71

Prospect 71 covers a laterally extensive bedrock geochemical anomaly within the Laterite Hill Gold Field (Figure 2). Four holes totalling 320m were drilled to follow up drilling results obtained previously by PDI and a former explorer, Emerging African Gold, including 4m at 15g/t Au and 4m at 7.5g/t Au . One significant intersection was obtained – 3m at 6.1g/t Au including 1m at 14g/t Au .

==> picture [354 x 284] intentionally omitted <==

Figure 9: Graph of gold recovery vs. time – Bongou Prospect composite sample.

‐ 9 ‐

PREDICTIVE DISCOVERY LIMITED

30 JUNE 2013

REVIEW OF OPERATIONS…..

MADYABARI PROSPECT

Madyabari is the site of an artisanal miner gold rush which was first reported in November 2012. At least 2,000 artisanal shafts have been excavated there, most of them since July 2012.

Seventeen vertical RC holes, totalling 1,590m, were drilled at Madyabari on an 80 x 80m grid. About half of the drill holes intersected gold anomalous quartz veins in weathered volcanics at shallow depths. Based on the drilling results and the artisanal miners’ own descriptions, these veins appear to be approximately horizontal. The best drill intercepts were 3m at 8.3g/t Au from 23m, including 1m at 23g/t Au and 2m at 8.3g/t Au from 34m including 1m at 14g/t Au . In several holes, voids were intersected suggesting that possible high grade quartz vein material had already been removed by the artisanal miners.

While there is no doubt that artisanal miners have been recovering a significant amount of gold from the site and that the flat dipping quartz vein system extends over an area of more than five hectares, it appears that the high grade distribution is very “nuggetty” and therefore difficult to drill test effectively. No further drilling is planned in the short term.

DAVE PROSPECT (PDI 100%)

Geological Assessment

The Dave Prospect is known to consist of multiple gold mineralised zones extending for at least 5.5km along strike and several hundred metres across strike (Figures 1 and 8). Artisanal workings extend for approximately 600m of strike. But the gold mineralisation is much more extensive than these workings; it is buried under a thin ferricrete layer east of the workings, and under alluvium derived from the Sirba River west of the workings. The gold mineralised system may extend for up to 10km further to the west, concealed beneath the Sirba River which bedrock power auger drilling is unable to penetrate.

Gold mineralisation is hosted in intermediate volcanic rocks with lesser amounts of mafic to intermediate intrusive rocks. PDI’s analysis

suggests that gold mineralisation has been deposited in a broad ENE oriented shear zone largely on the margins of small mafic layers or in small shears. Weathering extends to an average depth of approximately 50m. In general, gold grades are moderate, with many assays recorded in the 1 to 2g/t Au range, however significantly higher grade intercepts are also present (e.g. 26m at 5.0g/t Au).

Re‐logging of the Dave Prospect RC drill chips by an MSc student from the Camborne School of Mines in the United Kingdom commenced in June 2013. This work forms part of a larger geological study designed to integrate all of the past work on this large gold mineralised system. Apart from the extensive drilling programs, the past work has included geological mapping, airborne magnetics, bedrock geochemical drilling, whole rock analysis using a hand‐held XRF machine, trenching and in‐hole photographic imaging. The result of this study will be a 3D interpretation of the geology and mineralisation. If possible, this may then be used to undertake a JORC Resource estimate.

Metallurgical Testwork

A program of preliminary metallurgical test work was carried out with the aim of gaining a preliminary understanding of the potential for gold recovery by heap leaching the oxidised Dave gold mineralisation. The test work was carried out at SGS’s Perth laboratories under the supervision of Coffey Mining. A mineralogical study was also carried out by Roger Townend and Associates.

One composite sample from seven RC drill holes weighing 20kg was submitted for metallurgical test work. A 500g screen fire assay of the composite sample at SGS in Perth gave a head grade of 1.45g/t Au and a multi‐ element ICP analysis indicated low levels of potentially deleterious elements apart from minor arsenic (580ppm).

The sample was largely composed of fine material as a result of the RC drilling process. It was therefore taken without any further grinding and subjected to an intermittent bottle roll in a weak cyanide solution for a period of ten days.

‐ 10 ‐

PREDICTIVE DISCOVERY LIMITED

30 JUNE 2013

REVIEW OF OPERATIONS…..

Most gold was extracted very quickly with 70% gold recovery achieved after just 4 hours and 81% after one day. At the end of the test 89% of the gold had been recovered . Had the material been ground to 75 microns, a slightly higher recovery may well have been achieved. Cyanide consumption was low at just 0.3kg/t with lime consumption at 2.9kg/t.

BIRA PERMIT (PDI 100%)

This new permit covers an area of 21km[2] in the north‐eastern portion of the Bonsiega block of tenements (Figure 2) and was granted in February 2013.

PDI has been interested in this area since 2010 when it commenced exploration on the

adjacent permit. Until late last year, the area was unavailable for application because it was covered by a uranium exploration reserve. PDI applied for the ground after this reserve was removed.

The area was explored by Anglo American through its subsidiary Anmercosa in the late 1990’s. PDI holds a database of Anmercosa information including soil geochemistry and RC drill data from the Bira permit.

The RC drill data includes a series of very encouraging gold intersections (Figures 10 and 11). While PDI does not have access to the quality control data and the original laboratory assay files, it has verified the location of some of the drill holes on the ground.

==> picture [410 x 390] intentionally omitted <==

Figure 10: Plan view of historic drill results from the Bira permit, Burkina Faso.

‐ 11 ‐

PREDICTIVE DISCOVERY LIMITED

30 JUNE 2013

REVIEW OF OPERATIONS…..

Gold mineralisation was intersected in a series of holes extending over more than 1km of strike. Some of the best intercepts (e.g. 14.5m at 3.1g/t Au and 13m at 2.5g/t Au ) were obtained in a series of shallow angled holes in two lines in the HL10 series of holes (Figure 10) which were drilled to depths of 15 to 30m.

The consistency of reported intercepts from section to section and down‐dip from hole to hole (Figure 11) in the southern part of the drilled area suggests good continuity, which, if confirmed by PDI’s drilling, will be important for the delineation of a JORC resource in the future.

During 2012‐13, PDI carried out a ground magnetic survey, totalling 161 line km, and a

power auger bedrock drilling program totalling 77 holes and 936m. Power auger drill samples were collected at the interface between the overlying cover and the weathered bedrock and analysed by for gold by AAS at SGS in Ouagadougou.

The ground magnetic survey revealed a new structure, parallel to the Bira trend, under alluvial cover 2km west of the known Bira Prospect. The power auger drilling, designed to test this structure, was not completed because of wet, thick alluvial cover. As a result, the highest priority interpreted structure was only intersected by two lines, one of which encountered a 50m wide anomalous zone peaking at 104ppb Au.

==> picture [436 x 378] intentionally omitted <==

Figure 11: Cross section through the Bira gold mineralisation. No vertical exaggeration.

‐ 12 ‐

PREDICTIVE DISCOVERY LIMITED

30 JUNE 2013

REVIEW OF OPERATIONS…..

BANGABA PERMIT (PDI earning 95%)

BACKGROUND

The Ban g aba projec t in Easter n Burkina F a so (Figure 2) covers ar e as of extensive artisanal mining. PDI is earnin g a 95% interest in the 1 28 km[2] Ban g aba explor a tion permi t by makin g a series of staged pay m ents in cash and sha r es. PDI’s equity now stands at 84%.

PDI esti m ates tha t artisanal miners h a ve produced several tonnes of gold at Bang a ba over the past 30 years. Artisan a l workings a re located o n two structures on t he north‐west and sou t h‐east co n tacts of a granodior i te‐ diorite b o dy (Figure 1 2). A large artisanal mining site is loc a ted at Soln a .

R C and diam o nd drilling programs a t the two m ajor sites of artisanal mining, S olna and T a mbiri, hav e encounte r ed a series of high g r ade intercepts in p r imary min e ralisation i n cluding: 6m at 20g/t Au, 2m at 56g/t Au , 5m at 17g/t Au , 7m at 13g/t Au and 5.6m at 16g/t Au . No super g ene enrich m ent is evi d ent in the n e ar surface s o it is poss i ble that th e high gold g r ades may p e rsist to considerable d e pths.

RC DRILLING PROGRAM

I n the 2012‐ 1 3 year, P D I carried o u t one RC d r illing program, totall i ng 1,225 m on the B a ngaba permit. The drilling was aimed at t e sting the T a mbiri Sout h and Solna Prospects ( F igure 12).

==> picture [15 x 188] intentionally omitted <==

==> picture [51 x 63] intentionally omitted <==

==> picture [52 x 63] intentionally omitted <==

==> picture [51 x 63] intentionally omitted <==

==> picture [52 x 63] intentionally omitted <==

==> picture [51 x 63] intentionally omitted <==

==> picture [52 x 63] intentionally omitted <==

==> picture [9 x 375] intentionally omitted <==

==> picture [51 x 64] intentionally omitted <==

==> picture [52 x 64] intentionally omitted <==

==> picture [51 x 64] intentionally omitted <==

==> picture [52 x 64] intentionally omitted <==

==> picture [51 x 64] intentionally omitted <==

==> picture [52 x 64] intentionally omitted <==

==> picture [51 x 63] intentionally omitted <==

==> picture [52 x 63] intentionally omitted <==

==> picture [51 x 63] intentionally omitted <==

==> picture [52 x 63] intentionally omitted <==

==> picture [51 x 63] intentionally omitted <==

==> picture [52 x 63] intentionally omitted <==

==> picture [15 x 188] intentionally omitted <==

==> picture [51 x 64] intentionally omitted <==

==> picture [52 x 64] intentionally omitted <==

==> picture [51 x 64] intentionally omitted <==

==> picture [52 x 64] intentionally omitted <==

==> picture [51 x 64] intentionally omitted <==

==> picture [52 x 64] intentionally omitted <==

==> picture [51 x 63] intentionally omitted <==

==> picture [52 x 63] intentionally omitted <==

==> picture [51 x 63] intentionally omitted <==

==> picture [52 x 63] intentionally omitted <==

==> picture [51 x 63] intentionally omitted <==

==> picture [52 x 63] intentionally omitted <==

==> picture [51 x 63] intentionally omitted <==

==> picture [52 x 63] intentionally omitted <==

==> picture [51 x 63] intentionally omitted <==

==> picture [52 x 63] intentionally omitted <==

==> picture [51 x 63] intentionally omitted <==

==> picture [52 x 63] intentionally omitted <==

Figure 12: Bangaba Permi t showing loc a tion of Tam b iri South and Solna Prospe c ts. Approximate location of b e drock geoch e mical anom a lies is outline d in pink ellip s es.

‐ 13 ‐

PREDICTIVE DISCOVERY LIMITED

30 JUNE 2013

REVIEW OF OPERATIONS…..

A d ditional deeper drillin g is therefor e required t o test this ta r get.

Tambiri South Drilling

The Ta m biri Sout h Prospec t is loca t ed approximately 1.5k m south of t he previously drilled Tambiri Prosp e ct (Figure 1 2) and on t he same m i neralised structure. F i ve RC holes, spaced 100m apart and totalling 530m, w e re completed in an are a where his t oric drillin g is reported to have en c ountered u p to 6m at 5.2 g/t Au .

Solna Prospect Drilling

Six RC holes , totalling 6 88m, were drilled at S o lna to test for high gr a de sub‐hor i zontal ore s h oots. Gold m ineralisati o n was obtained in five o f the six hol e s. The high e st grade int e rcept was 2m at 26g/t Au from 70 m including 1m at 51g/t Au . Several intercepts were obta i ned from p r eviously unrecognised and/or un m ined gold‐ m ineralised q uartz veins, the best b e ing 2m at 11.7g/t Au fr o m 12 m in c luding 1m at 21g/t Au ( F igure 13) .

All five h o les interse c ted gold m i neralisation in quartz‐veined mafic volcanics w ith the b e st intercept being 4m at 6.1g/t Au from 8 3 m including 1m at 14g/t Au . As at the m a in Tambiri p rospect, the gold‐min e ralised quartz vein zon e is steeply d ipping and appears to be continuo u s.

A l though dril l ing at Soln a has generated good g o ld intersections, ge o logical co n trols on m ineralisatio n are not well u n derstood. P o tential stil l exists to discover a significant a m ount of high grade gold min e ralisation, h o wever PDI’ s immediate focus is on high grade t a rgets with better continuity, s u ch as at B o ngou.

Interpret a tion of th e drill resul t s at the m a in Tambiri P rospect sho w s that the high grade o re shoot ha s a sub‐hori z ontal plung e . PDI belie v es that ther e is potential to discove r a compara b le shoot at Tambiri S outh at slightly grea t er depths b e low the 4m at 6.1 g/t Au intercept.

==> picture [51 x 58] intentionally omitted <==

==> picture [52 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [52 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [52 x 58] intentionally omitted <==

==> picture [48 x 58] intentionally omitted <==

==> picture [41 x 73] intentionally omitted <==

==> picture [51 x 59] intentionally omitted <==

==> picture [52 x 59] intentionally omitted <==

==> picture [51 x 59] intentionally omitted <==

==> picture [52 x 59] intentionally omitted <==

==> picture [51 x 59] intentionally omitted <==

==> picture [52 x 59] intentionally omitted <==

==> picture [48 x 59] intentionally omitted <==

==> picture [41 x 73] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [52 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [52 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [52 x 58] intentionally omitted <==

==> picture [48 x 58] intentionally omitted <==

==> picture [41 x 73] intentionally omitted <==

==> picture [51 x 59] intentionally omitted <==

==> picture [52 x 59] intentionally omitted <==

==> picture [51 x 59] intentionally omitted <==

==> picture [52 x 59] intentionally omitted <==

==> picture [51 x 59] intentionally omitted <==

==> picture [52 x 59] intentionally omitted <==

==> picture [48 x 59] intentionally omitted <==

==> picture [41 x 73] intentionally omitted <==

==> picture [51 x 59] intentionally omitted <==

==> picture [52 x 59] intentionally omitted <==

==> picture [51 x 59] intentionally omitted <==

==> picture [52 x 59] intentionally omitted <==

==> picture [51 x 59] intentionally omitted <==

==> picture [52 x 59] intentionally omitted <==

==> picture [48 x 59] intentionally omitted <==

F i gure 13: Solna drill results – plan view

‐ 14 ‐

PREDICTIVE DISCOVERY LIMITED

30 JUNE 2013

REVIEW OF OPERATIONS…..

METALLURGICAL TESTWORK

A program of preliminary metallurgical test work was carried out with the aim of obtaining an initial indication of gold recoveries by standard CIL treatment of gold mineralisation from the Solna and Tambiri Prospects. Two samples were submitted for metallurgical test work, one from each prospect, each weighing 20kg. All samples were obtained from RC drill holes.

The test work was carried out at SGS’s Perth laboratories under the supervision of Coffey Mining. A mineralogical study was also carried out by Roger Townend and Associates.

Solna Metallurgy

The composite sample consisted of primary mineralisation containing minor sulphides. A 500g screen fire assay of the composite sample at SGS in Perth gave a head grade of 7.65g/t Au and a multi‐element ICP analysis indicated low levels of potentially deleterious elements. The sample was ground to 75 microns and subjected

to a standard cyanide leach test over 72 hours. Gold recovery was 96% at the end of the test with 91% recovered in the first four hours. Cyanide and lime consumption were 1.9kg/t and 0.3kg/t respectively. Cyanide consumption was not optimised and is expected to decrease considerably in future test work.

Tambiri Metallurgy

Again, the sample consisted of primary mineralisation. A 500g screen fire assay of the composite sample at SGS in Perth gave a head grade of 3.55g/t Au and a multi‐element ICP analysis indicated low levels of potentially deleterious elements. The sample was ground to 75 microns and subjected to a standard cyanide leach test over 72 hours. Gold recovery was 93% at the end of the test with 85% recovered in the first four hours. Cyanide and lime consumption were 2.0kg/t and 0.3kg/t respectively. Again, cyanide consumption was not optimised and is expected to decrease in future test work.

==> picture [415 x 305] intentionally omitted <==

Figure 14: Polished section of RC chips from the Solna Prospect at high magnification showing a composite grain of pyrite (grey) and gold (yellow).

‐ 15 ‐

PREDICTIVE DISCOVERY LIMITED

REVIEW OF OPERATIONS…..

30 JUNE 2013

BOUSSOUMA PERMIT (PDI earning 95%)

TYEKANYEBI PROJECT (PDI 100%)

B o ussouma is located in the v ery well m ineralised B oromo Be l t in centr a l Burkina F a so (Figure 2 ). The per m it contains a number o f artisanal g o ld working s and large u nexplored a r eas covere d by thin cover. PDI is e a rning 95% o f the Bouss o uma perm i t through a series of o p tion payments. Access into the permit is e x cellent as i t is crossed by the bit u men road from Ouagad o ugou to th e large regi o nal centre o f Dori in nor t h‐east Burk i na Faso.

This wholly owned p e rmit was gr a nted to PDI in December 2010. It is located o n the sou t h‐ western e xtension o f a greenst o ne belt wh i ch hosts th e Koma Ba n gou artisa n al working in Niger, r e putedly the largest a rtisanal g o ld mining si t e in that co u ntry.

Work d u ring the 2012‐13 f inancial y e ar consisted of geologi c al mappin g and soil and power auger geoc h emical drilling. 305 s oil samples w ere collec t ed and 10 8 power au g er holes we r e drilled, to t alling 301m.

T h e 2012‐13 work pro g ram consis t ed of 97 p o wer auger drill holes, t otalling 674m, and 21 s o il samples. This work was design e d to test s t ructural t argets id e ntified b y earlier a e romagneti c surveys a n d geological mapping a n d to follo w up on encouraging wide spaced p o wer auge r drill res u lts obtain e d in the p r evious field season.

The soil sampling r e vealed so m e anomal o us gold valu e s and was t herefore fo l lowed up with a closer spaced p o wer auge r geochemical drilling p r ogram. Bot h surveys w e re carried o ut north‐ea s t of and al o ng strike f r om the Ty e na Prospect on the Gandhi per m it owned by Golden R im Resour c es (ASX: GMR). In A p ril, 2013, G M R report e d a serie s of RC d rill intersections, includi n g: • GRC001 – 6m at 6 .9g/t Au from 59m

P o wer auger samples w ere collect e d at the i n terface bet w een the o v erlying cov e r and the w eathered b e drock and analysed by f or gold by A A S at SG S in Ouag a dougou. T his work o b tained encouraging results, peaking at 519 ppb Au , on t wo lines 700m apart . Additional a n omalous v e ry widely s p aced result s suggest a W NW oriented trend 3 km long. Additional p o wer auger drilling is r e quired to infill these r e sults and d e termine w h ether the a nomalous r e sults form p art of the s ame gold m ineralised z o ne.

GRC005 – 6m at 5 .1g/t Au from 103m

Power auger drill sa m ples were c o llected at the interface between the overlying cover and the weather e d bedrock and analysed by for gold by AAS at S G S in Ouagadougou. Th e power au g er drilling i d entified a 1km long gold anomaly with a peak value of 210ppb Au , which is open to the no r th‐east (Fig u re 15).

==> picture [4 x 192] intentionally omitted <==

==> picture [45 x 64] intentionally omitted <==

==> picture [52 x 64] intentionally omitted <==

==> picture [51 x 64] intentionally omitted <==

==> picture [52 x 64] intentionally omitted <==

==> picture [51 x 64] intentionally omitted <==

==> picture [52 x 64] intentionally omitted <==

==> picture [45 x 65] intentionally omitted <==

==> picture [52 x 65] intentionally omitted <==

==> picture [51 x 65] intentionally omitted <==

==> picture [52 x 65] intentionally omitted <==

==> picture [51 x 65] intentionally omitted <==

==> picture [52 x 65] intentionally omitted <==

==> picture [45 x 65] intentionally omitted <==

==> picture [52 x 65] intentionally omitted <==

==> picture [51 x 65] intentionally omitted <==

==> picture [52 x 65] intentionally omitted <==

==> picture [51 x 65] intentionally omitted <==

==> picture [52 x 65] intentionally omitted <==

Figure 15: C o ntoured Tye k anyebi power auger bedr o ck geochemi s try results shown on satel l ite i m agery back g round. Repo r ted locations of Golden Ri m Resources’ r ecent RC dril l collars are s o uth of the bou n dary (thick black line) bet w een PDI’s Ty e kanyebi Per m it and GMR’ s Gandi Perm i t.

‐ 16 ‐

PREDICTIVE DISCOVERY LIMITED

30 JUNE 2013

REVIEW OF OPERATIONS…..

COTE D’IVO

IRE

T h e town of Kokumbo, n ear the ce n tre of the p e rmit, services a substantial population of a r tisanal min e rs who are working on numerous p r ospects thr o ughout the area. Thes e prospects c o nsist of both quartz vein mine ope r ations and p r ocessing of gold mineralised laterit e .

BACKGROUND

Detailed w ork on Cote D’Ivoire d ata sets o v er the past two to th r ee years has led PDI to identify a series of high priority prospects and targets in Cote D’Ivoire. As a result, t he Company has been w orking on s ecuring up to five expl o ration permits in the co u ntry, cover i ng a total ar e a of 1,700 k m[2] . Of thes e , two perm i ts, Kokumbo and Ferkes s edougou, w ere grante d in July 201 3 and a f urther thr e e are un d er applicati o n (Figure 16). Grant of the th r ee applicati o ns to PDI is not guarant e ed.

T h e permit li e s within th e volcano‐s e dimentary Oume‐Fetekr o belt in an area o f complex g e ology (Fig u re 17). Th e three pri n cipal gold p r ospects o n the pe r mit are k nown as K o kumbo, A o uadia and K polessou ( F igure 17). A l l three site s contain q u artz vein‐h o sted gold m ineralisatio n in multi p le vein orientations. Host rocks include mafic volcanics, b lack shale a n d granite. C urrently, t h e most active area of a r tisanal wor k ings is at A o uadia.

KOKUMBO (PDI earning 90%)

The per m it is held by local c ompany Ivoir Negoce a nd covers an area of 400 km[2] in southern Cote D’Iv o ire (Figure s 16 and 17). Located 30km south of the count r y’s administ r ative capi t al, Yamoussoukro, and about 4 0 km north of Newcrest’s operat i ng Bonikro G old Mine, the permit i s serviced b y a bitumen road and a power lin e . The area is covered b y forested rolling hills and extensive lateritic c o ver.

K o kumbo ha s a long hist o ry of artisanal mining d a ting back t o before colonial times in the late 1 9 th century. Commer c ial scale m ining was c a rried out by various p a rties in from early in t h e twentieth century un t il 1953. Sin c e then, all m ining in th e area has been carri e d out by a r tisanal min e rs.

==> picture [48 x 59] intentionally omitted <==

==> picture [51 x 59] intentionally omitted <==

==> picture [52 x 59] intentionally omitted <==

==> picture [51 x 59] intentionally omitted <==

==> picture [52 x 59] intentionally omitted <==

==> picture [51 x 59] intentionally omitted <==

Figure 16: L o cality map of PDI’s intere s ts in Cote D’Ivoire. Notes:

(1) Green a r eas signify volcanic an d sedimentary rocks, (2) PDI per m its that have been grant e d are in brown and the per m it application s are in blue, (3) Red squ a res are operating g o ld mines and magenta d o ts are plus 1 million oun c e gold deposit s (e.g. Agbao u and Sissingue) o f which one, Agbaou, is c urrently under constructio n , (4) Boundia l i is along strike from Resol u te’s Syama operating m ine and Perseus’s p r oposed Sissingue o p eration.

==> picture [48 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [52 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [52 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [48 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [52 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [52 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [48 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [52 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [52 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [48 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [52 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

==> picture [52 x 58] intentionally omitted <==

==> picture [51 x 58] intentionally omitted <==

‐ 17 ‐

PREDICTIVE DISCOVERY LIMITED

30 JUNE 2013

REVIEW OF OPERATIONS…..

In the 1980’s Cot e D’Ivoire’ s governm e nt geological agency, SODEMI, carried o ut sampling, pitting, ground geophysics and drilling. A resource estimat e (not JORC complian t ) was mad e on alluvial and collu v ial gold dep o sits at Kok u mbo with a verage gra d es reported t o exceed 3 g /t Au.

ti m e, most of the Aoua d ia Prospec t area was h e ld separat e ly and has therefore only been c o vered with limited soil s ampling an d a ground g e ophysical s u rvey.

I n June 2013 , PDI reached agreeme n t with the l o cal owner of the pe r mit application, Ivoir Negoce. Key terms of the agreeme n t were as f o llows:

Between 2002 and 2 0 07 Equigold NL carried o ut soil sam p ling, aero m agnetic sur v eys, and RAB and RC d r illing over p arts of the c urrent per m it. Publishe d Equigold q uarterly r e ports indic a te that gold soil geoche m ical anom a lies and so m e gold drill intercepts were obtained includ i ng one of 12m at 2.5g/t Au from surface. At t he

PDI can earn 90% t h rough exp e nditure of US$2 million within 4 years.
Minimu m expenditu r e commitment before withdra w al is US$30 0 ,000.

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [41 x 70] intentionally omitted <==

==> picture [47 x 70] intentionally omitted <==

==> picture [51 x 57] intentionally omitted <==

==> picture [52 x 57] intentionally omitted <==

==> picture [51 x 57] intentionally omitted <==

==> picture [52 x 57] intentionally omitted <==

==> picture [51 x 57] intentionally omitted <==

==> picture [52 x 57] intentionally omitted <==

==> picture [41 x 70] intentionally omitted <==

==> picture [47 x 70] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [41 x 71] intentionally omitted <==

==> picture [47 x 71] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [51 x 56] intentionally omitted <==

==> picture [52 x 56] intentionally omitted <==

==> picture [41 x 70] intentionally omitted <==

==> picture [47 x 70] intentionally omitted <==

==> picture [51 x 57] intentionally omitted <==

==> picture [52 x 57] intentionally omitted <==

==> picture [51 x 57] intentionally omitted <==

==> picture [52 x 57] intentionally omitted <==

==> picture [51 x 57] intentionally omitted <==

==> picture [52 x 57] intentionally omitted <==

Figure 17: Geology and location of r e ported and/ o r observed g o ld artisanal m ining sites. Note: ge o logy obtaine d from a Gov e rnment geol o gical map.

==> picture [438 x 124] intentionally omitted <==

Figure 18: Surface a rtisanal workings on the A o uadia Prosp e ct, Kokumbo Permit.

‐ 18 ‐

PREDICTIVE DISCOVERY LIMITED

REVIEW OF OPERATIONS…..

30 JUNE 2013

PDI to make cash payments over three years totalling US$375,000 as follows:
US$25,000 on receipt of the signed Presidential Decree awarding the permit,
US$50,000 on the first anniversary,
US$100,000 on the second anniversary,
US$200,000 on the third anniversary.

In addition, PDI will issue to Ivoir Negoce US$25,000 worth of PDI shares on receipt of the Presidential Decree. The first payment and share issue were made in August 2013.

PDI to carry Ivoir Negoce’s 10% share of expenditure until the decision to mine at which time Ivoir Negoce must decide whether it will pay back its 10% share of expenditure after earn‐in or convert to a 3.5% NSR. PDI can purchase up to 2% of the above NSR (leaving Ivoir Negoce with 1.5%), at any time at a price of US$1 million for each 1%.

FERKESSEDOUGOU (PDI earning 100%)

The Ferkessedougou permit is located in northern Cote D’Ivoire (Figure 16) and covers approximately 390km[2] . It was among the highest priority areas highlighted by PDI’s Predictore® analysis of the country and is reported to contain a series of gold occurrences. This permit was granted in July 2013.

OTHER PERMIT APPLICATIONS

Three other exploration permit applications covering approximately 920km[2 ] are currently being considered by the Cote d’Ivoire Ministry of Mines (Figure 16). Of these, two ‐ Boundiali and Kounahiri – are PDI applications. The third, Komboro, is an application made by a third party with which PDI negotiated an agreement in 2011‐12. Should all these permits be granted, the Company would then hold 1,710 km[2] of highly prospective gold exploration ground in Cote D’Ivoire.

The Boundiali exploration permit application is of particular interest. It is located within the same greenstone belt as the Syama, Sissingue and Tongon gold deposits (Figure 16). The permit application lies directly along strike from Syama and Sissingue. Syama is a large gold mine in Mali owned by Resolute Mining Limited (ASX: RSG) and Sissingue is an undeveloped gold deposit in northern Cote D’Ivoire owned by Perseus Mining Limited (ASX:PRU).

Favourable geology in the Boundiali permit includes a mixture of granite, schist, gabbro and sedimentary rocks. Numerous gold occurrences are recorded on geological maps and other databases. A major shear zone is also mapped through the permit, which has the potential to host gold mineralization.

AUSTRALIAN GOLD PROJECT

VICTORIA

PDI has only one project remaining in Australia – in Victoria, west of Ballarat. The Company’s objective there is the discovery of a large gold deposit on the margins of one of more concealed volcanic domes beneath basalt cover (cf. the 5 million ounce Stawell gold deposit in Western Victoria).

Work done on the project in 2012‐13 consisted of limited amount of geological mapping and geophysical data interpretation. PDI surrendered the Skipton Exploration Licence during 2012‐13 and has since surrendered the Woady Creek Exploration Licence. A new Exploration Licence, EL5434, covering 150 km[2] was granted to PDI in

August 2013.

==> picture [203 x 165] intentionally omitted <==

Figure 19: EL5434 outline on a satellite image, located south‐west of Ballarat, Victoria

‐ 19 ‐

PREDICTIVE DISCOVERY LIMITED

30 JUNE 2013

REVIEW OF OPERATIONS…..

CORPORATE

PDI listed on 1[st] December 2010, following a heavily oversubscribed IPO. The Company raised $4.2 million during 2012‐2013 via a rights issue in July 2012 and a placement in November 2012.

The Company took a number of steps to reduce its overhead costs during 2012‐2013. The Australia‐based Exploration Manager was retrenched and the Burkina Faso team was reduced in size significantly, leaving PDI with a core group of four experienced geologists in the country. Office costs were also reduced by sub‐ letting office space. PDI’s Board was also reduced from five to three members during the year in the interest of reducing overhead costs.

OUTLOOK

BURKINA FASO

PDI’s immediate focus continues to be on high grade gold targets with strong evidence of good gold mineralisation continuity. The first priority in the 2013‐2014 field season is therefore to drill additional holes at Bongou, where drilling in 2012‐2013 revealed high grade gold mineralisation with good continuity. Exploration will also be carried out on the Laterite Hill Gold Field, especially along the

42km strike length of the Bongou structure to identify more high grade gold targets.

Limited exploration of other areas will be carried out to ensure that the entire tenement holding remains in good standing, focused on testing prospects with potential for high gold grades and good ore continuity.

The Company’s key objective is to build an inventory of high grade resources as a nucleus for a future mining operation and then return to testing the more moderate grade mineralisation which has already been identified in reconnaissance drilling in the Laterite Hill Gold Field.

COTE D’IVOIRE

PDI will commence low key exploration on its two granted permits in October 2013. Work will commence with compilation of past data, geological mapping, ground magnetic surveys and geochemical sampling. The initial aim of the 2013‐2014 work program will be to identify targets for reconnaissance RAB drilling.

VICTORIA

The Company will carry out a limited geophysical and geological mapping program aimed at identifying a Stawell type drilling target on EL5434.

Competent Persons Statement

The exploration results reported herein, insofar as they relate to mineralisation, are based on information compiled by Mr Paul Roberts (Fellow of the Australian Institute of Geoscientists). Mr Roberts is a full time employee of the company and has sufficient experience relevant to the style of mineralisation and type of deposits being considered to qualify as a Competent Person as defined by the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code, 2004 Edition). Mr Roberts consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

‐ 20 ‐

PREDICTIVE DISCOVERY LIMITED

30 JUNE 2013

DIRECTORS’ REPORT

Your directors present their report for the financial year ended 30 June 2013.

The names of the directors in office at any time during, or since the end of the year are:

NAMES POSITION Mr Phillip Harman Non‐Executive Chairman Mr Paul Roberts Managing Director Mr Philip Henty Non‐Executive Director Dr Thomas Whiting Non‐Executive Director (resigned 21 May 2013) Dr Robert Danchin Non‐Executive Director (resigned 21 May 2013)

The Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.

COMPANY SECRETARY

Mr Ian Hobson holds a bachelor of business degree and is a Chartered Accountant and Chartered Secretary. Mr Hobson provides company secretarial and corporate, management and accounting advice to a number of listed public companies involved in the resource, mining services and oil and gas industries. He was appointed on 17 September 2010.

PRINCIPAL ACTIVITIES

During the financial year, the principal activity of The Group was mineral exploration with the objective of identifying and developing economic reserves in West Africa and Australia.

OPERATING RESULTS FOR THE PERIOD

The consolidated loss of The Group for the financial year after providing for income tax amounted to $1,057,479 (2012: $2,706,350). This was largely from the costs of administering The Group to 30 June 2013, impairment of exploration and exploration costs.

REVIEW OF OPERATIONS

In the year to June 2013, Predictive Discovery Limited (PDI) undertook a substantial and successful work program. Capital raisings during the year totaled $4,177,969 million via a rights issue in July 2012 and a placement in November 2012. Staff numbers were reduced in both Australia and Burkina Faso reflecting the difficult capital raising environment during the year. One permit was granted in Burkina Faso, covering 21 km[2] and a second permit, covering 74 km[2] was close to grant at June 2013; both areas form part of the Bonsiega Permit Group.

Exploration programs in Burkina Faso were focused especially on the Madyabari, Sirba, Bangaba, Tyekanyebi and Boussouma exploration permits. 9,100m of drilling was completed, consisting of 4,700m of reverse circulation and 4,400m of power auger drilling. 129 km[2] of tenement area was geologically mapped and 242 line km surveyed with ground magnetics and induced polarization surveys.

‐ 21 ‐

PREDICTIVE DISCOVERY LIMITED

30 JUNE 2013

DIRECTORS’ REPORT….

Very promising drill results were obtained on the Laterite Hill Gold Field and the Bangaba permit including 48m at 4.3 g/t Au, 26m at 6.9g/t Au and 10m at 7.4g/t Au at the Bongou Prospect (Madyabari permit) and 2m at 26/t Au at the Solna Prospect (Bangaba permit). This work highlighted the potential of the 43km long Bongou Fault Zone.

Preliminary metallurgical testwork results on the Bongou, Tambiri, Solna and Dave Prospects in Eastern Burkina Faso resulted in excellent gold recoveries from all four prospects.

Project generation activities in West Africa, using the Predictore® technology, continued during the year. This led to application for three permits in Cote D’Ivoire, covering a total area of 1,140km[2] and successful negotiations with an Ivoirian company to acquire a fourth permit, Kokumbo, covering 400km[2] . At the end of June, both Kokumbo and one of the three PDI applications, Ferkessedougou, had been approved by the Council of Ministers, the final step before receipt of the Presidential Decrees granting the two permits.

The Company surrendered its Skipton Exploration Licence in Victoria, reducing the Company’s holdings there to one 2 km[2] granted Exploration Licence.

DIVIDENDS PAID OR RECOMMENDED

No dividends were paid or declared since the start of the financial year. No recommendation for payment of dividends has been made.

FINANCIAL POSITION

The net assets of The Group have increased by $5,069,619 from 30 June 2012 to 30 June 2013. This increase is largely due to the following factors:

$4,177,969 capital raising;
Expenditure on exploring and evaluating the assets in Burkina Faso; and
$787,500 share‐based payment to acquire the balance of El Dore Joint Venture permits.

SIGNIFICANT CHANGES IN STATE OF AFFAIRS

No significant changes in The Group’s state of affairs occurred during the financial year.

EVENTS SUBSEQUENT TO BALANCE DATE

In accordance with the purchase agreement for the Cote d’Ivoire Kokumbo permit, the Company has paid the first instalment of USD$25,000 and issued USD$25,000 worth of shares on 20 August 2013 to Ivoir Negoce. No other matters or circumstances have arisen for the year which significantly affected or could significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.

FUTURE DEVELOPMENTS

Likely developments in the operations of The Group and the expected results of those operations in future financial years have not been included in this report, as the inclusion of such information is likely to result in unreasonable prejudice to The Group.

‐ 22 ‐

PREDICTIVE DISCOVERY LIMITED

DIRECTORS’ REPORT….

30 JUNE 2013

ENVIRONMENTAL ISSUES

The Group’s operations are subject to significant environmental regulations under both Commonwealth and State legislation. The Board believes that The Group has adequate systems in place for the management of its environmental regulations and is not aware of a breach of those environmental requirements as they apply to The Group.

INFORMATION ON DIRECTORS

Mr Phillip Harman Non‐Executive Chairman Qualifications BSc (Hons), MAusIMM, MAICD Experience Mr Harman is a professional geophysicist who spent more than 30 years working for BHP Billiton in minerals exploration in a broad number of roles both technical and managerial, both in Australia and overseas. Mr Harman was material in bringing BHP Billiton’s proprietary FALCON® airborne gravity gradiometer technology to Gravity Capital Limited in 2001, which was the precursor to Gravity Diamonds Limited.

Interest in Shares and Options Shareholding: 3,398,258 Optionholding: 1,095,469

Directorships held in other listed Callabonna Uranium Limited and Stellar Resources Limited. entities during the three years prior to the current year

Mr Paul Roberts Managing Director Qualifications BSc, MSc, FAIG, MGSA Experience Mr 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 copper gold 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, Mr Roberts led the Predictive Mineral Discovery CRC’s research effort from 2002 to 2007, and therefore has a deep understanding of the practical application of the Predictore® technology to mineral exploration.

Interest in Shares and Options Shareholding: 3,702,079 Optionholding: 1,825,000

Directorships held in other listed None entities during the three years prior to the current year

‐ 23 ‐

PREDICTIVE DISCOVERY LIMITED

DIRECTORS’ REPORT….

30 JUNE 2013

Dr Thomas Whiting Non‐Executive Director – (resigned 21 May 2013) Qualifications BSc (Hons), PhD, MAppFin, MASEG, MAICD Experience Dr Whiting is currently a consultant, having retired from BHP Billiton in 2008, 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. 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.

Interest in Shares and Options Shareholding: 1,791,942 Optionholding: 705,469

Directorships held in other listed Stellar Resources, EXCO Resources Ltd, Mineral Deposits entities during the three years prior to Limited. the current year

Dr Robert Danchin Non‐Executive Director – (resigned 21 May 2013) Qualifications BSc, BSc (Hons), MSc, PhD, FAusIMM Experience Dr Danchin has over 40 years’ experience in the exploration industry. He was Chief Executive Officer of Anglo American PLC’s Exploration and Acquisition Division and the Anglo American Group’s Deputy Technical Director (Geology). From 1997 to 2002, he was an executive director of Anglo American Corporation of South Africa Limited.

In 1980, he joined Stockdale Prospecting Limited, (an Australian subsidiary of De Beers) as Chief Geologist based in Australia. He remained with that company for 15 years, eventually becoming Exploration Manager heading up its Australian‐based diamond exploration programme.

Interest in Shares and Options Shareholding: Nil Optionholding: 600,000

Directorships held in other listed Mineral Deposits Limited entities during the three years prior to the current year

‐ 24 ‐

PREDICTIVE DISCOVERY LIMITED

DIRECTORS’ REPORT….

30 JUNE 2013

Mr Philip Henty Non‐Executive Director

Qualifications BA Acc, Dip SIA, F Fin

Experience Mr Henty has extensive experience in the Australian securities markets.

He has worked for nearly 30 years in stockbroking and investments 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.

Interest in Shares and Options Shareholding: 10,929,688 Optionholding: 1,226,563

Directorships held in other listed None entities during the three years prior to the current year

MEETINGS OF DIRECTORS

During the financial year, 10 meetings of directors (including committees of directors) were held. Attendances by each director during the year were as follows:

	DIRECTORS' MEETINGS	DIRECTORS' MEETINGS	AUDITCOMMITTEEMEETINGS	AUDITCOMMITTEEMEETINGS
	NUMBER ELIGIBLE TO ATTEND	NUMBER ATTENDED	NUMBER ELIGIBLE TO ATTEND	NUMBER ATTENDED
Mr Phillip Harman Mr Paul Roberts Dr Thomas Whiting Dr Robert Danchin Mr Philip Henty	8 8 6 6 8	7 7 5 5 8	‐ ‐ 2 2 2	‐ ‐ 2 2 2

INDEMNIFYING OFFICERS OR AUDITORS

The Group has paid premiums to insure directors against liabilities for costs and expenses incurred by them in defending legal proceedings arising from their conduct while acting in the capacity of director of The Group, other than conduct involving a wilful breach of duty in relation to The Group. The terms and conditions of the insurance are confidential and cannot be disclosed.

‐ 25 ‐

PREDICTIVE DISCOVERY LIMITED

DIRECTORS’ REPORT….

30 JUNE 2013

OPTIONS

At the date of this report, the unissued ordinary shares of Predictive Discovery Limited under option, including those options issued during the year and since 30 June 2012 to the date of this report are as follows:

GRANTDATE DATE OFEXPIRY EXERCISEPRICE 20 August 2010 20 August 2015 $0.25 21 July 2011 21 July 2015 $0.31 26 July 2012 30 June 2015 $0.10 to $0.20 8 August 2012 30 June 2015 $0.10 to $0.20 10 October 2012 30 June 2015 $0.10 to $0.20 5 December 2012 30 October 2015 $0.15 5 December 2012 11 July 2015 $0.10 to $0.20 TOTAL*	NUMBER UNDEROPTION 6,000,000 500,000 3,756,075 1,000,000 875,000 2,000,000 3,500,000
	17,631,025

3,500,000 unlisted options with an exercise price of 10 cents to 30 June 2013, 15 cents from 1 July 2013 to 30 June 2014 and 20 cents from 1 July 2014 to the expiry date on 30 June 2015.

During the year ended 30 June 2013, no ordinary shares of Predictive Discovery Limited were issued on the exercise of options granted.

PROCEEDINGS ON BEHALF OF THE COMPANY

No person has applied for leave of Court to bring proceeding on behalf of The Group or intervene in any proceedings to which The Group is a party for the purpose of taking responsibility on behalf of The Group for all or any part of those proceedings.

The Group was not a party to any such proceeding during the year.

NON AUDIT SERVICES

The Board of Directors in accordance with the advice from the audit committee is satisfied that no provision of non‐audit services was provided by the auditors during the year.

AUDITOR’S INDEPENDENCE DECLARATION

The auditors’ independence declaration for the year ended 30 June 2013 has been received and can be found on page 35 of the financial report.

‐ 26 ‐

PREDICTIVE DISCOVERY LIMITED

DIRECTORS’ REPORT….

30 JUNE 2013

REMUNERATION REPORT (AUDITED)

REMUNERATION POLICY

It is the policy of the Company that, except in special circumstances, non executive directors normally be remunerated by way of fixed fees, should not receive a bonus or options and should not be provided with retirement benefits other than statutory superannuation.

The Board, within the limit pre‐approved by shareholders, determines fees payable to individual non executive directors. The remuneration level of any executive director or other senior executive is determined by the Board after taking into consideration levels that apply to similar positions in comparable companies in Australia and taking account of the individual’s possible participation in any equity based remuneration scheme. The Board may use industry wide data gathered by independent remuneration experts annually as its point of reference. Options or shares issued to any director pursuant to any equity based remuneration scheme require approval by shareholders prior to their issue. Options or shares granted to senior executives who are not directors are issued by resolution of the Board.

It is the policy of the Company that persons to whom options have been issued should not enter into any transaction in any associated product which is designed to limit the economic risk of participating in unvested entitlements under an equity based remuneration scheme.

There are no schemes for retirement benefits, other than the payment of the statutory superannuation contribution for non executive and executive directors.

All executives receive a base salary (which is based on factors such as qualifications, expertise, experience etc.), superannuation and fringe benefits and are eligible for the grant of options under the Employee Option Plan.

The Board policy is to remunerate non executive directors at market rates for comparable companies for the time, commitment and responsibilities.

The fees payable to individual non executive directors must be determined by the Board within the aggregate sum of $500,000 per annum provided for under clause 21.1 of the constitution. That aggregate sum can only be increased with the prior approval of the shareholders of the Company at a general meeting. A non executive director is entitled to a refund of approved expenditure and may also receive payments for consultancy work contracted for and performed separately on the Company’s behalf.

The Company’s policy for determining the nature and amount of emoluments of Board members and senior executives of the Company is as follows:

The remuneration structure for executive officers, including executive directors, is based on a number of factors, including length of service, particular experience of the individual concerned, and overall performance of the Company. The contracts for service between the Company, Directors and executives are on a continuing basis the terms of which are not expected to change in the immediate future.

‐ 27 ‐

PREDICTIVE DISCOVERY LIMITED

DIRECTORS’ REPORT….

30 JUNE 2013

REMUNERATION REPORT (continued

PERFORMANCE‐BASED REMUNERATION

Performance based remuneration for key management personnel is limited to granting of options.

RELATIONSHIP BETWEEN REMUNERATION POLICY AND COMPANY PERFORMANCE

The remuneration policy has been tailored to increase goal congruence between shareholders, directors and executives. The issue of options in past years to the majority of directors and executives is to encourage the alignment of personal and shareholder interests. The company believes this policy will be effective in increasing shareholder wealth.

PERFORMANCE CONDITIONS LINKED TO REMUNERATION

The Group’s remuneration of key management personnel does not include any performance conditions.

EMPLOYMENT DETAILS OF MEMBERS OF KEY MANAGEMENT PERSONNEL AND OTHER EXECUTIVES

The following table provides employment details of persons who were, during the financial year, members of key management personnel of The Group, and to the extent different, among the five Group executives or company executives receiving the highest remuneration. The table also illustrates the proportion of remuneration that was performance and non‐performance‐based and the proportion of remuneration received in the form of options.

		NON‐SALARY
Key Management Personnel	POSITION HELD DURING THE YEAR ENDED30 JUNE2013	CASH‐BASED INCENTIVES %	OPTIONS/ RIGHTS %	FIXED SALARY/FEES %	TOTAL %
Mr Phillip Harman	Non‐Executive Chairman	‐	‐	100	100
Mr Paul Roberts	Managing Director	‐	‐	100	100
Dr Thomas Whiting	Non‐Executive Director	‐	‐	100	100
Dr Robert Danchin	Non‐Executive Director	‐	‐	100	100
Mr Philip Henty	Non‐Executive Director	‐	‐	100	100
Mr Ian Hobson	Company Secretary	100	‐	‐	100
Mr David Pascoe	Head Geologist	‐	‐	100	100

The employment terms and conditions of key management personnel and group executives are formalised upon each Director's appointment. All non‐executive directors are remunerated on a monthly basis with no fixed term or termination benefits.

Paul Roberts, Managing Director, has entered into a contract of employment that requires 12 months’ notice of voluntary termination of employment that entitles Mr Roberts to $180,000 as a termination benefit.

‐ 28 ‐

PREDICTIVE DISCOVERY LIMITED

DIRECTORS’ REPORT….

30 JUNE 2013

REMUNERATION DETAILS FOR THE PERIOD ENDED 30 JUNE 2013

The following table of benefits and payment details, in respect to the financial year, the components of remuneration for each member of the key management personnel of The Group and, to the extent different, the five Group executives and five company executives receiving the highest remuneration:

Table of Benefits and Payments for the Period Ended 30 June 2013

KEYMANAGEMENT PERSONNEL Mr Phillip Harman 2013 2012 Mr Paul Roberts 2013 2012 Dr Thomas Whiting 2013 2012 Dr Robert Danchin 2013 2012 Mr Philip Henty 2013 2012 Mr Ian Hobson 2013 2012 Mr David Pascoe 2013 2012 Total Key Management Personnel 2013 2012	SALARY, FEES AND LEAVE $ OTHER $ PENSION AND SUPER‐ ANNUATION $ OTHER $ SHARES/ UNITS $ OPTIONS/ RIGHTS $ TOTAL $ 22,936 ‐ 2,064 ‐ ‐ ‐ 25,000 45,873 ‐ 4,128 ‐ ‐ ‐ 50,001 169,742 ‐ 15,642 ‐ ‐ ‐ 185,384 203,928 ‐ 44,918 ‐ ‐ ‐ 248,846 5,686 ‐ 8,000 ‐ ‐ ‐ 13,686 750 ‐ 34,250 ‐ ‐ ‐ 35,000 12,556 ‐ 1,130 ‐ ‐ ‐ 13,686 32,110 ‐ 2,890 ‐ ‐ ‐ 35,000 17,500 ‐ 1,130 ‐ ‐ ‐ 18,630 ‐ ‐ 35,000 ‐ ‐ ‐ 35,000 111,705 ‐ ‐ ‐ ‐ ‐ 111,705 165,016 ‐ ‐ ‐ ‐ ‐ 165,016 92,220 ‐ 6,498 ‐ ‐ ‐ 98,718 194,072 ‐ 17,466 ‐ ‐ 50,253 261,791
	432,345 ‐ 34,464 ‐ ‐ ‐ 466,809 641,749 ‐ 138,652 ‐ ‐ 50,253 830,654

KEYMANAGEMENT
PERSONNEL
Mr Phillip Harman
2013
2012
Mr Paul Roberts
2013
2012
Dr Thomas Whiting
2013
2012
Dr Robert Danchin
2013
2012
Mr Philip Henty
2013
2012
Mr Ian Hobson
2013
2012
Mr David Pascoe
2013
2012
Total Key Management
Personnel
2013
2012

SALARY,
FEES AND
LEAVE
$
OTHER
$
PENSION
AND SUPER‐
ANNUATION
$
OTHER
$
SHARES/
UNITS
$
OPTIONS/
RIGHTS
$
TOTAL
$
22,936
‐
2,064
‐
‐
‐
25,000

45,873
‐
4,128
‐
‐
‐
50,001
169,742
‐
15,642
‐
‐
‐
185,384
203,928
‐
44,918
‐
‐
‐
248,846
5,686
‐
8,000
‐
‐
‐
13,686
750
‐
34,250
‐
‐
‐
35,000

12,556
‐
1,130
‐
‐
‐
13,686

32,110
‐
2,890
‐
‐
‐
35,000
17,500
‐
1,130
‐
‐
‐
18,630

‐
‐
35,000
‐
‐
‐
35,000
111,705
‐
‐
‐
‐
‐
111,705
165,016
‐
‐
‐
‐
‐
165,016

92,220
‐
6,498
‐
‐
‐
98,718
194,072
‐
17,466
‐
‐
50,253 261,791

432,345
‐
34,464
‐
‐
‐
466,809
641,749
‐
138,652
‐
‐
50,253 830,654

SECURITIES RECEIVED THAT ARE NOT PERFORMANCE‐BASED

No members of key management personnel received securities during the period which were not dependent upon the performance of The Group’s share price as part of their remuneration package.

CASH BONUSES, PERFORMANCE‐RELATED BONUSES AND SHARE‐BASED PAYMENTS

No options or bonuses were granted as remuneration during the year to key management personnel and other executives.

END OF THE REMUNERATION REPORT

‐ 29 ‐

PREDICTIVE DISCOVERY LIMITED

DIRECTORS’ REPORT….

30 JUNE 2013

Signed in accordance with a resolution of the Board of Directors:

==> picture [92 x 78] intentionally omitted <==

Paul Roberts

Managing Director 5 September 2013

‐ 30 ‐

PREDICTIVE DISCOVERY LIMITED

CORPORATE GOVERNANCE STATEMENT

30 JUNE 2013

BOARD COMPOSITION

The skills, experience and expertise relevant to the position of each director, and board committee member, who is in office at the date of the annual report and their term of office are detailed in the Director’s report.

The independent directors of the Company are Phil Harman and Phil Henty. Tom Whiting and Bobby Danchin resigned in May 2013.

When determining the independent status of a Director the Board used the Guidelines detailed in the ASX Corporate Governance Council’s Principles of Good Corporate Governance and Best Practice Recommendations.

The Board sets out below its “if not why not” report in relation to those matters of corporate governance where the Company’s practices depart from the Recommendations.

The Board sets out below its “if not why not” repo governance where the Company’s practices depart from	rt in relation to those matters of corporate the Recommendations.
Recommendation	Current Practice
1.1 Companies should establish the functions reserved for the board and those delegated to senior executives and disclose those functions.	Satisfied. The functions reserved for the Board and delegated to senior executives have been established. The Board Charter is available at www.predictivediscovery.com.au in the Corporate Governance policy.
1.2 Companies should disclose the process for evaluating the performance of senior executives.	Satisfied. Formal evaluation process has been adopted. The Performance Evaluation Policy is available at www.predictivediscovery.com.au in the Corporate Governance policy.
1.3 Companies should provide the information indicated in the Guide for reporting on Principle 1	Satisfied The Board Charter is available at www.predictivediscovery.com.au in the Corporate Governance policy. No formal appraisal of management was conducted.
2.1 A majority of the board should be independent directors.	Satisfied. Phil Harman and Phil Henty are Non-Executive independent directors as defined in ASX guidelines.

‐ 31 ‐

CORPORATE GOVERNANCE STATEMENT

30 JUNE 2013

PREDICTIVE DISCOVERY LIMITED CORPORATE GOVERNANCE STATEMENT 30 JUNE 2013	PREDICTIVE DISCOVERY LIMITED CORPORATE GOVERNANCE STATEMENT 30 JUNE 2013
Recommendation Current Practice
2.2 The chair should be an independent director.	Satisfied. Mr Phil Harman is an independent director.
2.3 The roles of chair and Chief Executive Officer should not be exercised by the same individual.	Satisfied.
2.4 The board should establish a nomination committee.	Not Satisfied. Given the current size of the Board (3) this function is undertaken by the Board.
2.5 Companies should disclose the process for evaluating the performance of the board, its committees and individual directors.	Satisfied. Board Performance Evaluation Policy is available at www.predictivediscovery.com.au in the Corporate Governance policy.
2.6 Companies should provide the information indicated in the guide to reporting on Principle 2	Satisfied Formal board appraisals were not conducted for the 2013 financial year.
3.1 Companies should disclose a code of conduct and disclose the code or a summary of the code as to: - The practices necessary to maintain confidence in the company’s integrity - The practices necessary to take into account their legal obligations and the reasonable expectations of their stakeholders - The responsibility and accountability of individuals for reporting and investigating reports of unethical practices.	Satisfied. The Code of Conduct is available at www.predictivediscovery.com.auin the Corporate Governance policy.
3.2 Companies should establish a policy concerning diversity and disclose the policy or a summary of that policy. The policy should include requirements for the board to establish measurable objectives for achieving gender diversity for the board to assess annually both the objectives and progress in achieving them.	Satisfied. The Diversity Policy is available at www.predictivediscovery.com.auin the Corporate Governance policy.
3.3 Companies should disclose in each annual report the measurable objectives for achieving gender diversity and progress towards achieving them.	Not Satisfied. The measurable objectives have yet to be established.
3.4 Companies should disclose in each annual report the proportion of women employees in the whole organisation, women in senor executive positions and women on the board.	Proportion of women employees in the whole organisation is 15%. There is one women (33%) in a senior executive position and none on the board.

‐ 32 ‐

PREDICTIVE DISCOVERY LIMITED

CORPORATE GOVERNANCE STATEMENT

30 JUNE 2013

Recommendation Current Practice

3.5 Companies should provide the information indicated in the Guide to reporting on Principle 3	Satisfied
4.1 The board should establish an audit committee.	Not satisfied. The audit committee was disbanded during the year when the board was reduced from 5 to 3 directors.
4.2 The audit committee should be structured so that it: - Consists only of non-executive directors - Consists of a majority of independent directors - Is chaired by an independent chair, who is not chair of the board - Has at least three members	Not satisfied. The role of the committee is undertaken by the board.
4.3 The audit committee should have a formal charter.	Satisfied.
4.4 Companies should provide the information indicated in the Guide to reporting on Principle 4	Satisfied. The audit committee charter is available at www.predictivediscovery.com.au in the Corporate Governance policy.
5.1 Companies should establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at senior executive level for that compliance and disclose those policies or a summary of those policies.	Satisfied. Continuous disclosure policy is available at www.predictivediscovery.com.au in the Corporate Governance policy.
5.2 Companies should provide the information indicated in the Guide to reporting on Principle 5	Satisfied
6.1 Companies should design a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings and disclose their policy or a summary of their policy.	Satisfied. Shareholders communication strategy is available at www.predictivediscovery.com.au in the Corporate Governance policy.
6.2 Companies should provide the information indicated in the Guide to reporting on Principle 6	Satisfied
7.1 Companies should establish policies for the oversight and management of material business risks and disclose a summary of those policies.	Satisfied. The company has established policies for the oversight and management of material business risks. Risk management program is available at www.predictivediscovery.com.auin the Corporate Governance policy.

‐ 33 ‐

CORPORATE GOVERNANCE STATEMENT

30 JUNE 2013

PREDICTIVE DISCOVERY LIMITED

PREDICTIVE DISCOVERY LIMITED CORPORATE GOVERNANCE STATEMENT 30 JUNE 2013	PREDICTIVE DISCOVERY LIMITED CORPORATE GOVERNANCE STATEMENT 30 JUNE 2013
Recommendation Current Practice
7.2 The board should require management to design and implement the risk management and internal control system to manage the company’s material business risks and report to it on whether those risks are being managed effectively. The board should disclose that management has reported to it as to the effectiveness of the company’s management of its material business risks.	Satisfied. Management consist of the managing director, who has designed and implemented a risk management and internal control system to manage material business risks. Management have reported to the Board that those risks are being managed effectively.
7.3 The board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks.	Satisfied. The Board has received a section 295A declaration pursuant to the 2013 financial period.
7.4 Companies should provide the information indicated in the Guide to reporting on Principle 7	Satisfied The board has received the reports and assurances in 7.2 and 7.3. The policies are available on the company’s website.
8.1 The board should establish a remuneration committee.	Not Satisfied. The function of this committee is performed by the full board given the current size of the Board is 3 directors.
8.2 The remuneration committee should be structured so that is: • Consists of a majority of independent directors • Is chaired by an independent director • Has at least three members	Not satisfied.
8.3 Companies should clearly distinguish the structure of non-executive directors’ remuneration from that of executive directors and senior executives.	The structure of Directors’ remuneration is disclosed in the remuneration report of the annual report.
8.4 Companies should provide the information indicated in the Guide to reporting on Principle 8	The remuneration committee charter is available at www.predictivediscovery.com.au in the Corporate Governance policy.

Further information about the Company’s corporate governance practices is set out on the Company’s website at www.predictivediscovery.com.au.

‐ 34 ‐

==> picture [120 x 79] intentionally omitted <==

AUDITOR’S INDEPENDENCE DECLARATION UNDER S 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF PREDICTIVE DISCOVERY LIMITED & CONTROLLED ENTITIES

I declare that, to the best of my knowledge and belief, during the year ended 30 June 2013, there have been:

i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
ii. no contraventions of any applicable code of professional conduct in relation to the audit.

==> picture [56 x 43] intentionally omitted <==

NEXIA MELBOURNE

ABN 16 847 721 257

==> picture [68 x 76] intentionally omitted <==

ANDREW JOHNSON Partner Audit & Assurance Services

Melbourne

5 September 2013

==> picture [169 x 67] intentionally omitted <==

PREDICTIVE DISCOVERY LIMITED

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 30 June 2013

Note
Finance income
Share based payments
Administrative expenses
Foreign exchange expense
Impairment of exploration
Exploration expenditure pre-right to tenure
Profit (loss) before income taxes
Income tax expense
2
Profit (loss) from continuing operations
Other comprehensive income
Total comprehensive income for the year
Profit attibutable to:
Members of the parent entity
Basic (loss) per share (cents per share)
12
Diluted (loss) per share (cents per share)
12

2013
2012
$
$
38,533
191,196
(14,498)
(50,253)
(868,496)
(1,366,305)
176,854
(602,487)
(299,575)
(731,847)
(90,297)
(146,654)
(1,057,479)
(2,706,350)
-
-
(1,057,479)
(2,706,350)
1,383,801
(198)
326,322
(2,706,548)
326,322
(2,706,548)
326,322
(2,706,548)
(0.002 )
(0.023 )
(0.002 )
(0.023 )
Consolidated

These financial statements should be read in conjunction w ith the accompanying notes

‐ 36 ‐

PREDICTIVE DISCOVERY LIMITED

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 30 June 2013

Note
ASSETS
CURRENT ASSETS
Cash and cash equivalents
3
Trade and other receivables
4
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
5
Exploration expenditure
6
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
7
Provisions
9
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
10
Reserves
11
Accumulated losses
TOTAL EQUITY

2013
2012
$
$
1,352,410
1,063,472
129,071
179,608
1,481,481
1,243,080
364,969
526,742
14,604,406
10,235,139
14,969,375
10,761,881
16,450,856
12,004,961
229,658
734,901
20,626
139,107
250,284
874,008
250,284
874,008
16,200,572
11,130,953
19,942,017
15,264,189
1,668,042
218,772
(5,409,486)
(4,352,008)
16,200,573
11,130,953
Consolidated

These financial statements should be read in conjunction w ith the accompanying notes

‐ 37 ‐

PREDICTIVE DISCOVERY LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 30 June 2013

SHARE BASED ORDINARY ACCUMULATED PAYMENT SHARES LOSSES RESERVE $ $ $	SHARE BASED ORDINARY ACCUMULATED PAYMENT SHARES LOSSES RESERVE $ $ $	SHARE BASED ORDINARY ACCUMULATED PAYMENT SHARES LOSSES RESERVE $ $ $	FOREIGN CURRENCY TRANSLATION RESERVE TOTAL $ $
15,264,188	(4,352,007) (1,057,479)	311,995	(93,223) 11,130,953 (1,057,479) 1,383,801 1,383,801 4,979,967 (302,138) 65,469 1,383,801 5,069,620 1,290,578 16,200,573 FOREIGN CURRENCY TRANSLATION RESERVE TOTAL $ $
4,979,967 (302,138)		65,469
4,677,828	(1,057,479)	65,469
19,942,017	(5,409,486)	377,464
10,349,630	(1,645,659) (2,706,348)	261,742	(93,025) 8,872,688 (2,706,348) (198) (198) (198) (2,706,546) 5,275,213 (360,655) 50,253 (198) 2,258,265 (93,223) 11,130,953
5,275,213 (360,655)	(2,706,348)	50,253
4,914,558	(2,706,348)	50,253
15,264,188	(4,352,007)	311,995

These financial statements should be read in conjuction w ith the accompanying notes

‐ 38 ‐

PREDICTIVE DISCOVERY LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS

for the year ended 30 June 2013

		2013	2012
	Note	$	$
CASH FROM OPERATING ACTIVITIES:
GST receipts		20,110	10,066
Payments to suppliers and employees		(716,682)	(1,731,254)
Net cash provided by (used in) operating activities	21	(696,572)	(1,721,188)
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest received		38,533	191,196
Purchase of property, plant and equipment		(2,175)	(546,851)
Payments for exploration expenditure		(2,751,532)	(6,973,426)
Net cash provided by (used in) investing activities		(2,715,174)	(7,329,081)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issue of shares		4,177,969	5,275,213
Payment of share issue costs		(236,669)	(360,655)
Net cash from financing activities		3,941,300	4,914,558
OTHER ACTIVITIES:
Foreign exchange differences		(240,616)	(9,041)
Net cash used by other activities		(240,616)	(9,041)
Net increase (decrease) in cash held		529,554	(4,135,711)
Cash and cash equivalents at beginning of period		1,063,472	5,208,224
Cash and cash equivalents at end of financial period	3	1,352,410	1,063,472

These financial statements should be read in conjunction w ith the accompanying notes

‐ 39 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

This financial report includes the consolidated financial statements and notes of Predictive Discovery Limited and controlled entities (The Group).

1 SUMMARY OF SINGIFICANT ACCOUNTING POLICIES

Predictive Discovery Limited is a company limited by shares, incorporated and domiciled in Australia.

The financial report is a general purpose financial statement that has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001 .

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented below and have been consistently applied unless otherwise stated.

The financial report has been prepared on an accruals basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected financial assets and financial liabilities.

These financial statements are presented in Australian dollars, rounded to the nearest dollar.

(A) PRINCIPLES OF CONSOLIDATION

The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by Predictive Discovery Limited at the end of the reporting period. A controlled entity is any entity over which Predictive Discovery Limited has the power to govern the financial and operating policies so as to obtain benefits from the entity's activities. Control will generally exist when the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity. In assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are also considered.

Where controlled entities have entered or left The Group during the year, the financial performance of those entities are included only for the period of the year that they were controlled. A list of controlled entities is contained in Note 18 to the financial statements.

As at reporting date, the assets and liabilities of all controlled entities have been incorporated into the consolidated financial statements as well as their results for the year then ended. Where controlled entities have entered (left) The Group during the year, their operating results have been included (excluded) from the date control was obtained (ceased).

In preparing the consolidated financial statements, all inter‐group balances and transactions between entities in The Group have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those adopted by the parent entity.

‐ 40 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..

(A) PRINCIPLES OF CONSOLIDATION (continued)

Non‐controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent, are shown separately within the Equity section of the consolidated statement of financial position and consolidated statement of comprehensive income. The non‐controlling interests in the net assets comprise their interests at the date of the original business combination and their share of changes in equity since that date.

Subsidiaries are accounted for in the parent entity at cost.

Business Combinations

Business combinations occur where an acquirer obtains control over one or more businesses and results in the consolidation of its assets and liabilities.

A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The acquisition method requires that for each business combination one of the combining entities must be identified as the acquirer (i.e. parent entity). The business combination will be accounted for as at the acquisition date, which is the dale that control over the acquiree is obtained by the parent entity. At this date, the parent shall recognise, in the consolidated accounts, and subject to certain limited exceptions, the fair value of the identifiable assets acquired and liabilities assumed. In addition, contingent liabilities of the acquiree will be recognised where a present obligation has been incurred and its fair value can be reliably measured.

The acquisition may result in the recognition of goodwill or a gain from a bargain purchase. The method adopted for the measurement of goodwill will impact on the measurement of any non‐ controlling interest to be recognised in the acquiree where less than 100% ownership interest is held in the acquiree.

The acquisition date fair value of the consideration transferred for a business combination plus the acquisition date fair value of any previously held equity interest shall form the cost of the investment in the separate financial statements. Consideration may comprise the sum of the assets transferred by the acquirer, liabilities incurred by the acquirer to the former owners of the acquiree and the equity interests issued by the acquirer.

Fair value uplifts in the value of pre‐existing equity holdings are taken to the statement of comprehensive income. Where changes in the value of such equity holdings had previously been recognised in other comprehensive income, such amounts are recycled to profit or loss.

Included in the measurement of consideration transferred is any asset or liability resulting from a contingent consideration arrangement. Any obligation incurred relating to contingent consideration is classified as either a financial liability or equity instrument, depending upon the nature of the arrangement. Rights to refunds of consideration previously paid are recognised as a receivable. Subsequent to initial recognition, contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or a liability is remeasured each reporting period to fair value

‐ 41 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..

(A) PRINCIPLES OF CONSOLIDATION (continued)

Business Combinations (continued)

through the statement of comprehensive income unless the change in value can be identified as existing at acquisition date.

All transaction costs incurred in relation to the business combination are expensed to the statement of comprehensive income.

(B) REVENUE AND OTHER INCOME

Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts and volume rebates allowed. Any consideration deferred is treated as the provision of finance and is discounted at a rate of interest that is generally accepted in the market for similar arrangements. The difference between the amount initially recognised and the amount ultimately received is interest revenue.

Interest revenue is recognised using the effective interest rate method. The effective interest rate method uses the effective interest rate which is the rate that exactly discounts the estimated future cash receipts over the expected life of the financial assets.

All revenue is stated net of the amount of goods and services tax (GST).

(C) BOROWING COSTS

Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

All other borrowing costs are recognised in income in the period in which they are incurred.

(D) INCOME TAX

The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income).

Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at the end of the reporting period. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.

Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses.

Current and deferred tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity.

‐ 42 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES…..

(D) INCOME TAX (continued)

Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at the end of the reporting period. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.

Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.

Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.

Current assets and liabilities are offset where a legally enforceable right of set‐off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set‐off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

(E)

EMPLOYEE BENEFITS

Provision is made for the company's liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later than one year have been measured at present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wage increases and the probability that the employee may satisfy vesting requirements. Those cashflows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cashflows.

‐ 43 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..

(E) EMPLOYEE BENEFITS (continued)

Liabilities recognised in respect of employee benefits which are not expected to be settled within 12 months are measured at the present value of the estimated future cash outflows to be made by The Group in respect of services provided by employees up to reporting date.

(F) PROVISIONS

Provisions are recognised when The Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.

The liability for long service leave is recognised in current and non‐current liabilities, depending on the unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

(G) FOREIGN CURRENCY TRANSACTIONS AND BALANCES

The functional currency of each of The Group's entities is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity's functional and presentation currency. All other companies within The Group have Australian dollars as their functional currency.

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year‐end exchange rate. Non‐monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non‐monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

Exchange differences arising on the translation of monetary items are recognised in the consolidated statement of comprehensive income, except where deferred in equity as a qualifying cash flow or net investment hedge.

Exchange differences arising on the translation of non‐monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the consolidated statement of comprehensive income.

The financial results and position of foreign operations whose functional currency is different from The Group's presentation currency are translated as follows:

assets and liabilities are translated at year‐end exchange rates prevailing at that reporting date;
income and expenses are translated at average exchange rates for the period; and
retained earnings are translated at the exchange rates prevailing at the date of the transaction.

‐ 44 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..

(G) FOREIGN CURRENCY TRANSACTIONS AND BALANCES (continued)

Exchange differences arising on translation of foreign operations are transferred directly to The Group's foreign currency translation reserve in the consolidated statement of financial position. These differences are recognised in the consolidated statement of comprehensive income in the period in which the operation is disposed.

(H) CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short term borrowings in current liabilities in the statement of financial position.

(I) FINANCIAL INSTRUMENTS

Initial recognition and measurement

Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is the equivalent to the date that The Group commits itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted).Financial instruments are initially measured at fair value plus transactions costs, except where the instrument is classified 'at fair value through profit or loss', in which case transaction costs are expensed to profit or loss immediately.

Classification and subsequent measurement

Financial instruments are subsequently measured at either of fair value, amortised cost using the effective interest rate method, or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled, between knowledgeable, willing parties. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted.

Amortised cost is calculated as:

(a) the amount at which the financial asset or financial liability is measured at initial recognition;
(b) less principal repayments;
(c) plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised and the maturity amount calculated using the effective interest method; and
(d) less any reduction for impairment.

‐ 45 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..

(I) FINANCIAL INSTRUMENTS (continued)

Classification and subsequent measurement ……

The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense in profit or loss.

The Group does not designate any interests in subsidiaries, associates or joint venture entities as being subject to the requirements of accounting standards specifically applicable to financial instruments.

(i) Financial assets at fair value through profit or loss

Financial assets are classified at ‘fair value through profit or loss’ when they are either held for trading for the purpose of short term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss.

(ii) Loans and receivables

Loans and receivables are non‐derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost.

Loans and receivables are included in current assets, except for those which are not expected to mature within 12 months after the end of the reporting period. (All other loans and receivables are classified as non‐current assets).

(iii) Held‐to‐maturity investments

Held‐to‐maturity investments are non‐derivative financial assets that have fixed maturities and fixed or determinable payments, and it is The Group's intention to hold these investments to maturity. They are subsequently measured at amortised cost.

Held‐to‐maturity investments are included in non‐current assets, except for those which are expected to mature within 12 months are the end of the reporting period. (All other investments are classified as current assets).

‐ 46 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..

(I) FINANCIAL INSTRUMENTS (continued)

Classification and subsequent measurement ……

If during the period The Group sold or reclassified more than an insignificant amount of the held to maturity investments before maturity, the entire held‐to‐maturity investments category would be tainted and reclassified as available for sale.

(iv) Available for sale financial assets

Available for sale financial assets are non‐derivative financial assets that are either not suitable to be classified into other categories of financial assets due to their nature, or they are designated as such by management. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments.

Available for sale financial assets are included in non‐current assets, except for those which are expected to mature within 12 months after the end of the reporting period. (All other financial assets are classified as current assets).

(v) Financial liabilities

Non‐derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost.

Derecognition

Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expired. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non‐cash assets or liabilities assumed is recognised in profit or loss.

(J) PROPERTY, PLANT AND EQUIPMENT

Each class of property, plant and equipment is carried at cost or fair value as indicated, less, where applicable, any accumulated depreciation and impairment losses.

Plant and Equipment

Plant and equipment are measured on the cost basis.

Depreciation

The depreciable amount of all fixed assets is depreciated on a straight line basis over the asset's useful life to The Group commencing from the time the asset is held ready for use.

‐ 47 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..

(J) PROPERTY, PLANT AND EQUIPMENT (continued)

Depreciation …..

Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

The estimated useful lives used for each class of depreciable assets are:

CLASS OFFIXEDASSET	USEFULLIFE
Camp under construction	7 ‐ 20 years

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the consolidated statement of comprehensive income.

Property, plant and equipment is derecognised and removed from the consolidated statement of financial position on disposal or when no future economic benefits are expected. Gains and losses from derecognition are measured as the difference between the net disposal proceeds, if any, and the carrying amount and are recognised in profit or loss.

Subsequent costs are included in the property, plant and equipment's carrying value or recognised as a separate asset when it is probable that future economic benefits associated with the item will be realised and the cost of the item can be measured reliably. All other repairs and maintenance are recognised in profit or loss.

(K) EXPLORATION AND DEVELOPMENT EXPENDITURE

Costs Carried Forward

Costs arising from exploration and evaluation activities are carried forward where the rights to tenure for the area of interest are current and such costs are expected to be recouped through successful development, or by sale, or where exploration and evaluation activities have not, at reporting date, reached a stage to allow a reasonable assessment regarding the existence of economically recoverable reserves.

Costs carried forward in respect of an area of interest that is abandoned are written off in the period in which the decision to abandon is made.

Contributions received from third parties in exchange for participating interests in exploration and evaluation tenements (e.g. as part of farm out arrangements) are netted off against the costs carried forward in respect of those tenements in which the third party acquires a participating interest.

‐ 48 ‐

PREDICTIVE DISCOVERY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..

(L) IMPAIRMENT OF ASSETS

At each reporting date, The Group assesses whether there is any indication that an asset may be impaired. The assessment will include considering external sources of information including, dividends received from subsidiaries, associates or jointly controlled entities deemed to be out of pre‐acquisition profits. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset's fair value less costs to sell and value in use to the asset's carrying value. Any excess of the asset's carrying value over its recoverable amount is expensed to the consolidated statement of comprehensive income.

Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.

Where an impairment loss on a revalued asset is identified, this is debited against the revaluation surplus in respect of the same class of asset to the extent that the impairment loss does not exceed the amount in the revaluation surplus for that same class of asset.

Non‐financial assets, other than inventories, deferred tax assets, assets from employee benefits, investment properties and deferred acquisition costs, are assessed for any indication of impairment at the end of each reporting period. Any indication of impairment requires formal testing of impairment by comparing the carrying amount of the asset to an estimate of the recoverable amount of the asset. An impairment loss is calculated as the amount by which the carrying amount of the asset exceeds the recoverable amount of the asset.

Intangible assets with an indefinite useful life and intangible assets not yet available for use are tested for impairment annually regardless of whether there is any indication of impairment.

The recoverable amount is the greater of the asset's fair value less costs to sell and its value in use. The asset's value in use is calculated as the estimated future cash flows discounted to their present value using a pre‐tax rate that reflects current market assessments of the time value of money and the risks associated with the asset. Assets that cannot be tested individually for impairment are grouped together into the smallest group of assets that generates cash inflows (the asset's cash generating unit).

Impairment losses are recognised in profit or loss. Impairment losses are allocated first, to reduce the carrying amount of any goodwill allocated to cash generating units, and then to other assets of the group on a pro rata basis.

Assets other than goodwill are assessed at the end of each reporting period to determine whether previously recognised impairment losses may no longer exist or may have decreased. Impairment losses recognised in prior periods for assets other than goodwill are reversed up to the carrying amounts that would have been determined had no impairment loss been recognised in prior periods.

‐ 49 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..

(M) TRADE AND OTHER PAYABLES

Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services received by The Group during the reporting period which remain unpaid. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of the liability.

(N) GOODS AND SERVICES TAX (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the consolidated statement of financial position are shown inclusive of GST.

(O) LEASES

Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that are transferred to entities in The Group, are classified as finance leases.

Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.

Lease payments for operating leases, where substantially all of the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred.

(P) EARNINGS PER SHARE

Basic loss per share is calculated as net loss attributable to members of The Group divided by the weighted average number of ordinary shares. Diluted loss per share is calculated by adjusting the net loss attributable to members of The Group and the number of shares outstanding for the effects of all dilutive potential ordinary shares, which include shares options.

(Q) CONTRIBUTED EQUITY

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown as a deduction, net of tax, from the proceeds.

(R) SHARE‐BASED PAYMENT TRANSACTIONS

Employees of The Group receive remuneration in the form of share based payment transactions, whereby employees render services in exchange for equity instruments ("equity settled transactions").

‐ 50 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..

(R) SHARE‐BASED PAYMENT TRANSACTIONS (continued)

When the goods or services acquired in a share based payment transaction do not qualify for recognition as assets, they are recognised as expenses.

The cost of equity settled transactions and the corresponding increase in equity is measured at the fair value of the goods or services acquired. Where the fair value of the goods or services received cannot be reliably estimated, the fair value is determined indirectly by the fair value of the equity instruments using the Black Scholes option valuation technique.

Equity‐settled transactions that vest after employees complete a specified period of service are recognised as services are received during the vesting period with a corresponding increase in equity.

(S) CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The directors evaluate estimates and judgments incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within The Group.

Key estimates – Impairment

The Group assesses impairment at the end of each reporting period by evaluating conditions specific to The Group that may be indicative of impairment triggers. Recoverable amounts of relevant assets are reassessed using fair value less cost to sell or value‐in‐use calculations which incorporate various key assumptions.

Key judgements – Exploration and Evaluation Expenditure

The Group capitalises expenditure relating to exploration and evaluation where it is considered likely to be recoverable or where the activities have not reached a stage which permits a reasonable assessment of the existence of reserves. $14,604,406 has been capitalised as at 30 June 2013 (see note 6). While there are certain areas of interest from which no reserves have been extracted, the directors are of the continued belief that such expenditure should not be written off since feasibility studies in such areas have not yet concluded and there are no facts of circumstances that suggest the carrying amounts of the exploration and evaluation assets recognised exceed their recoverable amount.

Key Judgements – Share‐based payment transactions

The Group measures the cost of equity settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using the Black Scholes method. The related assumptions are detailed in note 22. The accounting estimates and assumptions relating to equity‐settled share‐based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact expenses and equity.

‐ 51 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..

(S) CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)

Key Judgements ‐ Going Concern

The financial report has been prepared using the going concern basis. The Directors have determined that as with similar companies, future capital raisings will be required in order to continue the exploration and development of the company's mining tenements (some subject to an option payment) to achieve a position where they can prove exploration reserves. The ability of the company to continue as a going concern is dependent upon the company raising additional capital sufficient to meet the company's exploration commitments. Should there be no funding available, exploration of the areas of interest may be put on hold. The recoverability of the exploration asset is dependent upon the continued exploration of each area of interest.

The Directors have prepared a cash flow forecast for the foreseeable future reflecting this expectation and their effect upon the company. The achievement of the forecast is dependent upon the future capital raising, the outcome of which is uncertain.

Key Judgements ‐ Recoverability of Intercompany Loan

Within Non‐current assets of the parent entity (see note 20) there is a loan due from the 100% subsidiary of $12,013,493 which is considered fully recoverable. The recoverability of this loan is dependent upon the successful development or sale of exploration assets in Burkina Faso.

(T) ADOPTION OF NEW AND REVISED ACCOUNTING STANDARDS

During the current year the Group adopted all of the new and revised Australian Accounting Standards and Interpretations applicable to its operations which became mandatory.

The adoption of these standards has impacted the recognition, measurement and disclosure of certain transactions. The following is an explanation of the impact the adoption of these standards and interpretations has had on the financial statements of Predictive Discovery Limited.

Limited.
Reference	Title	Nature of Change	Application date of
			standard
AASB 9 (issued	Financial	Amends the requirements for	Periods beginning on or
December 2009	Instruments	classification and	after 1 January 2015
and amended		measurement of financial
December 2010)		assets. The available‐for‐sale
		and held‐to‐maturity
		categories of financial assets
		in AASB 139 have been
		eliminated.

‐ 52 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2013

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..

(T) ADOPTION OF NEW AND REVISED ACCOUNTING STANDARDS (continued)

Reference	Title	Nature of Change	Application date of
			standard
		AASB 9 requires that gains or
		losses on financial liabilities
		measured at fair value are
		recognised in profit or loss,
		except that the effects of
		changes in the liability’s credit
		risk are recognised in other
		comprehensive income.
AASB 10 (issued	Consolidated	Introduces a single ‘control	Annual reporting
August 2011)	Financial	model’ for all entities,	periods commencing on
	Statements	including special purpose	or after 1 January 2013
		entities (SPEs), whereby all of
		the following conditions must
		be present:
		• Power over investee
		(whether or not power used
		in practice)
		• Exposure, or rights, to
		variable returns from
		investee
		• Ability to use power over
		investee to affect the
		[Entity]’s returns from
		investee.
		• Introduces the concept of
		‘defacto’ control for entities
		with less than 50%
		ownership interest in an
		entity, but which have a
		large shareholding
		compared to other
		shareholders. This could
		result in more instances of
		control and more entities
		being consolidated.
AASB 11 (issued	Joint	Joint arrangements will be	Annual reporting
August 2011)	Arrangements	classified as either ‘joint	periods commencing on
		operations’ (where parties	or after 1 January 2013
		with joint control have rights

‐ 53 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2013

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..

(T) ADOPTION OF NEW AND REVISED ACCOUNTING STANDARDS (continued)

Reference	Title	Nature of Change	Application date of
			standard
		to assets and obligations for
		liabilities) or ‘joint ventures’
		(where parties with joint
		control have rights to the net
		assets of the arrangement).
AASB 12 (issued	Disclosure of	Combines existing disclosures	Annual reporting
August 2011)	Interests in	from AASB 127_Consolidated_	periods commencing on
	Other Entities	and Separate Financial	or after 1 January 2013
		Statements, AASB 128
		_Investments in Associates_and
		AASB 131_Interests in Joint_
		Ventures. Introduces new
		disclosure requirements for
		interests in associates and
		joint arrangements, as well as
		new requirements for
		unconsolidated structured
		entities.
AASB 13 (issued	Fair Value	AASB 13 establishes a single	Annual reporting
September 2011)	Measurement	framework for measuring fair	periods commencing on
		value of financial and non‐	or after 1 January 2013
		financial items recognised at
		fair value in the statement of
		financial position or disclosed
		in the notes in the financial
		statements.
		Additional disclosures
		required for items measured
		at fair value in the statement
		of financial position, as well as
		items merely disclosed at fair
		value in the notes to the
		financial statements.
		Extensive additional disclosure
		requirements for items
		measured at fair value that
		are ‘level 3’ valuations in the
		fair value hierarchy that are
		not financial instruments.

‐ 54 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2013

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..

(T) ADOPTION OF NEW AND REVISED ACCOUNTING STANDARDS (continued)

Reference	Title	Nature of Change	Application date of
			standard
AASB 119	Employee	Employee benefits expected	Annual periods
(reissued	Benefits	to be settled (as opposed to	commencing on or after
September 2011)		due to settled under current	1 January 2013
		standard) wholly within 12
		months after the end of the
		reporting period are short‐
		term benefits, and therefore
		not discounted when
		calculating leave liabilities.
		Annual leave not expected to
		be used wholly within 12
		months of end of reporting
		period will in future be
		discounted when calculating
		leave liability.
AASB 2011‐4	Amendments to	Amendments to remove	Annual periods
(issued July 2011)	Australian	individual key management	commencing on or after
	Accounting	personnel (KMP) disclosure	1 July 2013
	Standards to	requirements from AASB 124
	Remove	to eliminate duplicated
	Individual Key	information required under
	Management	the_Corporation Act 2001_
	Personnel
	Disclosure
	Requirements
Interpretation 20	Stripping Costs	Clarifies that costs of	Annual periods
(issued November	in the	removing mine waste	commencing on or after
2011)	Production	materials (overburden) to gain	1 January 2013
	Phase of a	access to mineral ore deposits
	Surface Mine	during the production phase
		of a mine must be capitalised
		as inventories under AASB 102
		_Inventories_if the benefits
		from stripping activity is
		realised in the form of
		inventory produced.

‐ 55 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2013

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..

(T) ADOPTION OF NEW AND REVISED ACCOUNTING STANDARDS (continued)

Reference	Title	Nature of Change	Application date of
			standard
		Otherwise, if stripping activity
		provides improved access to
		the ore, stripping costs must
		be capitalised as a non‐
		current, stripping activity asset
		if certain recognition criteria
		are met.
AASB 2012‐5	Annual	Non‐urgent but necessary	Periods commencing on
(issued June	Improvements	changes to IFRSs (IAS1, IAS 16	or after 1 January 2013
2012)	to Australian	& IAS 32)
	Accounting Standards 2009‐ 2011 Cycle	e.g: AASB 116 clarifies that items such as spare parts, stand‐by or service
		equipment are required to be
		classified as property, plant
		and equipment and not
		inventory
IFRS (issued	Mandatory	Entities are no longer required	Annual reporting
December 2011)	Effective Date of	to restate comparatives on	periods commencing on
	IFRS 9 and	first time adoption. Instead,	or after 1 January 2015
	Transition	additional disclosures on the
	Disclosures	effects of transition are
		required.
AASB 2012‐9	Amendment to	Deletes Australian	Annual reporting
(issued December	AASB 1048	Interpretation 1039	periods beginning on or
2012)	arising from the	Substantive Enactment of	after 1 January 2013
	Withdrawal of	Major Tax Bills In Australia
	Australian	from the list of mandatory
	Interpretation	Australian Interpretations to
	1039	be applied by entities
		preparing financial
		statements under the
		_Corporations Act 2001_or
		other general purpose
		financial statements.

‐ 56 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2013

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..

(U) NEW ACCOUNTING STANDARDS FOR APPLICATION IN FUTURE PERIODS

The AASB has issued new and amended accounting standards and interpretations that have mandatory application dates for future reporting periods. The Group has decided against early adoption of these standards. A discussion of those future requirements and their impact on the Group follows:

AASB 9 ‐ Financial Instruments

Application Date of the standard 1 January 2013 Application Date for the Group 1 July 2013

AASB 9 includes requirements for the classification and measurement of financial assets resulting from the first part of Phase 1 of the IASB’s project to replace IAS 39 Financial Instruments: Recognition and Measurement (AASB 139 Financial Instruments: Recognition and Measurement).

These requirements improve and simplify the approach for classification and measurement of financial assets compared with the requirements of AASB 139. The main changes from AASB 139 are described below.

(a) Financial assets are classified based on (1) the objective of the entity’s business model for managing the financial assets; (2) the characteristics of the contractual cash flows. This replaces the numerous categories of financial assets in AASB 139, each of which had its own classification criteria.
(b) AASB 9 allows an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument.
(c) Financial assets can be designated and measured at fair value through profit or loss at initial recognition if doing so eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities, or recognising the gains and losses on them, on different bases.

AASB 10 ‐ Consolidated Financial Statements

Application Date of the standard 1 January 2013 Application Date for the Group 1 July 2013

AASB 10 establishes a new control model that applies to all entities. It replaces parts of AASB 127 Consolidated and Separate Financial Statements dealing with the accounting for consolidated financial statements and Interpretation 112 Consolidation – Special Purpose Entities.

The new control model broadens the situations when an entity is considered to be controlled by another entity and includes new guidance for applying the model to specific situations, including when acting as a manager may give control, the impact of potential voting rights and when holding less than a majority voting rights may give control. This is likely to lead to more entities being consolidated into the group.

‐ 57 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..

(U) NEW ACCOUNTING STANDARDS FOR APPLICATION IN FUTURE PERIODS (continued)

AASB 11 ‐ Joint Arrangements

Application Date of the standard 1 January 2013 Application Date for the Group 1 July 2013

AASB 11 replaces AASB 131 Interests in Joint Ventures and Interpretation 113 Jointly‐ controlled Entities – Non‐monetary Contributions by Ventures. AASB 11 uses the principle of control in AASB 10 to define joint control, and therefore the determination of whether joint control exists may change. In addition AASB 11 removes the option to account for jointly controlled entities (JCEs) using proportionate consolidation. Instead, accounting for a joint arrangement is dependent on the nature of the rights and obligations arising from the arrangement. Joint operations that give the venturers a right to the underlying assets and obligations themselves is accounted for by recognising the share of those assets and obligations. Joint ventures that give the venturers a right to the net assets is accounted for using the equity method. This may result in a change in the accounting for the joint arrangements held by the group.

AASB 12 ‐ Disclosure of Interests in Other Entities

Application Date of the standard 1 January 2013 Application Date for the Group 1 July 2013

AASB 12 includes all disclosures relating to an entity’s interests in subsidiaries, joint arrangements, associates and structures entities.

New disclosures have been introduced about the judgements made by management to determine whether control exists, and to require summarised information about joint arrangements, associates and structured entities and subsidiaries with non‐controlling interests.

AASB 13 – Fair Value Measurement

Application Date of the standard 1 January 2013 Application Date for the Group 1 July 2013

AASB 13 establishes a single source of guidance under Australian Accounting Standards for determining the fair value of assets and liabilities. AASB 13 does not change when an entity is required to use fair value, but rather, provides guidance on how to determine fair value under Australian Accounting Standards when fair value is required or permitted by Australian Accounting Standards. Application of this definition may result in different fair values being determined for the relevant assets.

AASB 13 also expands the disclosure requirements for all assets or liabilities carried at fair value. This includes information about the assumptions made and the qualitative impact of those assumptions on the fair value determined.

‐ 58 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2013

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..

(U) NEW ACCOUNTING STANDARDS FOR APPLICATION IN FUTURE PERIODS (continued)

AASB 119 ‐ Employee Benefits

Application Date of the standard 1 January 2013 Application Date for the Group 1 July 2013

The main changes to accounting for defined benefit plans are:

to eliminate the option to defer the recognition of gains and losses (the ‘corridor method’);
requiring remeasurements to be presented in other comprehensive income; and
enhancing the disclosure requirements relating to defined benefit plans for Tier 1 entities. The AASB has provided relief from certain disclosure requirements for entities that adopt Tier 2 Reduced Disclosure Requirements.

Interpretation 20 ‐ Stripping the Costs in the Production Phase of a Surface Mine

Application Date of the standard 1 January 2013 Application Date for the Group 1 July 2013

This interpretation applies to stripping costs incurred during the production phase of a surface mine.

Production stripping costs are to be capitalised as part of an asset, if an entity can demonstrate that it is probable future economic benefits will be realised, the costs can be reliably measured and the entity can identify the component of an ore body for which access has been improved. This asset is to be called the “stripping activity asset”.

The stripping activity asset shall be depreciated or amortised on a systematic basis, over the expected useful life of the identified component of the ore body that becomes more accessible as a result of the stripping activity. The units of production method shall be applied unless another method is more appropriate.

Consequential amendments were also made to other standards via AASB 2011‐12.

Annual Improvements 2009‐2011 Cycle

Application Date of the standard 1 January 2013 Application Date for the Group 1 July 2013

This standard sets out amendments to International Financial Reporting Standards (IFRSs) and the related bases for conclusions and guidance made during the International Accounting Standards Board’s Annual Improvements process. These amendments have not yet been adopted by the AASB.

The following items are addressed by this standard:

IFRS 1 First‐time Adoption of International Financial Reporting Standards

Repeated application of IFRS 1
Borrowing costs

‐ 59 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES …..

(U) NEW ACCOUNTING STANDARDS FOR APPLICATION IN FUTURE PERIODS (continued)

Annual Improvements 2009‐2011 Cycle…..

IAS 1 Presentation of Financial Statements

Clarification of the requirements for comparative information

IAS 16 Property, Plant and Equipment

Classification of servicing equipment

IAS 32 Financial Instruments: Presentation

Tax effect of distribution to holders of equity instruments

IAS 34 Interim Financial Reporting

Interim financial reporting and segment information for total assets and liabilities

AASB 2011‐4 Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements

Application Date of the standard 1 July 2013 Application Date for the Group 1 July 2013

This Amendment deletes from AASB 124 individual key management personnel disclosure requirements for disclosing entities that are not companies.

AASB 1053 Application of Tiers of Australian Accounting Standards

Application Date of the standard 1 July 2013 Application Date for the Group 1 July 2013

This Standard establishes a differential financial reporting framework consisting of two Tiers of reporting requirements for preparing general purpose financial statements:

(a) Tier 1: Australian Accounting Standards
(b) Tier 2: Australian Accounting Standards – Reduced Disclosure Requirements

Tier 2 comprises the recognition, measurement and presentation requirements of Tier 1 and substantially reduced disclosures corresponding to those requirements.

The following entities apply Tier 1 requirements in preparing general purpose financial statements:

(a) For‐profit entities in the private sector that have public accountability (as defined in this Standard)
(b) The Australian Government and State, Territory and Local Governments

The following entities apply either Tier 2 or Tier 1 requirements in preparing general purpose financial statements:

(a) For‐profit private sector entities that do not have public accountability
(b) All not‐for‐profit private sector entities.

Public sector entities other than the Australian Government and State, Territory and Local Governments

The Group does not anticipate early adoption of any of the above accounting standards.

‐ 60 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

2 INCOME TAX EXPENSE

(A) THE COMPONENTS OF TAX EXPENSE COMPRISE:

(a) Income tax recognised in profit or loss
Tax expense / (revenue) comprises:
Current tax expense / (revenue)
Deferred tax expense / (revenue) relating to the origination and
reversal of temporary differences
Tax Losses Not Recognised
Total tax expense / (revenue)
The prima facie income tax expense on pre‐tax accounting
profit from operations reconciles to the income tax expense in
the financial statements as follows:
Profit / (loss) from operations
Income tax expense (revenue) calculated at 30% (2010: 30%)
Tax Effect of Employee Options
Tax effect of FX Loss
Tax Effect of Capital Raising Costs Not Recognised
Non‐deductable expenses
Tax Losses Not Recognised
Current tax
Deferred tax

2013
$
2012
$
‐
‐
‐
‐

‐
‐

2013
$
2012
$
(1,362,791)
(2,670,783)
912,584
1,892,950
450,207
777,833
‐
‐
326,322
(2,706,548)
97,897
(811,964)
4,349
15,076
(468,196)
‐
(84,393)
136
18,996
450,207
777,892
‐
‐

Income tax rate

The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by the Australian corporate entities on taxable profits under the Australian tax law. There has been no change in the corporate tax rate when compared with the previous year.

3 CASH AND CASH EQUIVALENTS

Cash at bank	2013 $ 2012 $ 1,352,410 1,063,472
	1,352,410 1,063,472

Of the cash at bank amount, $10,000 is provided as security to the ANZ Bank for a bank guarantee.

‐ 61 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

4 TRADE AND OTHER RECEIVABLES

Trade receivables Other receivables	2013 $ 2012 $ 22,978 90,152 106,093 89,456
	129,071 179,608

5 PROPERTY, PLANT AND EQUIPMENT

PLANT AND EQUIPMENT At cost Accumulated depreciation Total plant and equipment	2013 $ 2012 $ 531,334 529,159 (166,365) (103,115)
	364,969 426,044

(A) MOVEMENTS IN CARRYING AMOUNTS

Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year:

Balance at 30 June 2013 Balance at the beginning of year Additions Depreciation expense Movement in exchange rates Balance at 30 June 2013 Balance at 30 June 2012 Balance at the beginning of year Additions Depreciation expense Movement in exchange rates Balance at 30 June 2012	PLANT AND EQUIPMENT $ TOTAL $ 426,044 426,044 2,175 2,175 (109,361) (109,361) 46,111 46,111
	364,969 364,969
	287,593 287,593 282,107 282,107 (103,115) (103,115) (40,541) (40,541)
	426,044 426,044

‐ 62 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

6 EXPLORATION, EVALUATION AND DEVELOPMENT ASSETS

Exploration and evaluation expenditure 2013 Balance at beginning of the year Expenditure incurred Impairment Balance at end of the year 2012 Balance at beginning of the year Expenditure incurred Impairment Balance at end of the year	2013 $ 14,604,406	2012 $ 10,235,139
	14,604,406	10,235,139
	EXPLORATION AND EVALUATION $ 10,235,139 4,668,842 (299,575) 14,604,406 3,925,307 7,041,679 (731,847) 10,235,139

The recoverability of the carrying amount of the exploration and evaluation assets is dependent on successful development and commercial exploitation, or alternatively, sale of the respective areas of interest. It is the Board’s view that PD’s exploration and evaluation assets satisfy AASB6 7.2(b)(ii) because PD only commenced exploration activities over the past year and those activities have not reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves.

Active and significant operations have occurred on all permits until the beginning of the wet season (July) and PD’s budget shows active expenditure on exploration activities in the dry season (November to June). The budget is split by geographical area and not by area of interest as the allocation of resources will depend upon findings. However, it is acknowledged that the budget allows for spending on all areas of interest without exclusion. It is anticipated that all expenditure required by agreement or permit will be met.

In assessing the recoverability of the carrying amounts, reference is made to Note 1 (S) ‐ Key Judgements ‐ Exploration and Evaluation Expenditure and Going Concern. The Directors have determined that as with similar companies, future capital raisings will be required in order to continue the exploration and development of the company's mining tenements (some subject to an option payment) to achieve a position where they can prove exploration reserves. Should there be no funding available, exploration of the areas of interest may be put on hold. The recoverability of the exploration asset is dependent upon the continued exploration of each area of interest.

‐ 63 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

7 TRADE AND OTHER PAYABLES

*CURRENT* Trade payables Other payables 8 TAX ASSETS AND LIABILITES (a) Assets Current Income tax refundable Non‐current Deferred tax asset comprises: Employee Entitlements Accruals and payables ASX Listing Costs Tax Losses Amount Not Recognised (b) Liabilities Current Income tax liabilities Less: PAYG instalments paid Income tax payable Non‐current Deferred tax liability comprises: Exploration Expenditure Amount Not Recognised Net DTA/DTL	2013 $ 2012 $ 229,658 734,901 20,626 139,107
	250,284 874,008
	2013 $ 2012 $ ‐ ‐
	‐ ‐
	6,188 41,732 11,250 ‐ 909 ‐ 4,097,821 4,267,723 (4,116,168) (4,309,455)
	‐ ‐
	‐ ‐ ‐ ‐
	‐ ‐
	(2,491,965) (3,070,542) 2,491,965 3,070,542
	‐ ‐

‐ 64 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

8 TAX ASSETS AND LIABILITES (continued) (c) Reconciliations (i) Gross Movements The overall movement in the deferred tax balances is as follows: Opening balance Underprovision in prior year Credited / (charge) to the income statement Amount Not Recognised Closing balance (ii) Deferred tax assets The movement in deferred tax assets for each temporary difference during the year is as follows: Employee Entitlements Opening balance Credited / (charge) to the income statement Amount Not Recognised Closing balance Provisions Opening balance Credited / (charge) to the income statement Amount Not Recognised Closing balance Accruals and payables Opening balance Credited / (charge) to the income statement Amount Not Recognised Closing balance Tax Losses Opening balance Credited / (charge) to the income statement Amount Not Recognised Closing balance	2013 $ 2012 $ 1,173,995 455,019 ‐ ‐ 450,208 777,833 (1,624,203) (1,232,852)
	‐ ‐
	41,732 24,392 (35,544) ‐ (6,188) (24,392)
	‐ ‐
	‐ ‐ ‐ ‐ ‐ ‐
	‐ ‐
	9,000 8,550 2,250 ‐ (11,250) (8,550)
	‐ ‐
	2,735,029 1,596,940 1,362,792 2,670,783 (4,097,821) (4,267,723)
	‐ ‐

‐ 65 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

8 TAX ASSETS AND LIABILITES (continued) ASX Listing Costs Opening balance Under provision in prior year Credited / (charge) to the income statement Amount Not Recognised Closing balance (iii) Deferred tax liability Exploration Expenditure Opening balance Credit / (charge) to the income statement Amount Not Recognised Closing balance	2013 $ 2012 $ 1,819 2,729 ‐ ‐ (910) (910) (909) (1,819)
	‐ ‐
	(1,613,585) (1,177,592) (878,380) ‐ 2,491,965 1,177,592
	‐ ‐

The DTL is not recognised as a liability as the future tax benefits are assumed to be available if and when the deferred tax liability crystalises.

9 PROVISIONS

*CURRENT* Employee entitlements ISSUED CAPITAL 234,633,856 (2012: 125,555,405) Ordinary shares Share issue costs written off against issued capital	2013 $ 2012 $ 20,626 139,107
	20,626 139,107
	2013 $ 2012 $ 21,348,580 16,368,613 (1,406,563) (1,104,424)
	19,942,017 15,264,189

10 ISSUED CAPITAL

‐ 66 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

10 ISSUED CAPITAL (continued)

ORDINARY SHARES

*ORDINARY SHARES*
At the beginning of the reporting period Tenement Purchase Employee share issue Placements Rights Issues	2013 NO. 2013 $ 2012 NO. 2012 $ 125,555,405 16,386,368 97,056,681 11,093,400 11,250,000 787,500 524,590 100,000 329,500 14,498 ‐ ‐ 86,236,843 3,277,000 ‐ ‐ 11,262,108 900,969 27,974,134 5,192,968
	234,633,856 21,348,580 125,555,405 $16,386,368

OPTIONS

(i) For information relating to Predictive Discovery Limited employee option plan, including details of options issued, exercised and lapsed during the financial year and the options outstanding at year end, refer to Note 22.

11 RESERVES

FOREIGN CURRENCY TRANSLATION RESERVE

Exchange differences arising on translation of the foreign controlled entity are recognised in other comprehensive income foreign currency translation reserve. The cumulative amount is reclassified to profit or loss when the net investment is disposed of.

OPTION RESERVE

The option reserve records items recognised as expenses on valuation of employee share options.

12 EARNINGS PER SHARE

EARNINGS PER SHARE
	2013	2012
	$	$
Earnings used to calculate basic EPS	(1,029,304)	(2,706,350)

Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS.

Weighted average number of ordinary shares outstanding during the period‐ Number used in calculating basic EPS Weighted average number of ordinary shares outstanding during the year used in calculating dilutive EPS	2013 NO. 2012 NO. 193,090,138 118,702,116
	193,090,138 118,702,116

Diluted earnings per share is the same as basic earnings per share as The Group incurred a loss for the period and therefore is not considered dilutive.

‐ 67 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

12 EARNINGS PER SHARE (continued)

Weighted average number of ordinary shares outstanding during the period‐ Number used in calculating basic EPS Weighted average number of ordinary shares outstanding during the year used in calculating dilutive EPS	2013 NO. 2012 NO. 193,090,138 118,702,116
	193,090,138 118,702,116

Diluted earnings per share is the same as basic earnings per share as The Group incurred a loss for the period and therefore is not considered dilutive.

13 CAPITAL AND LEASING COMMITMENTS

(A) LEASE COMMITMENTS

Payable ‐ minimum lease payments: ‐ not later than 12 months ‐ between 12 months and 5 years _(B) _ *OPTIONS FEE COMMITMENTS* Payable ‐ minimum lease payments: ‐ not later than 12 months ‐ between 12 months and 5 years _(C) _ *CAPITAL EXPENDITURE COMMITMENTS* Payable: ‐ not later than 12 months ‐ between 12 months and 5 years		2013 $ 2012 $ 245,232 220,486 ‐ 427,873 245,232 648,359 2013 $ 2012 $ 500,000 430,000 ‐ 100,000 500,000 530,000 2013 2012 $ $ 50,087 72,352 146,454 289,410
		196,541 361,762

‐ 68 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

13 CAPITAL AND LEASING COMMITMENTS (continued)

(D) LICENCE FEE COMMITMENTS

Payable: ‐ not later than 12 months ‐ between 12 months and 5 years	2013 2012 $ $ 300,000 300,000 1,200,000 1,200,000
	1,500,000 1,500,000

14 FINANCIAL RISK MANAGEMENT

The Group's financial instruments consist mainly of deposits with banks, receivables and payables.

The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting policies to these financial statements, are as follows:

NOTE Financial Assets Cash and cash equivalents 3 Trade and other receivables 4 Total Financial Assets Financial Liabilities Trade and other payables 7 Total Financial Liabilities	2013 $ 2012 $ 1,352,410 1,063,261 129,071 179,819
	1,481,481 1,243,080
	250,284 874,008
	250,284 874,008

The carrying amounts of these financial instruments approximate their fair values.

FINANCIAL RISK MANAGEMENT POLICIES

Exposure to key financial risks is managed in accordance with the Group’s risk management policy with the objective to ensure that the financial risks inherent in exploration activities are identified and then managed or kept as low as reasonably practicable.

The main financial risks that arise in the normal course of business are market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk. Different methods are used to measure and manage these risk exposures. Liquidity risk is monitored through the ongoing review of available cash and future commitments for exploration expenditure.

‐ 69 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

14 FINANCIAL RISK MANAGEMENT (continued)

FINANCIAL RISK MANAGEMENT POLICIES…..

Exposure to liquidity risk is limited by anticipating liquidity shortages and ensures capital can be raise in advance of shortages. Interest rate risk is managed by limiting the amount interest bearing loans entered into by The Group. It is the Board's policy that no speculative trading in financial instruments be undertaken so as to limit expose to price risk.

Primary responsibility for identification and control of financial risks rests with the Company Secretary, under the authority of the Board. The Board is apprised of these risks from time to time and agrees any policies that may be undertaken to manage any of the risks identified.

Details of the significant accounting policies and methods adopted, including criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each financial instrument are disclosed in Note 1 to the financial statements. The carrying values less the impairment allowance for receivables and payables are assumed to approximate fair values due to their short term nature. Cash and cash equivalents are subject to variable interest rates.

SPECIFIC FINANCIAL RISK EXPOSURES AND MANAGEMENT

(A) CREDIT RISK

Exposure to credit risk relating to financial assets arises from the potential non‐performance by counter parties of contract obligations that could lead to a financial loss to The Group.

The Group trades only with recognised, creditworthy third parties.

The Group has no customers and consequently no significant exposure to bad debts or other credit risks.

With respect to credit risk arising from financial assets, which comprise cash and cash equivalents and receivables, the exposure to credit risk arises from default of the counter party, with a maximum exposure equal to the carrying amount of these instruments. At balance date cash and deposits were held with National Australia Bank.

(B) LIQUIDITY RISK

Liquidity risk arises from the possibility that The Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities.

Prudent liquidity risk management implies maintaining sufficient cash reserves to meet the ongoing operational requirements of the business. It is the Group’s policy to maintain sufficient funds in cash and cash equivalents. Furthermore, the Group monitors its ongoing exploration cash requirements and raises equity funding as and when appropriate to meet such planned requirements. The Group has no undrawn financing facilities. Trade and other payables, the only financial liability of the Group, are due within 3 months.

The tables below reflect an undiscounted contractual maturity analysis for financial liabilities.

‐ 70 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

14 FINANCIAL RISK MANAGEMENT (continued)

SPECIFIC FINANCIAL RISK EXPOSURES AND MANAGEMENT….

(B) LIQUIDITY RISK (continued)

Cash flows realised from financial assets reflect management's expectation as to the timing of realisation. Actual timing may therefore differ from that disclosed. The timing of cash flows presented in the table to settle financial liabilities reflects the earliest contractual settlement dates and does not reflect management's expectations that banking facilities will be rolled forward.

Financial liability and financial asset maturity analysis

Financial liabilities due for payment Trade and other payables Total contractual outflows Financial assets ‐ cash flows realisable Trade and other receivables Total anticipated inflows	WITHIN1 YEAR 1 TO5 YEARS TOTALCONTRACTUALCASH FLOW 2013 $ 2012 $ 2013 $ 2012 $ 2013 $ 2012 $ 250,284 874,008 ‐ ‐ 250,284 874,008
	250,284 874,008 ‐ ‐ 250,284 874,008
	129,071 179,608 ‐ ‐ 129,071 179,608
	129,071 179,608 ‐ ‐ 129,071 179,608

The financial assets and liabilities noted above are interest free.

(C) MARKET RISK

i. Interest rate risk

The Group’s cash flow interest rate risk primarily arises from cash at bank and deposits subject to market bank rates. At balance date, the Group does not have any borrowings. The Group does not enter into hedges. An increase/ (decrease) in interest rates by 1% during the whole of the respective periods would have led to an increase/(decrease) in both equity and losses of less than $10,000. 1% was thought to be appropriate because it represents four 0.25 basis point rate rises/falls, which is appropriate in the recent economic climate. The majority of cash held in a cash management account earns interest income at a rate of 3% p.a.

‐ 71 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

14 FINANCIAL RISK MANAGEMENT (continued)

SPECIFIC FINANCIAL RISK EXPOSURES AND MANAGEMENT …..

(C) MARKET RISK (continued)

ii. Foreign exchange risk

Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial instrument fluctuating due to movement in foreign exchange rates of currencies in which The Group holds foreign currency which are other than the AUD functional currency of The Group.

15 OPERATING SEGMENTS

Identification of Reportable Segments

The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (chief operating decision makers) in assessing performance and determining the allocation of resources.

The accounting policies applied for internal purposes are consistent with those applied in the preparation of these financial statements.

a) The following is an analysis of the Group’s revenue and results from operations by reportable segment.

2013 Revenue Interest income Expenses Share based payments Administration expenses FX Expense Exploration expenditure written off Impairment of Exploration Loss before tax Current assets Exploration expenditure Plant and Equipment Current liabilities Net assets	Corporate Gold Aust Uranium Aust Gold Burkina Faso Other West Africa Total $ $ $ $ $ $ ‐ ‐ ‐ ‐ ‐ ‐ 38,533 ‐ ‐ ‐ ‐ 38,533 (14,498) ‐ ‐ ‐ ‐ (14,498) (678,618) ‐ ‐ (189,876) ‐ (868,494) 251,095 ‐ ‐ (74,241) ‐ 176,854 ‐ (299,575) ‐ ‐ (299,575) ‐ (62,122) ‐ ‐ ‐ (62,122) ‐ ‐ ‐ ‐ ‐ ‐
	(403,488) (361,697) ‐ (264,117) ‐ (1,029,302)
	1,365,866 ‐ ‐ 115,616 ‐ 1,481,482 ‐ ‐ ‐ 14,632,581 ‐ 14,632,581 2,842 ‐ ‐ 362,127 ‐ 364,969 (110,511) ‐ ‐ (139,773) ‐ (250,284)
	1,258,197 ‐ ‐ 14,964,783 ‐ 16,228,748

‐ 72 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

15 OPERATING SEGMENTS (continued)

Identification of Reportable Segments …..

2012 Revenue Interest income Expenses Share based payments Administration expenses FX Expense Exploration expenditure written off Impairment of Exploration Loss before tax Current assets Exploration expenditure Plant and Equipment Current liabilities Net assets	Corporate Gold Aust Uranium Aust Gold Burkina Faso Other West Africa Total $ $ $ $ $ $ 191,196 ‐ ‐ ‐ ‐ 191,196 (50,253) ‐ ‐ ‐ ‐ (50,253) (1,121,190) ‐ ‐ (245,115) ‐ (1,366,305) (602,487) ‐ ‐ ‐ ‐ (602,487) ‐ (67,911) ‐ (20,497) (58,246) (146,654) ‐ ‐ (731,847) ‐ ‐ (731,847)
	(1,582,734) (67,911) (731,847) (265,612) (58,246) (2,706,350)
	1,014,634 ‐ ‐ 228,446 ‐ 1,243,080 ‐ 317,732 ‐ 9,917,408 ‐ 10,235,140 5,644 ‐ ‐ 420,400 ‐ 426,044 (222,868) ‐ ‐ (550,443) ‐ (773,311)
	797,410 317,732 ‐ 10,015,811 ‐ 11,130,953

The Group operates in three principal geographical areas – Australia (country of domicile), Burkina Faso and other West African countries.

16 INTERESTS OF KEY MANAGEMENT PERSONNEL

Refer to the Remuneration Report contained in the Directors' Report for details of the remuneration paid or payable to each member of The Group's key management personnel for the year ended 30 June 2013.

The totals of remuneration paid to key management personnel of the company and The Group during the year are as follows:

‐ 73 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2013

16 INTERESTS OF KEY MANAGEMENT PERSONNEL (continued)

KEY MANAGEMENT PERSONNEL OPTIONS AND RIGHTS HOLDINGS

The number of options over ordinary shares held by each key management person of The Group during the financial year is as follows:

30 JUNE2013 Mr Phillip Harman Mr Paul Roberts Dr Thomas Whiting Dr Robert Danchin Mr Philip Henty Mr Ian Hobson David Pascoe	BALANCE AT BEGINNING OF PERIOD GRANTED AS REMUNERAT‐ ION DURING THE PERIOD EXERCISED DURING THE PERIOD OTHER CHANGES DURING THE PERIOD BALANCE AT END OF PERIOD VESTED DURING THE PERIOD VESTED AND EXERCISABLE VESTED AND UNEXERCIS‐ ABLE 900,000 ‐ ‐ ‐ 900,000 ‐ 900,000 ‐ 1,700,000 ‐ ‐ ‐ 1,700,000 ‐ 1,700,000 ‐ 600,000 ‐ ‐ ‐ 600,000 ‐ 600,000 ‐ 600,000 ‐ ‐ ‐ 600,000 ‐ 600,000 ‐ 600,000 ‐ ‐ ‐ 600,000 ‐ 600,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 500,000 ‐ ‐ ‐ 500,000 ‐ 500,000 ‐
	4,900,000 ‐ ‐ ‐ 4,900,000 ‐ 4,900,000 ‐

30 JUNE2013
Mr Phillip Harman
Mr Paul Roberts
Dr Thomas Whiting
Dr Robert Danchin
Mr Philip Henty
Mr Ian Hobson
David Pascoe

BALANCE AT
BEGINNING
OF PERIOD
GRANTED AS
REMUNERAT‐
ION DURING
THE PERIOD
EXERCISED
DURING THE
PERIOD
OTHER
CHANGES
DURING THE
PERIOD
BALANCE AT
END OF
PERIOD
VESTED
DURING THE
PERIOD
VESTED AND
EXERCISABLE
VESTED AND
UNEXERCIS‐
ABLE
900,000
‐
‐
‐
900,000
‐
900,000
‐
1,700,000
‐
‐
‐
1,700,000
‐
1,700,000
‐
600,000
‐
‐
‐
600,000
‐
600,000
‐
600,000
‐
‐
‐
600,000
‐
600,000
‐
600,000
‐
‐
‐
600,000
‐
600,000
‐
‐
‐
‐
‐
‐
‐
‐
‐
500,000
‐
‐
‐
500,000
‐
500,000
‐

4,900,000
‐
‐
‐
4,900,000 ‐
4,900,000 ‐

30 JUNE2012 Mr Phillip Harman Mr Paul Roberts Dr Thomas Whiting Dr Robert Danchin Mr Philip Henty Mr Ian Hobson David Pascoe	BALANCE AT BEGINNING OF PERIOD GRANTED AS REMUNERAT‐ ION DURING THE PERIOD EXERCISED DURING THE PERIOD OTHER CHANGES DURING THE PERIOD BALANCE AT END OF PERIOD VESTED DURING THE PERIOD VESTED AND EXERCISABLE VESTED AND UNEXERCIS‐ ABLE 900,000 ‐ ‐ ‐ 900,000 ‐ 900,000 ‐ 1,700,000 ‐ ‐ ‐ 1,700,000 ‐ 1,700,000 ‐ 600,000 ‐ ‐ ‐ 600,000 ‐ 600,000 ‐ 600,000 ‐ ‐ ‐ 600,000 ‐ 600,000 ‐ 600,000 ‐ ‐ ‐ 600,000 ‐ 600,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 500,000 ‐ ‐ 500,000 500,000 500,000 ‐
	4,400,000 500,000 ‐ ‐ 4,900,000 500,000 4,900,000 ‐

30 JUNE2012
Mr Phillip Harman
Mr Paul Roberts
Dr Thomas Whiting
Dr Robert Danchin
Mr Philip Henty
Mr Ian Hobson
David Pascoe

BALANCE AT
BEGINNING
OF PERIOD
GRANTED AS
REMUNERAT‐
ION DURING
THE PERIOD
EXERCISED
DURING THE
PERIOD
OTHER
CHANGES
DURING THE
PERIOD
BALANCE AT
END OF
PERIOD
VESTED
DURING THE
PERIOD
VESTED AND
EXERCISABLE
VESTED AND
UNEXERCIS‐
ABLE
900,000
‐
‐
‐
900,000
‐
900,000
‐
1,700,000
‐
‐
‐
1,700,000
‐
1,700,000
‐

600,000
‐
‐
‐
600,000
‐
600,000
‐

600,000
‐
‐
‐
600,000
‐
600,000
‐
600,000
‐
‐
‐
600,000
‐
600,000
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
500,000
‐
‐
500,000
500,000
500,000
‐

4,400,000
500,000
‐
‐
4,900,000
500,000 4,900,000
‐

‐ 74 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

16 INTERESTS OF KEY MANAGEMENT PERSONNEL (continued)

KEY MANAGEMENT PERSONNEL SHAREHOLDINGS

The number of ordinary shares in Predictive Discovery Limited held by each key management person of the Group during the financial year is as follows:

30 June 2013 Mr Phillip Harman Mr Paul Roberts Dr Thomas Whiting Dr Robert Danchin Mr Philip Henty Mr Ian Hobson Mr David Pascoe	BALANCE AT BEGINNING OF PERIOD GRANTED AS REMUNERATION DURING THE PERIOD ISSUED ON EXERCISE OF OPTIONS DURING THE PERIOD OTHER CHANGES DURING THE PERIOD BALANCE AT END OF PERIOD 1,954,688 ‐ ‐ 1,443,570 3,398,258 3,320,500 ‐ ‐ 381,579 3,702,079 1,054,688 ‐ ‐ 737,254 1,791,942 ‐ ‐ ‐ ‐ ‐ 5,976,563 ‐ ‐ 4,953,125 10,929,688 50,000 ‐ ‐ 10,000 60,000 ‐ ‐ ‐ ‐ ‐
	12,355,501 ‐ ‐ 7,525,528 19,881,967

30 June 2013
Mr Phillip Harman
Mr Paul Roberts
Dr Thomas Whiting
Dr Robert Danchin
Mr Philip Henty
Mr Ian Hobson
Mr David Pascoe

BALANCE AT
BEGINNING OF
PERIOD
GRANTED AS
REMUNERATION
DURING THE
PERIOD
ISSUED ON
EXERCISE OF
OPTIONS
DURING THE
PERIOD
OTHER
CHANGES
DURING THE
PERIOD
BALANCE AT
END OF PERIOD
1,954,688
‐
‐
1,443,570
3,398,258
3,320,500
‐
‐
381,579
3,702,079
1,054,688
‐
‐
737,254
1,791,942
‐
‐
‐
‐
‐
5,976,563
‐
‐
4,953,125
10,929,688
50,000
‐
‐
10,000
60,000
‐
‐
‐
‐
‐

12,355,501
‐
‐
7,525,528
19,881,967

30 June 2012 Mr Phillip Harman Mr Paul Roberts Dr Thomas Whiting Dr Robert Danchin Mr Philip Henty Mr Ian Hobson Mr David Pascoe	BALANCE AT BEGINNING OF YEAR GRANTED AS REMUNERATION DURING THE YEAR ISSUED ON EXERCISE OF OPTIONS DURING THE YEAR OTHER CHANGES DURING THE YEAR BALANCE AT END OF YEAR 1,737,500 ‐ ‐ 217,188 1,954,688 3,187,500 ‐ ‐ 133,000 3,320,500 937,500 ‐ ‐ 117,188 1,054,688 ‐ ‐ ‐ ‐ ‐ 5,312,500 ‐ ‐ 664,063 5,976,563 50,000 ‐ ‐ ‐ 50,000 ‐ ‐ ‐ ‐ ‐
	11,225,000 ‐ ‐ 1,131,439 12,356,439

30 June 2012
Mr Phillip Harman
Mr Paul Roberts
Dr Thomas Whiting
Dr Robert Danchin
Mr Philip Henty
Mr Ian Hobson
Mr David Pascoe

BALANCE AT
BEGINNING OF
YEAR
GRANTED AS
REMUNERATION
DURING THE
YEAR
ISSUED ON
EXERCISE OF
OPTIONS
DURING THE
YEAR
OTHER
CHANGES
DURING THE
YEAR
BALANCE AT
END OF YEAR
1,737,500
‐
‐
217,188
1,954,688
3,187,500
‐
‐
133,000
3,320,500
937,500
‐
‐
117,188
1,054,688
‐
‐
‐
‐
‐
5,312,500
‐
‐
664,063
5,976,563
50,000
‐
‐
‐
50,000
‐
‐
‐
‐
‐

11,225,000
‐
‐
1,131,439
12,356,439

‐ 75 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

16 INTERESTS OF KEY MANAGEMENT PERSONNEL (continued)

OTHER KEY MANAGEMENT PERSONNEL TRANSACTIONS

There have been no other transactions involving equity instruments other than those described in the tables above. For details of other transactions with key management personnel, refer to Note 20: Related Party Transactions.

17 AUDITORS’ REMUNERATION

17	AUDITORS’ REMUNERATION
			2013	2012
			$	$
	Remuneration of the auditor of the parent entity for:
	‐ Audit services		51,450	41,000
			51,450	41,000
18	CONTROLLED ENTITIES
			PERCENTAGE	PERCENTAGE
	NAME	COUNTRY OFINCORPORATION	OWNED(%)*	OWNED(%)*
			2013	2012
	Parent Entity:
	Predictive Discovery Limited	Australia
	Subsidiaries of legal parent entity:
	Predictive Discovery SARL	Burkina Faso	100	100
	Predictive Discovery Niger SARL	Niger	100	100
	Predictive Discovery Cote D’Ivoire SARL	Cote D’Ivoire	100	100
	Birrimian Pty Ltd	British Virgin Islands	100	72.1
	Predictive Discovery Cote D’Ivoire Pty Ltd	Australia	100	‐

Percentage of voting power is in proportion to ownership

Acquisitions of controlled entities

During the year, the remaining 17.9% of Birrimian Pty Limited was acquired by Predictive Discovery Limited as the result of the Group successfully negotiating a transaction in order to obtain 100%. Predictive Discovery Cote d’Ivoire Pty Ltd, a 100% controlled subsidiary was established in Australia but did not undertake any activities in the year.

19 CONTINGENT LIABILITIES

There are no material contingent liabilities or contingent assets of The Group at balance date.

‐ 76 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

20 RELATED PARTY TRANSACTIONS

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

Transactions with related parties:

Intercompany Loans

Predictive Discovery Limited has made loans to its subsidiary in the amount of $12,013,493. The loan is interest free and payable on demand.

Directors’ Remuneration

For information relating to related party transactions with key management personnel during the financial year, refer to Note 16.

Other Related Party Transactions

Churchill Services Pty Ltd, an entity associated with Ian Hobson, was paid $111,705 for company secretarial services during the year.

21 CASH FLOW INFORMATION

RECONCILIATION OF CASH FLOW FROM OPERATIONS WITH LOSS AFTER INCOME TAX

Profit (loss) for the year Non‐operating items in profit Exploration expenditure Interest income Non‐cash flows in profit Non‐cash based share issues Share based payments Depreciation Foreign exchange (gains)/losses Write off of exploration expenditure Changes in assets and liabilities (Increase)/decrease in receivables Increase/(decrease) in payables Increase/(decrease) in provisions Increase/(decrease) in FX Reserve	2013 $ 2012 $ (1,029,304) (2,706,350) 62,122 146,654 (38,533) (191,195) ‐ 14,498 50,253 2,802 2,417 ‐ 299,575 731,847 30,381 167,193 (99,603) 66,807 (12,693) 11,186 74,183 ‐
	(696,572) (1,721,188)

Profit (loss) for the year
Non‐operating items in profit
Exploration expenditure
Interest income
Non‐cash flows in profit
Non‐cash based share issues
Share based payments
Depreciation
Foreign exchange (gains)/losses
Write off of exploration expenditure
Changes in assets and liabilities
(Increase)/decrease in receivables
Increase/(decrease) in payables
Increase/(decrease) in provisions
Increase/(decrease) in FX Reserve

2013
$
2012
$
(1,029,304)
(2,706,350)
62,122
146,654
(38,533)
(191,195)
‐
14,498
50,253
2,802
2,417
‐
299,575
731,847
30,381
167,193
(99,603)
66,807
(12,693)
11,186
74,183
‐

(696,572)
(1,721,188)

‐ 77 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

22 SHARE BASED PAYMENTS

During the year, the group entered into the following share‐based payments:

The issue of 11,250,000 ordinary shares in the Company in consideration for the 27.9% in Birrimian Pty Limited for a value of $787,500 (7 cents per share); and
The issue of 3,500,000 options exercisable at various prices and expiring at various times in part consideration for capital raising fees.
The issue of 329,500 ordinary shares in the company as employee incentives to Burkina Faso employees.

At 30 June 2013 the Group has the following share‐based payment options on issue to employees:

2012 GRANTDATE EXPIRYDATE EXERCISE PRICE 20 August 2010 20 August 2 015 0.25 11 July 2011 11 July 2 015 0.31 December 2130 0.56	START OF THE YEAR GRANTED DURING THE YEAR EXERCISED DURING THE YEAR FORFEITED DURING THE YEAR BALANCE AT THE END OF THE YEAR VESTED AND EXERCISABLE AT THE END OF THE YEAR 6,000,000 ‐ ‐ ‐ 6,000,000 6,000,000 500,000 ‐ ‐ ‐ 500,000 500,000
	6,500,000 ‐ ‐ ‐ 6,500,000 6,500,000

At 30 June 2013 the Group has the following share‐based payment options on issue in lieu of capital raising fees:

2012 GRANTDATE EXPIRYDATE EXERCISE PRICE 5 December 2012 30 October 2015 $0.15 5 December 2012 11 July 2015 $0.1 to $0.2* 30 December 2130 0.56	START OF THE YEAR GRANTED DURING THE YEAR EXERCISED DURING THE YEAR FORFEITED DURING THE YEAR BALANCE AT THE END OF THE YEAR VESTED AND EXERCISABLE AT THE END OF THE YEAR ‐ 2,000,000 ‐ ‐ 2,000,000 2,000,000 ‐ 3,500,000 ‐ ‐ 3,500,000 3,500,000
	‐ 5,500,000 ‐ ‐ 5,500,000 5,500,000

*3,500,000 unlisted options with an exercise price of 10 cents to 30 June 2013, 15 cents from 1 July 2013 to 30 June 2014 and 20 cents from 1 July 2014 to the expiry date on 30 June 2015.

The weighted average exercise price of options as at 30 June 2013 was $0.19 (30 June 2012: $0.26). The weighted average remaining contractual life of options outstanding at year end was 2.13 years (30 June 2012: 3.14).

The fair value of the options granted to employees and brokers is deemed to represent the value of services received over the vesting period.

The fair value of the options granted during the year was $65,469 (30 June 2012: $ 50,253.00).

‐ 78 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

22 SHARE BASED PAYMENTS (continued)

These values were calculated by using a Black‐Scholes option pricing model applying the following inputs:

Dividend yield (%):	‐
Exercise price (cents):	Range of 10 to 25 cents
Life of option (years):	4
Expected share price volatility (%):	77.60
Risk‐free interest rate (%):	2.94

Historic volatility has been the basis of determining expected share price volatility as it is assumed that this is indicative of future movements.

The life of the options is based on the historical exercise patterns, which may not eventuate in the future.

23 EVENTS AFTER THE END OF THE REPORTING PERIOD

In accordance with the purchase agreement for the Cote d’Ivoire Kocoumbo permit, the Company has paid the first instalment of USD$25,000 and issued USD$25,000 worth of shares on 20 August 2013 to Ivoir Negoce. No other matters or circumstances have arisen for the year which significantly affected or could significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.

24 PARENT ENTITY

The following information has been extracted from the books and records of the parent, Predictive Discovery Limited and has been prepared in accordance with Accounting Standards.

The financial information for the parent entity, Predictive Discovery Limited has been prepared on the same basis as the consolidated financial statements except as disclosed below.

Assets Current assets Non‐current assets Total Assets Liabilities Current liabilities Non‐current liabilities Total Liabilities	2013 $ 2012 $ 1,365,866 989,698 15,592,764 10,686,185
	16,958,630 11,675,883
	110,511 189,408 ‐ ‐
	110,511 189,408

‐ 79 ‐

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013

24 PARENT ENTITY (continued)

Equity Issued capital Accumulated losses Reserve Total Equity Total loss for the period Total comprehensive income	2013 $ 2012 $ 19,942,017 15,264,189 (4,762,648) (3,997,464) 1,668,750 219,750
	16,848,119 11,486,475
	(765,184) (2,488,096)
	(765,184) (2,488,096)

CONTINGENT LIABILITIES

The parent entity has a contingent liability of $300,000 for licence fees and expenditure commitments as at 30 June 2013. No invoice has been received for these amounts. The directors have been negotiating a termination of the contract during the year and based on discussions held, believe the matter will be resolved with no liability to the parent entity.

CONTRACTUAL COMMITMENTS

The parent entity has commitments as at 30 June 2013 that are disclosed in Note 13.

RECOVERABILITY OF INTERCOMPANY LOAN

Within Non‐current assets is a loan due from the 100% subsidiary of $13,397,025 which is considered fully recoverable. The recoverability of this loan is dependent upon the successful development or sale of exploration assets in Burkina Faso.

25 COMPANY DETAILS

The registered office and principal place of business of the company is:

Predictive Discovery Limited Level 2, 9 Colin Street WEST PERTH WA 6005

‐ 80 ‐

PREDICTIVE DISCOVERY LIMITED

DIRECTORS’ DECLARATION

The directors of the company declare that:

The financial statements and notes, as set out on pages 36 to 80, are in accordance with the Corporations Act 2001 and:
(a) comply with Accounting Standards; and
(b) give a true and fair view of the financial position as at 30 June 2013 and of the performance for the year ended on that date of the consolidated group;
The Chief Executive Officer and Chief Financial Officer have each declared that:
(a) the financial records of the company for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2001 ;
(b) the financial statements and notes for the financial year comply with the Accounting Standards; and
(c) the financial statements and notes for the financial year give a true and fair view.

Note 1 confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board.

In the directors' opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors.

==> picture [91 x 77] intentionally omitted <==

Paul Roberts

Managing Director 5 September 2013

‐ 81 ‐

==> picture [120 x 78] intentionally omitted <==

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PREDICTIVE DISCOVERY LIMITED & CONTROLLED ENTITIES

Report on the Financial Report

We have audited the accompanying financial report of Predictive Discovery Limited & controlled entities, which comprises the consolidated statement of financial position as at 30 June 2013, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation of the 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 financial report that is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements that the financial statements comply with International Financial Reporting Standards (IFRS).

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company’s preparation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

==> picture [168 x 34] intentionally omitted <==

Independent Auditor’s Report to the Members of Predictive Discovery Limited & Controlled Entities

==> picture [120 x 53] intentionally omitted <==

Independence

In conducting our audit, 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 Predictive Discovery Limited & controlled entities, would be in the same terms if provided to the directors as at the date of this auditor’s report.

Auditor’s Opinion

In our opinion:

a. the financial report of Predictive Discovery Limited & controlled entities is in accordance with the Corporations Act 2001 , including:
i. giving a true and fair view of the consolidated entity’s financial position as at 30 June 2013 and of its performance for the year ended on that date; and
ii. complying with Australian Accounting Standards and the Corporations Regulations 2001 ; and
b. the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.

Inherent Uncertainty Regarding Continuation as a Going Concern

Without qualification to the conclusion expressed above, attention is drawn to the following matter. As a result of the matters described in the section entitled “Key Judgement – Going Concern” in Note 1 (S) to the financial statements for the period ended 30 June 2013, the ability to continue the exploration and development of the company`s mining tenements is dependent upon future capital raising. Should there be no funding available, explorations of the areas of interest may be put on hold and the recoverability of exploration assets may be realised below their carrying amounts at balance date.

Report on the Remuneration Report

We have audited the remuneration report included in page 7 of the directors’ report for the year ended 30 June 2013. The directors of the company are responsible for the preparation and presentation of the remuneration report in accordance with s 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards.

Independent Auditor’s Report to the Members of Predictive Discovery Limited & Controlled Entities

==> picture [120 x 53] intentionally omitted <==

Auditor’s Opinion

In our opinion the remuneration report of Predictive Discovery Limited & controlled entities for the year ended 30 June 2013 complies with s 300A of the Corporations Act 2001 .

==> picture [56 x 43] intentionally omitted <==

NEXIA MELBOURNE

ABN 16 847 721 257

==> picture [68 x 76] intentionally omitted <==

ANDREW JOHNSON Partner Audit & Assurance Services

Melbourne

5 September 2013

PREDICTIVE DISCOVERY LIMITED

ADDITIONAL SHAREHOLDER INFORMATION IN COMPLIANCE WITH ASX REQUIREMENTS

The additional ASX information is current as at 12 September 2013.

SUBSTANTIAL SHAREHOLDERS

Substantial shareholders as defined by Section 671B of Australian Corporations Law are:

Shareholder name	Number Held	Percentage
AFRICAN LION 3 LIMITED	20,316,260	7.49%
EQUITY TRUSTEES LIMITED	17,955,223	6.62%

PARTICULARS OF TWENTY LARGEST SHAREHOLDERS

Rank	Name	Units Held	%IC
1	AFRICAN LION 3 LIMITED	20,316,260	7.49%
2	EQUITY TRUSTEES LIMITED	17,955,223	6.62%
3	KITARA INVESTMENTS PTY LTD	10,312,500	3.80%
4	FINANCE ASSOCIATES PTY LTD	8,842,246	3.26%
5	MR NEIL CLIFFORD DUNCAN & MRS LUDMILLA DUNCAN	8,313,058	3.06%
6	DYSPO PTY LIMITED	6,710,938	2.47%
7	MR PHILIP C. LANGDON & MRS ROBYN M. LANGDON	5,245,991	1.93%
8	PRIVATE EQUITY CAPITAL PTY LTD	4,218,750	1.55%
9	BUPRESTID PTY LIMITED	4,000,000	1.47%
10	PAUL ROBERTS	3,702,079	1.36%
11	SISU INTERNATIONAL PTY LTD	3,388,252	1.25%
12	MR WILLIAM HENRY HERNSTADT	3,302,241	1.22%
13	AFRICAN LION 3 LIMITED	3,289,474	1.21%
14	MR SEAGER REX HARBOUR	3,108,955	1.15%
15	MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED	2,950,000	1.09%
16	AGGREGATED CAPITAL PTY LTD	2,907,500	1.07%
17	EDNA SECURITIES PTY LTD	2,400,000	0.88%
18	PAJAL PTY LTD	2,278,126	0.84%
19	THE HARBOUR FOUNDATION	2,140,000	0.79%
20	MR WILLIAM HENRY HERNSTADT	2,127,239	0.78%
	TOTAL	117,508,832	43.30%
	Balance of Register	153,875,362	56.70%
	Grand TOTAL	271,384,194	100.00%

DISTRIBUTION OF EQUITY SECURITIES

Analysis of numbers of shareholders by size of holding:

Range of Holding – Ordinary Shares 1‐1,000 1,001‐5,000 5,001‐10,000 10,001 ‐ 100,000 100,001 and Over	Holders Shares 20 1,875 33 106,895 46 399,035 399 18,587,973 313 252,288,416
	811 271,384,194

‐ 85 ‐

PREDICTIVE DISCOVERY LIMITED

ADDITIONAL SHAREHOLDER INFORMATION

IN COMPLIANCE WITH ASX REQUIREMENTS ……

DISTRIBUTION OF EQUITY SECURITIES (continued)

Unmarketable Parcels

There are 196 holders holding less than a marketable parcel of $500 of ordinary shares at a price of 2 cents per share.

UNQUOTED EQUITY SECURITIES

There are 8 holders of 6,000,000 unlisted options expiring 20 August 2015 and exercisable at 25 cents.

Holders of more than 20%
Holder name	Number	%
PAUL ROBERTS	1,700,000	28.3%

There is 1 holder of 500,000 unlisted options expiring 11 July 2015, exercisable at $0.31

Holders of more than 20%
Holder name	Number	%
DAVID PASCOE	500,000	100%

There are 94 holders of 9,131,075 unlisted options with an exercise price of 10 cents to 30 June 2013, 15 cents from 1 July 2013 to 30 June 2014 and 20 cents from 1 July 2014 to the expiry date on 30 June 2015.

Holders of more than 20%

Holder name Number % N/A

There is 1 holder of 2,000,000 unlisted options expiring 30 October 2015, with an exercise price of 15 cents.

Holders of more than 20%
Holder name	Number	%
CHALMSBURY NOMINEES PTY LTD	2,000,000	100%

USE OF FUNDS

The Company has used the cash and assets in a form readily convertible to cash at the time of re‐ admission in a way consistent with its business objectives.

VOTING RIGHTS

Each fully paid ordinary share carries voting rights of one vote per share.

‐ 86 ‐

PREDICTIVE DISCOVERY LIMITED

INTERESTS IN MINING TENEMENTS

AUSTRALIAN TENEMENTS

Name	Number	Percentage Interest	Location
Woady Creek	EL5314	100%	Victoria, Australia

BURKINA FASO TENEMENTS

Name	Number	Percentage Interest	Location
	Arrêté 2005‐11‐
Fouli	351/MCE/SG/DGMGC	100%	Burkina Faso
	Arrêté 2007‐
Tantiabongou	019/MCE/SG/DGMGC	100%	Burkina Faso
	Arrêté 2005‐11‐
Sirba	353/MCE/SG/DGMGC	100%	Burkina Faso
	Arrêté 2011‐11‐
Madyabari	352/MCE/SG/DGMGC	100%	Burkina Faso
	Arrêté 2010‐
Tyekanyebi	202/MCE/SG/DGMGC	100%	Burkina Faso
	353 (arrêté 2005‐
Tamfoagou	061/MCE/SG/DGMGC)	100%	Burkina Faso
	Arrêté 2013‐
Bira	33/MCE/SG/DGMGC	100%	Burkina Faso
	Arrêté 2009‐	Option to acquire
Tangagari	068/MCE/SG/DGMGC	95%	Burkina Faso
	Arrêté 2008‐	Option to acquire
Aoura	023/MCE/SG/DGMGC	95%	Burkina Faso
	Arrêté 2011‐	Option to acquire
Kogodou South	299/MCE/SG/DGMGC	95%	Burkina Faso
	Arrêté 2011‐	Option to acquire
Boussouma	059/MCE/SG/DGMGC	95%	Burkina Faso
	Arrêté 2009‐	Option to acquire
Bangaba	100/MCE/SG/DGMGC	95%	Burkina Faso

‐ 87 ‐

AI assistant

PREDICTIVE DISCOVERY LIMITED — Annual Report 2013

65537_rns_2013-10-08_ffd6e98e-95c7-4401-8361-9a3a04287aa2.pdf

CORPORATE DIRECTORY

DIRECTORS

COMPANY SECRETARY

REGISTERED OFFICE

AUDITORS

SHARE REGISTER

SOLICITORS

BANKERS

HOME EXCHANGE

TABLE OF CONTENTS

CHAIRMAN’S REPORT

REVIEW OF OPERATIONS

INTRODUCTION

BURKINA FASO GOLD PROJECTS

REVIEW OF OPERATIONS…..

g o ld targets.

REVIEW OF OPERATIONS…..

BONSIEGA PERMIT GROUP

BACKGROUND

BONGOU PROSPECT (PDI 100%)

Bongou RC Drilling

REVIEW OF OPERATIONS…..

• BNGRC010: 16m at 9.7g/t Au

REVIEW OF OPERATIONS…..

REVIEW OF OPERATIONS…..

Bongou Metallurgical Test Work

OTHER DRILLING PROGRAMS

LATERITE HILL GOLD FIELD (PDI 100%)

PROSPECT 71

REVIEW OF OPERATIONS…..

MADYABARI PROSPECT

DAVE PROSPECT (PDI 100%)

Geological Assessment

Metallurgical Testwork

REVIEW OF OPERATIONS…..

BIRA PERMIT (PDI 100%)

REVIEW OF OPERATIONS…..

REVIEW OF OPERATIONS…..

BANGABA PERMIT (PDI earning 95%)

BACKGROUND

RC DRILLING PROGRAM

REVIEW OF OPERATIONS…..

Tambiri South Drilling

Solna Prospect Drilling

REVIEW OF OPERATIONS…..

METALLURGICAL TESTWORK

Solna Metallurgy

Tambiri Metallurgy

BOUSSOUMA PERMIT (PDI earning 95%)

TYEKANYEBI PROJECT (PDI 100%)

REVIEW OF OPERATIONS…..

COTE D’IVO

IRE

BACKGROUND

KOKUMBO (PDI earning 90%)

REVIEW OF OPERATIONS…..

FERKESSEDOUGOU (PDI earning 100%)

OTHER PERMIT APPLICATIONS

AUSTRALIAN GOLD PROJECT

VICTORIA

REVIEW OF OPERATIONS…..

CORPORATE

OUTLOOK

BURKINA FASO

COTE D’IVOIRE

VICTORIA

Competent Persons Statement

DIRECTORS’ REPORT

COMPANY SECRETARY

PRINCIPAL ACTIVITIES

OPERATING RESULTS FOR THE PERIOD

REVIEW OF OPERATIONS

DIRECTORS’ REPORT….

DIVIDENDS PAID OR RECOMMENDED

FINANCIAL POSITION

SIGNIFICANT CHANGES IN STATE OF AFFAIRS

EVENTS SUBSEQUENT TO BALANCE DATE

PREDICTIVE DISCOVERY LIMITED Annual Report 2013