PREDICTIVE DISCOVERY LIMITED — Annual Report 2013

Sep 4, 2013

PREDICTIVE DISCOVERY LTD

FINANCIAL REPORT

FOR THE YEAR ENDED 30 JUNE 2013

PREDICTIVE DISCOVERY LIMITED

TABLE OF CONTENTS

DIRECTORS’ REPORT

AUDITOR’S INDEPENDENCE DECLARATION

FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED STATEMENT OF CASH FLOWS

NOTES TO THE FINANCIAL STATEMENTS

DIRECTORS’ DECLARATION

INDEPENDENT AUDITOR’S REPORT

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. 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.

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 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.

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PREDICTIVE DISCOVERY LIMITED

DIRECTORS’ REPORT….

30 JUNE 2013

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 (Bongou 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 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.

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.

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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.

Mr Paul Roberts In addition, he led the Predictive Mineral Discovery CRC’s research effort from 2002 to 2007, and therefore has a deep Experience (continued) 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

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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

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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.

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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 11 of the financial report.

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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.

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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.

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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

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.

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PREDICTIVE DISCOVERY LIMITED

DIRECTORS’ REPORT….

30 JUNE 2013

END OF THE REMUNERATION REPORT

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

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Paul Roberts

Managing Director 5 September 2013

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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.

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NEXIA MELBOURNE

ABN 16 847 721 257

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ANDREW JOHNSON Partner Audit & Assurance Services

Melbourne

• 5 September 2013

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PREDICTIVE DISCOVERY LIMITED

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME	CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for theyear ended 30 June 2013
		Consolidated
		2013		2012
		$		$
	Note
Finance income		38,533		191,196
Share basedpayments		(14,498)		(50,253)
Administrative expenses		(868,496)		(1,366,305)
Foreign exchange expense		176,854		(602,487)
Impairment of exploration		(299,575)		(731,847)
Exploration expenditurepre-right to tenure		(90,297)		(146,654)
Profit(loss) before income taxes		(1,057,479)		(2,706,350)
Income tax expense	2	-		-
Profit(loss) from continuing operations		(1,057,479)		(2,706,350)
Other comprehensive income		1,383,801		(198)
Total comprehensive income for theyear		326,322		(2,706,548)
Profit attibutable to:
Members of theparent entity		326,322		(2,706,548)
		326,322		(2,706,548)
Basic(loss) per share(centsper share)	12	(0.002)		(0.023)
Diluted(loss) per share(centsper share)	12	(0.002)		(0.023)
These financial statements should be read in conjunction w ith the accompanying notes

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PREDICTIVE DISCOVERY LIMITED

CONSOLIDATEDSTATEMENTOF FINANCIAL POSITION
as at 30 June 2013
		Consolidated
		2013		2012
	Note	$		$
ASSETS
CURRENT ASSETS
Cash and cash equivalents	3	1,352,410		1,063,472
Trade and other receivables	4	129,071		179,608
TOTAL CURRENT ASSETS		1,481,481		1,243,080
NON-CURRENT ASSETS
Property, plant and equipment	5	364,969		526,742
Exploration expenditure	6	14,604,406		10,235,139
TOTAL NON-CURRENT ASSETS		14,969,375		10,761,881
TOTAL ASSETS		16,450,856		12,004,961
LIABILITIES
CURRENT LIABILITIES
Trade and otherpayables	7	229,658		734,901
Provisions	9	20,626		139,107
TOTAL CURRENT LIABILITIES		250,284		874,008
TOTAL LIABILITIES		250,284		874,008
NET ASSETS		16,200,572		11,130,953
EQUITY
Issued capital	10	19,942,017		15,264,189
Reserves	11	1,668,042		218,772
Accumulated losses		(5,409,486)		(4,352,008)
TOTAL EQUITY		16,200,573		11,130,953
These financial statements should be read in conjunction w ith the accompanyingnotes

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PREDICTIVE DISCOVERY LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 30 June 2013

2013 Balance at 1 July 2012 Profit/(loss) attributable to members of the parent entity Other comprehensive income Total comprehensive income for the year Shares issued during the year Transaction costs Share-based payments Sub-total Balance at 30 June 2013 2012 Balance at 1 July 2011 Profit/(loss) attributable to members of the parent entity Other comprehensive income Total comprehensive income for the year Shares issued during the year Transaction costs Share-based payments Sub-total Balance at 30 June 2012	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) 1,383,801	11,130,953 (1,057,479) 1,383,801
	4,979,967 (302,138)		65,469		4,979,967 (302,138) 65,469
	4,677,828	(1,057,479) ( , , )	65,469	1,383,801	5,069,620
	19,942,017	(5,409,486)	377,464	1,290,578	16,200,573
				FOREIGN CURRENCY TRANSLATION RESERVE $	TOTAL $
	10,349,630	(1,645,659) (2,706,348)	261,742	(93,025) (198)	8,872,688 (2,706,348) (198)
	5,275,213 (360,655)	(2,706,348)	50,253	(198)	(2,706,546) 5,275,213 (360,655) 50,253
	4,914,558	(2,706,348)	50,253	(198)	2,258,265
	15,264,188	(4,352,007)	311,995	(93,223)	11,130,953

These financial statements should be read in conjuction with the accompanying notes

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PREDICTIVE DISCOVERY LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS

for the year ended 30 June 2013

Note CASH FROM OPERATING ACTIVITIES: GST receipts Payments to suppliers and employees Net cash provided by (used in) operating activities 21 CASH FLOWS FROM INVESTING ACTIVITIES: Interest received Purchase of property, plant and equipment Payments for exploration expenditure Net cash provided by (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issue of shares Payment of share issue costs Net cash from financing activities OTHER ACTIVITIES: Foreign exchange differences Net cash used by other activities Net increase (decrease) in cash held Cash and cash equivalents at beginning of period Cash and cash equivalents at end of financial period 3

2013 2012 $ $ 20,110 10,066 (716,682) (1,731,254) (696,572) (1,721,188) 38,533 191,196 (2,175) (546,851) (2,751,532) (6,973,426) (2,715,174) (7,329,081) 4,177,969 5,275,213 (236,669) (360,655) 3,941,300 4,914,558 (240,616) (9,041) (240,616) (9,041) 529,554 (4,135,711) 1,063,472 5,208,224 1,352,410 1,063,472

These financial statements should be read in conjunction with the accompanying notes

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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.

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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 noncontrolling 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

• 17 -

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.

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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.

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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.

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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.

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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).

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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.

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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 OF FIXED ASSET USEFUL LIFE 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.

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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.

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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").

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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.

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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.

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

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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 August 2011)	Consolidated Financial Statements	Introduces a single ‘control model’ for all entities, including special purpose 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.	Annual reporting periods commencing on or after 1 January 2013
AASB 11 (issued August 2011)	Joint Arrangements	Joint arrangements will be classified as either ‘joint operations’ (where parties withjoint control have rights	Annual reporting periods commencing on or after 1 January 2013

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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 August 2011)	Disclosure of Interests in Other Entities	Combines existing disclosures from AASB 127_Consolidated_ and Separate Financial 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.	Annual reporting periods commencing on or after 1 January 2013
AASB 13 (issued September 2011)	Fair Value Measurement	AASB 13 establishes a single framework for measuring fair value of financial and non- 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.	Annual reporting periods commencing on or after 1 January 2013

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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 (reissued September 2011)	Employee Benefits	Employee benefits expected to be settled (as opposed to due to settled under current 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.	Annual periods commencing on or after 1 January 2013
AASB 2011-4 (issued July 2011)	Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements	Amendments to remove individual key management personnel (KMP) disclosure requirements from AASB 124 to eliminate duplicated information required under the_Corporation Act 2001_	Annual periods commencing on or after 1 July 2013
Interpretation 20 (issued November 2011)	Stripping Costs in the Production Phase of a Surface Mine	Clarifies that costs of removing mine waste materials (overburden) to gain access to mineral ore deposits 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.	Annual periods commencing on or after 1 January 2013

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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 (issued June 2012)	Annual Improvements to Australian Accounting Standards 2009- 2011 Cycle	Non-urgent but necessary changes to IFRSs (IAS1, IAS 16 & IAS 32) 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	Periods commencing on or after 1 January 2013
IFRS (issued December 2011)	Mandatory Effective Date of IFRS 9 and Transition Disclosures	Entities are no longer required to restate comparatives on first time adoption. Instead, additional disclosures on the effects of transition are required.	Annual reporting periods commencing on or after 1 January 2015
AASB 2012-9 (issued December 2012)	Amendment to AASB 1048 arising from the Withdrawal of Australian Interpretation 1039	Deletes Australian Interpretation 1039 Substantive Enactment of Major Tax Bills In Australia from the list of mandatory Australian Interpretations to be applied by entities preparing financial statements under the _Corporations Act 2001_or other general purpose financial statements.	Annual reporting periods beginning on or after 1 January 2013

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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.

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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.

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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

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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.

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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.

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PREDICTIVE DISCOVERY LIMITED

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

4 TRADE AND OTHER RECEIVABLES

Trade receivables Other receivables 5 PROPERTY, PLANT AND EQUIPMENT PLANT AND EQUIPMENT At cost Accumulated depreciation Total plant and equipment		2013 $ 2012 $ 22,978 90,152 106,093 89,456
		129,071 179,608
		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

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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 $ 2012 $ 14,604,406 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.

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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
		- -

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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)
	- -

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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 10 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

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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

ARNINGS 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.

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PREDICTIVE DISCOVERY LIMITED

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

12 EARNINGS PER SHARE (continued)

		2013	2012
		**NO. **	**NO. **
Weighted average number of ordinary shares outstanding during the
period- Number used in calculating basic EPS		193,090,138	118,702,116
Weighted average number of ordinary shares outstanding during the
year	used in calculating dilutive EPS	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.
CAPITAL AND LEASING COMMITMENTS
(A)	LEASE COMMITMENTS
		2013	2012
		$	$
	Payable - minimum lease payments:
	- not later than 12 months	245,232	220,486
	- between 12 months and 5 years	-	427,873
		245,232	648,359
**_(B) _ **	OPTIONS FEE COMMITMENTS
		2013	2012
		$	$
	Payable - minimum lease payments:
	- not later than 12 months	500,000	430,000
	- between 12 months and 5 years	-	100,000
		500,000	530,000
**_(C) _ **	CAPITAL EXPENDITURE COMMITMENTS
		2013	2012
	Payable:	$	$
	- not later than 12 months	50,087	72,352
	- between 12 months and 5 years	146,454	289,410
		196,541	361,762

13 CAPITAL AND LEASING COMMITMENTS

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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.

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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.

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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.

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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 - - - 14,632,5 81 - 14,632,581 2,842 - - 362,127 - 364,969 (110,511) - - (139,773) - (250,284)
	1,258,197 - - 14,964,7 83 - 16,228,748

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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 - 9,917,40 8 - 10,235,140 5,644 - - 420,400 - 426,044 (222,868) - - (550,443) - (773,311)
	797,410 317,732 - 10,015,8 11 - 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:

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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 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 -

• 50 -

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 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

• 51 -

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

			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.

• 52 -

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)

• 53 -

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:

1. 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

2. The issue of 3,500,000 options exercisable at various prices and expiring at various times in part consideration for capital raising fees.

3. 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 - 3,500,00 0 - - 3,500,000 3,500,000 - 5,500,00 0 - - 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).

• 54 -

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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

• 55 -

PREDICTIVE DISCOVERY LIMITED

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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

• 56 -

PREDICTIVE DISCOVERY LIMITED

DIRECTORS’ DECLARATION

The directors of the company declare that:

1. The financial statements and notes, as set out on pages 13 to 56, are in accordance with the Corporations Act 2001 and:

2. (a) comply with Accounting Standards; and

3. (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;

4. The Chief Executive Officer and Chief Financial Officer have each declared that:

5. (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 ;

6. (b) the financial statements and notes for the financial year comply with the Accounting Standards; and

7. (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.

1. 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.

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Paul Roberts

Managing Director 5 September 2013

• 57 -

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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.

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Independent Auditor’s Report to the Members of Predictive Discovery Limited & Controlled Entities

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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

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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 .

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NEXIA MELBOURNE

ABN 16 847 721 257

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ANDREW JOHNSON Partner Audit & Assurance Services

Melbourne

5 September 2013