PREDICTIVE DISCOVERY LIMITED — Interim / Quarterly Report 2016

Mar 8, 2016

ABN 11 127 871 877

INTERIM FINANCIAL REPORT

FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 871 877

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CORPORATE DIRECTORY

DIRECTORS

AUDITOR

Mr Phillip Jackson Non-executive Chairman Mr Paul Roberts Managing Director Mr David Kelly Non-executive Director

Moore Stephens Level 18, 530 Collins Street MELBOURNE VIC 3000

Company Secretary

Mr Eric Moore

REGISTERED OFFICE

Suite 2, Level 2 20 Kings Park Road WEST PERTH WA 6005 Telephone: +61 8 6143 1840 Fax: +61 8 9321 4692 Email: info@predictivediscovery.com.au Web Site: www.predictivediscovery.com.au

SHARE REGISTRY

Link Market Services Limited Level 4, 152 St Georges Terrace PERTH WA 6000 Telephone: +61 8 9211 6670 Email: info@linkmarketservices.com.au

POSTAL ADDRESS

PO Box 1710 WEST PERTH WA 6872

SOLICITORS

Corrs Chambers Westgarth 240 St Georges Terrace PERTH WA 6000

ASX CODE

PDI

CONTENTS

DIRECTORS’ REPORT	3
STATEMENT OF COMPREHENSIVE INCOME	4
STATEMENT OF FINANCIAL POSITION	5
STATEMENT OF CHANGES IN EQUITY	6
STATEMENT OF CASH FLOWS	7
NOTES TO THE FINANCIAL STATEMENTS	8
DIRECTORS’ DECLARATION	12
INDEPENDENT AUDITOR’S REPORT	13
AUDITOR’S INDEPENDENCE DECLARATION	15

PREDICTIVE DISCOVERY LIMITED INTERIM FNANCIAL REPORT

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PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 871 877 DIRECTORS’ REPORT

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Your directors present their report, together with the condensed financial statements of Predictive Discovery Limited and controlled entities (the Group) for the half year ended 31 December 2015.

DIRECTORS

The names of the Company’s directors in office during the half-year and until the date of this report are as below. Directors were in office for this entire period unless otherwise stated.

Mr Phillip Jackson Non-executive Chairman Mr Paul Roberts Managing Director Mr David Kelly Non-executive Director (appointed 22 January 2016) Mr Phillip Henty Non-executive Director (resigned 30 November 2015) Mr Tim Markwell Non-executive Director (resigned 17 December 2015)

RESULTS

The consolidated loss of the Group for the half year after providing for income tax amounted to $367,843 (31 December 2014: $1,178,959).

REVIEW OF OPERATIONS

During the half year to December 2015, the Group moved to a strategy of advancing exploration on its extensive ground holdings in West Africa and Victoria through joint ventures or other types of project-level funding. This change was in response to the very difficult capital raising environment for junior gold explorers in recent times. This new strategy is now partly in place, with drilling having been carried out in Victoria (Cape Clear Joint Venture) and extensive geochemical and geological surveys completed on four of Predictive’s permits in Cote D’Ivoire (Toro Gold Joint Venture). Predictive also expanded its ground holdings in Cote D’Ivoire through an agreement with a local company (XMI SARL) which then held one permit and two permit applications in Cote D’Ivoire. Results from both the Toro Gold and Cape Clear joint ventures have been encouraging. Predictive’s exploration activities in Burkina Faso were on hold during the December half with work supported by new project-level funding expected to re-commence in the first half of 2016.

Total capital raisings (net of costs) during the period amounted to $1.21 million which was raised via a fully subscribed rights issue priced at $0.002 per share in December 2015. Overhead costs were cut further in the period, and, with continuing tight cost control, the capital raised will be sufficient to sustain the Company in its new strategy to mid2017.

AUDITOR’S INDEPENDENCE DECLARATION

A copy of the lead auditor’s independence declaration as required by Section 307c of the Corporations Act 2001 is included within the Financial Report.

Signed in accordance with a resolution of Directors:

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DIRECTOR 09 March 2016

PREDICTIVE DISCOVERY LIMITED INTERIM FINANCIAL REPORT

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PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 871 877

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INTERIM CONDENSED STATEMENT OF COMPREHENSIVE INCOME

FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

Note Finance Income Administrative payments Foreign exchange gain/expenses Impairment of exploration Loss before income tax Income tax expense Net loss for the year Other comprehensive income Item that may be reclassified subsequently to operating result Other comprehensive income Total comprehensive loss for the year Profit attributable to: Members of the parent entity Basic loss per share (cents per share) Diluted loss per share (cents per share)	Consolidated 31 December 2015 $ 31 December 2014 $ 972 4,260 (318,008) (617,869) (27,595) 4,690 (91,201) (570,040) (435,832) (1,178,959) - - (435,832) (1,178,959) 67,989 - (367,843) (1,178,959) (367,843) (1,178,959) (0.061) (0.260) (0.061) (0.260)	Consolidated 31 December 2015 $ 31 December 2014 $ 972 4,260 (318,008) (617,869) (27,595) 4,690 (91,201) (570,040) (435,832) (1,178,959) - - (435,832) (1,178,959) 67,989 - (367,843) (1,178,959) (367,843) (1,178,959) (0.061) (0.260) (0.061) (0.260)
		(1,178,959) -
		(1,178,959) -
		(1,178,959)
		(1,178,959)
		(0.260) (0.260)

The accompanying notes form part of these financial statements

PREDICTIVE DISCOVERY LIMITED INTERIM FINANCIAL REPORT 4

PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 871 877

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INTERIM CONDENSED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2015

Note Current Assets Cash and cash equivalents Trade and other receivables Total current assets Non-Current Assets Property, plant and equipment Exploration and evaluation expenditure Total non-current assets Total assets Current Liabilities Trade and other payables Provisions Total current liabilities Total liabilities Net Equity Issued capital 3 Reserves Accumulated losses Total Equity	Consolidated 31 December 2015 $ 30 June 2015 $ 1,315,201 717,648 104,827 188,141 1,420,028 905,789 147,016 180,703 10,579,454 10,338,343 10,726,470 10,519,046 12,146,498 11,424,835 192,219 322,522 19,216 20,285 211,435 342,807 211,435 342,807 11,935,063 11,082,028 25,401,747 24,180,869 2,029,405 1,961,416 (15,496,089) (15,060,257) 11,935,063 11,082,028	Consolidated 31 December 2015 $ 30 June 2015 $ 1,315,201 717,648 104,827 188,141 1,420,028 905,789 147,016 180,703 10,579,454 10,338,343 10,726,470 10,519,046 12,146,498 11,424,835 192,219 322,522 19,216 20,285 211,435 342,807 211,435 342,807 11,935,063 11,082,028 25,401,747 24,180,869 2,029,405 1,961,416 (15,496,089) (15,060,257) 11,935,063 11,082,028
		905,789
		180,703 10,338,343
		10,519,046
		11,424,835
		322,522 20,285
		342,807
		342,807
		11,082,028
		24,180,869 1,961,416 (15,060,257)
		11,082,028

The accompanying notes form part of these financial statements

PREDICTIVE DISCOVERY LIMITED INTERIM FINANCIAL REPORT 5

PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 871 877

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INTERIM CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

CONSOLIDATED At 1 July 2015 Loss for the year Other comprehensive income Total comprehensive loss for the year Transactions with owners in their capacity as owners: Shares issued during the years Transaction costs At 31 December 2015 At 1 July 2014 Loss for the year Other comprehensive income Total comprehensive loss for the year Transactions with owners in their capacity as owners: Issue of share capital Transaction costs At 31 December 2014	Issued Capital Accumulated Losses Foreign Currency Translation Reserve Share Based Payments Reserve Total $ $ $ $ $ 24,180,869 (15,060,257) 1,452,485 508,931 11,082,028 - (435,832) - - (435,832) - - 67,989 - 67,989
	- (435,832) 67,989 - (367,843)
	1,351,169 - - - 1,351,169 (130,291) - - - (130,291)
	25,401,747 (15,496,089) 1,520,474 508,931 11,935,063
	22,539,830 (7,999,368) 1,449,315 508,931 16,498,708 - (1,178,959) - - (1,178,959) - - 51,354 - 51,354
	- (1,178,959) 51,354 - (1,127,605)
	1,857,784 - - - 1,857,784 (213,074) - - - (213,074)
	24,184,540 (9,178,327) 1,500,669 508,931 (17,015,813)

The accompanying notes form part of these financial statements

PREDICTIVE DISCOVERY LIMITED INTERIM FINANCIAL REPORT

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PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 871 877

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INTERIM CONDENSED STATEMENT OF CASH FLOWS

FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

Note Cash flows from operating activities Payments to suppliers and employees GST receipts Net cash (used in ) operating activities Cash flows from investing activities Interest received Payments for purchase of plant and equipment Payments for exploration expenditure Net cash inflow from investing activities Cash flows from financing activities Proceeds from issue of shares Payment for share issue costs Net cash inflow from financing activities Foreign exchange differences Net cash provided by other activities Net increase in cash held Cash and cash equivalents at beginning of the half-year Cash and cash equivalents at the end of the half-year	Consolidated 31 December 2015 31 December 2014 $ $ (291,892) (642,982) 108 1,800 (291,784) (641,182) 972 4,260 - 1,729 (361,812) (483,436) (360,840) (477,447) 1,301,169 1,857,784 (85,291) (213,074) 1,215,878 1,644,710 34,299 37,588 34,299 37,588 563,254 563,669 717,648 950,825 1,315,201 1,514,494	Consolidated 31 December 2015 31 December 2014 $ $ (291,892) (642,982) 108 1,800 (291,784) (641,182) 972 4,260 - 1,729 (361,812) (483,436) (360,840) (477,447) 1,301,169 1,857,784 (85,291) (213,074) 1,215,878 1,644,710 34,299 37,588 34,299 37,588 563,254 563,669 717,648 950,825 1,315,201 1,514,494
		(641,182)
		4,260 1,729 (483,436)
		(477,447)
		1,857,784 (213,074)
		1,644,710
		37,588
		37,588 563,669 950,825
		1,514,494

The accompanying notes form part of these financial statements

PREDICTIVE DISCOVERY LIMITED INTERIM FINANCIAL REPORT

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PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 871 877 NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

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NOTES TO THE FINANCIAL STATEMENTS

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation

This consolidated interim financial report for the half year ending 31 December 2015 has been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standard AASB 134: Interim Financial Reporting.

The interim financial report is intended to provide users with an update on the latest annual financial statements of Predictive Discovery Limited and controlled entities (the Group). As such it does not contain information that represents relatively insignificant changes occurring during the half year within the Group. This interim consolidated financial report does not include all the notes normally included in an annual financial report. It is therefore recommended that this interim financial report be read in conjunction with the annual financial report of the Group for the year ended 30 June 2015, together with any public announcements made during the half year. The same accounting policies and methods of valuation have been followed in this interim financial report as were applied in the most recent annual financial report.

Key Judgement – Going Concern

The interim 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 beyond the foreseeable future 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.

NOTE 2: DEFERRED EXPLORATION AND EVALUATION EXPENDITURE Carrying amount at beginning of year Expenditure Impairment Movement in exchange rates	Consolidated 31 December 2015 $ 30 June 2015 $ 10,338,343 15,639,370 332,312 1,002,766 -91,201 (6,320,397) - 16,604 10,579,454 10,338,343	Consolidated 31 December 2015 $ 30 June 2015 $ 10,338,343 15,639,370 332,312 1,002,766 -91,201 (6,320,397) - 16,604 10,579,454 10,338,343
		10,338,343

The Group has capitalised exploration expenditure of $10,579,454 (30 June 2015: $10,338,343). This amount includes costs directly associated with exploration and the purchase of exploration properties. These costs are capitalised as an intangible asset until assessment and / or drilling of the permit is complete and the results have been evaluated. These direct costs include employee remuneration, materials, permit rentals and payments to contractors. The expenditure is carried forward until such a time as the area moves into the development phase, is abandoned or sold. Given exploration activities have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of recoverable resources and the difficulty in forecasting cash flows to assess the fair value of exploration expenditure there is uncertainty as to the carrying value of exploration expenditure. The ultimate recovery of the carrying value of exploration expenditure is dependent upon the successful development and commercial exploitation or, alternatively, sale of the interest in the tenements. The Directors are of the opinion that the exploration expenditure is recoverable for the amount stated in the financial report.

PREDICTIVE DISCOVERY LIMITED INTERIM FINANCIAL REPORT

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PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 871 877 NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

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NOTE 3: ISSUED CAPITAL 1,326,168,686 (30 June 2015: 650,584,343) Ordinary Shares Share issue costs written off against issued capital	Consolidated 31 December 2015 $ 30 June 2015 $ 27,215,993 25,864,824 (1,814,246) (1,683,955) 25,401,747 24,180,869	Consolidated 31 December 2015 $ 30 June 2015 $ 27,215,993 25,864,824 (1,814,246) (1,683,955) 25,401,747 24,180,869
		24,180,869

At 1 July 2014 Issue of shares in placement Issue of shares in rights issue At 31 December 2014 At 1 July 2015 Issue of shares in rights issue Issue of shares for underwriting services Issue of shares for other services Options cancelled/expired At 31 December 2015	Shares Listed Options Unlisted Options No. No. No. 387,865,214 - 25,631,075 18,750,000 - - 243,969,129 -
	650,584,343 - 25,631,075
	650,584,343 - 16,500,000 650,584,343 - - 22,500,000 - - 2,500,000 - - - - (8,500,000)
	1,326,168,686 - 8,000,000

NOTE 4 - SEGMENT INFORMATION

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 group operates as three segments, which are gold exploration and evaluation within Australia, Burkina Faso and Cote D’Ivoire.

The group is domiciled in Australia. Segment revenues are allocated based on the country in which the customer is located. Segment assets are allocated to countries based on where the assets are located.

PREDICTIVE DISCOVERY LIMITED INTERIM FINANCIAL REPORT

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PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 871 877 NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

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NOTE 4 - SEGMENT INFORMATION (continued)

Half Year Ended 31 December 2015 Other income Expenses Loss for the period As At 31 December 2015 Current assets Non-current assets Current liabilities Non-current liabilities Exploration expenditure Net Assets Half Year Ended 31 December 2014 Other income Expenses Loss for the period As At 30 June 2015 Current assets Non-current assets Current liabilities Non-current liabilities Exploration expenditure Net Assets	Corporate $ Gold Australia $ Gold Burkina Faso $ Gold Cote D’Ivoire $ Consolidated $ 972 - - - 972 (164,843) - (210,168) (61,793) (436,804)
	(163,871) - (210,168) (61,793) (435,832)
	1,329,416 - 79,500 11,112 1,420,028 3,559 - 143,457 - 147,016 (176,307) - (31,958) (3,170) (211,435) - - - - - - 1,407 10,578,047 - 10,579,454
	1,156,668 1,407 10,769,046 7,942 11,935,063
	4,260 - - - 4,260 (343,300) - (808,379) (31,540) (1,183,219)
	(339,040) - (808,379) (31,540) (1,178,959)
	714,374 - 170,866 20,548 905,788 - - 180,703 - 180,703 (159,019) - (181,914) (1,873) (342,806) - - - - - - - 10,338,343 - 10,338,343
	555,355 - 10,507,998 18,675 11,082,028

NOTE 5 – CONTROLLED ENTITIES

		PERCENTAGE OWNED	PERCENTAGE
		(%)*	OWNED (%)*
	COUNTRY OF INCORPORATION	31 DEC 2015	30 JUNE 2015
Subsidiaries:
Predictive Discovery SARL	Burkina Faso	100	100
Predictive Discovery Niger SARL	Niger	100	100
Predictive Discovery Cote d’Ivoire	Cote d’Ivoire	100	100
Birrimian Pty Limited	British Virgin Islands	100	100

* Percentage of voting power is in proportion to ownership

NOTE 6 – CONTINGENT LIABILITIES AND CONTINGENT ASSETS

In the opinion of the Directors, the Group did not have any contingencies at 31 December 2015 (30 June 2015: Nil).

PREDICTIVE DISCOVERY LIMITED INTERIM FINANCIAL REPORT

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PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 871 877 NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

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NOTE 7 – 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.

Other than intercompany loans and remuneration of Key Management Personnel, there were no other related party transactions during the half year.

NOTE 8 – EVENTS AFTER THE END OF THE REPORTING PERIOD

There no other matters or circumstances have arisen since the end of the half 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.

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PREDICTIVE DISCOVERY LIMITED AND CONTROLLED ENTITIES ACN 127 871 877 DIRECTORS’ DECLARATION

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DIRECTORS’ DECLARATION

The directors of the company declare that:

1. The concise financial statements and notes, as set out on pages 3 to 11, are in accordance with the Corporations Act 2001 and:

2. (a) comply with Australian Accounting Standard 134; and

3. (b) give a true and fair view of the financial position as at 31 December 2015 and of the performance for the half year ended on that date of the company and consolidated group;

4. 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 DIRECTOR 09 March 2016

PREDICTIVE DISCOVERY LIMITED INTERIM FINANCIAL REPORT

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INDEPENDENT AUDITOR’S REVIEW REPORT

TO THE MEMBERSOF PREDICTIVE DISCOVERY LIMITED & CONTROLLED ENTITIES

Report on the Half‐Year Financial Report

We have reviewed the accompanying half‐year financial report of Predictive Discovery Limited & controlled entities ( the company ), which comprises the condensed statement of financial position as at 31 December 2015, the condensed statement of profit or loss and other comprehensive income, condensed statement of changes in equity, the condensed statement of cash flows for the half‐year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration.

Directors’ Responsibility for the Half‐Year Financial Report

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

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half‐year financial report based on our review. We conducted our review in accordance with Auditing Standards on Review Engagements ASRE 2410: Review of Interim and Other Financial Reports Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half‐year financial report is not in accordance with the Corporations Act 2001 including:

• a. giving a true and fair view of the company’s financial position as at 31 December 2015 and its performance for the half‐year ended on that date; and

• b. complying with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Regulations 2001 .

As the auditor of the company, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

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

Independence

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

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Conclusion

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

• a. giving a true and fair view of the company’s financial position as at 31 December 2015 and of its performance for the half‐year ended on that date; and

• b. complying with AASB 134: Interim Financial Reporting and the Corporations Regulations 2001 .

Emphasis of Matter – Going Concern

Without modifying the opinion 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 to the financial statements for the period ended 31 December 2015, 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.

Emphasis of Matter ‐ Inherent Uncertainty regarding Recoverability of Capitalised Exploration and Evaluation Assets

Without modifying the opinion expressed above, attention is drawn to the following matter. As a result of the matter described in Note 2 to the financial statements, there is uncertainty as to whether the company will be able to recover the carrying value of exploration expenditure for the amount recorded in the financial report. The ultimate recovery of the carrying value of exploration expenditure, and future exploration expenditure, is dependent upon the successful development and commercial exploitation or, alternatively, sale of the interest in the tenements.

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MOORE STEPHENS AUDIT (VIC)

ABN 16 847 721 257

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ADREW JOHNSON Partner Audit & Assurance Services

Melbourne, Victoria

9 March 2016

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 31 December 2015, 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.

MOORE STEPHENS AUDIT (VIC) ABN 16 847 721 257

ANDREW JOHNSON Partner

Audit & Assurance Services

Melbourne, Victoria

• 9 March 2016