# KEY AUDIT MATTERS (continued)

<table><tr><td colspan="2">Impairment assessment of intangible assets, construction in progress (“CIP”) and property, plant 
and equipment (“PP&E”) of Full Gold</td></tr><tr><td colspan="2">Refer to notes 14, 15, 16 to the consolidated financial statements and the accounting policies on page 
80.</td></tr><tr><td>The Key Audit Matter</td><td>How the matter was addressed in our audit</td></tr><tr><td>Due to the increasing uncertainty about the 
operational environment of a cash-generating unit 
(“CGU”), Full Gold Mining Limited Liability 
Company (“Full Gold”), a subsidiary of the Group, 
which incorporated in and has operations in the 
Kyrgyz Republic, there is a risk that the value of 
the intangible assets, CIP and PP&E of Full Gold 
may not be recoverable in full through the future 
cash flows to be generated from its mining 
operations or from disposal of these assets.
Full Gold held intangible assets (excluding 
exploration and evaluation assets) totalling RMB96 
million, CIP totalling RMB9 million and PP&E 
totalling RMB178 million as at 31 December 2020.
The recoverable amount of the cash generating 
unit which included Full Gold was determined by 
management as the greater of the value in use 
and the fair value less cost of disposal of the 
assets of Full Gold. A discounted cash flow 
forecast was prepared by management to 
determine the value in use.
We identified the impairment assessment of the 
intangible assets, CIP and PP&E of Full Gold as a 
key audit matter because the impairment 
assessment prepared by management is complex 
and contains certain judgements and assumptions, 
particularly in relation to future gold prices, the 
long-term growth rate and the discount rate 
applied, which are inherently uncertain and may be 
subject to management bias.</td><td>Our audit procedures to assess potential impairment of 
the intangible assets, CIP and PP&E of Full Gold 
included the following:
•    engaging our internal valuation specialists to assist 
us in evaluating the methodology used by 
management in the preparation of the discounted 
cash flow forecast with reference to the 
requirements of the prevailing accounting 
standards;
•   comparing the future gold prices used in the 
discounted cashflow forecast with gold futures 
contract prices in the market;
•   comparing data in the discounted cashflow forecast 
with the relevant data, including future revenue, 
future cost of sales and future other operating 
expenses, in the budget which was approved by 
the Board of Directors;
•   comparing the revenue and operating costs 
included in discounted cashflow forecast prepared 
in the prior year with the current year’s 
performance of Full Gold to assess how accurate 
the prior year’s discounted cashflow forecast was 
and making enquiries of management as to the 
reasons for any significant variations identified;
•   with the assistance of our internal valuation 
specialists, assessing whether the discount rate 
applied in the discounted cashflow forecast was 
within the range adopted by other companies in 
the same industry;</td></tr></table>

# KEY AUDIT MATTERS (continued)

<table><tr><td colspan="2">Impairment assessment of intangible assets, construction in progress (“CIP”) and property, plant 
and equipment (“PP&E”) of Full Gold</td></tr><tr><td colspan="2">Refer to notes 14, 15, 16 to the consolidated financial statements and the accounting policies on page 
80.</td></tr><tr><td>The Key Audit Matter</td><td>How the matter was addressed in our audit</td></tr><tr><td></td><td>•   comparing the long-term growth rate adopted in 
the discounted cashflow forecast with those of 
comparable companies and external market data; 
and
•   obtaining from management sensitivity analyses of 
the key assumptions, including future gold prices, 
future production quantities and future gross profit 
margins, adopted in the discounted cashflow 
forecast prepared by management and assessing 
the impact of changes in the key assumptions to 
the conclusions reached in the impairment 
assessments and whether there were any 
indicators of management bias.</td></tr></table>

# INFORMATION OTHER THAN THE CONSOLIDATED FINANCIAL STATEMENTS AND AUDITOR’S REPORT THEREON

The Directors are responsible for the other information. The other information comprises all the information included in the annual report, other than the consolidated financial statements and our auditor’s report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.