STELLAR RESOURCES LIMITED ABN

Transcription

1 STELLAR RESOURCES LIMITED ABN HALF YEAR FINANCIAL REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2018

2 Contents Corporate directory 2 Review of operations 3 Directors' report 7 Auditor's independence declaration 9 Statement of profit or loss and other comprehensive income 10 Statement of financial position 11 Statement of changes in equity 12 Statement of cash flows 13 Notes to the financial statements 14 Directors' declaration 19 Independent auditor's review report to the members of Stellar Resources 20 1

3 Corporate directory Directors Company Secretary Phillip Harman (Non-Executive Chairman) Peter Blight (Managing Director) Thomas Whiting (Non-Executive Director) Miguel Lopez de Letona (Non-Executive Director) Melanie Leydin Registered Office Level Collins Street Melbourne VIC 3000 Facsimile: (03) Telephone: (03) Share register Auditor Bankers Stock exchange listing Website Tax Agents and Advisors Boardroom Pty Limited Level 12, 225 George Street Sydney NSW 2000 Telephone: Deloitte Touche Tohmatsu 550 Bourke Street Melbourne VIC 3000 National Australia Bank 800 Bourke St Docklands VIC 3008 shares are listed on the Australian Securities Exchange (ASX code: SRZ and SRZO) Deloitte Private Pty Ltd 550 Bourke Street Melbourne VIC

4 Review of operations REVIEW OF OPERATIONS Stellar has continued to consolidate its land holdings over tin assets on the west coast of Tasmania and now owns 100% of six tin deposits and 6km of prime exploration strike length along tin mineralised structures. Two of the additional ore sources, St Dizier and Razorback provide an opportunity for low-cost open pit development and early entry to tin production. The flagship Heemskirk tin project remains the core asset of the company with its potential to deliver a long-life underground mine comparable to the tier-one Renison mine which lies 18km to the northeast of Zeehan. Key Achievements December 2018, EL13/2018 Montana Flats covering extensions of the Heemskirk tin mineralisation to the north of ML2023P/M was secured December 2018, St Dizier ML10M/2017 granted for an initial term of 6 years January 2019, St Dizier Scoping Study updated for current tin price and exchange rates January 2019, exploration targets identified within the Montana Flats EL Figure 1: Location of Tasmanian Tin Assets Tenements Secured Montana Flats (EL13/2018) is a 24km 2 tenement that lies immediately north of the Heemskirk tin deposits and provides tenure for 5 years. The strategically important tenement was granted in December 2018 following a competitive tender process that focused on Stellar s exploration model, work program and track record. Stellar has identified a number of exploration drill targets within the EL. St Dizier (ML10M/2017) is a 2km 2 mining lease that provides Stellar with unencumbered access to the St Dizier tin deposit for an initial period of 6 years. St Dizier is located 20km to the northwest of Zeehan along the all-weather Heemskirk Road. Positive St Dizier Scoping Study The updated St Dizier Scoping Study valuation has resulted in a base case NPV 10%, at current tin prices (US$20,000/t), determined to an accuracy of ±35%, of approximately A$10.4m, an IRR of approximately 166% and a payback period of approximately 8 months. The project has a low capital investment estimated at A$ 3.8m and can be bought into production within 3 months of receiving approvals, providing flexibility to ensure that it is developed in a supportive tin price environment (see Table 1). 3

5 Review of operations Table 1: St Dizier Project; Key Scoping Study Outcomes Figure 2: St Dizier Long Projection Showing Planned Open Pit The 2015 St Dizier Scoping Study was based on the following key parameters: Global Indicated Resource of 0.69% tin (0.3% tin cut-off grade) - includes West and Central Lodes Open pit mine on the upper section of the Central Lode a mineable resource of 0.90% tin was defined as the in-situ resource within a design pit shell (see Figure 2) Contractor mining pit dimensions set maximum annual ore mining rate at 163,000t Contractor ore haulage up to 20km to a processing plant Renison tin style processing flow sheet crush, grind, magnetic separation, sulphide float, gravity separation, tin float and concentrate dressing to >50% tin in concentrate Concentrate shipped to Asia for smelting under industry treatment and refining terms 4

6 Review of operations Exploration Exploration will focus on the Razorback and Montana Flats ELs (see Figure 1). At Razorback, the primary objective of the test-work is to determine whether a low-cost fine gravity separation process can produce a saleable tin concentrate from Razorback tailings. The secondary objective will be to calculate a theoretical overall recovery for Razorback ore that can be used in an economic review of the Razorback open pit. An assessment of tin targets on the Montana Flats EL, focused on historical mines that have had little or no drilling at depth or in the case of silver mines no testing for associated tin lodes. The targets identified in Figure 3 are the Oonah, Montana No1 and Zeehan Western mines. (Other targets shown in Figure 3, occur to the south of EL11/2017 on Stellar s ML2023P/M) Figure 3: Montana Flats Proposed Drill Targets 5

7 Review of operations Tin Market Outlook The outlook for tin has steadily improved over the half year with steady demand growth and disrupted supply from Indonesia as authorities move to gain control over illegal production. An increase in the London Metal Exchange (LME) tin price from a low of US$18,425/t in late November 2018 to the current level of US$21,680/t in February 2019 reflects a response to restricted Indonesian supply and re-structuring of supply in China (see Figure 4). The tin price has out-performed all other LME metal prices in the period since November In December quarter 2018, Indonesian tin exports declined by 40% to 13,800t on the previous corresponding period as the industry restructured to meet permitting requirements. According to the International Tin Association (ITA), China s refined tin production declined by 29% in the December quarter 2018 due to disrupted production in Yunnan province and a shortage of tin concentrate. ITA estimates that shipments of tin in concentrate from Myanmar to China fell by 48% in December quarter 2018 due to declining grade and a reduction in government owned tin stocks. Research into tin use in rechargeable batteries is continuing to proliferate. ITA have identified nine tin-inanode technologies that could be commercialised. In addition, research at the University of Illinois has developed a nickel-tin 3D anode with significant advantages in energy intensity. Figure 4: LME Tin Price (US/t, A$/t) Versus Exchange Stocks (t) 6

8 Directors' report The Directors of ("the Company") and its controlled entities ("the Consolidated Entity") submit herewith the financial report for the half-year ended. In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows: Directors The names of the Directors of the Company during or since the end of the half-year are: Phillip Harman Peter Blight Thomas Whiting Miguel Lopez de Letona The above named Directors held office during and since the end of the half-year. Principal activities The principal activity of the consolidated entity during the half-year continued to be mineral exploration with the objective of identifying and developing economic reserves. Dividends There were no dividends paid, recommended or declared during the current or previous financial half-year. Review of operations The loss for the consolidated entity after providing for income tax amounted to $240,888 (31 December 2017: $471,515). Revenue during the period amounted to $10,925 (2017: $25,659) all of which was interest received. Administration expenses amounted to $242,423 (2017: $339,009) resulting from continuing operations, the decrease was largely due to decreased corporate and exploration associated activities during the half-year. The Impairment loss on exploration and evaluation assets amounted to Nil (2017: $148,401). Financial Position The net assets of the consolidated entity decreased by $269,942 to $18,424,474 as at (30 June 2018: $18,694,416) which is largely due to the loss from continuing operations. The consolidated entity s working capital surplus, being current assets less current liabilities was $903,817 at (30 June 2018: $1,223,032). During the half-year the consolidated entity had a negative cash flow from operating activities of $262,463 (2017: $328,279). Significant changes in the state of affairs There were no significant changes in the state of affairs of the consolidated entity during the financial half-year. Matters subsequent to the end of the financial half-year No matter or circumstance has arisen since that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years. Environmental Regulations The consolidated entity s exploration activities are subject to various environmental regulations under both state and federal legislation in Australia. The ongoing operation of these tenements is subject to compliance with the respective mining and environmental regulations and legislation. Licence requirements relating to ground disturbance, rehabilitation and waste disposal exist for all tenements held. The Directors are not aware of any significant breaches of mining and environmental regulations and legislation during the halfyear period covered by this report. Auditor's independence declaration The auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this directors' report. 7

9 Directors' report This report is made in accordance with a resolution of directors, pursuant to section 306(3)(a) of the Corporations Act On behalf of the directors P Blight Managing Director 6 March 2019 Melbourne 8

10 Deloitte Touche Tohmatsu ABN Bourke Street Melbourne VIC 3000 GPO Box 78 Melbourne VIC 3001 Australia DX: 111 Tel: +61 (03) Fax: +61 (03) The Board of Directors Level 17, 530 Collins Street Melbourne VIC March 2019 Dear Board Members In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of. As lead audit partner for the review of the financial statements of Stellar Resources Limited for the half-year ended, I declare that to the best of my knowledge and belief, there have been no contraventions of: (i) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and (ii) any applicable code of professional conduct in relation to the review. Yours sincerely DELOITTE TOUCHE TOHMATSU Ryan Hansen Partner Chartered Accountant Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited 9

11 Statement of profit or loss and other comprehensive income For the half-year ended Consolidated 31 December 31 December $ $ Revenue Interest received 10,925 25,659 Expenses Depreciation and amortisation expenses (9,390) (9,764) Exploration expenditure and other costs written off - (148,401) Administration expenditure (242,423) (339,009) Loss before income tax expense (240,888) (471,515) Income tax expense - - Loss after income tax expense for the half-year attributable to the owners of Stellar Resources (240,888) (471,515) Other comprehensive income Items that may not be transferred subsequently to income statement Gain on the revaluation of financial assets at fair value through other comprehensive income, net of tax (29,054) 37,166 Other comprehensive income for the half-year, net of tax (29,054) 37,166 Total comprehensive income for the half-year attributable to the owners of Stellar Resources (269,942) (434,349) Cents Cents Basic earnings per share (0.06) (0.12) Diluted earnings per share (0.06) (0.12) The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes 10

12 Statement of financial position As at Note Consolidated 31 December June 2018 $ $ Assets Current assets Cash 898,226 1,222,238 Trade and other receivables 12,041 6,207 Other financial assets 3 59,826 88,880 Other assets 19,665 20,200 Total current assets 989,758 1,337,525 Non-current assets Trade and other receivables 166, ,470 Property, plant and equipment 125, ,905 Exploration expenditure 4 17,233,225 17,188,699 Total non-current assets 17,524,790 17,481,074 Total assets 18,514,548 18,818,599 Liabilities Current liabilities Trade and other payables 33,045 60,538 Provisions 46,782 44,991 Other liabilities 6,114 8,964 Total current liabilities 85, ,493 Non-current liabilities Provisions 4,133 3,574 Other liabilities - 6,116 Total non-current liabilities 4,133 9,690 Total liabilities 90, ,183 Net assets 18,424,474 18,694,416 Equity Issued capital 5 36,867,490 36,867,490 Reserves 1,725,535 1,754,589 Accumulated losses (20,168,551) (19,927,663) Total equity 18,424,474 18,694,416 The above statement of financial position should be read in conjunction with the accompanying notes 11

13 Statement of changes in equity For the half-year ended Issued Accumulated capital Reserves losses Total equity Consolidated $ $ $ $ Balance at 1 July ,867,490 2,236,127 (19,734,597) 19,369,020 Loss after income tax expense for the half-year - - (471,515) (471,515) Other comprehensive income for the half-year, net of tax - 37,166-37,166 Total comprehensive income for the half-year - 37,166 (471,515) (434,349) Transactions with owners in their capacity as owners: Lapse of options - (497,426) 497,426 - Balance at 31 December ,867,490 1,775,867 (19,708,686) 18,934,671 Issued Accumulated capital Reserves losses Total equity Consolidated $ $ $ $ Balance at 1 July ,867,490 1,754,589 (19,927,663) 18,694,416 Loss after income tax expense for the half-year - - (240,888) (240,888) Other comprehensive income for the half-year, net of tax - (29,054) - (29,054) Total comprehensive income for the half-year - (29,054) (240,888) (269,942) Balance at 36,867,490 1,725,535 (20,168,551) 18,424,474 The above statement of changes in equity should be read in conjunction with the accompanying notes 12

14 Statement of cash flows For the half-year ended Consolidated 31 December 31 December $ $ Cash flows from operating activities Payments to suppliers (262,463) (328,279) Net cash used in operating activities (262,463) (328,279) Cash flows from investing activities Payments for security deposits (8,580) (9,400) Interest received 12,496 39,071 Payments for exploration expenditure (56,500) (915,639) Net cash used in investing activities (52,584) (885,968) Cash flows from financing activities Payments for finance lease (8,965) (8,485) Net cash used in financing activities (8,965) (8,485) Net decrease in cash and cash equivalents (324,012) (1,222,732) Cash and cash equivalents at the beginning of the financial half-year 1,222,238 2,901,944 Cash and cash equivalents at the end of the financial half-year 898,226 1,679,212 The above statement of cash flows should be read in conjunction with the accompanying notes 13

15 Notes to the financial statements Note 1. Significant accounting policies These general purpose financial statements for the interim half-year reporting period ended have been prepared in accordance with Australian Accounting Standard AASB 134 'Interim Financial Reporting' and the Corporations Act 2001, as appropriate for for-profit oriented entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 'Interim Financial Reporting'. These general purpose financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2018 and any public announcements made by the company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act The principal accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, except for the policies stated below. Reporting Entity (the Company ) is a company domiciled in Australia. The consolidated interim financial statements of the Company as at and for the half-year ended comprises the Company and its subsidiaries (together referred to as the Consolidated Entity ). Statement of Compliance The half-year financial report is a general purpose financial report prepared in accordance with the Corporations Act 2001 and AASB 134 Interim Financial Reporting. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 Interim Financial Reporting. The half-year financial report does not include notes of the type normally included in an annual financial report and shall be read in conjunction with the most recent annual financial report. Basis of Preparation The consolidated financial statements have been prepared on the basis of historical cost, except for the revaluation of certain current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted. The accounting policies and methods of computation adopted in the preparation of the half-year financial report are consistent with those adopted and disclosed in the Company s 2018 annual financial report for the financial year ended 30 June 2018, except for the impact of the of the Standards and Interpretations described below. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards. Amendments to AASBs and the new Interpretation that are mandatorily effective for the current reporting period The Consolidated Entity has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for the current half-year. All new accounting standards required, were adopted and they did not have a material impact. The adoption of all the new and revised Standards and Interpretations has not resulted in any changes to the consolidated entity s accounting policies and has no effect on the amounts reported for the current or prior half-years. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the consolidated entity. 14

16 Notes to the financial statements Note 1. Significant accounting policies (continued) The following Accounting Standards and Interpretations are most relevant to the consolidated entity: AASB 9 Financial Instruments The consolidated entity has adopted AASB 9 from 1 July The standard introduced new classification and measurement models for financial assets. A financial asset shall be measured at amortised cost if it is held within a business model whose objective is to hold assets in order to collect contractual cash flows which arise on specified dates and that are solely principal and interest. A debt investment shall be measured at fair value through other comprehensive income if it is held within a business model whose objective is to both hold assets in order to collect contractual cash flows which arise on specified dates that are solely principal and interest as well as selling the asset on the basis of its fair value. All other financial assets are classified and measured at fair value through profit or loss unless the entity makes an irrevocable election on initial recognition to present gains and losses on equity instruments (that are not held-for-trading or contingent consideration recognised in a business combination) in other comprehensive income ('OCI'). Despite these requirements, a financial asset may be irrevocably designated as measured at fair value through profit or loss to reduce the effect of, or eliminate, an accounting mismatch. For financial liabilities designated at fair value through profit or loss, the standard requires the portion of the change in fair value that relates to the entity's own credit risk to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge accounting requirements are intended to more closely align the accounting treatment with the risk management activities of the entity. New impairment requirements use an 'expected credit loss' ('ECL') model to recognise an allowance. Impairment is measured using a 12-month ECL method unless the credit risk on a financial instrument has increased significantly since initial recognition in which case the lifetime ECL method is adopted. For receivables, a simplified approach to measuring expected credit losses using a lifetime expected loss allowance is available. There will be no material impact on the carrying values. Changes in fair value are expected to continue being recorded through OCI, with the one-time election to record equity investments as such expected to be undertaken by the directors. Under AASB 9 the fair value gains/losses in relation to equity are not recycled to the Statement of Profit and Loss (even on disposal of the investment) and are not subject to impairment testing. AASB 15 Revenue from Contracts with Customers This standard is applicable to annual reporting periods beginning on or after 1 January The standard provides a single standard for revenue recognition. The core principle of the standard is that an entity will recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard will require: contracts (either written, verbal or implied) to be identified, together with the separate performance obligations within the contract; determine the transaction price, adjusted for the time value of money excluding credit risk; allocation of the transaction price to the separate performance obligations on a basis of relative stand-alone selling price of each distinct good or service, or estimation approach if no distinct observable prices exist; and recognition of revenue when each performance obligation is satisfied. Credit risk will be presented separately as an expense rather than adjusted to revenue. For goods, the performance obligation would be satisfied when the customer obtains control of the goods. For services, the performance obligation is satisfied when the service has been provided, typically for promises to transfer services to customers. For performance obligations satisfied over time, an entity would select an appropriate measure of progress to determine how much revenue should be recognised as the performance obligation is satisfied. Contracts with customers will be presented in an entity's statement of financial position as a contract liability, a contract asset, or a receivable, depending on the relationship between the entity's performance and the customer's payment. Sufficient quantitative and qualitative disclosure is required to enable users to understand the contracts with customers; the significant judgements made in applying the guidance to those contracts; and any assets recognised from the costs to obtain or fulfil a contract with a customer. The consolidated entity has adopted this standard from 1 July 2018 but it has no material impact as there are no contracts with customers. 15

17 Notes to the financial statements Note 1. Significant accounting policies (continued) Amendments to AASBs and the new Interpretation that are mandatorily effective for the future reporting period: AASB 16 Leases This standard is applicable to annual reporting periods beginning on or after 1 January The standard replaces AASB 117 'Leases' and for lessees will eliminate the classifications of operating leases and finance leases. Subject to exceptions, a 'right-of-use' asset will be capitalised in the statement of financial position, measured at the present value of the unavoidable future lease payments to be made over the lease term. The exceptions relate to short-term leases of 12 months or less and leases of low-value assets (such as personal computers and small office furniture) where an accounting policy choice exists whereby either a 'right-of-use' asset is recognised or lease payments are expensed to profit or loss as incurred. A liability corresponding to the capitalised lease will also be recognised, adjusted for lease prepayments, lease incentives received, initial direct costs incurred and an estimate of any future restoration, removal or dismantling costs. Straight-line operating lease expense recognition will be replaced with a depreciation charge for the leased asset (included in operating costs) and an interest expense on the recognised lease liability (included in finance costs). In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when compared to lease expenses under AASB 117. However EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results will be improved as the operating expense is replaced by interest expense and depreciation in profit or loss under AASB 16. For classification within the statement of cash flows, the lease payments will be separated into both a principal (financing activities) and interest (either operating or financing activities) component. For lessor accounting, the standard does not substantially change how a lessor accounts for leases. The consolidated entity will adopt this standard from 1 July 2019 but no material impact is expected as the consolidated entity currently has no material leases. Going concern s consolidated financial statements are prepared on a going concern basis which assumes continuity of normal business activities and the realisation of assets and settlement of liabilities and commitments in the normal course of business. During the half-year ended, the consolidated entity recognised a loss of $240,888, had net cash outflows from operating activities of $262,463, payments for exploration activities of $56,500 and had an accumulated loss of $20,168,551 as at. The continuation of the consolidated entity as a going concern is dependent upon its ability to generate sufficient cash from operating and financing activities and manage the level of exploration and other expenditure within available cash resources. The Directors consider that the going concern basis of accounting is appropriate for the following reasons: As at, the consolidated entity had cash assets of $898,226, net working capital of $903,817, including investments in Twenty Seven Co. (formerly UraniumSA Limited) of $15,552, Samphire Uranium Limited of $21,774 and Renascor Resources Limited of $22,500 which can be liquidated if and when required. The most recently prepared cash flow forecast prepared by management and reviewed by the Directors indicates that the consolidated entity will hold sufficient cash reserves to continue its current exploration programmes and other working capital requirements beyond twelve months from issuing these financial statements. The cash flow forecast takes into account the consolidated entity s implementation of cost reviews which includes exploration activity and overhead expenditure, as well as raising new equity capital in order for the consolidated entity to meet its planned exploration expenditure. In the event that the consolidated entity is unsuccessful in the matters set out above, there is material uncertainty whether the consolidated entity will continue as a going concern and therefore whether it will realise its assets and discharge its liabilities in the normal course of business and at the amounts stated in the financial report. 16

18 Notes to the financial statements Note 2. Segment information Identification of reportable operating segments During the current financial year the consolidated entity operated in one segment being an explorer of tin. AASB 8 requires operating segments to be identified on the basis of internal reports about the components of the consolidated entity that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance. In the current year the board reviews the consolidated entity as one operating segment being mineral exploration within Australia. Revenue by geographical area All assets and liabilities and operations are based in Australia. Note 3. Current assets - Other financial assets Consolidated 31 December June 2018 $ $ Investment in Twenty Seven Co. (formerly UraniumSA Limited) 15,552 31,106 Investment in Renascor Resources Limited 22,500 36,000 Investment in Samphire Uranium Limited 21,774 21,774 Reconciliation Reconciliation of the fair values at the beginning and end of the current and previous financial half-year are set out below: 59,826 88,880 Opening fair value 88,880 72,991 Revaluation increments/(decrements) (29,054) 15,889 Closing fair value 59,826 88,880 Shares in Twenty Seven Co. (ASX:TSC) (formerly UraniumSA Limited (ASX:USA)) (3,888,238 fully paid ordinary shares held) and Renascor Resources Limited (1,500,000 fully paid ordinary shares held) are held by Hiltaba Gold Pty Ltd (a wholly owned subsidiary) and are measured at fair value valued in accordance AASB 13 - Level 1 of the fair value hierarchy - quoted prices (unadjusted) in active markets for identical assets or liabilities. A revaluation decrement of $29,054 was recognised in other comprehensive income. The valuation remains unchanged from 30 June 2018 in Samphire Uranium Limited (3,888,238 fully paid ordinary shares held). Note 4. Non-current assets - exploration expenditure Consolidated 31 December June 2018 $ $ Exploration expenditure 17,233,225 17,188,699 17

19 Notes to the financial statements Note 4. Non-current assets - exploration expenditure (continued) Reconciliations Reconciliations of the written down values at the beginning and end of the current financial half-year are set out below: Consolidated $ Balance at 1 July ,188,699 Expenditure during the half-year 44,526 Balance at 17,233,225 Ultimate recovery of capitalised exploration expenditure is dependent upon success in exploration and development or sale or farm-in\farm-out of the exploration interests. Note 5. Equity - issued capital Consolidated 31 December June December June 2018 Shares Shares $ $ Ordinary shares - fully paid 379,713, ,713,489 36,867,490 36,867,490 Ordinary shares Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares held. At shareholders meetings, each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands. Note 6. Equity - dividends There were no dividends paid, recommended or declared during the current or previous financial half-year. Note 7. Commitments Consolidated 31 December June 2018 $ $ Exploration Commitments Within one year 600, ,395 One to five years 1,855,650 1,489,211 2,456,623 2,105,606 In order to maintain current rights to tenure to exploration and mining tenements, the consolidated entity has the above exploration expenditure requirements up until expiry of leases. These obligations, which may be varied from time to time and which are subject to renegotiation upon expiry of the lease are not provided for in the financial report and are payable. Current year commitments will be met on the assumption that additional funding and capital will be raised. However if it is not successful, management is confident that these commitments may be deferred with no consequences with maintaining the right to tenure the exploration and mining tenements. Note 8. Events after the reporting period No matter or circumstance has arisen since that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years. 18

20 Directors' declaration The Directors of the Company declare that: 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; and in the Directors' opinion, the financial statements and notes hereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the Consolidated Entity. Signed in accordance with a resolution of the Directors made pursuant to section 303(5)(a) of the Corporations Act On behalf of the Directors P Blight Managing Director 6 March 2019 Melbourne 19

21 6,116 Deloitte Touche Tohmatsu ABN Bourke Street Melbourne VIC 3000 GPO Box 78 Melbourne VIC 3001 Australia Tel: Fax: Independent Auditor s Review Report to the members of We have reviewed the accompanying half-year financial report of, which comprises the condensed consolidated statement of financial position as at, and the condensed consolidated statement of profit or loss and other comprehensive income, the condensed consolidated statement of cash flows and the condensed consolidated statement of changes in equity for the half-year ended on that date, 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 end of the half-year or from time to time during the halfyear. 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 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 gives a true and fair view and 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 Standard on Review Engagements ASRE 2410 Review of a Financial Report 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: giving a true and fair view of the consolidated entity s financial position as at and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations As the auditor of, 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 other 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. Auditor s Independence Declaration In conducting our review, we have complied with the independence requirements of the Corporations Act We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of, would be in the same terms if given to the directors as at the time of this auditor s review report. Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited 20

22 Material Uncertainty Related to Going Concern We draw attention to Note 1 in the financial report, which indicates that the Group incurred a net loss of $240,888, and had a net cash outflow from operating activities of $262,463 during the period ended. As stated in the Note 1, these events or conditions, along with other matters set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt about the Group s ability to continue as a going concern. Our conclusion is not modified in respect of this matter. 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 is not in accordance with the Corporations Act 2001, including: (a) giving a true and fair view of the consolidated entity s financial position as at and of 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 DELOITTE TOUCHE TOHMATSU Ryan Hansen Partner Chartered Accountants Melbourne, 6 March