LANEWAY RESOURCES LIMITED A.B.N INTERIM FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2018

Transcription

1 A.B.N INTERIM FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER

2 CORPORATE DIRECTORY DIRECTORS Stephen Bizzell (Chairman) Rick Anthon Mark Baker Peter Wright COMPANY SECRETARY Paul Marshall PRINCIPAL BUSINESS ADDRESS Level 9 1 Eagle St Brisbane Qld 4000 Telephone: (07) admin@lanewayresources.com.au SHARE REGISTRY Link Market Services Ltd Level Eagle Street Brisbane Qld 4000 Telephone: SOLICITOR McCullough Robertson Level 11, 66 Eagle Street Brisbane, QLD 4000 Telephone: AUSTRALIAN BUSINESS NUMBER ABN STOCK EXCHANGE LISTING Australian Securities Exchange ASX Code: LNY ordinary shares REGISTERED OFFICE Level 9 1 Eagle St Brisbane Qld 4000 AUDITOR BDO Audit Pty Ltd Level 10, 12 Creek Street Brisbane QLD 4000 Phone: WEBSITE 2

3 DIRECTORS REPORT Your directors present their report on the consolidated entity consisting of Laneway Resources Limited and the entities it controlled at the end of, or during, the half-year ended 31 December Directors The directors of the company in office during the half-year and until the date of this report are: SG Bizzell (Chairman) RS Anthon (Non-executive Director) CM Baker (Non-executive Director) P Wright (Non-executive Director) Review and Results of Operations and Significant Changes in the State of Affairs During the half year, Laneway s progressed the planning and approvals processes for the commencement of mining activities at the Agate Creek gold project in North Queensland with the Mining Licence for the project being granted in early February Limited exploration activities were undertaken on the gold project in New Zealand and on the Ashford coal project in Northern NSW. Agate Creek Gold Project The Agate Creek Gold Project is located approximately 40km south of Forsayth and 60km west of Kidston in North Queensland. The Project covers a total of km 2 and comprises of the following tenures EPM 17788, EPM 26460, MDL402 & ML The Agate Creek project is currently defined as two principal areas, Sherwood and Sherwood West, that are situated on the north western edge of a Permian caldera measuring 10km by 5km. Numerous historic mines are within the Etheridge Gold Field which historically produced 1 million ozs of gold between 1870 and Laneway controls much of the southern end of the Etheridge Field. A global recoverable Mineral Resource is defined for the Agate Creek Project in Table 1 at a 0.5 g/t Au cut-off suitable for a large open pit operation. A continuous high-grade Mineral Resource can be interpreted at cut-off of 2 g/t Au for Sherwood and 1 g/t Au for Sherwood West shown in Table 2 (prior to inclusion of results from the recent drilling program). 0.5 g/t cut-off Resource Classification Mt Sherwood Sherwood South Sherwood West Total Gold Gold Gold Gold Gold Gold Gold Mt Mt Mt (g/t) (oz) (g/t) (oz) (g/t) (oz) (g/t) Indicated , , ,000 Inferred , , , ,000 Total , , , ,000 Grade and tonnage rounded to two decimal places. Ounces calculated after rounding and reported to nearest 1,000 ounces. High Grade Sub Set Sherwood Sherwood West Total Cut-Off Grade Au (g/t) 2 1 kt Indicated Inferred Total Gold Gold Gold Gold Gold kt kt (g/t) (oz) (g/t) (oz) (g/t) Table 1 - Mineral Resource Figures and Table 2 - High Grade sub set for Mineral Resource Competent Persons Statement The information relating to the Mineral Resources at the Agate Creek Project is extracted from the ASX Announcement as follows: ASX Announcement titled Resource Update for Agate Creek Gold Project dated 1 February The report is available to view on the Laneway Resources website The report was issued in accordance with the 2012 Edition of the JORC Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. The company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Gold (oz) Gold (oz) , , , , , , , ,000 Grade and tonnage rounded to two decimal places. Ounces calculated after rounding and reported to nearest 1,000 ounces. 3

4 DIRECTORS REPORT Mineral Resources or Ore Reserves, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The company confirms that the form and context in which the Competent Person s findings are presented have not been materially modified from the original market announcement. Previously, a metallurgical sample of 5,472 tonnes of outcropping ore from Sherwood grading 11.2g/t produced 1,725 ozs at a recovered gold grade of 9.8g/t when processed through the nearby Georgetown Plant. A drilling program conducted over the Sherwood Deposit during November 2018, of 1,314m (51 hole) RC drilling, confirmed the high-grade nature of the Sherwood Deposit and highlighted the broader potential of the Agate Creek project which includes the Indicated and Inferred Mineral Resource containing 381,000 oz of Gold at 1.4 g/t. The results of the drilling program highlighted the high-grade core of the planned mining area with consistent high-grade zones identified with several individual assays exceeding 100 g/t gold and assays up to 564 g/t gold. Highlights included: CCGC g/t CCGC g/t CCGC g/t including 250 g/t CCGC g/t including 106 g/t CCGC g/t including 148 g/t CCGC g/t including g/t & 157 g/t CCGC g/t CCGC g/t The drilling program met its initial objective of improving the geological confidence of the high grade deposit planned to be initially mined once the Mining Lease is granted. Additionally, the drilling provided a strong basis for further exploration with a target of adding to the high grade inventory over the course of 2019 following the initial mining campaign. During November 2018 the Ancillary Agreement (Native Title Agreement MLA ), including an updated Cultural Heritage Management Agreement, was executed following consultation and consent being received from the Ewamian native title holders which represented the attainment of a key outstanding requirement for the granting of the mining lease. The agreement provides for certain financial benefits, employment, training and business development opportunities for Ewamian People whilst also providing a framework to manage the impact of the project on cultural heritage within the agreement area. On 8 February 2019 the company was issued with a Mining Lease (ML100030) at Laneway Resources 100% owned Agate Creek Gold Project. The Commencement Date of the Mining Lease is 1 March Laneway intends to commence mining activities as soon as possible pursuant to the Mining and Processing Agreement it has entered into with Maroon Gold Pty Ltd which will allow toll treatment of high-grade ore through Maroon s Gold Processing Plant at Charters Towers. Maroon recently finished recommissioning the Black Jack Plant and poured their first gold bar since taking over the plant Laneway anticipates material positive cash flow from the mining activities at the Agate Creek high grade project aided by recent high prices for AUD denominated gold. The expected cash flow will establish a sound financial platform for the Company to progress its project portfolio including the Ashford Coking Coal project, its NZ Gold assets and additional exploration appraisal of the broader Agate Creek Project area. Utilising an existing processing plant significantly reduces the capital expenditure and time to first gold production for Laneway. The direct costs incurred with respect to the first 100,000 tonnes of production from to the project including but not limited to mining; transportation crushing and processing of ore; and rehabilitation of the disturbed area, will be incurred and paid for by Maroon. Gold produced will be paid 60% to Laneway and 40% to Maroon above 3.5 g/t gold head grade with the initial 3.5g/t produced to be retained by Maroon towards the above costs. 4

5 DIRECTORS REPORT New Zealand Gold Project (100% LNY) The Project is located on the North Island of New Zealand within the Hauraki goldfield, within the mineralised corridor that is host to Oceana operating Martha Mine (Waihi); the Golden Cross gold-silver mine and also extends through the New Talisman Karangahake Project. The Hauraki goldfields have yielded in excess of 45 million ounces of gold and silver from approximately 50 low-sulphidation epithermal deposits. Andesite-hosted deposits comprise about 95% of past gold production. Gold and silver are localised in quartz veins that range up to 30m wide and approximately 800m long. Gold and silver occur in sheeted and stockwork quartz veins, breccia pipes and disseminated in hydrothermally altered wall rocks, typical of hot springs type epithermal gold deposits. Historic mining occurred in the Project area between 1860 and 1952, with workings reaching a depth of up to 140m from surface. There remains significant scope for down dip and strike extensions of this mineralization throughout a >7 km long prospective corridor. There is also the potential to delineate near surface resources that may be amenable to standard open cut mining techniques. Laneway received approval from NZP&M to amalgamate its two Mineral Permits (EP54216 & EP52469) into a single Permit EP still covering 58km2. This will reduce administration and management costs for the permit and allow for simplified exploration during the remainder of the permit term. A drilling program is planned for later in 2019 focusing within and below the historically mined area of Jubilee, targeting both the main Jubilee Vein System and also a newly identified zone identified following a re-assayed result of 521 g/t Au interpreted 50m behind the main stoped Jubilee Vein. The Jubilee area has only had 2 holes deeper than 200m drilled and as such retains significant open depth potential, particularly when compared to the Maria vein within the Karangahake Mine which sits 7km directly along trend. Ashford Coking Coal Project (100% LNY) The Ashford Coking Coal Project is located approximately 60km north of Inverell (northern NSW) and 4 km from the township of Ashford. The Project is comprised of EL 6234 & EL 6428 which covers approximately 14 km2. The tenures hold part of the Ashford Coal Measures covering the only commercial operation to mine the Ashford Seam the Ashford Colliery. A new increased resource estimate was completed during the 2018 financial year. Total resources within EL6234 are estimated at 14.8 million tonnes of in-situ coal with 6.5 million tonnes classified as Indicated and 8.3 million tonnes as Inferred. Of the total resource, 9.4 million tonnes are likely to be accessible by conventional open cut methods to a 15:1 vertical waste to in-situ coal tonnes stripping ratio cut off. A further 5.4 million tonnes are expected to be mined via high wall mining methods. These estimates reconcile well with previous studies. Coal Quality studies investigating the potential coking quality from a raw product found that the seam could qualify as a semi hard coking coal provided the raw ash is not above 10.5%. Method Indicated (Mt) Inferred (Mt) Total (Mt) Open Cut Underground Total Competent Persons Statement The information relating to the Mineral Resources at the Ashford Coking Coal Project is extracted from the ASX Announcement as follows: ASX Announcement titled: Ashford Coking Coal Project - Increased Resource dated 20 November The report is available to view on the Laneway Resources website The report was issued in accordance with the 2012 Edition of the JORC Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, and also Australian Guidelines for the Estimation and Classification of Coal 5

6 DIRECTORS REPORT Resources, (2014). The company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources or Ore Reserves that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The company confirms that the form and context in which the Competent Person s findings are presented have not been materially modified from the original market announcement. With the continued strength of metallurgical coal prices, the relative scarcity of open pittable Metallurgical Coal deposits and recent corporate activity in the sector, Laneway sees considerable shareholder value creation potential from the Ashford Coking Coal project and intends to progress the project towards a Mining Lease Application over the resource area within the next 12 months. During the half year a LiDAR survey was completed to give detailed topographic information across the project. The assessment of Biophysical Strategic Agricultural Land (BSAL) can now commence - the first step of the environmental studies required as part of the Mining Lease application process. Native Title investigations over the planned ML area has been investigated with the results being reviewed. Corporate and Events After The Reporting Period During and subsequent to the half year Laneway completed a capital raising program announced in June 2018 to raise $3 million via the issue of $1 million of ordinary shares and $2 million of unlisted 2020 $0.005 convertible notes. On 11 February 2019 the company issued a total of 70,000,000 ordinary shares at $0.003 per share raising $210,000 and 20,000,000 unlisted $ convertible notes raising $100,000 in relation to the final allotment of a capital raising program announced in June On 8 February 2019 the company was issued with a Mining Lease (ML100030) at Laneway Resources 100% owned Agate Creek Gold Project. The Commencement Date of the Mining Lease is 1 March Laneway intends to commence mining activities as soon as possible pursuant to the Mining and Processing Agreement it has entered into with Maroon Gold Pty Ltd which will allow toll treatment of high-grade ore through Maroon s Gold Processing Plant at Charters Towers. Laneway anticipates material positive cash flow from the mining activities at the Agate Creek high grade project aided by recent high prices for AUD denominated gold. The expected cash flow will establish a sound financial platform for the Company to progress its project portfolio including the Ashford Coking Coal project, its NZ Gold assets and additional exploration appraisal of the broader Agate Creek Project area. Auditor Independence Declaration under Section 307C of the Corporations Act 2001 The Auditor s Independence Declaration is attached and forms part of the Directors Report for the halfyear ended 31 December Signed in accordance with a resolution of the Directors. Stephen G Bizzell Director Brisbane 15 March

7 INDEPENDENT AUDITOR'S REPORT Tel: Fax: Level 10, 12 Creek St Brisbane QLD 4000 GPO Box 457 Brisbane QLD 4001 Australia DECLARATION OF INDEPENDENCE BY T R MANN TO THE DIRECTORS OF LANEWAY RESOURCES LIMITED As lead auditor for the review of Laneway Resources Limited for the half-year ended 31 December 2018, I declare that, to the best of my knowledge and belief, there have been: 1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and 2. No contraventions of any applicable code of professional conduct in relation to the review. This declaration is in respect of Laneway Resources Limited and the entities it controlled during the period. T R Mann Director BDO Audit Pty Ltd Brisbane, 15 March 2019 BDO Audit Pty Ltd ABN is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN , an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees. 7

8 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2018 Note 31 December 31 December $ $ Revenue Finance costs (102,440) (24,953) Employment costs (206,307) (240,027) Other expenses (308,346) (157,723) Loss before tax (616,960) (422,570) Income tax expense - - Loss for the period (616,960) (422,570) Other comprehensive income - - Total comprehensive income for the half-year (616,960) (422,570) Basic loss per share (cents per share) 6 (0.019) (0.014) Diluted loss per share (cents per share) 6 (0.019) (0.014) The Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes. 8

9 CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2018 Note 31 December 30 June $ $ Current Assets Cash and cash equivalents 3 520, ,147 Trade and other receivables 28,911 - Financial assets 4,533 4,533 Other current assets 67,514 19,363 Total Current Assets 621, ,043 Non-Current Assets Trade and other receivables 30,000 37,500 Exploration and evaluation assets 7 12,399,039 11,772,392 Total Non-Current Assets 12,429,039 11,809,892 Total Assets 13,050,707 12,005,935 Current Liabilities Trade and other payables 8 1,753,900 2,075,277 Borrowings 9 326,550 25,000 Provisions 104, ,173 Total Current Liabilities 2,185,046 2,200,450 Non-Current Liabilities Borrowings 9 1,670, ,984 Provisions 205, ,650 Total Non-Current Liabilities 1,876, ,634 Total Liabilities 4,061,571 2,958,084 Net Assets 8,989,136 9,047,851 Equity Issued capital 2 128,112, ,798,879 Convertible note equity reserve 329,125 85,000 Accumulated losses (119,452,988) (118,836,028) Total Equity 8,989,136 9,047,851 The Consolidated Balance Sheet should be read in conjunction with the accompanying notes 9

10 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2018 Note 31 December 31 December $ $ Cash Flows from Operating Activities Cash receipts in the course of operations Cash payments in the course of operations (223,375) (92,981) Net cash used in operating activities (223,242) (92,848) Cash Flows from Investing Activities Refund of tenement security deposits 7,500 - Payments for exploration & evaluation (709,473) (458,018) Net cash used in investing activities (701,973) (458,018) Cash Flows from Financing Activities Proceeds from issue of shares 349, ,350 Proceeds from issue of convertible notes 895,000 - Security issue expense (127,273) - Advance receipt of placement funds 180,000 99,900 Loans received 146, ,000 Loans (repaid) (170,000) (190,000) Net cash flows provided by financing activities 1,273, ,250 Net increase/(decrease) in cash held 348,563 13,384 Cash at the beginning of the period 172,147 54,017 Cash at the end of the period 3 520,710 67,401 The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes 10

11 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2018 Issued Capital Convertible Note Reserve Accumulated Losses Total $ $ $ $ Balance at 1 July ,446,279 - (118,052,036) 8,394,243 Loss for the period - - (422,570) (422,570) Other comprehensive income Total comprehensive income - - (422,570) (422,570) Transactions with owners in their capacity with owners Issue of shares re share placement 536, ,350 Total transactions with owners 536, ,350 Balance at 31 December ,982,629 - (118,474,606) 8,508,023 Balance at 1 July ,798,879 85,000 (118,836,028) 9,047,851 Loss for the period - - (616,960) (616,960) Other comprehensive income Total comprehensive income - - (616,960) (616,960) Transactions with owners in their capacity with owners Issue of shares re share placement 390, ,000 Share issue expense (75,880) - - (75,880) Convertible note issue - 244, ,125 Total transactions with owners 314, , ,245 Balance at 31 December ,112, ,125 (119,452,988) 8,989,136 The Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes 11

12 1. BASIS OF PREPARATION OF HALF-YEAR FINANCIAL STATEMENTS This general purpose financial report for the interim half-year reporting period ended 31 December 2018 has been prepared in accordance with Australian Accounting Standard AASB134: Interim Financial Reporting and the Corporations Act The interim report does not include all notes of the type normally included in an annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report. Accordingly, this interim financial report is to be read in conjunction with the annual report for the year ended 30 June 2018 and any public announcements made by Laneway Resources Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act The accounting policies and methods of computation applied by the Consolidated Entity in the consolidated interim financial report are the same as those applied by the Consolidated Entity in its consolidated financial report as at and for the year ended 30 June 2018, except as noted below. New and amended standards adopted by the group A number of new or amended standards became applicable for the current reporting period and the Consolidated Entity had to change its accounting policies as a result of adopting the following standards: AASB 9 Financial Instruments; and AASB 15 Revenue from Contracts with Customers. The impact of the adoption of these standards and the new accounting policies are disclosed below. The other standards did not have any impact on the Consolidated Entity s accounting policies and did not require retrospective adjustments. AASB 15 Revenue from Contracts with Customers Impact of adoption The Consolidated Entity has adopted AASB 15 Revenue from Contracts with Customers from 1 July In accordance with the transition provisions in AASB 15, the Consolidated Entity has adopted the new rules retrospectively however there was no material impact on the amounts disclosed previously and as a result there has been no restatement required as a result of reclassification or remeasurement and no change to the previously disclosed accounting policies. AASB 9 Financial Instruments Impact of adoption AASB 9 replaces the provisions of AASB 139 that relate to the recognition, classification and measurement of financial assets and financial liabilities, derecognition of financial instruments, impairment of financial assets and hedge accounting. The adoption of AASB 9 Financial Instruments from 1 July 2018 resulted in changes in accounting policies. The new accounting policies are set out in note below. In accordance with the transitional provisions in AASB 9(7.2.15) and (7.2.26), comparative figures have not been restated. (i) Classification and Measurement On 1 July 2018 (the date of initial application of AASB 9), the Consolidated Entity s management has assessed which business models apply to the financial assets held by the Consolidated Entity and has classified its financial instruments into the appropriate AASB 9 categories. There were no changes to the classification and measurement of financial assets. (ii) Impairment of financial assets The Consolidated Entity has one type of financial asset that is subject to AASB 9 s new expected credit loss model, being trade and other receivables. The group was required to revise its impairment methodology under AASB. There was no material impact of the change in impairment methodology on the group s retained earnings and equity. While cash and cash equivalents are also subject to the impairment requirements of AASB 9, there was no material impairment loss identified. 12

13 1. BASIS OF PREPARATION OF HALF-YEAR FINANCIAL STATEMENTS (cont d) AASB 9 Financial Instruments Accounting policies applied from 1 July 2018 (i) Investments and other financial assets Classification From 1 July 2018, the Consolidated Entity classifies its financial assets in the following measurement categories: those to be measured subsequently at fair value (either through OCI, or through profit or loss); and those to be measured at amortised cost. The classification depends on the entity s business model for managing the financial assets and the contractual terms of the cash flows. For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments that are not held for trading, this will depend on whether the group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (FVOCI). The Consolidated Entity reclassifies debt investments when and only when its business model for managing those assets changes. Measurement At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest. Debt instruments Subsequent measurement of debt instruments depends on the group s business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the group classifies its debt instruments: Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses), together with foreign exchange gains and losses. Impairment losses are presented as separate line item in the statement of profit or loss. FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognised in profit or loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other gains/(losses). Interest income from these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains and losses are presented in other gains/(losses) and impairment expenses are presented as separate line item in the statement of profit or loss. FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. Again or loss on a debt investment that is subsequently measured at FVPL is recognised in profit or loss and presented net within other gains/(losses) in the period in which it arises. 13

14 1. BASIS OF PREPARATION OF HALF-YEAR FINANCIAL STATEMENTS (cont d) Impairment From 1 July 2018, the group assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables, the group applies the simplified approach permitted by AASB 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables. Fair Values The fair values of cash and cash equivalents, trade and other receivables, security deposits, interest bearing loans and borrowings and trade and other payables approximate their carrying value. Going concern basis for accounting The consolidated entity has a net deficiency of current assets at 31 December 2018 of $1,563,377 (30 June 2018: $2,004,407) and has incurred losses of $616,960 for the half-year period to 31 December 2018 (2017 loss: $422,570). These conditions give rise to a material uncertainty which may cast significant doubt about the ability of the consolidated entity to continue as a going concern. The ability of the consolidated entity to continue as a going concern is principally dependent upon one or more of the following: Continuation of debt funding. The company has been advised that its Chairman will continue to support the company until such time as it has raised sufficient further funds either by way of a capital raising, a sale of an interest in a project or by way of a corporate transaction; Proceeds from capital raisings by the company; Successful implementation of the Agate Creek project development plan leading to commencement of high grade low strip open cut mining at the project; The realisation of funds from the sale of certain assets. As at the date of this report the directors are unable to confirm the success or otherwise of the asset sale process; and, The continued support of the company s trade and other creditors. As a result of the ongoing support from the Chairman of the company, the anticipated successful implementation of the Agate Creek project or additional capital raisings the directors believe the going concern basis of preparation is appropriate, and accordingly have prepared the financial report on this basis. The going concern basis presumes that funds will be available to finance future operations and that the realisation of assets and liabilities will occur in the normal course of business. Should the consolidated entity be unable to continue as a going concern, it may be required to realise its assets and extinguish its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial statements. This financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts or classification of liabilities and appropriate disclosures that may be necessary should the consolidated entity be unable to continue as a going concern. 14

15 2. ISSUED CAPITAL Ordinary Shares Half-year Ended Dec 2018 Year Ended June 2018 Ordinary shares fully paid Nos of shares $ Nos of shares $ Beginning of the financial period 3,480,065, ,798,879 3,060,666, ,446,279 Increases - Placement (1) ,066, ,600 - Placement (2) 130,000, , ,333, ,000 - Share issue costs (3) - (75,880) - - 3,610,065, ,112,999 3,480,065, ,798,879 (1) Issue of shares by way of placement at cents per share (2) Issue of shares by way of placement at 0.3 cents per share Share Options There were no options on issue at the start, during or at the end of the financial period. Convertible Notes At the start of the period there were 92,000,000 unlisted $ convertible notes on issue. During the half year a further 208,000,000 notes were issued resulting in a total of 300,000,000 being on issue at 31 December Each note is convertible, at the holder s election, into one fully paid ordinary share on or before 30 June RECONCILIATION OF CASH Cash and cash equivalents at the end of the half-year as shown in the Statement of Cash Flows is reconciled to the related items in the Balance Sheet as follows: Consolidated 31 December June December 2017 $ $ $ Cash and cash equivalents 520, ,147 67, , ,147 67,401 Non cash transactions Director participation in the capital raising completed in the period totalled $685,000. This comprised $40,500 for shares issued and $645,000 for convertible notes issued. The subscriptions were offset against amounts owing to Directors for loans advanced, salaries and Director fees from prior periods and other office and business expenses. 4. CONTINGENT ASSETS AND LIABILITIES Since the last annual reporting date, there has been no material change of any contingent assets or liabilities. 15

16 5. SEGMENT INFORMATION Reportable Segments The principal geographical areas of operation of the Consolidated Entity are as follows: - Australia - New Zealand Operating segments are identified on the basis of internal reports that are regularly reviewed by the executive team in order to allocate resources to the segment and assess its performance. Segment Revenues and Results The following is an analysis of the Consolidated Entity s revenue and results by reportable operating segment for the periods under review. New Zealand Australia Consolidated 31-Dec-18 $ $ $ Revenue: Revenue from outside the Consolidated Entity Other unallocated revenue Total Revenue Segment result - (616,960) (616,960) Income tax Net Loss - (616,960) (616,960) Assets: Segment assets 837,772 11,593,104 12,430,877 Unallocated corporate assets ,831 Consolidated Total Assets 837,772 11,593,104 13,050,707 New Zealand Australia Consolidated 31-Dec-17 $ $ $ Revenue: Revenue from outside the Consolidated Entity Other unallocated revenue Total Revenue Segment result - (422,570) (422,570) Income tax Net Loss - (422,570) (422,570) 30-Jun-18 Assets: Segment assets 769,457 11,236,478 12,005,935 Unallocated corporate assets Consolidated Total Assets 769,457 11,236,478 12,005,935 16

17 6. LOSS PER SHARE Consolidated Entity Half-year Ended 31 Year Ended 30 December 2018 December $ $ Loss per share Basic and diluted loss per share (cents per share) (0.019) (0.014) The following reflects the income and share data used in the calculations of basic and diluted loss per share: Loss for the period (616,960) (422,570) Earnings used in calculating basic and diluted loss per share (616,960) (422,570) Weighted average no. of ordinary shares on issue 3,261,531,512 3,105,349, EXPLORATION AND EVALUATION ASSETS Consolidated Entity Half-year Ended 31 Year Ended 30 December 2018 June 2018 $ $ Exploration costs carried forward in respect of areas of interest - Exploration phase 12,399,039 11,772,392 Reconciliation Exploration expenditure capitalised - Opening balance 11,772,392 10,332,979 - Net Current period/year expenditure 626,647 1,439,413 - Written off during the period/year - - Carried forward 12,399,039 11,772,392 Recoverability of the carrying amount of exploration assets is dependent on the successful development and commercial exploitation of areas of interest, and the sale of minerals or the sale of the respective areas of interest. 8. TRADE AND OTHER PAYABLES (CURRENT) Consolidated Entity Half-year Ended 31 Year Ended 30 December 2018 June 2018 $ $ Trade creditors 1,129,085 1,479,449 Other payables and accruals 624, ,828 1,753,900 2,075,277 17

18 9. BORROWINGS Consolidated Entity Half-year Ended 31 December 2018 Year Ended 30 June 2018 $ $ Current Loan director related entity (a) - 25,000 Loan from Maroon Gold Pty Ltd (b) 146,550 - Advance receipt re placement (c) 180, ,550 25,000 Non Current Loan director related entity (d) - 176,984 Convertible Notes - June 2021 (e) 1,670, ,000 1,670, ,984 (a) (b) (c) (d) (e) Advance from Director: An entity connected with Mr Peter Wright had advanced $25,000 to Laneway interest free and on no fixed terms. The loan was repaid as part of Mr Wright's subscription for ordinary shares and convertible notes in December Maroon Gold Pty Ltd has provided an interest free unsecured loan facility to Laneway, as part of an agreement for mining operations at Agate Creek and processing of ore through Maroon s wholly owned CIL processing plant, for an amount of up to $500,000 to meet costs to be incurred to complete the process for the Mining Lease grant at Agate Creek including Native Title and Landholder obligations, tenement holding costs and environmental liability financial assurance requirements. The balance at the end of the period was $146,550. Receipts of $180,000 had been received by the company in relation to the placement of ordinary shares that was completed post balance date. Secured Loan from Director: Bizzell Nominees Pty Ltd a company associated with Mr Stephen Bizzell has provided a loan facility to the company. The total facility provided is for up to $2,000,000. At the 31 December 2018 balance date the outstanding balance on the facility was $nil. During the period ended 31 December 2018 drawdowns of $80,000 and $264,257 of repayments of the loan were made. The interest rate on the loan is 10%. June 2021 $0.005 convertible notes: Number Issued: 400,000,000 at $0.005 per note. Interest Rate: 15% per annum. Interest Payments: Interest paid half yearly in arrears and the interest may be paid in certain circumstances at Laneway s election by the issue of further Convertible Notes. Conversion: Each Convertible Note can be converted into one fully paid Laneway share. Maturity Date: 30 June Liability: The liability component of $1,670,875 is reflected in financial liabilities while the equity component of $329,125 of the issued June 2021 Convertible Notes is reflected in the convertible note reserve. Security: The Convertible Notes have equal ranking security proportionally with the Bizzell Nominees Facility. 10. EVENTS AFTER THE REPORTING DATE On 11 February 2019 the company issued a total of 70,000,000 ordinary shares at $0.003 per share raising $210,000 and 20,000,000 unlisted $ convertible notes raising $100,000 in relation to the final allotment of a capital raising program announced in June On 8 February 2019 the company was issued with a Mining Lease (ML100030) at Laneway Resources 100% owned Agate Creek Gold Project. The Commencement Date of the Mining Lease is 1 March Laneway intends to commence mining activities as soon as possible pursuant to the Mining and Processing Agreement it has entered into with Maroon Gold Pty Ltd which will allow toll treatment of high-grade ore through Maroon s Gold Processing Plant at Charters Towers. Laneway anticipates material positive cash flow from the mining activities at the Agate Creek high grade project aided by recent high prices for AUD denominated gold. The expected cash flow will establish a sound financial platform for the Company to progress its project portfolio including the Ashford Coking Coal project, its NZ Gold assets and additional exploration appraisal of the broader Agate Creek Project area. 18

19 Directors Declaration In the Directors opinion: (a) the attached financial statements and notes as set out on pages 8 to 18 are in accordance with the Corporations Act 2001 and: (i) (ii) comply with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Regulations 2001; and give a true and fair view of the Consolidated Entity's financial position as at 31 December 2018 and of its performance for the half year ended on that date; and (b) 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. On behalf of the directors Stephen G Bizzell Director Brisbane 15 March

20 Tel: Fax: Level 10, 12 Creek St Brisbane QLD 4000 GPO Box 457 Brisbane QLD 4001 Australia INDEPENDENT AUDITOR S REVIEW REPORT To the members of Laneway Resources Limited Report on the Half-Year Financial Report Conclusion We have reviewed the half-year financial report of Laneway Resources Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated balance sheet as at 31 December 2018, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the half-year then ended, notes comprising a statement of accounting policies and other explanatory information, and the directors declaration. 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 Group is not in accordance with the Corporations Act 2001 including: (i) Giving a true and fair view of the Group s financial position as at 31 December 2018 and of its financial performance for the half-year ended on that date; and (ii) Complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations Emphasis of matter Material uncertainty relating to going concern We draw attention to Note 1 in the financial report which describes the events and/or conditions which give rise to the existence of a material uncertainty that may cast significant doubt about the Group s ability to continue as a going concern and therefore the Group may be unable to realise its assets and discharge its liabilities in the normal course of business. Our conclusion is not modified in respect of this matter. 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 is free from material misstatement, whether due to fraud or error. BDO Audit Pty Ltd ABN is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN , an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees. 20

21 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 Group s financial position as at 31 December 2018 and its financial 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 the Group, 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. Independence 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 the Group, would be in the same terms if given to the directors as at the time of this auditor s review report. BDO Audit Pty Ltd T R Mann Director Brisbane, 15 March 2019 BDO Audit Pty Ltd ABN is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN , an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees. 21