ACN I N T E R I M F I N A N C I A L R E P O R T

Transcription

1 ACN I N T E R I M F I N A N C I A L R E P O R T For the half-year ended 31 December 2017

2 Ausmex Mining Group Limited Contents Page Directors Report 1 Auditor s Independence Declaration 3 Condensed Consolidated Statement of Comprehensive Income 4 Condensed Consolidated Statement of Financial Position 5 Condensed Consolidated Statement of Changes in Equity 6 Condensed Consolidated Statement of Cash Flows 7 Notes to the Condensed Consolidated Financial Statements 8 Directors Declaration 14 Independent Auditor s Review Report 15

3 - 1 - Ausmex Mining Group Limited DIRECTORS REPORT Your directors submit the financial report of the Group for the half-year ended 31 December In order to comply with the provisions of the Corporations Act 2001, the directors report as follows: Directors The names of directors who held office during or since the end of the interim period and until the date of this report are noted below. Directors were in office for the entire period unless otherwise stated. Joseph Goldberg (Appointed 2 August 2017) Matthew Morgan Andrew Firek Geoff Kidd David Wheeler (Resigned 1 August 2017) Non-Executive Chairman Executive Director Non-Executive Director Non-Executive Director Non-Executive Chairman Review of Operations Cloncurry Exploration The company commenced a significant exploration field work and drilling program within the December 2017 half year aimed at upgrading the previous JORC (2004) resource estimations for the Gilded Rose Gold Mine and the Mt Freda Gold Mine to ASX compliant JORC (2012) resources. Significant high-grade assays for gold have been returned to date and released to the market at both the Gilded Rose and Mt Freda projects. Drilling was completed on 22 nd December 2017, with significant assays currently being analyzed by ALS Laboratories in Townsville, with JORC (2012) resource estimates due to be completed in May Additional exploration has been completed within the Mt Freda Mining Lease complex, with drilling results released to the market in early December 2017 describing high grade Cobalt, Copper & Gold intersections. Field work was also completed within Cloncurry Exploration permits that adjoin the northern extent of the Mt Freda Mining Leases. With initial results including SAM (Sub Audio Magnetics) indication the possible extension to the Mt Freda mineralised system. The target extension is several kilometers in combined strike length. Exploration drilling within EPM15858 was conducted in late December 2017 targeting historic workings at The Joker copper prospect. High grade copper results were released to the market in January Further exploration drilling was also completed in December 2017 on the two Mining Leases The Trump and The Answer that Ausmex purchased during the reporting period. The drilling results to both projects were reported to the market late January 2018, with high grade copper intersected at both projects Burra South Australia Following a technical review of recent geophysical data available an Auslamp interpreted signals under the Burra region was identified. Subsequently trial MT Geophysical surveys as well as Gravity traverses were conducted during the period to test conductivity responses and assess the suitability of the geophysical techniques for a large regional trial at Burra by Adelaide University, targeting a large IOCG signature. The initial trial results due in the first quarter Additional tenements were applied for surrounding the Ausmex owned tenement EL5881, targeting possible extensions to Auslamp targets. Furthermore, a farm in agreement with PNX Resources was also initiated during the period, that consolidates Ausmex holdings within the Burra Copper-Gold-Cobalt mineralised province.

4 - 2 - Ausmex Mining Group Limited Mongolian gold and tungsten project Chuluun Khoroot tungsten deposit and gold occurrence, XV No field work was completed during the reporting period on the prospective Tungsten and Gold project. Further expressions of interest by several parties to potentially purchase the project have been received, in the light of rising Tungsten prices, the Board is reviewing all options for the project and may consider divesting. Auditor s Independence Declaration Section 307C of the Corporations Act 2001 requires our auditors, HLB Mann Judd, to provide the directors of the company with an Independence Declaration in relation to the review of the interim financial report. This Independence Declaration is set out on page 3 and forms part of this directors report for the half-year ended 31 December This report is signed in accordance with a resolution of the Board of Directors made pursuant to s.306(3) of the Corporations Act Matthew Morgan Director 16 March 2018

5 - 3 - Ausmex Mining Group Limited AUDITOR S INDEPENDENCE DECLARATION As lead auditor for the review of the consolidated financial report of Ausmex Mining Group Limited for the half-year ended 31 December 2017, I declare that to the best of my knowledge and belief, there have been no contraventions of: a) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and b) any applicable code of professional conduct in relation to the review. Perth, Western Australia 16 March 2018 M R Ohm Partner HLB Mann Judd (WA Partnership) ABN Level Stirling Street Perth WA 6000 PO Box 8124 Perth BC WA 6849 Telephone +61 (08) Fax +61 (08) mailbox@hlbwa.com.au Website: Liability limited by a scheme approved under Professional Standards Legislation HLB Mann Judd (WA Partnership) is a member of International, a world-wide organisation of accounting firms and business advisers

6 - 4 - Ausmex Mining Group Limited CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER December December 2016 Revenue from continuing operations Interest income 10, Total income 10, Administrative expenses (78,103) (5,349) Audit fees (37,000) (3,000) Consulting fees (25,592) - Corporate services (35,700) - Directors and officers (232,000) - Exploration expenses (2,820,646) (100,626) Impairment of exploration expenditure (931,291) - Share based payment expenses (351,653) - Other expenses (5,791) - Loss before income tax (4,507,001) (108,960) Income tax benefit 578,585 - Net loss for the period (3,928,416) (108,960) Other comprehensive income, net of income tax Items that may be reclassified subsequently to profit or loss Exchange differences on translation of foreign operations 9,891 - Other comprehensive income for the period, net of tax 9,891 - Total comprehensive income for the period (3,918,525) (108,960) Net loss after income tax for the year attributable to: Members of the parent entity (3,465,129) (108,960) Non-controlling interest (463,287) - Net loss for the year (3,928,416) (108,960) Total comprehensive income attributable to: Members of the parent entity (3,455,238) (108,960) Non-controlling interest (463,287) - Net loss for the year (3,918,525) (108,960) Basic and diluted loss per share (cents) (0.97) (0.69) The accompanying notes form part of these financial statements

7 - 5 - Ausmex Mining Group Limited CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2017 Notes 31 December June 2017 Current Assets Cash and cash equivalents 1,497,628 4,409,734 Receivables 209, ,189 Prepayments 139, ,974 Total Current Assets 1,846,735 4,704,897 Non-current Assets Prepayments 40,395 40,395 Exploration and evaluation assets 2 2,737,059 3,651,476 Intangible assets 5,879 7,000 Property, plant and equipment 200, ,736 Total Non-Current Assets 2,983,786 3,809,607 TOTAL ASSETS 4,830,521 8,514,504 Current Liabilities Trade and other payables 523,971 62,497 Total Current Liabilities 523,971 62,497 Non Current Liabilities Deferred tax liabilities 138, ,327 Total Current Liabilities 138, ,327 TOTAL LIABILITIES 662, ,824 NET ASSETS 4,167,808 7,734,680 Issued capital 3 15,943,377 15,943,377 Reserves 2,413,774 2,052,230 Accumulated losses (14,246,577) (10,781,448) Equity attributable to equity holders of the parent 4,110,574 7,214,159 Non-controlling interest 57, ,521 TOTAL EQUITY 4,167,808 7,734,680 The accompanying notes form part of these financial statements

8 - 6 - Ausmex Mining Group Limited CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2017 Issued Capital Share Based Payments Reserve Foreign Currency Reserve Accumulated Losses Non- Controlling Interest Total Equity Balance at 1 July , (5,500) - 42,000 Loss for the period (108,960) - (108,960) Exchange differences on translation of foreign subsidiaries Total comprehensive loss for the period (108,960) - (108,960) Share issues 500, ,001 Balance at 31 December , (114,460) - 433,041 Balance at 1 July ,943,377 2,052,223 7 (10,781,448) 520,521 7,734,680 Loss for the period (3,465,129) (463,287) (3,928,416) Exchange differences on translation of foreign subsidiaries - - 9, ,891 Total comprehensive loss for the period - - 9,891 (3,465,129) (463,287) (3,918,525) Share based payment expense - 351, ,653 Balance at 31 December ,943,377 2,403,876 9,898 (14,246,577) 57,234 4,167,808 The accompanying notes form part of these financial statements

9 - 7 - Ausmex Mining Group Limited CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2017 Cash flows from operating activities 31 December December 2016 Payments for administration costs (inclusive of GST) (334,503) (10,315) Payments exploration costs (inclusive of GST) (2,473,613) (60,913) Interest received 10, Net cash (outflow) from operating activities (2,797,342) (71,218) Cash flows from investing activities Purchase of plant and equipment (107,201) - Proceeds from disposal of plant and equipment 5,000 - Payments for capitalised exploration expenditure (3,884) (113,139) Net cash (outflow) from investing activities (106,085) (113,139) Cash flows from financing activities Proceeds from issue of shares - 45,001 Proceeds from issue of converting notes - 500,000 Net cash inflow from financing activities - 545,001 Net (decrease) increase in cash held (2,903,427) 360,644 Exchange rate differences on cash balances (8,679) - Cash and cash equivalents at the beginning of the period 4,409,734 - Cash and cash equivalents at the end of the period 1,497, ,644 The accompanying notes form part of these financial statements

10 - 8 - Ausmex Mining Group Limited NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2017 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES Statement of compliance These interim consolidated financial statements are general purpose financial statements prepared in accordance with the requirements of the Corporations Act 2001, applicable accounting standards including AASB 134 Interim Financial Reporting, Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board ( AASB ). Compliance with AASB 134 ensures compliance with IAS 34 Interim Financial Reporting. This condensed half-year financial report does not include full disclosures of the type normally included in an annual financial report. Therefore, it cannot be expected to provide as full an understanding of the financial performance, financial position and cash flows of the Group as in the full financial report. It is recommended that these financial statements be read in conjunction with the annual financial report for the year ended 30 June 2017 and any public announcements made by Ausmex Mining Group Limited during the halfyear in accordance with continuous disclosure requirements arising under the Corporations Act 2001 and the ASX Listing Rules. The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period. Basis of preparation The interim report has been prepared on a historical cost basis. Cost is based on the fair value of the consideration given in exchange for assets. The company is domiciled in Australia and all amounts are presented in Australian dollars, unless otherwise noted. For the purpose of preparing the interim report, the half-year has been treated as a discrete reporting period. The interim financial statements were authorised for issue on 16 March Significant accounting judgments and key estimates The preparation of interim financial reports requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates. The significant judgments made by management in applying the Group s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial report for the year ended 30 June During the half-year it was determined that impairment triggers exist in respect to the Mongolian assets and realisation was uncertain and hence the carrying value was impaired in full (refer note 2). Accounting policies and methods of computation The accounting policies and methods of computation adopted are consistent with those of the previous financial year and corresponding interim reporting period. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards. Standards and Interpretations applicable to 31 December 2017 In the period ended 31 December 2017, the Directors have reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to the Company and effective for the current annual reporting period. As a result of this review, the Directors have determined that there is no material impact of the new and revised Standards and Interpretations on the Company and, therefore, no material change is necessary to Group accounting policies. Standards and Interpretations in issue not yet adopted The Directors have also reviewed all Standards and Interpretations in issue not yet adopted for the period ended 31 December As a result of this review the Directors have determined that there is no material impact of the Standards and Interpretations in issue not yet adopted on the Company and, therefore, no change is necessary to Group accounting policies.

11 - 9 - Ausmex Mining Group Limited Reverse acquisition Accounting On the 30 April 2017, Ausmex Mining Group Limited completed its acquisition of 100% of the issued shares of Ausmex Mining Limited. The acquisition has been accounted for as a reverse acquisition under AASB 3 Business Combinations because as a result of the acquisition, the former owners of the legal subsidiary (Ausmex Mining Limited) obtained accounting control of the legal parent (Ausmex Mining Group Limited). Whilst the acquisition does not meet the definition of a business combination in accordance with AASB 3 Business Combinations as Ausmex Mining Group Limited is deemed for accounting purposes not to be a business), the acquisition has been accounted for as a share-based payment transaction using the principles of AASB 2 Share-Based Payment. Accordingly, the consolidated financial statements for the year ended 30 June 2017 are issued under the name of the legal parent (Ausmex Mining Group Limited or AMG) but are presented as a continuation of the financial statements of the legal subsidiary (Ausmex Mining Limited or Ausmex), with the assets and liabilities of the legal subsidiary being recognised and measured at their pre combination carrying amounts rather than their fair values. The comparative information included in these financial statements, therefore represents the results and balances of Ausmex Mining Limited. Additionally, as a result of the financial statements being prepared as a continuation of the legal subsidiary, the Consolidated Entity has updated the classification of expenses to make the Statement of Comprehensive Income more relevant to the users of the financial report. Going Concern This report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and settlement of liabilities in the normal course of business. Notwithstanding the fact that during the half-year ended 31 December 2017 the Group incurred an operating loss (excluding impairments and non-cash share-based remuneration) of 3,224,057 and a net cash outflow from operating activities of 2,797,342, the Directors are of the opinion that the Company is a going concern for the following reasons: Net current assets were 1,322,764 as at 31 December 2017; The half-year operating loss included substantial drilling at the Cloncurry tenements in Queensland which is not envisaged to be replicated in the short term. Targeted follow up drilling should allow Ausmex to establish maiden JORC (2012) resources at the Gilded Rose Gold Mine and Mt Freda Gold Mine by mid-year; Subsequent to 31 December 2017 the Group anticipates receiving 2,500,000 from CopperChem a subsidiary of Washington H. Soul Pattinson and Company Limited (WHSP) ASX:SOL (the initial refundable deposit of 250,000 has been received) for the purchase of mineralized stockpiles located on the surface at Mt Freda. The Term sheet while subject to final approvals is due for completion by the execution of the sale and purchase agreement or 31 March 2018; The Group has had some preliminary discussions regarding the potential for offtake arrangements based on the copper and gold announcements to date, projects on tenements with Mining Leases and hence considered near term; and The Directors note that the Group has in excess of 100,000,000 shares available in its placement capacity which could be utilised if a significant investor approached the Group and or a capital raising was considered appropriate.

12 Ausmex Mining Group Limited NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2017 NOTE 2: EXPLORATION AND EVALUATION ASSETS Exploration and evaluation phase at cost Half year to 31 December 2017 Year to 30 June 2017 Balance at beginning of period 3,651,476 - Exploration expenditure acquired on acquisition of subsidiaries - 3,587,069 Exploration expenditure incurred 16,874 64,407 Impairment (931,291) - Total exploration and evaluation assets 2,737,059 3,651,476 The recoupment of costs carried forward in relation to areas of interest in the exploration and evaluation phase is dependent upon the successful development and commercial exploitation or sale of the respective areas. NOTE 3: ISSUED CAPITAL Ordinary shares 31 December June 2017 Issued and fully paid 15,943,377 15,943,377 Movements in ordinary shares Half year to 31 December 2017 Year to 30 June 2017 Number Number Balance at beginning of period 404,015,607 15,943,377 47,500 47,500 Conversion of convertible note Ausmex Mining Limited ,000, ,001 Shares on issue at acquisition ,165,607 - Elimination of historical value of Ausmex Mining Limited - - (207,047,500) - Consideration shares on reverse acquisition ,000,000 7,933,249 Broker mandate shares issued under prospectus ,350, ,000 Prospectus capital raising ,000,000 6,000,000 Exercise of QMN Cloncurry Option ,500,000 1,000,000 Share issue costs (365,373) Exercise of Director options # 396, Balance at end of period 404,412,399 15,943, ,015,607 15,943,377 # During the half-year 1,000,000 escrowed Director options were exercised utilizing the available cashless exercise facility. These options converted to 396,792 ordinary shares escrowed until 30 May 2019.

13 Ausmex Mining Group Limited NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2017 NOTE 4: SHARE BASED PAYMENTS Share based payment transactions recognised during the period were as follows: 6 months to 31 December 2017 Year ended 30 June 2017 Profit and Loss Share based payments to Advisors - 1,429,169 Share based payments to KMPs 268, ,489 Share based payments to consultants 82, ,564 The table below summarises options granted to consultants and KMPs during the half-year: Recipient 2017 Grant Date Expiry date Exercise price Balance at start of the halfyear Granted during the half-year Exercised during the half-year Expired during the half-year Balance a the end of the half-year Number Number Number Number Number Advisors 1 9 May 17 9 May ,000, ,000,000 KMP 2 15 Sep Nov ,000,000 11,470,588 1,000,000-23,470,588 Consultants 3 15 Sep Nov ,750,000 3,529, ,279,412 1 The advisor options were issued on 9 May 2017 after shareholder approval at the general meeting, the Company issued 20,000,000 unlisted options exercisable at 0.12 and 30,000,000 unlisted options exercisable at 0.14 on or before 9 May 2020 to the Company's broker in lieu of cash fees for services in relation to the Company's successful IPO. The options are not subject to any vesting conditions. 2 The opening balance of KMP options were issued on 9 May 2017 after shareholder approval at the general meeting where the Company issued 3,000,000 unlisted options exercisable at on or before 9 May 2020 and 10,000,000 unlisted options exercisable at 0.12 on or before 30 May 2020 to officers under the Ausmex Mining Group Limited Long-Term Incentive Plan. The options are not subject to any vesting conditions. During the period, the Company entered into a share-based payment arrangement with key management personnel to issue 11,470,588 options exercisable at 0.09 on or before 16 November These options were subject to shareholder approval. The grant date fair value has therefore been estimated in accordance with AASB 2 using the inputs below. - Grant date share price: Risk-free interest rate: 2.21% - Volatility: 97.0% The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the outcome. No other features of options granted were incorporated into the measurement of fair value.

14 Ausmex Mining Group Limited NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2017 NOTE 4: SHARE BASED PAYMENTS (Continued) 3 The opening balance of consultant s options were issued on 9 May 2017 after shareholder approval at the general meeting where the Company issued 500,000 unlisted options exercisable at on or before 9 May 2020 and 6,250,000 unlisted options exercisable at 0.12 on or before 31 May 2020 to officers under the Ausmex Mining Group Limited Long-term Incentive Plan. The options are not subject to any vesting conditions. During the period, the Company entered into a share-based payment arrangement with consultants to issue 3,529,412 options exercisable at 0.09 on or before 16 November These options were subject to shareholder approval. The grant date fair value has therefore been estimated in accordance with AASB 2 using the inputs below. - Grant date share price: Risk-free interest rate: 2.21% - Volatility: 97.0% The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the outcome. No other features of options granted were incorporated into the measurement of fair value. NOTE 5: CONTINGENT LIABILITIES There has been no change in contingent liabilities since the last annual reporting date. NOTE 6: COMMITMENTS FOR EXPENDITURE There has been no change in commitments for expenditure since the last annual reporting date. NOTE 7 : EVENTS SUBSEQUENT TO REPORTING DATE As announced to the ASX on 27 February 2018 a Term Sheet has been entered between CopperChem ( CCL ), an unlisted Australian owned and operated company, (a subsidiary of Washington H. Soul Pattinson and Company Limited (WHSP) ASX:SOL), and Ausmex to purchase the mineralised stockpiles (Stockpiles) located on the surface of Mt Freda. In accordance with the Term Sheet, consideration is 2,500,000 plus an 80% beneficial interest in two sub-blocks from within EPM15923 being CLON 825P and CLON 825U. Ausmex has received the 250,000 refundable 10% deposit from CCL and the parties have proceeded to the preparation of the sale and purchase agreement (SPA). The SPA is subject further to the approvals and will terminate on the earlier of the execution of the SPA or 31 March On 5 February ,000,000 unlisted options were issued with an exercise price of 0.09 expiring 16 November Other than noted above, there has been no additional matter or circumstance that has arisen after balance date that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial periods. NOTE 8: FINANCIAL INSTRUMENTS The methods and valuation techniques used for the purpose of measuring fair values are unchanged compared to the previous reporting periods. The carrying amounts of financial assets and financial liabilities are considered to be a reasonable approximation of their fair values.

15 Ausmex Mining Group Limited NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2017 NOTE 8: SEGMENT REPORTING The Board has determined that the Group has two reportable segments, being mineral exploration and other. The following tables present revenue and profit information and certain asset and liability information regarding business segments for the half years ended 31 December 2017 and 31 December December 2017 Continuing Operations Discontinued Operations Mineral Exploration Other Exploration Unallocated items Consolidated Segment revenue (i) - 10, ,775 Segment loss before income tax expense (2,820,646) (755,064) (931,291) - (4,507,001) Segment assets 3,114,627 1,715, ,830,521 Segment liabilities (487,984) (35,987) - (138,742) (662,713) (i) Segment revenues represents interest revenue. There were no inter-segment revenues in the current period. 31 December 2016 Continuing Operations Discontinued Operations Mineral Exploration Other Exploration Unallocated items Consolidated Segment revenue (i) Segment loss before income tax expense (100,626) (8,334) - - (108,960) Segment assets 113, ,139 Segment liabilities (39,713) (8,660) - - (48,373) (i) Segment revenues represents interest revenue. There were no inter-segment revenues in the current period.

16 Ausmex Mining Group Limited DIRECTORS DECLARATION 1. In the opinion of the directors of Ausmex Mining Group Limited ( the company ): a. the accompanying interim financial statements and notes are 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 2017 and of its performance for the half-year then ended; and ii. complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements. 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. c. the interim financial statements and notes thereto are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board. 2. This declaration has been made after receiving the declarations required to be made to the Directors in accordance with Section 303(5) of the Corporations Act 2001 for the half-year ended 31 December This declaration is signed in accordance with a resolution of the Board of Directors. Matthew Morgan Director 16 March 2018

17 Ausmex Mining Group Limited INDEPENDENT AUDITOR S REVIEW REPORT To the members of Ausmex Mining Group Limited Report on the Condensed Interim Financial Report Conclusion We have reviewed the accompanying interim financial report of Ausmex Mining Group Limited ( the group ) which comprises the condensed consolidated statement of financial position as at 31 December 2017, the condensed consolidated statement of comprehensive income, the condensed consolidated statement of changes in equity and the condensed consolidated statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory notes, and the directors declaration, for the group comprising the company and the entities it controlled at the half-year end or from time to time during the half-year. Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the interim financial report of Ausmex Mining Group Limited is not in accordance with the Corporations Act 2001 including: (a) giving a true and fair view of the group s financial position as at 31 December 2017 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 Directors responsibility for the interim financial report The directors of the company are responsible for the preparation of the interim 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 interim 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 interim 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 interim financial report is not in accordance with the Corporations Act 2001 HLB Mann Judd (WA Partnership) ABN Level Stirling Street Perth WA 6000 PO Box 8124 Perth BC WA 6849 Telephone +61 (08) Fax +61 (08) mailbox@hlbwa.com.au Website: Liability limited by a scheme approved under Professional Standards Legislation HLB Mann Judd (WA Partnership) is a member of International, a world-wide organisation of accounting firms and business advisers

18 Ausmex Mining Group Limited including: giving a true and fair view of the group s financial position as at 31 December 2017 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 the company, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report. A review of an interim 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 HLB Mann Judd Chartered Accountants M R Ohm Partner Perth, Western Australia 16 March 2018