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1 Apex Minerals NL ABN ended 31 December 2012 This financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2012 and any public announcements made by Apex Minerals NL during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

2 Contents Page Corporate Directory 1 Directors Report 2 Auditor s Independence Declaration 5 Independent Auditor s Review Report 6 Director s Declaration 7 Consolidated Statement of Comprehensive Income 8 Consolidated Balance Sheet 9 Consolidated Statement of changes in Equity 10 Consolidated Statement of Cash Flow 11 Notes to the Consolidated Interim Financial Statements 12

3 Corporate Directory DIRECTORS Eduard Eshuys Executive Chairman Brice Mutton Non Executive Director Kim Robinson Non Executive Director COMPANY SECRETARY Jeremy Robinson PRINCIPAL OFFICE Level 1, 10 Ord Street, West Perth WA 6005 PO Box 682, West Perth WA 6872 Telephone: Facsimile: admin@apexminerals.com.au REGISTERED OFFICE Level 1, 10 Ord Street, West Perth WA 6005 PO Box 682, West Perth WA 6872 SHARE REGISTRY AUDITORS LAWYERS Link Market Services Limited Ground Floor, 178 St Georges Terrace Perth WA 6000 Facsimile: Shareholder Enquiries: Outside Australia: Crowe Horwath Perth Level 6, 256 St Georges Terrace, Perth WA 6000 Telephone: Facsimile: Steinepreis Paganin Level 4, The Read Buildings, 16 Milligan Street, Perth WA 6000 Australia Telephone: Facsimile: ASX CODE: AXM ACN: WEB: 1

4 Directors Report The directors present their report together with the consolidated financial report comprising Apex Minerals NL ( Apex or the Company ) and its controlled entities ( the Group ) for the six months ended 31 December 2012 and the review report thereon. Directors The directors of the Company at any time during or since the end of the interim period are: Mr Eduard Eshuys (Executive Chairman) Mr Brice K Mutton (Non-executive Director) Mr Kim Robinson (Non-executive Director) Mr Ross C Hutton (Non-executive Director) resigned 3 December 2012 Mr Matthew Sheldrick (Non-executive Director) resigned 1 November 2012 Unless otherwise disclosed, all directors held their office from 1 July 2012 until the date of this report. Review of Operations Underground mine production of 252,538 tonnes at 3.4 g/t for 21,247 ounces was generated in the six months to December The shortfall in production of high grade ore tonnes and dilution compared to forecast occurred at Burgundy zone, accessed by the Bulletin Decline. Mining at the Burgundy zone is occurring at depths greater than 800 metres in difficult ground conditions. Poor mine design, development and operating practices established during 2011 have resulted in the production shortfall and dilution issues currently being experienced. Lower grades have also been encountered at the East Lode and West Lode zones due to dilution and isolated grade reconciliation issues respectively. The main focus at the Wiluna Gold Operations during the six months to 31 December 2012, was on switching underground mine production, to the shallower East/West decline operations, increasing production from the high grade free milling Golden Age Reefs accessed from the Bulletin Decline and reduction of operating costs. The impact of these strategic decisions and action is expected to become evident in the second half of this financial year. Production and operational measures have also been taken to reduce dilution and improve the grade of the underground production with particular focus on design and execution of production drilling. Underground mine production will continue to focus on the shallower East and West Lodes zones with the objective of reducing dependence on the high cost and deeper Calais zone, Burgundy zone and Henry 5 zone ore bodies of the Bulletin Decline. Detailed three year underground mine production schedules were implemented and provided the basis of the cost reduction initiatives and the focus on mining higher grade parts of the reserves. Improvements in operating practices, the focus on identifying and implementing cost reductions and efficiency gains and the development of the detailed production schedule to 30 June 2016 has begun to produce tangible benefits. This includes the intended commencement of production from the new shallow and lower cost East Lode ore reserves during the March Quarter 2013, which will replace production previously scheduled from the deeper ore reserves. 2

5 Events occurring after the reporting period i. On 12 February 2013, Apex announced that it had signed a Binding Memorandum of Understanding (MoU) with Infinity Fame Limited (Infinity) for the sale of the Youanmi Gold Project. As part of the MoU, Apex provided Infinity with an exclusive 60 day due diligence period. In return Infinity subscribed for an initial 4,166,167 Apex shares at $0.06 per share and a further 4,166,167 shares in the Company at $0.06 per share for a total subscription of $500,000. These shares will be held in voluntary escrow for the duration of the due diligence period. The due diligence subscription is non-refundable. Upon completion of a satisfactory due diligence and regulatory approvals, Apex and Infinity intend to enter into a Sale and Purchase Agreement that will result in the Youanmi Gold Project being sold to Infinity for a total consideration of $15,000,000. ii. On 12 March 2013, Apex announced that it had signed a Binding Memorandum of Understanding (MoU) with Everprosperity Investments Co Ltd (Everprosperity) for the sale of the Wiluna Gold Mine. The MoU contemplates that upon completion of a satisfactory due diligence and regulatory approvals, Apex and Everprosperity will enter into a Sale and Purchase Agreement that will result in the Wiluna Gold Mine being sold to Everprosperity for a total consideration of $50,000,000. In accordance with the terms of the MoU, Apex has provided Everprosperity with an exclusive 60 day due diligence period. Everprosperity will in return immediately subscribe for 8,333,333 Apex shares at $0.06 per share for a total subscription of $500,000. These shares will be held in voluntary escrow for the duration of the due diligence period. The due diligence subscription is non-refundable. iii. iv. On 5 March 2013, Apex Gold Pty Ltd was served with a Default Notice from one of its major creditor, Atlas Copco. The notice stipulates that if the Group failed to rectify the default, by the payment of $1.3 million by 12 March 2013, Atlas Copco may declare all amounts outstanding (as defined under the Deed of Settlement entered into with Atlas Copco in the prior reporting period), totalling approximately $4,600,000, immediately due and payable. In this instance, the Group would have 14 days in which to pay the said amount. As at the date of these financial statements, this matter is yet to be resolved. All amounts owing to Atlas Copco at 31 December 2012 have been included as current liabilities. On 22 February 2013 an unsecured creditor of Apex Gold Pty Ltd, lodged a Notification of court action relating to winding-up with the ASIC. At 31 December 2012, this creditor was owed approximately $92,000. An offer has been made by Apex to the creditor to settle the amount. As at the date of these financial statements, this matter is yet to be resolved. Other than the matters noted above, there are no other events or circumstances that have arisen since the half year that have significantly affected or may significantly affect the operation of the Group, the results of those operations, or the state of affairs of the Group in the subsequent financial years. Auditor s Independence Declaration The auditor s independence declaration is set out on page 4 and forms part of the Directors Report for the six months. 3

6 Rounding off The Company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with that Class Order, amounts in the financial report and directors report have been rounded off to the nearest thousand dollars, unless otherwise stated. Dated at Perth this 21st day of March 2013 Signed in accordance with a resolution of the board of directors Eduard Eshuys Executive Chairman Perth 21 March

7 Auditor s Independence Declaration 5

8 Independent Auditor s Review Report 6

9 Director s Declaration In the opinion of the Directors of Apex Minerals NL: 1. the financial statements and notes set out on pages 7 to 13, are in accordance with the Corporations Act 2001 including: (a) (b) giving a true and fair view of the Group s financial position as at 31 December 2012 and of its performance for the half year period ended on that date; and complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001; and 2. 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 Directors. Eduard Eshuys Executive Chairman Perth 21 March

10 Consolidated Statement of Comprehensive Income for the half year Half Year in thousands of AUD Note Revenue 35,438 39,456 Cost of sales (41,669) (38,103) Depreciation and amortisation (9,403) (13,796) Gross loss (15,634) (12,443) Other income Share based payments 10 (1,699) - Administrative expenses (3,122) (2,117) Exploration expensed (174) (249) Impairment loss - (2,343) Loss from operating activities (20,514) (16,272) Finance income Finance expenses (1,841) (579) Net finance expense (1,760) (487) (Loss) before income tax (22,274) (16,759) Income tax expense - - (Loss) for the half year (22,274) (16,759) Other comprehensive income - - Total comprehensive (loss) for the half year (22,274) (16,759) Earnings per share: Basic and diluted earnings / (loss) per share (cents) (9.99) (0.30) The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes. 8

11 Consolidated Balance Sheet As at 31 December 2012 in thousands of AUD Note 31 December June 2012.For personal use only Assets Current Assets Cash and cash equivalents Trade and other receivables Inventories 7,736 9,776 Derivative assets 9 25 Available for sale financial assets 12 8 Assets held for sale 4 1,462 1,552 Total current assets 10,377 12,773 Non Current Assets Other receivables 4,537 4,669 Property, plant and equipment 9 49,460 54,212 Total non-current assets 53,997 58,881 Total assets 64,374 71,654 Liabilities Current Liabilities Trade and other payables 19,155 17,106 Loans and borrowings 7,141 7,687 Provisions 1,674 1,590 Liability held for sale 4 4,673 4,456 Total current liabilities 32,643 30,839 Non Current Liabilities Loans and borrowings 950 1,126 Provisions 19,827 18,993 Total non-current liabilities 20,777 20,119 Total liabilities 53,420 50,958 Net assets 10,954 20,696 Equity Share capital 352, ,398 Reserves 30,194 28,529 Accumulated losses (371,505) (349,231) Total equity 10,954 20,696 The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes. 9

12 Consolidated Statement of changes in Equity for the half year in thousands of AUD Issued Capital Accumulated Losses Share Based Payments Reserve Quoted Options Reserve Available For Sale Reserve Warrants Reserve Total Equity Balance as at 1 July ,375 (298,045) 10,168 15,608 (76) 1,185 50,215 Loss for the period - (16,759) (16,759) Prior period adjustment - (76) (76) Other comprehensive income Total comprehensive loss for the period - (16,835) (16,835) Transactions with owners, recorded directly in equity Balance at 31 December ,375 (314,880) 10,168 15,608 (76) 1,185 (33,380) Balance at 1 July ,398 (349,231) 11,896 15,608 (160) 1,185 20,696 Loss for the period - (22,274) (22,274) Other comprehensive income Net change in fair value of available-for-sale assets (12) - (12) Total comprehensive loss for the period - (22,274) - - (12) - (22,286) Transactions with owners, recorded directly in equity Issue of ordinary shares 11, ,552 Costs of issuing capital (685) (685) Share-based payment transactions - - 1, ,677 Total contributions by and distributions to owners 10,867-1, ,544 Balance at 31 December ,265 (371,505) 13,573 15,608 (172) 1,185 10,954 The above Consolidated Statement of changes in Equity should be read in conjunction with the accompanying notes.

13 Consolidated Statement of Cash Flow for the half year Half Year In thousands of AUD Note Cash flows from operating activities Cash receipts in the course of operations 35,591 39,399 Cash payments in the course of operations (46,094) (33,618) Interest received Interest paid (388) (90) Net cash (used in) / provided by operating activities (10,796) 5,775 Cash flows from investing activities Proceeds for investments Payments for mine properties - (3,022) Net cash (used in) from investing activities - (2,788) Cash flows from financing activities Proceeds from issue of share capital 11,552 - Payments for capital raising costs (685) - Proceeds from cash backed guarantees Repayment of finance lease liabilities (922) (2,624) Net cash provided by / (used in) financing activities 10,211 (2,624) Net (decrease) / increase in cash and cash equivalents (585) 363 Cash and cash equivalents at the beginning of the half year Cash and cash equivalents at end of the half year The above Consolidated Statement of Cash Flow should be read in conjunction wit the accompanying notes.

14 Notes to the Consolidated Interim Financial Statements (continued) 1. Reporting Entity Apex Minerals NL ( Apex or the Company ) is a company domiciled in Australia. The consolidated interim financial statement of the Company as at and for the six months comprises the Company and its subsidiaries (together referred to as the Group ). The consolidated annual financial report of the Group as at and for the year ended 30 June 2012 is available upon request from the Company s registered office at level 1, 10 Ord Street, West Perth, WA 6005 or at Basis of Preparation Statement of Compliance The half-year financial report is a general purpose financial report prepared in accordance with the Corporation 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 report does not include notes of the type normally included in the annual report and should be read in conjunction with the most recent annual financial report and any public announcements made during the half year. The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards. The consolidated financial statements have been prepared on the basis of historical cost, except for the revaluation of certain non-current assets. 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 significant 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 2012 Annual Financial Report for the financial year ended 30 June These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards. Rounding The Company is a company of the kind referred to in ASIC Class Order 98/100, dated 10 July 1998, and in accordance with that Class Order amounts in the Directors Report and the half year financial report have been rounded to the nearest thousand dollars, unless otherwise indicated. New and revised Standards The adoption of all the new and revised Standards and Interpretations has not resulted in any changes to the Group s accounting policies and has no effect on the amounts reported for the current or prior periods. 2. Material Uncertainty in relation to Going Concern The Group incurred a loss for the 6 months to 31 December 2012 of $22,275,000 (31 December 2011: $16,759,000) and its current liabilities exceed its current assets by $22,266,000 (30 June 2012: $18,066,000). At 30 June 2012, the Group s net asset position was $20,696,000 and at 31 December 2012, the net asset position has reduced to $10,954,000. The cash used in operating activities for the six months to 31 December 2012 was $10,796,000 (2011: cash provided by operating activities of $5,775,000). The going concern basis of preparation of the 30 June 2012 annual report, assumed amongst other things, that the Group would successfully raise sufficient funding whether via debt or equity to continue as a going concern. Despite raising $11,552,000 (before costs) during the half year to 31 December 2012, the Group has been faced with a number of operational challenges in relation to production volume and operating costs which had a greater than anticipated impact on the Group s performance, as discussed below:

15 Notes to the Consolidated Interim Financial Statements (continued) 2. Material Uncertainty in relation to Going Concern (continued) Production volume over the last six months has reduced by approximately 11,000ounces, when compared to that originally forecast. The reduced level of production has been the result of reduced mine capacity as well as lower than anticipated recoveries and grade from the Wiluna mine. Average grades over the six months have been 3.7g/t and recoveries have averaged 79%. Cash operating costs per ounce have increased over the six months when compared to forecast as a direct result of the lower grades and recoveries being experienced. The average cash cost per ounce for the six months to 31 December 2012 was $1,809/oz whereas cash costs forecasted were expected to be $1,500/oz. The consolidated financial statements at 31 December 2012 have been prepared on a going concern basis using a cashflow forecast for the next 12 months from the date of these financial statements. The forecast includes the following key assumptions and strategies: The identification of areas for improvement in an attempt to reduce the cash costs per ounce including the termination of the hiring of non-core mining equipment, the demobilisation of surplus items of underground equipment on hire due and the rearrangements of contracts regarding power and gas and other operational efficiencies. The Group is also undertaking work on processing material from the dump leach stockpile using its existing infrastructure, which Management believe will have a positive impact on reducing the overall cash costs of Wiluna; The need to secure sufficient funds either through debt and / or equity in order to maintain sufficient levels of working capital and to meet its repayment obligations under the deferred payment plans agreed with its two major creditors. It should be noted that on 22 February 2013 an unsecured creditor of Apex Gold Pty Ltd, lodged a Notification of court action relating to winding-up with the ASIC. At 31 December 2012, this creditor was owed approximately $92,000. An offer has been made by Apex to the creditor to settle the amount. As at the date of these financial statements, this matter is yet to be resolved; The Group being able to successfully renegotiate with its major creditor, Atlas Copco, a revised payment plan. On 5 March 2013, The Group was served with a Default Notice under the Deed of Settlement, which required the default to be rectified by the payment of $1,360,000 by 12 March As this did not occur, Atlas Copco may demand that all amounts owing under the Deed (approximately $4,300,000) be paid by 26 March As at the date of these financial statements, this matter is yet to be resolved; and the sale of its Youanmi Project for $15,000,000. In addition to the above, the Group has also entered into a binding Memorandum of Understanding for the sale of its Wiluna Gold Operations for $50,000,000. The sale is subject to a number of conditions precedent, which at the date of these financial statements, have yet to be achieved. If any of the key assumptions as outlined above, fail to occur as anticipated, the going concern basis may not be appropriate, and as a result the Group may have to realize its assets and extinguish its liabilities other than in the ordinary course of business. No allowance for such circumstances has been made in the financial report.

16 Notes to the Consolidated Interim Financial Statements (continued) 3. Operating Segments Identification of Reportable Segments The Group has identified its operating segment (Wiluna operations) on the internal reports that are reviewed and used by the Board of Directors (chief operating decision makers) in assessing performance and determining the allocation of resources. In thousands of AUD Wiluna Operations Reconciliation to Financial Statements Total (i) Segment Performance 31 December 2012 Revenue 35,438-35,438 Segment result December 2011 Revenue 39,456-39,456 Segment result (13,641) (3,118) (16,759) (ii) Segment assets 31 December 2012 Segment assets 64,374-64, December 2011 Segment assets 75,126 13,088 88, Assets and Liabilities held for sale At 31 December 2012 the Group was in the process of selling its Youanmi Projects including its assets and related liabilities. 31 December 30 June In thousand of AUD Youanmi Youanmi Current Assets Mine Properties - - Environmental bonds 1,418 1,552 Other assets 44-1,462 1,552 Current Liabilities Provisions 4,673 4,456 4,673 4,456 Total net Assets held for sale (3,211) (2,904)

17 Notes to the Consolidated Interim Financial Statements (continued) 5. Other Income In thousands of AUD 31 December December 2011 Insurance income Scrap sales - 76 Sale of tenement Others Related Parties Arrangements with related parties continue to be in place on the same basis as at 30 June The details of these arrangements are disclosed in the Consolidated Financial Report as at and for the year ended 30 June Contingent Liabilities There has been no change in contingent liabilities since the last annual reporting date. 8. Events occurring after the reporting period i. On 12 February 2013, Apex announced that it had signed a Binding Memorandum of Understanding (MoU) with Infinity Fame Limited (Infinity) for the sale of the Youanmi Gold Project. As part of the MoU, Apex provided Infinity with an exclusive 60 day due diligence period. In return Infinity subscribed for an initial 4,166,167 Apex shares at $0.06 per share and a further 4,166,167 shares in the Company at $0.06 per share for a total subscription of $500,000. These shares will be held in voluntary escrow for the duration of the due diligence period. The due diligence subscription is non-refundable. Upon completion of a satisfactory due diligence and regulatory approvals, Apex and Infinity intend to enter into a Sale and Purchase Agreement that will result in the Youanmi Gold Project being sold to Infinity for a total consideration of $15,000,000. ii. On 12 March 2013, Apex announced that it had signed a Binding Memorandum of Understanding (MoU) with Everprosperity Investments Co Ltd (Everprosperity) for the sale of the Wiluna Gold Mine. The MoU contemplates that upon completion of a satisfactory due diligence and regulatory approvals, Apex and Everprosperity will enter into a Sale and Purchase Agreement that will result in the Wiluna Gold Mine being sold to Everprosperity for a total consideration of $50,000,000. In accordance with the terms of the MoU, Apex has provided Everprosperity with an exclusive 60 day due diligence period. Everprosperity will in return immediately subscribe for 8,333,333 Apex shares at $0.06 per share for a total subscription of $500,000. These shares will be held in voluntary escrow for the duration of the due diligence period. The due diligence subscription is non-refundable.

18 Notes to the Consolidated Interim Financial Statements (continued) 8. Events occurring after the reporting period (continued) iii. iv. On 5 March 2013, Apex Gold Pty Ltd was served with a Default Notice from one of its major creditor, Atlas Copco. The notice stipulates that if the Group failed to rectify the default, by the payment of $1.3 million by 12 March 2013, Atlas Copco may declare all amounts outstanding (as defined under the Deed of Settlement entered into with Atlas Copco in the prior reporting period), totalling approximately $4.600,000, immediately due and payable. In this instance, the Group would have 14 days in which to pay the said amount. As at the date of these financial statements, this matter is yet to be resolved. All amounts owing to Atlas Copco at 31 December 2012 have been included as current liabilities. On 22 February 2013 an unsecured creditor of Apex Gold Pty Ltd, lodged a Notification of court action relating to winding-up with the ASIC. At 31 December 2012, this creditor was owed approximately $92,000. An offer has been made by Apex to the creditor to settle the amount. As at the date of these financial statements, this matter is yet to be resolved. Other than the matters noted above, there are no other events or circumstances that have arisen since the half year that have significantly affected or may significantly affect the operation of the Group, the results of those operations, or the state of affairs of the Group in the subsequent financial years. 9. Property, plant and equipment Wiluna Mine Cash Generating Unit (Wiluna CGU) An impairment test was triggered during the six months to 31 December 2012 due to operational issues encountered by Apex in relation to production volumes and operating costs as further detailed in Note 2. The recoverable amount of the Wiluna CGU was estimated based on fair value less cost to sell with the following key inputs over the forecast period: Gold price of A$1,600/oz; Average grade and recoveries of 4.27g/t and 78.5% respectively; Mining unit cash cost of approximately $1,100/oz to $1,200/oz; and Post tax discount rate of 12%. The recoverable amount was estimated to be higher than the carrying amount of the Wiluna CGU, and accordingly no impairment was required to be recognised at 31 December 2012.

19 Notes to the Consolidated Interim Financial Statements (continued) 10. Share based payments The fair value of services received in return for share options granted is based on the fair value of share options granted, measured using the Black-Scholes valuation methodology with the following inputs: Grant Date Issued To Expiry Date Number of Options Fair Value per Option Price of Shares on Grant Date Expected Volatility Risk Free Interest Rate Director Options 24/07/2012 Eduard Eshuys 24/07/2015 9,160, % 3.5% 24/07/2012 Brice Mutton 24/07/2015 2,000, % 3.5% 24/07/2012 Kim Robinson 24/07/2015 2,000, % 3.5% Other Options 24/07/2012 AMNL Financing Pty Ltd 24/07/2012 Metal Group Pty Ltd 24/07/2012 Drummond Gold Limited 24/07/2012 Senior Contract Management 24/07/2015 5,500, % 3.5% 24/07/ ,832, % 3.5% 24/07/ ,180, % 3.5% 24/07/2013 7,000, % 3.5% Expected volatility is estimated by considering historic average share price volatility. The options are unlisted and non-transferable.