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1 ABN August 2013 ASX Limited ASX Code BAB AIM Code - BGL INTERIM FINANCIAL REPORT We attach the interim financial report for Bullabulling Gold Limited for the half year ended 30 June For and on behalf of the Board B Lambert Managing Director BULLABULLING GOLD LIMITED ABN Level 2, 55 Carrington Street, Nedlands Western Australia 6009 PO Box 985 Nedlands WA 6909 Telephone Fax info@bullabullinggold.com

2 BULLABULLING GOLD LIMITED ABN INTERIM FINANCIAL REPORT 30 JUNE 2013

3 CONTENTS CONTENTS Page Company Directory 1 Directors Report 2 Auditor s Independence Declaration 13 Condensed Consolidated Statement of Financial Position 14 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income 15 Condensed Consolidated Statement of Changes in Equity 16 Condensed Consolidated Statement of Cash Flows 19 Notes to the Condensed Interim Financial Statements 20 Directors Declaration 27 Independent Auditor s Review Report 28

4 COMPANY DIRECTORY COMPANY DIRECTORY DIRECTORS AND COMPANY SECRETARY: Peter Mansell Non-executive Chairman Ronnie Beevor Non-executive Director Brett Lambert Managing Director David McArthur Company Secretary and Chief Financial Officer REGISTERED AND PRINCIPAL OFFICE: Level 2, 55 Carrington Street NEDLANDS WA 6009 PO Box 985 NEDLANDS WA 6909 AUDITORS: BDO Audit (WA) Pty Ltd 38 Station Street SUBIACO WA 6008 Telephone: Facsimile: SHARE REGISTRY: Computershare Investor Services Pty Ltd Level 2, Reserve Bank Building 45 St George s Terrace PERTH WA 6000 DOMICILE AND COUNTRY OF INCORPORATION: Australia Telephone: Facsimile: SECURITIES EXCHANGE: Bullabulling Gold Limited shares are listed on the Australian Securities Exchange (ASX) under the ticker symbol BAB; and on the London AIM market under the ticker symbol BGL. WEBSITE AND info@bullabullinggold.com 1

5 DIRECTORS REPORT DIRECTORS REPORT The directors present their report together with the financial report for the six months ended 30 June 2013 and the audit review thereon. DIRECTORS The directors of the Company at any time during or since the end of the interim period were: Name Period of Directorship Executive Brett Lambert Director since 1 May 2012 Non-executive Peter Mansell Director since 10 April 2012 Ronnie Beevor Director since 2 July 2012 Tim Netscher Director from 20 August 2012 to 31 May 2013 PRINCIPAL ACTIVITIES The principal activity of the Group during the interim period was gold exploration and project development. RESULTS The net loss of the Group for the interim period after income tax expense was 21,311 (2012 loss: 36,350,366). Subsequent to year end, the Group received 4,538,603 in Research and Development tax incentive refunds which are included in the Group results. DIVIDENDS No dividend was paid during the interim period and the Directors do not recommend payment of a dividend. REVIEW OF OPERATIONS Bullabulling Gold Limited is a mining exploration and development company, headquartered in Perth, Western Australia and is dual-listed on the Australian Securities Exchange (ASX) and London AIM markets. Bullabulling Gold is the 100% owner of a large, previously producing gold mine called the Bullabulling Gold Project. Located in the goldfields of Western Australia, Bullabulling is within easy commuting distance of the main gold mining centre of Kalgoorlie which is less than 80kms away on the main Perth-Kalgoorlie highway. Exploration and Resource Development A reverse circulation (RC) drilling program comprising 5,435 metres in 36 holes was carried out over 1.3 kilometres of strike on the southern portion of Bullabulling Trend. The program was centred on the Edwards and Gryphon prospects where limited earlier drilling had defined two discrete zones of mineralisation. 2

6 DIRECTORS REPORT REVIEW OF OPERATIONS (continued) Exploration and Resource Development Mineralisation at Edwards and Gryphon was approximately 30% higher in grade than the average for the Bullabulling Gold Project and the drilling program was designed to test for extensions to this higher grade mineralisation and to determine whether there is sufficient continuity between the two prospects to support the development of a single large pit. The program was successful with 29 of the 36 holes intersecting mineralisation above the resource cut-off grade of 0.5g/t and a number generating high grade intercepts. Drilling at Gryphon intersected mineralisation down dip and along strike from previous drill coverage. Notable holes included: BJ metres at 3.47g/t from 97 metres BJ metres at 4.27g/t from 87 metres, including 2 metres at 17.60g/t BJ metres at 1.36g/t from 92 metres BJ metres at 11.76g/t from 127 metre, including 2 metres at 29.08g/t BJ metres at 2.36g/t from 133 metres The Edwards prospect also produced intercepts beneath the current resource with hole BJ4622 intersecting 5 metres at 2.68g/t from 97 metres and an intersection of 4 metres grading 11.42g/t from 117 metres in hole BJ4631. Of greatest near term importance was the confirmation of extensive mineralisation in the corridor between the two prospects. Significant intercepts from this area included: BJ metres at 3.52g/t from 85 metres, including 1 metre at 12.30g/t BJ metres at 1.89g/t from 93 metres BJ metres at 1.16g/t from 70 metres BJ metres at 5.78g/t from 116 metres, including 3 metres at 13.47g/t A complete list of significant intercepts from the Edwards/Gryphon drilling program is presented in Table 1 with details for all holes provided in Table 2. 3

7 DIRECTORS REPORT REVIEW OF OPERATIONS (continued) Exploration and Resource Development (continued) Table 1: Edwards/Gryphon Significant Intercepts (0.5g/t cut-off, 2 metre minimum width) Hole No From Interval Grade From Interval Grade To (m) Hole No To (m) (m) (m) (g/t) (m) (m) (g/t) BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ Including BJ BJ BJ Including BJ BJ BJ BJ Including BJ BJ BJ BJ BJ BJ

8 DIRECTORS REPORT REVIEW OF OPERATIONS (continued) Exploration and Resource Development (continued) Table 2: Edwards/Gryphon Drill Hole Details (co-ordinates are in AMG84) Hole No Easting Northing RL Dip Azi Depth Hole No Easting Northing RL Dip Azi Depth BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ BJ Data from the drilling program was incorporated into the project database and used to update the Mineral Resource estimate for the Bullabulling Gold Project for the area south of 6,564,800 mn. The update increased total project resources by 3.9 million tonnes at 1.68g/t to million tonnes at 1.02g/t. Contained gold increased by 210,500 ounces to 3,715,500 ounces. Resource details are presented in Table 3. Table 3: Bullabulling Gold Project Mineral Resource Estimate (0.5g/t cut-off) Deposit Classification Tonnage Grade Cont. Gold Bullabulling Laterite Inferred 1.7 Mt 0.89 g/t 48,000 oz Bullabulling Primary Indicated 72.7 Mt 0.97 g/t 2,274,000 oz Inferred 34.0 Mt 1.11 g/t 1,216,000 oz Bullabulling Total Ind. & Inf Mt 1.02 g/t 3,538,000 oz Gibraltar Inferred 4.8 Mt 1.15 g/t 177,500 oz Project Total Ind. & Inf Mt 1.02 g/t 3,715,500 oz The grade of the extended resource exceeded expectations and led to a two per cent increase in the global resource grade. The additional high grade material will be scheduled for early processing and is expected to contribute to improved project economics. 5

9 DIRECTORS REPORT REVIEW OF OPERATIONS (continued) Bullabulling Gold Project Prefeasibility Study The Bullabulling Gold Project prefeasibility study (PFS) was completed in January The PFS was based on the development of a 7.5 million tonne per annum open pit mining operation with forecast gold production of 1.95 million ounces over an initial mine life of 10.5 years. The PFS incorporated a series of five open pits mines along an eight kilometre segment of the Bullabulling trend. The pit designs were based on a Gemcom WhittleTM Pit Optimisation carried out at a gold price of 1,500/oz. Contractor mining was assumed. Allowance was made for exclusion zones adjacent to Great Eastern Highway and the power transmission lines that link the Eastern Goldfields to the South-West power grid. The PFS was largely completed prior to the acquisition of Mining Lease M15/552 in December 2012, which is situated immediately west of the deposit. Therefore in the PFS all mining infrastructure, including waste dumps and the tailings storage facility, was placed on the eastern side of the deposit. The PFS mining inventory was 79.1 million tonnes grading 0.87 g/t with an average strip ratio of 3.6 to 1. The processing facility incorporated a conventional carbon in leach (CIL) flow sheet consisting of a gyratory crusher, SAG mill, ball mill, five leach and five adsorption tanks, a tailings thickener and AARL stripping circuit. Plant layout is shown in Figure 1. Nameplate capacity of 7.5 million tonnes per annum was achieved at an availability of 91%. Average recovery was estimated at Figure 1: Bullabulling Gold Project Proposed Plant Layout 6

10 DIRECTORS REPORT REVIEW OF OPERATIONS (continued) Bullabulling Gold Project Definitive Feasibility Study The Bullabulling Gold Project Definitive Feasibility Study (DFS) commenced immediately after completion of the PFS. The DFS has to date focussed on reviewing and re-optimising the mine design and operating plan. The current work has incorporated the upgraded resource at Edwards/Gryphon and has enabled greater flexibility in relation to the site layout following the acquisition of Mining Lease M15/552. In addition, the Company has significantly increased its technical capabilities, enabling core components of the DFS to be carried out in-house, in contrast to the PFS which was entirely outsourced. A revised open pit design and mining plan have been developed based on development of four open pits, shown in Figure 2 below. Total diluted Mineral Resources within the pit designs is 89.3 million tonnes grading 0.84 g/t for 2.4 million ounces of contained gold. Average strip ratio over the life of mine is 3.6 to 1. Figure 2: Isometric View of the Proposed Bullabulling Gold Mine Detailed pit designs were developed from a Gemcom WhittleTM pit optimisation that was run and financially evaluated at a gold price of A1,500 per ounce, which equates to US1,371 per ounce at the exchange rate at close of business on 28 June 2013 of The DFS mine plan delivers gold production of 2.1 million ounces over a mine life of 12 years with average C1 cash costs of US843 per ounce. State and private royalties total US63 per ounce and sustaining capital amounts to US24 per ounce, taking total all in cash costs to US930 per ounce. The PFS capital cost estimate for fixed plant and infrastructure of A326 million was retained for the latest evaluation. However this estimate will be refined during the DFS and there is an expectation that construction costs may reduce as a result of the recent sharp downturn in construction activity within the Western Australian mining sector. 7

11 DIRECTORS REPORT REVIEW OF OPERATIONS (continued) Bullabulling Gold Project Definitive Feasibility Study (continued) In the latest evaluation, pre-production capital expenditure of A81.6 million was allocated for procurement of the mining fleet to accommodate owner mining. A further A10.5 million was allowed for additional mining equipment as mining ramps up and pit depth increases. Mine establishment and pre-production mining expenses were estimated at A32.4 million. Based on the above parameters, the project would generate net cash flow of million over the scheduled mine life. Net present value at an 8% discount rate is A166.0 million and internal rate of return is 15.2% before tax. Key project statistics are summarised in Table 4 below, with Figures 3 and 4 graphically presenting forecast annual mining rates and gold production. Table 4: Key Project Statistics Mineral Resources (excluding Gibraltar) Tonnage Grade Cont d Gold Indicated Resource 72.7Mt 0.97g/t 2,274,000 oz Inferred Resource 35.7Mt 1.10g/t 1,264,000 oz Total Resource 108.4Mt 1.02g/t 3,538,000 oz In Pit Diluted Mineral Resources Tonnage Grade Cont d Gold Indicated Resource 76.3Mt 0.82g/t 2,007,000 oz Inferred Resource 13.0Mt 0.97g/t 405,000 oz Total In Pit Diluted Mineral Resources 89.3Mt 0.84g/t 2,412,000 oz Capital Costs Fixed Plant & Infrastructure Establishment & Pre production Mining Mobile Equipment Pre production Mobile Equipment Additions Sustaining Capital Life of Mine A326.4M A32.4M A81.6M A10.5M A54.4M Production Summary Years 1 3 Life of Mine Project Life 3 years 12 years Strip Ratio 4.4:1 3.6:1 Annual Processing Rate 7.5 Mtpa 7.5 Mtpa Processing Recovery 87.0% 87.3% Gold Production 569,000 oz 2,106,000 oz Total Operating Costs A21.39/t A21.79/t Project Economics Years 1 3 Life of Mine Base Case Gold Price US1,371/oz US1,371/oz C1 Cash Costs US774/oz US843/oz NPV at 8% discount (Pre tax) 166M IRR (Pre tax) 15.2% Net Cash Flow (Pre tax) A111M A565M 8

12 DIRECTORS REPORT REVIEW OF OPERATIONS (continued) Bullabulling Gold Project Definitive Feasibility Study (continued) Figure 3: Graph of Forecast Annual Mine Production Mine Production (million tonnes) Mined Grade (g/t) Waste Mined Ore Mined Mined Grade Figure 4: Graph of Forecast Annual Gold Production and Plant Head Grade Gold Production (thousand ounces) Head Grade (g/t) Recovered Ounces Head Grade 9

13 DIRECTORS REPORT REVIEW OF OPERATIONS (continued) Bullabulling Gold Project Definitive Feasibility Study (continued) Whilst the current mine plan has been designed to optimise value at a gold price of A1,500 (US1,371) per ounce, a series of optimisation runs were carried out at gold prices ranging from A1,200 (US1,097) per ounce to A1,800 (US1,645) per ounce. The results, summarised in Table 5 below, provide guidance on gold production and cash costs for mine plans based on alternative gold prices. Table 5: Bullabulling DFS Whittle Pit Optimisation Results Optimisation Gold Price Tonnage Grade Mine Life Contained Gold Recovered Gold Indicated C1 Cash Cost US1,097/oz 50 Mt 0.92 g/t 7 years 1.5 Moz 1.3 Moz US716/oz US1,234/oz 77 Mt 0.86 g/t 10 years 2.1 Moz 1.9 Moz US797/oz US1,371/oz 92 Mt 0.85 g/t 12 years 2.5 Moz 2.2 Moz US843/oz US1,508/oz 109 Mt 0.83 g/t 15 years 2.9 Moz 2.5 Moz US897/oz US1,645/oz 120 Mt 0.81 g/t 16 years 3.1 Moz 2.8 Moz US936/oz The revised mine plan has delivered a substantial improvement in cash costs, extended mine life and increased gold production relative to the pre-feasibility study (PFS). Factors that led to this improvement include: Additional high grade resources in the Gryphon following the resource update Reduced mining costs based on owner mining and the utilisation of larger excavators and trucks Amended pit slope designs to improve geotechnical stability and reduce waste stripping Amended waste rock stockpiling strategy to utilise dumps on both sides of the open pit resulting in reduced haulage distances Allowance has been made to source a combination of locally generated power and power transmitted from the south-west grid Use of an alternative tailings storage facility design with reduced construction costs Whilst work to date has centred on improving the mine plan, the DFS will also evaluate opportunities to improve performance in other areas including: Relocation of infrastructure to enable the Phoenix, Dicksons and Bonecrusher pits to be combined to extend mine life and improve mining efficiency Inclusion of Gibraltar into the mining plan to extend mine life and lift average grade Additional metallurgical test work aimed at lifting plant gold recoveries Review of plant and infrastructure capital expenditure following a marked fall in WA and global demand for mining/construction service providers Review of processing operating costs Further drilling to consolidate resources within or in close proximity to the current pit designs 10

14 DIRECTORS REPORT REVIEW OF OPERATIONS (continued) Corporate Broker Appointment Westhouse Securities Limited (Westhouse) was appointed Broker to the Company in accordance with AIM Rule 35. Westhouse is a London based corporate and institutional stockbroking group with a strong track record across a number of market sectors with particular expertise in mining. Westhouse have acted as Nominated Advisor (Nomad) to the Company since listing and will continue in that role. Entitlement Offer On 14 March 2013 the Company announced that an entitlement offer was to be made to shareholders on the basis of one new share for every two shares held. The entitlement offer was priced at A0.05 per share or per share for eligible holders of Depositary Interests for gross proceeds of up to 7.6 million to be applied to the Bullabulling Gold project DFS. The entitlement offer opened on 28 March 2013 and closed on 15 April 2013 with subscriptions received for 39,214,906 shares, generating gross proceeds of 2.0 million. Board Change Prior to the Company s annual general meeting on 31 May 2013, non-executive director Tim Netscher advised the Board that due to the recent extension of his tenure as managing director and CEO of Gindalbie Metals, he would not seek re-election as a director of Bullabulling Gold. Competent Person Statement The information in this report that relates to the Exploration Results, Mineral Resources or Ore Reserves is based upon information compiled by Mr Trevor Pilcher, who is a full time employee of the Company and is a member of The Australasian Institute of Mining and Metallurgy. Mr Pilcher has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and the activity in which he is undertaking to qualify as a Competent Person under 2004 Edition of the Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves (JORC Code). Mr Pilcher consents to the inclusion in this report of the matters based on his information in the form and context in which it appears. DIRECTORS REMUNERATION (a) Executive Directors and Senior Officers Analysis of bonuses included in remuneration During the interim period the following short term incentive cash bonuses were awarded as remuneration to directors and key management personnel of the Group for the year ended 31 December 2012: - Mr Brett Lambert : 44,334 - Mr David McArthur : 34,650 78,984 39,492, being 50% of the bonuses, has been paid in cash. The balance of 39,492 is to be satisfied by the issue of 1,112,451 shares at a price of 3.55 cents per share, being the 5 day VWAP on the date the bonus was approved by the Board. These shares have not been issued, and in the case of Mr Lambert, the issue will require prior shareholder approval. The balance owing has been accrued at the reporting date. 11

15 DIRECTORS REPORT DIRECTORS REMUNERATION (continued) (b) Non-executive Directors Tim Netscher resigned from the Board effective 31 May In view of the need to preserve cash in light of the current financial climate and market conditions, the Board resolved to implement a scheme effective 1 July 2013 whereby non-executive directors will receive 50% of their directors fees in shares. The pricing of the shares, and accordingly the number of shares to be issued, will be based on a 5 day VWAP at the end of each calendar quarter. The issue of shares in lieu of directors fees will require the approval of shareholders, and accordingly such fees will accrue until such time shareholder approval is obtained. CORPORATE GOVERNANCE In recognising the need for the highest standards of corporate behaviour and accountability, the directors of Bullabulling Gold Limited support and have adhered to the principles of good corporate governance. The Group s corporate governance statement is contained within the 31 December 2012 Annual Report and on the Company s web site. SUBSEQUENT EVENTS Other than the matters disclosed in note 13 of the notes to the condensed interim financial statements, there have been no matters or circumstances that have arisen since the end of the financial year that have significantly affected, or may significantly affect, the operations of the Company, the results of these operations, or the state of affairs of the Company in future financial years. LEAD AUDITOR S INDEPENDENCE DECLARATION The lead auditor s independence declaration as required under Section 307C of the Corporations Act 2001 is set out on the next page and forms part of the Directors report for the six months ended 30 June Dated at Perth, Western Australia this 28 th day of August Signed in accordance with a resolution of the Directors. Brett Lambert Director 12

16 Tel: Fax: Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia 28 August 2013 The Board of Directors Bullabulling Gold Limited 55 Carrington Street NEDLANDS WA 6009 Dear Sirs, DECLARATION OF INDEPENDENCE BY GLYN O BRIEN TO THE DIRECTORS OF BULLABULLING GOLD LIMITED As lead auditor for the review of Bullabulling Gold Limited for the half-year ended 30 June 2013, I declare that to the best of my knowledge and belief, there have been: no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and no contraventions of any applicable code of professional conduct in relation to the review. This declaration is in respect of Bullabulling Gold Limited and the entities it controlled during the period. Glyn O Brien Director BDO Audit (WA) Pty Ltd Perth, Western Australia BDO Audit (WA) 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 (WA) 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) in each State or Territory other than Tasmania.

17 FINANCIAL STATEMENTS CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2013 Assets Note 30 June December 2012 Cash and cash equivalents 762,090 4,078,830 Other receivables 6 4,594,873 52,508 Prepayments 114,468 32,768 Total current assets 5,471,431 4,164,106 Investments 427, ,778 Other receivables 1,466,000 1,436,200 Property, plant and equipment 839, ,183 Total non-current assets 2,733,336 2,634,161 Total assets 8,204,767 6,798,267 Liabilities Trade and other payables 460,744 1,890,328 Employee benefits 127,666 97,069 Total current liabilities 588,410 1,987,397 Provision for site rehabilitation 10 1,353, ,000 Total non-current liabilities 1,353, ,000 Total liabilities 1,941,603 2,457,397 Net assets 6,263,164 4,340,870 Equity Share capital 7 68,545,051 66,704,237 Reserves 7 648,807 1,074,760 Accumulated losses (62,930,694) (63,438,127) Total equity attributable to equity holders of the Company 6,263,164 4,340,870 The condensed notes on pages 20 to 26 are an integral part of these financial statements. 14

18 FINANCIAL STATEMENTS CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 30 JUNE 2013 Note 30 June June 2012 Continuing operations Other income 4,540,160 1,664,600 Feasibility study and exploration expenditure (2,242,322) (35,689,132) Goodwill written off - (701,803) Administrative expenses (1,129,007) (1,276,620) Other expenses (1,255,105) (979,279) Results from operating activities (86,274) (36,982,234) Finance income 66, ,168 Net finance income 66, ,168 Loss before income tax (19,950) (36,683,066) Income tax (expense) / benefit (1,361) 332,700 Loss from continuing operations (21,311) (36,350,366) Loss for the period 11 (21,311) (36,350,366) Other comprehensive expense Items that will not be reclassified to profit or loss - - Total items that will not be reclassified to profit or loss - - Items that may be reclassified subsequently to profit or loss Changes in fair value on equity instruments measured at fair value through other comprehensive income - (368,149) Foreign currency translation difference of foreign operations - (279,586) Total items that may be reclassified subsequently to profit or loss - (647,735) Other comprehensive income for the period, net of income tax - (647,735) Total comprehensive loss for the period (21,311) (36,998,101) Loss attributable to owners of the Company (21,311) (36,350,366) Total comprehensive loss attributable to owners (21,311) (36,998,101) Loss per share Basic and diluted (cents per share) (0.01) (16.56) The condensed notes on pages 20 to 26 are an integral part of these financial statements. 15

19 FINANCIAL STATEMENTS CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2013 Attributable to equity holders of the Company Note Share capital Translation reserve Equity -based benefits reserve Available for sale asset reserve Accumulated losses Total Balance at 1 January ,704,237-1,074,760 - (63,438,127) 4,340,870 Total comprehensive loss for the year Loss for the year (21,311) (21,311) Other comprehensive income for the year Total other comprehensive income Total comprehensive expense for the period (21,311) (21,311) Transactions with owners, recorded directly in equity Contributions by and distributions to owners Issue of 39,214,906 ordinary shares 2,000, ,000,183 Capital raising costs (159,369) (159,369) Share-based payment transactions 6b - - (425,953) - 528, ,791 Total contributions by and distributions to owners 1,840,814 - (425,953) - 528,744 1,943,605 Total changes in ownership interests in subsidiaries Total transactions with owners 1,840,814 - (425,953) - 528,744 1,943,605 Balance at 30 June ,545, ,807 - (62,930,694) 6,263,164 The condensed notes on pages 20 to 26 are an integral part of these financial statements. 16

20 FINANCIAL STATEMENTS CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2012 Share capital Translation reserve Attributable to equity holders of the Company Equity Available -based for sale benefits asset reserve reserve Accumulated losses Balance at 1 January ,717,898 1,391, , ,149 (12,460,798) 25,607,960 Adjustments arising from change in functional currency on 1 January, ,766 25,182 (62,501) - (99,806) 250,641 Balance at 1 January 2012, restated 36,105,664 1,416, , ,149 (12,560,604) 25,858,601 Loss for the year (36,350,366) (36,350,366) Other comprehensive income for the year Total Exchange differences on translation of foreign operations Change in fair value of equity instruments measured at fair value through other comprehensive income - (279,586) (279,586) (368,149) - (368,149) Total other comprehensive income - (279,586) - (368,149) - (647,735) Total comprehensive expense for the period - (279,586) - (368,149) (36,350,366) (36,998,101) The condensed notes on pages 20 to 26 are an integral part of these financial statements. 17

21 FINANCIAL STATEMENTS CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2012 (continued) Transactions with owners, recorded directly in equity Share capital Translation reserve Attributable to equity holders of the Company Equity Available -based for sale benefits asset reserve reserve Accumulated losses Total Contributions by and distributions to owners Exercise of 4,400,000 warrants 847, ,706 Issue of ordinary shares for acquisition of asset 28,553, ,553,437 Capital raising costs (17,570) (17,570) Share-based payment transactions , ,612 Total contributions by and distributions to owners 29,383, , ,826,185 Total changes in ownership interests in subsidiaries Total transactions with owners 29,383, , ,826,185 Balance at 30 June ,489,237 1,137, ,356 - (48,910,950) 18,686,685 The condensed notes on pages 20 to 26 are an integral part of these financial statements.. 18

22 FINANCIAL STATEMENTS CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 30 JUNE 2013 Note 30 June June 2012 Cash flows from operating activities Net cash (paid to) / received from suppliers, employees and customers (2,751,600) (2,272,146) Payments for exploration, evaluation and development (2,312,257) (4,273,916) Income tax paid (1,361) - Net cash outflow from operating activities (5,065,218) (6,546,062) Cash flows from investing activities Interest received 60, ,751 Acquisition of subsidiary, net of cash - 1,887,526 Payments for property, plant and equipment (154,838) (12,696) Net cash (outflow) / inflow from investing activities (94,001) 2,144,581 Cash flows from financing activities Proceeds from issue of shares 2,000, ,706 Capital raising costs (159,372) (17,570) Net cash inflow from financing activities 1,840, ,136 Net decrease in cash and cash equivalents (3,318,408) (3,571,345) Cash and cash equivalents at the beginning of the half-year 4,078,830 11,475,475 Effects of exchange rate fluctuations on cash held 1,668 (100,517) Cash and cash equivalents at the end of the half-year 762,090 7,803,613 The condensed notes on pages 20 to 26 are an integral part of these financial statements. 19

23 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE REPORTING ENTITY Bullabulling Gold Limited (the Company ) is a company domiciled in Australia. The condensed consolidated interim financial report of the Company as at and for the six months ended 30 June 2013 comprises the Company and its subsidiaries (together referred to as the Group and individually as Group Entities ). The Group is primarily involved in the mineral exploration and development industry in Australia. The consolidated financial report of the Group as at and for the year ended 31 December 2012 is available upon request from the Company s registered office at Level 2, 55 Carrington Street, Nedlands, Western Australia, 6009 and is available for review on the Company s web site. 2. BASIS OF PREPARATION (a) Statement of compliance The condensed consolidated interim financial report is a general purpose financial report which has been prepared in accordance with AASB 134 Interim Financial Reporting and the Corporations Act It does not include all of the information required for a full annual financial report, and should be read in conjunction with the annual consolidated financial report of the Group as at and for the year ended 31 December 2012 and any public announcements made by Bullabulling Gold Limited during the interim reporting period. The condensed consolidated interim financial report was approved by the Board of Directors on 28 August (b) Judgements and estimates The preparation of interim financial reports requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing this condensed consolidated interim financial report, the significant judgements 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 statements as at and for the year ended 31 December (c) Going concern The condensed consolidated interim financial report has been prepared on a going concern basis, which contemplates the continuity of normal business activity and the settlement of liabilities in the normal course of business. Additional funds will need to be sourced for the Company to continue to carry on its business. The ability of the Group to continue funding its exploration and development activities is dependent on the Group securing further working capital by additional equity or financing facilities. The timing of raising additional capital will depend on investment markets, current and future planned exploration and development activities. Whilst there is uncertainty regarding the outcomes of funding alternatives, the Board considers that the quality of its project will enable it to raise further capital to fund its exploration and development activities. In addition, the Company has the capacity to delay or cancel a number of expenses that are discretionary in nature, including administrative costs, exploration programs and development expenditure for the defined feasibility study that are not contractually binding. The Directors have reviewed the business outlook and are of the opinion that the use of the going concern basis of accounting is appropriate as they believe the Group will be able to raise the funds that it requires to carry on business. The financial report does not contain any adjustments to the amounts or classification of recorded assets or liabilities which might be necessary if the Group was not to continue as a going concern. 20

24 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS 3. SIGNIFICANT ACCOUNTING POLICIES Except as described below, the accounting policies applied by the Group in the condensed consolidated interim financial report are the same as those applied by the Group in its consolidated financial report as at and for the year ended 31 December The following change in accounting policy is also expected to be reflected in the Group s consolidated financial statements as at and for the year ending 31 December Presentation of transactions recognised in other comprehensive income From 1 January 2013 the Group applied amendments to AASB 101 Presentation of Financial Statements outlined in AASB Amendments to Australian Accounting Standards Presentation of Items of Other Comprehensive Income. The change in accounting policy only relates to disclosures and has had no impact on consolidated earnings per share or net income. The changes have been applied retrospectively and require the Group to separately present those items of other comprehensive income that may be reclassified to profit or loss in the future from those that will never be reclassified to profit or loss. These changes are included in the statement of profit or loss and other comprehensive income. 4. FINANCIAL RISK MANAGEMENT The Group s financial risk management objectives and policies are consistent with those disclosed in the financial statements as at and for the year ended 31 December

25 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS 5. OPERATING SEGMENTS At the reporting date the Group had one reportable segment, being gold exploration and evaluation. Reconciliation of reportable segment loss, assets and liabilities and other material items Loss 30 June June 2012 Total loss for reportable segment (2,242,322) (35,689,132) Unallocated amounts: other corporate expenses 2,156,048 (1,293,102) Finance income 66, ,168 Consolidated loss before income tax (19,950) (36,683,066) Assets 30 June December 2012 Total assets for reportable segment - - Other assets 8,204,767 6,798,267 8,204,767 6,798,267 Liabilities Total liabilities for reportable segment - - Other liabilities (1,941,603) (2,457,397) (1,941,603) (2,457,397) There have been no changes to the basis of segmentation or the measurement basis for the segment profit or loss since 31 December

26 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS 6. OTHER RECEIVABLES 30 June December 2012 Research and development tax incentive refund 4,538,603 - Bank interest income 33,515 28,027 Other receivables 22,755 24,481 4,594,873 52, CAPITAL AND RESERVES (a) Share capital 2013 Number Ordinary shares 2012 Number On issue at 1 January 302,533, ,280,301 Exercise of warrants at cents each - 4,400,000 Issue of shares at 20.4 cents each pursuant to the acquisition of the 50% share of Bullabulling assets held by Auzex Resources Ltd - 118,353,573 - Entitlement issue of shares at 5 cents each to Australian shareholders 16,870,703 - Entitlement issue of shares at 5.2 cents each to UK shareholders 22,344,203 - On issue at 30 June 341,748, ,033,874 Issuance of ordinary shares On 23 April 2013, 39,214,906 fully paid ordinary shares were issued pursuant to an entitlement offer, raising 2,000,183 less costs. (b) Reserves Equity-based benefits reserve The equity-based benefits reserve represents the cost of options that have been granted and vested as sharebased payments but not exercised. This reserve will be transferred to accumulated losses should these options be exercised or reversed through profit and loss should certain vesting conditions not be met. During the reporting period 528,744, representing the value of options issued to shareholders in Bullabulling Gold (UK) Limited prior to the reverse merger on 29 March 2012, was expensed through retained losses as they had vested. 23

27 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS 7. CAPITAL AND RESERVES (continued) (c) Options At the date of this report, there are 15,359,242 options on issue in Bullabulling Gold Limited. The exercise price ranges from cents to cents, and the exercise dates range from October 2013 to November COMMITMENTS Commitments for approved mineral exploration expenditure are scheduled as follows: 30 June June 2012 Mineral exploration Not later than one year 614, , RELATED PARTY TRANSACTIONS (a) Transactions with key management personnel Key management personnel receive compensation in the form of short-term employee benefits, postemployment benefits and share-based payments awards (where applicable). Key management personnel received total compensation of 886,973 for the six months ended 30 June 2013 (six months ended 30 June 2012: 482,259). During the interim period the following short term incentive cash bonuses were awarded as remuneration to directors and key management personnel of the Group for the year ended 31 December 2012: - Mr Brett Lambert : 44,334 - Mr David McArthur : 34,650 78,984 39,492, being 50% of the bonuses, has been paid in cash. The balance of 39,492 is to be satisfied by the issue of 1,112,451 shares at a price of 3.55 cents per share, being the 5 day VWAP on the date the bonus was approved by the Board. These shares have not been issued, and in the case of Mr Lambert, the issue will require prior shareholder approval. The balance owing has been accrued at the reporting date. (b) Non-executive Directors In view of the need to preserve cash in light of the current financial climate and market condition, the Board resolved to implement a scheme effective 1 July 2013 whereby non-executive directors will receive 50% of their directors fees in shares. The pricing of the shares and accordingly, the number of shares to be issued, will be based on a 5 day VWAP at the end of each calendar quarter. This proposal will require the approval of shareholders, and the fees will accrue until such approval is obtained 24

28 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS 10. SITE RESTORATION PROVISION 30 June December 2012 Site restoration provision 1,353, ,000 On 16 May 2013, an independent consultant was engaged to review and analyse the disturbance and rehabilitation summary tables used in the Annual Environmental Report submissions to the DMP. Based on the information received, the estimate for rehabilitation is 1,353, LOSS BEFORE TAX FOR THE HALF YEAR Note 30 June June 2012 Loss before income tax includes the following specific gains, losses and expenses that are unusual because of their nature, size or incidence: Other income Research and development tax incentive refund 4,538,603 - Gain on acquisition of investment - 1,656,075 Other expenses Site restoration expenses 883,193 - Professional fees 285, ,585 Foreign exchange loss ,776 Finance income and expense Interest income on bank deposits 66, ,904 Other interest income - 2,264 66, ,168 Exploration and evaluation expensed through profit or loss Auzex Resources Limited pre-acquisition exploration expensed - 32,894,832 Goodwill written off - 701,803 25

29 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS 12. CONTINGENCIES There were no contingent liabilities at the reporting date (2012: Nil). 13. SUBSEQUENT EVENTS Subsequent to the reporting date, the Group received 4,634,954 from the ATO comprising 4,536,603 in Research and Development tax refunds and 96,351 interest. On 5 August 2013, the Company issued 500,000 fully paid ordinary shares at 5 cents each to Metaliko Resources Limited in consideration for the option to acquire approximately 500 hectares of additional land adjacent to the Bullabulling mine site. Other than these matters, there have been no matters or circumstances that have arisen since the end of the financial year that have significantly affected, or may significantly affect, the operations of the Company, the results of these operations, or the state of affairs of the Company in future financial years. 26

30 DIRECTORS DECLARATION DIRECTORS DECLARATION In the opinion of the directors of Bullabulling Gold Limited (the Company ): (1) the financial statements and notes set out on pages 14 to 26 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 30 June 2013 and of its performance, for the six month 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. Signed in accordance with a resolution of the Directors: BRETT LAMBERT Director Dated at Perth this 28 th day of August

31 Tel: Fax: Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia INDEPENDENT AUDITOR S REVIEW REPORT TO THE MEMBERS OF BULLABULLING GOLD LIMITED Report on the Half-Year Financial Report We have reviewed the accompanying half-year financial report of Bullabulling Gold Limited, which comprises the condensed consolidated statement of financial position as at 30 June 2013, and the condensed consolidated statement of profit or loss and other comprehensive income, condensed consolidated statement of changes in equity and 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 information, and the directors declaration of the consolidated entity comprising the disclosing entity and the entities it controlled at the half-year s end or from time to time during the half-year. Directors Responsibility for the Half-Year Financial Report The directors of the disclosing entity 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. Auditor s Responsibility Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity s financial position as at 30 June 2013 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 Bullabulling Gold Limited, 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 Bullabulling Gold Limited, would be in the same terms if given to the directors as at the time of this auditor s review report. BDO Audit (WA) 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 (WA) 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) in each State or Territory other than Tasmania.

32 Conclusion Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Bullabulling Gold Limited is not in accordance with the Corporations Act 2001 including: (a) giving a true and fair view of the consolidated entity s financial position as at 30 June 2013 and of its performance for the half-year ended on that date; and (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations BDO Audit (WA) Pty Ltd Glyn O Brien Director Perth, Western Australia Dated this 28 th day of August 2013