BROKEN HILL PROSPECTING LIMITED (Incorporated in New ...media.abnnewswire.net/media/en/docs/ASX-BPL-2A1071776.pdf · portfolio. BPL now holds the largest tenement portfolio in the

BROKEN HILL PROSPECTING LIMITED (Incorporated in New Zealand) NZ Company Number: 322887 NZ Financial Services Provider Number FSP32949 ARBN 003 453 503 ABN: 83 003 453 503 (Australia)

INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2017

BROKEN HILL PROSPECTING LIMITED INTERIM FINANCIAL STATEMENTS 31 DECEMBER 2017 Page 2

CONTENTS

CONTENTS ....................................................................................................................................................... 2 COMPANY DIRECTORY .................................................................................................................................. 3 DIRECTORS’ REPORT .................................................................................................................................... 4

1. Directors ................................................................................................................................................ 4 2. Review of Operations ............................................................................................................................ 4 3. Auditor’s Independence Declaration ..................................................................................................... 9 4. Subsequent Events ............................................................................................................................... 9

AUDITOR’S INDEPENDENCE DECLARATION ............................................................................................ 10 INDEPENDENT AUDITOR’S REVIEW REPORT ........................................................................................... 11 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 31 DECEMBER 2017 ........................................................................................ 13 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 31 DECEMBER 2017 ........................................................................................................................................... 14 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2017.......................... 15 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 31 DECEMBER 2017 ........................................................................................................................................................................ 16 NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2017 ...................................................................................................................................... 17

1. Summary of Significant Accounting Policies ....................................................................................... 17 2. Share capital ....................................................................................................................................... 18 3. Reconciliation of operating cash flow & net income ............................................................................ 18 4. Prior period adjustment ....................................................................................................................... 19 5. Commitments ...................................................................................................................................... 19 6. Controlled entities................................................................................................................................ 19 7. Intangible assets ................................................................................................................................. 19 8. Contingent liabilities ............................................................................................................................ 20 9. Seasonality of operations .................................................................................................................... 20 10. Related parties ................................................................................................................................ 20 11. Segment Information ....................................................................................................................... 20 12. Going concern ................................................................................................................................. 20 13. Subsequent Events ......................................................................................................................... 20

DIRECTORS’ STATEMENT ........................................................................................................................... 21


COMPANY DIRECTORY

DIRECTORS F Creagh O’Connor (Chairman) Anthony (Trangie) Johnston (Managing Director) Matthew G Hill Denis Geldard Geoffrey G Hill

AUDITORS Nexia Sydney Audit Pty Ltd Level 16 1 Market Street Sydney NSW 2000

COMPANY SECRETARY Ian Morgan

BANKERS National Australia Bank, Sydney Commonwealth Bank, Sydney

REGISTERED OFFICE Ground Floor Nathan House 541 Parnell Road Parnell, Auckland 1052 New Zealand

SECURITIES LISTED Australian Securities Exchange (ASX): Code: BPL (shares) Code: BPLO (options)

AUSTRALIAN OFFICE Suite 1002, Level 10 171 Clarence Street Sydney 2000 NSW GPO Box 1546 SYDNEY NSW 2001 Phone: (+61 2) 9238 1170 Email: [email protected] WEBSITE www.bhpl.biz TWITTER @BH_PL

SHARE REGISTRAR AUSTRALIA Computershare Investor Services Pty Ltd Level 5, 115 Grenfell Street Adelaide, South Australia 5001 Phone: 1300 556 161 (within Australia)

(+61 3) 9415 4000 (outside Australia) www.computershare.com.au

INTERESTS IN MINING TENEMENTS HELD BY THE COMPANY AND ITS SUBSIDIARIES Tenement Minerals Status

ML 86 Broken Hill NSW Australia Cobalt, Iron, Iron Minerals, Nickel, Platinum & Sulphur

Current

ML 87 Broken Hill NSW Australia Cobalt, Iron, Iron Minerals, Nickel, Platinum & Sulphur

Current

EL 6622 Broken Hill NSW Australia Group 1 Current

EL 8143 Broken Hill NSW Australia Group 1 Current

ELA5622 Broken Hill NSW Australia Groups 1 & 2 Pending ELA 5623 Broken Hill NSW Australia Groups 2 & 5 Pending ELA 5624 Broken Hill NSW Australia Groups 1 & 2 Pending EL 8558 Murray Basin NSW Australia Group 10 Current EL 8559 Murray Basin NSW Australia Group 10 Current EL 8649 Murray Basin NSW Australia Group 10 Current EL 8650 Murray Basin NSW Australia Group 10 Current ELA 6583 Murray Basin VIC Australia Mineral Sands Pending ELA 6584 Murray Basin VIC Australia Mineral Sands Pending ELA 6585 Murray Basin VIC Australia Mineral Sands Pending ELA 6614 Murray Basin VIC Australia Mineral Sands Pending ELA 2017/00201 Murray Basin SA Australia Mineral Sands Pending


DIRECTORS’ REPORT

FOR THE SIX MONTHS ENDED 31 DECEMBER 2017

The Directors present the following report including financial statements of Broken Hill Prospecting Limited (Company) for the six months ended 31 December 2017.

1. Directors

The names of the Directors of the Company during the half-year and up to the date of this report are:

F Creagh O’Connor Non-Executive Chairman Appointed 22 June 2000 Anthony (Trangie) Johnston Managing Director Appointed 18 January 2018 Matthew G Hill Non-Executive Director Appointed 14 March 2012 Denis Geldard Non-Executive Director Appointed 3 August 2015 Geoffrey G Hill Non-Executive Director Appointed 27 August 2015

2. Review of Operations

Broken Hill Prospecting Limited (ASX: BPL) is an Australian exploration company focussed on the discovery and development of strategic mineral resources across two primary geographical areas; the Broken Hill Region (base, precious and industrial metals, including the Thackaringa Cobalt & Base/Precious Metal Project) and the Murray Basin Region (Heavy Mineral Sands).

Additional information about the Company is available on BPL’s website at www.bhpl.biz.

Thackaringa Project, Broken Hill, NSW

Thackaringa Cobalt Project Joint Venture (TJV)

The successful spin-off of Cobalt Blue Holdings Limited (ASX: COB) was completed in February 2017, with investors seeking shares and options exceeding the $10 million maximum being offered. The deal was an important initiative for BPL to realise significant value from its Thackaringa Cobalt Project.

An important part of the spin-off was that BPL enter a detailed farm-in joint venture agreement with COB to finance and undertake an extensive exploration and development program at Thackaringa (the TJV). BPL and COB agreed to certain changes to the joint venture agreement on the 30th June 2017, which are summarised in Table 1 below.

Under the TJV, COB can earn 100% of the Project if it completes a 4-stage farm-in by committing $10.9 million project expenditure before 30 June 2020 and paying BPL $7.5 million in cash. In addition, BPL will receive a 2% net smelter royalty on all cobalt produced from the Thackaringa tenements for the life of mine.

Subject to COB completing Stage 1 milestones, COB has a 51% beneficial interest in the Thackaringa Cobalt Project with BPL retaining a 49% beneficial interest. In order for COB to retain its 51% beneficial interest, key deliverables by 1 April 2018 are a 40Mt Indicated Resource sufficient to support a Pre-feasibility Study to JORC 2012 standard. A Pre-feasibility Study is due by 30 June 2018 and forms part of Stage 2 milestones whereby COB can earn up to 70% beneficial interest.

Importantly, under the terms of the TJV, BPL retains the rights to lead, zinc, copper, silver and gold minerals on the TJV tenements.


Table 1. Thackaringa Cobalt Project JV Agreement

Scoping Study

BPL received a Scoping Study for the Thackaringa Cobalt Project from COB on 30 June 2017. The results of the Study were positive and importantly provided strong encouragement for the joint venture to commit to the next stage of exploration and development.

Pre-feasibility Study

During the reporting period, a major drilling program was completed to support a resource upgrade in preparation for Pre-feasibility Studies.

The drilling program comprised seventy-four (74) drill holes for 12,458.7 metres and included sixteen (16) DD holes, fifty-five (55) RC holes and three (3) RC holes with diamond tails. By deposit forty-eight (48) holes were drilled at Railway, seventeen (17) holes at Pyrite Hill and nine (9) holes at Big Hill.

The results demonstrate strong continuity along both strike and down dip at the Railway, Pyrite Hill and Big Hill deposits. Cobalt mineralisation outcrops in prominent ridgelines that extend for 4.5km strike with widths ranging from 25 to 100m and open at depth.

The drilling program was designed to upgrade the resource to Indicated status, expand the overall resource base, provide comprehensive geotechnical information and additional samples for metallurgical testing.

The Pre-feasibility Study is well advanced with the continuation of metallurgical test work and ongoing geotechnical, hydrological, mining and environmental assessments. Results to date have been positive and the joint venture remains on track to complete Stage Two deliverables by 30 June 2018.


Photograph 1: Drilling at Thackaringa Cobalt Project

Thackaringa Base & Precious Metal Exploration

BPL retains the rights to all lead, zinc, copper, silver and gold minerals at Thackaringa under the terms of the TJV with COB.

During the reporting period, a major heliborne electromagnetic (‘EM’) survey (VTEM-Max) was completed at Thackaringa covering the entire project area (63km2) at a nominal 100m-line spacing. The survey was fully funded by COB as part of the TJV.

The high resolution electromagnetic and magnetic data was used in conjunction with geological mapping to produce a new tenement-scale, 3D geological model which has greatly enhanced base and precious metal targeting at the Thackaringa Project.

Multiple base and precious metal anomalies have been identified for further evaluation, including a newly discovered zinc, lead and silver (Zn-Pb-Ag) prospect with outcropping quartz-gahnite veins – a key vector for Broken Hill-style Zn-Pb-Ag mineralisation.

The updated geology model has provided renewed focused on previously explored prospects, with rocks chips defining extensive Cu-Pb-Zn-Au-Ag mineralisation:

Pyramid Hill

o 7.5% Cu, 40g/t Ag, 1g/t Au, 0.1% Ni & 0.2% Pb

Old Coolgardie West

o • 5.2% Cu, 140g/t Ag, 0.2g/t Au, 0.2% Ni & 0.1% Pb

Himalaya North

o • 2.6% Cu, 5.9% Pb, 62g/t Ag & 0.8% Zn


Figure 1. Thackaringa base and precious metal prospects as related to geophysical anomalies and mapped quartz-gahnite outcrops – a key vector for Broken Hill Pb-Zn-Ag deposits.

Key ASX Announcements

5 March 2018 PFS – Calcine and Leach Testwork Complete – Strong Results 24 January 2018 Significant Thackaringa Drilling Program Complete 12 December 2017 Latest Thackaringa Project Results 22 November 2017 Multiple large base and precious metal targets found at Thackaringa Project 27 September 2017 Geophysical Survey and 3D Modelling Commences at Thackaringa

Heavy Mineral Sands Projects, Murray Basin NSW, VIC and South Australia

Major Expansion

During the reporting period, BPL under took a restructure and major expansion of the mineral sands portfolio. BPL now holds the largest tenement portfolio in the world class Murray Basin placing the Company in a strong position to take advantage of improving market conditions.

The expanded tenement footprint is underpinned by extensive data compilation and prospectivity analysis that has equipped BPL with a unique proprietary database comprising approximately 45,000 drill holes for 1.5 million metres of drilling. The database reflects a total exploration replacement value of approximately $650 million in today’s terms (drilling and assay only).

BPL is targeting the establishment of a sustainable pipeline of high grade, low tonnage deposits amendable to processing through low capex/low opex mobile plant equipment that could be deployed across the broader project area.

Joint Venture Dispute Resolved

Part of the tenement portfolio re-structure involved settlement of a dispute with former joint venture partner Relentless Resources Ltd. The partial divestment of the heavy mineral sands portfolio raised $3.1m cash and has put the Company in a strong financial position.

Maiden Resource Estimates

On 10 August 2017, BPL announced maiden Mineral Resource estimates for the Jaws and Gilligans HMS deposits. Jaws and Gilligans deposits are located in south-western New South Wales approximately 50km north of Mildura and 20km east of the Silver City Highway, which links Mildura to Broken Hill.


The Inferred Mineral Resources comprise a total of 113 Mt @ 1.8% HM and 3% slimes containing 2 Mt of HM with an assemblage of 10% total ilmenite, 10% zircon, 26% rutile and 21% magnetic leucoxene and 2% non-magnetic leucoxene including:

Table 2. Mineral Resource estimates for the Jaws and Gilligans deposits as reported at a 1% HM cut-off grade.

Figure 2. BPL Tenement Map


Subsequent to the end of the reporting period, the Company has applied for several additional tenements in the Broken Hill region. These application areas, prospective for base, precious and industrial minerals, are under review. At the date of this report the applications have not been granted.

Key ASX Announcements

4 October 2017 Murray Basin Heavy Mineral Sands Expansion Strategy Advances 28 September 2017 Completion of Legal Dispute Settlement 10 August 2017 Large Maiden Resource Estimate Murray Basin Mineral Sands 28 June 2017 Dispute Settled and HMS Expansion Plans Accelerate

The Company confirms it is not aware of any new information or data that materially affects the information included in the original market announcements, and, in the case of exploration targets, that all material assumptions and technical parameters underpinning the exploration targets in the relevant market announcements continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings presented have not been materially modified from the original market announcements.

3. Auditor’s Independence Declaration

We confirm that we have obtained the Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001 (Cth) which is set out on page 11.

4. Subsequent Events

The Directors are not aware of any other material events subsequent to the end of the period that have not been reflected in the financial statements.

Signed for and on behalf of the Board

Anthony (Trangie) Johnston

Managing Director

Matthew Hill

Director

Date: 16 March 2018

The Board of Directors

Broken Hill Prospecting Limited

GPO Box 1546

SYDNEY NSW 2001

Dear Board Members

Auditor’s Independence Declaration under section 307C of the Corporations Act 2001

As lead audit partner for the review of the financial statements of Broken Hill Prospecting 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.

Yours sincerely

Nexia Sydney Audit Pty Ltd

Andrew Hoffmann

Director

Dated: 16 March, 2018

Page 10

Page 11

Independent Auditor’s Review Report to the members of Broken Hill Prospecting Limited

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Broken Hill Prospecting Limited, which

comprises the consolidated statement of financial position as at 31 December 2017, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and the

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.

Directors’ Responsibility for the Half-Year Financial Report

The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for

such internal control as the directors determine is necessary to enable the preparation of the half-year financial

report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We

conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis

of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the

company'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 2001. As the auditor of Broken Hill Prospecting 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 2001.

Page 12

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 Broken Hill Prospecting Limited is not in accordance with the Corporations Act 2001, including:

i. giving a true and fair view of Group’s financial position as at 31 December 2017 and of its

performance for the period ended on that date; and

ii. complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and

the Corporations Regulations 2001.

Nexia Sydney Audit Pty Ltd.

Andrew Hoffmann

Director Sydney, NSW

16 March 2018


CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 31 DECEMBER 2017

6 months ended

31/12/2017 6 months ended

31/12/2016 A$ A$ Continuing Operations Interest received 12,844 14,768 Management fee 53,460 - Other income - 40,000 Auditors’ remuneration – auditing the accounts (20,826) (11,352) Marketing & promotion (21,021) (23,061) Employee expenses (198,621) (669,281) Accounting, secretarial, legal (112,471) (429,199) Consulting fees (150,917) (34,301) Administration expenses (91,532) (128,102) Directors’ fees (43,750) (54,595) Rent & outgoings (18,502) (4,400) Loss for the period before income tax (591,336) (1,299,523) Income tax benefit - - Loss for the period after income tax (591,336) (1,299,523) Other comprehensive income/(loss) Profit on disposal of interest in joint venture tenements

- 125,209

Discount on acquisition of controlled entity - 616,726 Net loss and other comprehensive income (591,336) (557,588) Net loss attributable to non-controlling interest - 153,603 Net loss attributable to members of the Parent entity

(591,336) (403,985)

Net Loss per share Basic loss per share from continuing operations (0.40) cents (0.28) cents Diluted loss per share from continuing operations

(0.30) cents (0.20) cents

This statement is to be read in conjunction with the accompanying notes and the previous year’s annual

financial statements.


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 31 DECEMBER 2017

Note Share

capital Option

reserve Accumulated

losses

Foreign currency

translation

Non-controlling

interest Total A$ A$ A$ A$ A$ A$ 2017 Equity at 1 July 2017 4 8,185,359 48,000 (2,402,186) (477) - 5,830,696 Transfer to accumulated losses - - (477) 477 - - Net loss and other comprehensive income - - (591,336) - - (591,336) Share based payments - 68,880 - - - 68,880 Movement in equity for the period - 68,880 (591,813) 477 - (522,456) Equity at 31 December 2017 8,185,359 116,880 (2,993,999) - - 5,308,240 2016 Equity at 1 July 2016 7,485,051 88,000 (3,328,161) (477) - 4,244,413 Net loss and other comprehensive income - - (403,985) - (153,603) (557,588) Proceeds from share capital issued 857,124 - - - - 857,124 Share issue costs (33,866) - - - - (33,866) Share options written off - (40,000) - - - (40,000) Share based payments 35,000 - - - - 35,000 Non-controlling interest contribution - - - - 179,042 179,042 Movement in equity for the period 858,258 (40,000) (403,985) - 25,439 439,712 Equity at 31 December 2016 8,343,309 48,000 (3,732,146) (477) 25,439 4,684,125

This statement is to be read in conjunction with the accompanying notes and the previous year’s annual financial statements.


CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2017

Note 31/12/2017 30/6/2017 A$ A$ Equity Share capital 2 8,185,359 8,185,359 Foreign currency translation - (477) Reserves 116,880 48,000 Accumulated losses (2,993,999) (2,402,186) Total equity attributable to members of the Parent entity 5,308,240 5,830,696 Non-controlling interest - - Total equity 5,308,240 5,830,696 Represented by: Current assets Cash and cash equivalents 2,878,715 802,732 Receivables and prepayments 4 84,740 3,632,601 Tax refund receivable 8,813 - Total current assets 2,972,268 4,435,333 Non-current assets Intangible assets 7 2,357,900 2,226,339 Security deposits 165,000 145,000 Total non-current assets 2,522,900 2,371,339 Total assets 5,495,168 6,806,672 Current liabilities Trade and other payables 147,011 754,612 Provisions 19,917 15,177 Tax payable - 186,187 Total current liabilities 166,928 955,976 Non-current liabilities Provisions 20,000 20,000 Total non-current liabilities 20,000 20,000 Total liabilities 186,928 975,976 Net Assets 5,308,240 5,830,696 Net tangible assets per share 2.00 cents 2.44 cents


Anthony (Trangie) Johnston Managing Director

Matthew Hill Director

Date: 16 March 2018



CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 31 DECEMBER 2017

Note 6 months ended

31/12/2017

6 months ended 31/12/2016

Cash flows from operating activities Interest received 12,844 14,768 Fees received 137,370 - Research & development tax incentive received 253,613 - Income tax paid (195,000) - Payments to suppliers and employees (1,081,282) (811,469) Net cash used in operating activities 3 (872,455) (796,701) Cash flows from investing activities Prospecting expenditure (131,562) (242,479) Security deposit paid (20,000) - Proceeds from disposal of interests in tenements 3,100,000 125,209 Net cash provided by / (used in) investing activities 2,948,438 (117,270) Cash flows from financing activities Share capital issued - 857,124 Shares issue costs - (33,866) Controlled entity share capital issued net of costs - 445,768 Net cash provided by financing activities - 1,269,026 Net increase in cash and cash equivalents held 2,075,983 355,055 Cash and cash equivalents at the beginning of the period 802,732 1,391,675 Cash and cash equivalents at the end of the period 2,878,715 1,746,730 Cash comprises: Cash at bank 2,878,715 1,746,730



NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2017

1. Summary of Significant Accounting Policies

General: Broken Hill Prospecting Limited (BPL) is a company incorporated in New Zealand and registered under the Companies Act 1993 and listed on the Australian Securities Exchange (ASX). BPL is a FMC Reporting Entity under the Financial Markets Conduct Act 2013 and the Financial Reporting Act 2013.

The principal activity of the company and its subsidiaries (the “group”) is minerals exploration.

The group consists of Broken Hill Prospecting Limited and its wholly-owned subsidiaries, Broken Hill Uranium Pty Ltd, Broken Hill Chemical Pty Limited, Broken Hill Minerals Pty Ltd and Murray Basin Minerals Pty Limited. Cobalt Blue Holdings Limited was also a subsidiary in prior period until it was spun off in February 2017.

These consolidated financial statements have been reviewed but not audited.

Reporting currency: The functional and presentation currency is Australian dollars.

Basis of preparation: These general purpose financial statements for the interim half-year reporting period ended 31 December 2017 have been prepared in accordance with NZ IAS-34, Interim Financial Reporting and should be read in conjunction with the accounting policies set out in the annual financial statements for the year ended 30 June 2017.

These accounts have been prepared in accordance with generally accepted accounting practice in New Zealand and therefore also comply with International Financial Reporting Standards. For this purpose, the company has designated itself as profit-oriented.

These financial statements also comply with the New Zealand Financial Markets Conduct Act 2013.

The accounting principles recognised as appropriate for the measurement and reporting of financial performance and financial position on an historical cost basis have been followed by the group.

New or amended Accounting Standards and Interpretations adopted: The group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.

Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

Seasonality of operations: The results are unaffected to any significant extent by seasonal factors.

Changes in accounting policies: There have been no changes in accounting policies during the period. The accounting policies and method of computation applied during the previous year were applied on a consistent basis during the current period.

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2017 (continued)


2. Share capital

31/12/2017 30/06/2017 A$ A$ Ordinary shares – 147,773,401 (30/06/2017: 147,773,401) 8,185,359 8,185,359 Movement in share capital There was no movement in share capital during the six months to 31 December 2017 Movement in Options No. of options A$ Options as at 30 June 2017 46,689,388 48,000 Movements: Employee options granted 2,400,000 68,880 Options as at 31 December 2017 49,089,388 116,880

All shares have equal voting rights and will share equally in dividends and surplus on winding up.

3. Reconciliation of operating cash flow & net income

6 months ended

31/12/2017

6 months ended

31/12/2016 A$ A$ Net loss attributable to members of parent entity (591,336) (403,985) Add non-cash items: Options forfeited - (40,000) Net loss attributable to non-controlling interest - (153,603) Profit on disposal of interests in tenements - (125,209) Discount on acquisition of controlled entity - (616,726) Share based payments 68,880 35,000 Controlled entity share based payments - 350,000 Changes in assets and liabilities: Decrease / (increase)in receivables and prepayments 447,861 (114,205) (Decrease) / increase in payables & accruals (602,860) 272,027 Decrease in tax payable (195,000) - Net cash used in operating activities (872,455) (796,701)



4. Prior period adjustment

The Company entered into an agreement for the sale of joint venture tenements on 26 June 2017. Per the agreement the purchaser Relentless Resources Limited (RRL) retained $800,000 towards expenditure on feasibility study on the tenements in the proposal. The amount receivable from RRL was the net value of $3,100,000 (gross receivable of $3,900,000 less the amount retained for expenditure on the tenements being $800,000). The Company had incorrectly recorded the gross receivable of $3,900,000 instead of $3,100,000. This has been corrected in the period ended 31 December 2017.

The aggregate effect of the correction of the prior period adjustment on the financial statements for the half year ended 31 December 2017:

30 June 2017

Previously stated Adjustment Restated

A$ A$ A$ Statement of Financial Position Accumulated losses (1,602,186) (800,000) (2,402,186) Receivables and prepayments 4,432,601 (800,000) 3,632,601

5. Commitments

Tenements: in order to maintain current rights of tenure to exploration and mining tenements, the Company is required to meet minimum expenditure requirements.

Expenditure requirements for tenements 31/12/2017 30/06/2017 A$ A$ Not later than 1 year 140,000 158,238 Later than 1 year but not later than 5 years 211,123 10,582 Total 351,123 168,820

6. Controlled entities

Interests in subsidiaries

Equity Held Country of Incorporation Name of Entity 2017 2016

Broken Hill Uranium Pty Ltd 100% 100% Australia Broken Hill Chemical Pty Ltd 100% 100% Australia Broken Hill Minerals Pty Ltd 100% 100% Australia Murray Basin Minerals Pty Ltd 100% - Australia Cobalt Blue Holdings Ltd - 77.78% Australia

All subsidiaries are direct subsidiaries of the company and have the same balance date.

7. Intangible assets

Prospecting costs and mining tenements 31/12/2017 30/06/2017 A$ A$ Balance at beginning of period 2,226,339 2,864,932 Exploration & evaluation expenses 131,561 239,774 Exploration costs impaired - (21,601) Less: Interest disposed - (856,766) Balance at end of period 2,357,900 2,226,339



8. Contingent liabilities

There were no contingent liabilities at 31 December 2017 (31 December 2016: $nil).

9. Seasonality of operations

The results are unaffected to any significant extent by seasonal factors.

10. Related parties

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. Amount paid to directors related entities for consulting and other services were both for the parent company and the group:



A$ A$ Winkara Pty Ltd – an entity related to D Geldard 9,800 9,000 Asia Pacific Capital Group – an entity related to M Hill 57,500 - 67,300 9,000

11. Segment Information

The Company has identified its operating segments based on internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers (‘CODM’)) in assessing performance and in determining the allocation of resources. The Company does not yet have any products or services from which it derives an income. During the half year to 31 December 2017, CODM has identified the Company as having one reportable segment, being the geographic location of assets in Australia. The CODM review EBITDA (earnings before interest, tax, depreciation and amortisation) on a monthly basis. The accounting policies adopted for internal reporting to the CODM are consistent with those adopted in the financial statements.

12. Going concern

The financial report has been prepared on a going concern basis. The Company has raised sufficient funds to ensure that expected financial obligations can continue to be met for longer than 12 months. The company expects that the majority of exploration and evaluation expenses in the next financial year will be funded from joint venture partners. The validity of the going concern assumption in the longer term is dependent on the success of these initiatives.

13. Subsequent Events

The Directors are not aware of any other material events subsequent to the end of the period that have not been reflected in the financial statements.


DIRECTORS’ STATEMENT

The Directors of the company declare that:

1. The financial statements and notes, as set out in the half yearly report to 31 December 2017:

(a) comply with New Zealand International Accounting Standard 34, Interim Financial Reporting, and

(b) give a true and fair view of the economic entity’s financial position as at 31 December 2017 and its performance and cash flows for the period ended on that date.

2. In the Directors’ opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable


Anthony (Trangie) Johnston Managing Director

Matthew Hill Director

Date: 16 March 2018

BROKEN HILL PROSPECTING LIMITED (Incorporated in New ...media.abnnewswire.net/media/en/docs/ASX-BPL-2A1071776.pdf · portfolio. BPL now holds the largest tenement portfolio in the

Documents