ALCHEMY RESOURCES LIMITED — Annual Report 2015

Sep 15, 2015

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ABN 17 124 444 122

ANNUAL REPORT

For the year ended 30 June 2015

Corporate Directory

Directors

Oscar Aamodt Non-Executive Chairman Sofia Bianchi Non-Executive Director Liza Carpene Non-Executive Director Lindsay Dudfield Non-Executive Director Anthony Ho Non-Executive Director

Company Secretary

Bernard Crawford

Registered & Principal Office

Suite 8, 8 Clive Street West Perth WA 6005 Telephone: (08) 9481 4400 Facsimile: (08) 9481 4404 Email: alchemy@alchemyresources.com.au Website: www.alchemyresources.com.au

Auditors

BDO Audit (WA) Pty Ltd 38 Station Street Subiaco WA 6008

Bankers

National Australia Bank 226 Main Street Osborne Park WA 6017

Share Registry

Security Transfer Registrars Pty Ltd 770 Canning Highway Applecross WA 6153 Telephone: (08) 9315 2333 Facsimile: (08) 9315 2233

Securities Exchange Listing

The Company is listed on the Australian Securities Exchange Ltd (“ASX”) Home Exchange: Perth, Western Australia

ASX Code: ALY

Alchemy Resources Limited Annual Report 2015

Contents

CHAIRMAN’S LETTER ...................................................................................................................... 2 KEY INVESTMENT HIGHLIGHTS ....................................................................................................... 3 REVIEW OF ACTIVITIES ................................................................................................................... 4 DIRECTORS’ REPORT ....................................................................................................................... 9 AUDITOR’S INDEPENDENCE STATEMENT ..................................................................................... 22 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ......... 23 CONSOLIDATED STATEMENT OF FINANCIAL POSITION ................................................................ 24 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ................................................................. 25 CONSOLIDATED STATEMENT OF CASH FLOWS ............................................................................. 26 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ............................................................ 27 DIRECTORS’ DECLARATION ........................................................................................................... 59 INDEPENDENT AUDITOR’S REPORT .............................................................................................. 60 ADDITIONAL SHAREHOLDER INFORMATION ................................................................................ 62 TENEMENT SCHEDULE .................................................................................................................. 64

Alchemy Resources Limited Annual Report 2015

1

Chairman’s Letter

Dear Shareholders

On behalf of the Board of Directors, I am pleased to present the Annual Report of Alchemy Resources Limited for the year ended 2015.

The past two years have been very challenging for the resources sector and for exploration companies such as Alchemy in particular. The combination of lower commodity prices and low levels of interest from investors has led to significant declines in the share prices of many companies and a corresponding decrease in exploration activity.

Against this background, I am pleased to report that despite these challenges Alchemy has been able to complete significant transactions with two of Australia’s leading mining companies, enabling exploration of the Bryah Basin Project to be accelerated while retaining a strong equity position if a high-value gold or base metal discovery is made.

Early in 2015 Alchemy signed a series of agreements with Northern Star Resources Ltd whereby Northern Star purchased the tenement containing the Hermes gold resource and adjacent tenements, and commenced a farm-in and joint venture to earn an interest in the Company’s landholding that covers the gold prospective part of the Bryah Basin Project. Northern Star is the owner of the nearby Plutonic gold processing plant and development of Hermes will increase the chances of other deposits in the Project area being mined.

This transaction with Northern Star complements the farm-in and joint venture agreement with Independence Group NL covering the base metal prospective areas in the Bryah Basin Project that commenced in 2014. Independence has undertaken initial geophysical surveys over and drill testing of the prospective Narracoota corridor and delineated high-order, multi-element anomalism over a 2.5km long zone in the Neptune area. Further work is required but early indications are encouraging that there may be chances for the discovery of a large base metal deposit.

As a result of these transactions Alchemy now has sufficient funds to focus on identification and exploration of additional high-value gold and base metal projects. Additionally, the Company continues to conserve cash through reduced overhead expenditure and ongoing attention to detailed budgeting.

A key element of the agreements with Northern Star is that Northern Star has expressed an intention to introduce Alchemy where possible to projects that do not fit the Northern Star business model. Furthermore Alchemy has engaged a leading corporate advisory group to assist in the identification of highvalue projects with the potential to create significant value for Alchemy and its shareholders, with a short list of suitable opportunities currently being prepared for consideration.

Alchemy’s future will depend largely on the results of our current joint ventures with Independence and Northern Star and success in the search for new opportunities.

The Board sincerely appreciates the commitment and focused efforts of the Alchemy team and we thank you, our shareholders, for your ongoing support during the period.

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Oscar Aamodt Chairman

Alchemy Resources Limited Annual Report 2015

2

Review of Activities

Key Investment Highlights

• Leading Australian base metal and gold producer Independence Group NL (ASX: IGO ) continues exploration to earn an interest in the base metal prospective part of the Project

• Multiple geochemical and geophysical base metal targets along +45km long prospective Narracoota-Karalundi corridor

• On-ground exploration includes electromagnetic surveys over and drill testing of base metal targets along prospective corridor

• Initial broad-spaced RC and diamond drilling commenced in the Neptune area where high-order, multi-element VMS pathfinder anomalism has been defined over a 2.5km strike-parallel zone

• In April 2015 leading Australian gold producer Northern Star Resources Limited (ASX: NST ) commenced a farm-in and joint venture of gold prospective landholding at Bryah Basin

• Northern Star focusing on discovery of additional high-grade gold resources - pipeline of gold targets identified through advances in understanding of key controls on mineralisation

• Shallow geochemical drilling along Seaborg - Central Bore, Flamel, Henry and Troy corridors returns multiple areas with gold anomalism

• Strong cash position to focus on identification and exploration of additional highvalue gold and base metal projects

• Experienced and proven Board and management team in place to enable judicious use of funds towards future exploration success

Alchemy Resources Limited Annual Report 2015

3

Review of Activities

Alchemy Resources Limited’s vision is to be a successful minerals explorer and subsequently a profitable producer of metals with a portfolio of quality assets with opportunity for further exploration growth.

Alchemy’s strategy for the next twelve months is to:

• create value for shareholders through joint venture-funded exploration for gold and base metal deposits within the Bryah Basin Project;

• unlock the gold and base metal potential and grow resources of the Project region through systematic exploration and targeted drilling campaigns; and

• expand the Company's position through strategic acquisition and exploration of quality advanced project opportunities.

BRYAH BASIN PROJECT

(100% or 80% Alchemy Resources Ltd)

Alchemy’s Bryah Basin Project comprises a 500km[2] ground package, located 130km NE of Meekatharra, Western Australia. The Project is located along strike and west of Sandfire Resources’ DeGrussa coppergold mine and its recent discovery of high-grade copper-gold mineralisation at the Monty prospect, and adjacent to Peak Hill where about 1Moz of gold has been mined from several deposits ( Figure 1 ). Alchemy holds 100% interest in the project with the exception of several tenements held in joint-venture (Alchemy 80%) with Fe Ltd.

Alchemy retains its interests in the base metal and gold prospective Bryah Basin Project through farm-in and joint venture agreements with Independence Group NL (“ Independence ”) and Northern Star Resources Ltd (“ Northern Star ”). Should a high-value base metal or gold discovery be made by Independence or Northern Star, Alchemy retains the right to participate as a 20% partner, an equity position that may in time deliver significant value to shareholders.

Alchemy’s joint venture partners are employing innovative geochemical and geophysical methods in conjunction with drill testing of priority targets to unlock the base metal and gold potential across the under-explored Bryah Basin Project. Over the past 12 months, exploration focus has continued to advance through:

• comprehensive geological reviews resulting in delineation of multiple geochemical and geophysical gold and base metal targets;

• systematic regolith geochemical sampling of interpreted gold mineralised corridors; and

• initial aircore, reverse circulation (RC) and diamond drill testing of priority geophysical and multielement volcanic massive sulphide (VMS) pathfinder anomalies.

Base Metals Exploration – Independence Group earning up to 80%

Leading Australian base metal and gold producer Independence Group NL is exploring and earning an interest (“ Independence JV ”) in the whole and part tenements that cover the base metal prospective part of the Bryah Basin Project. Under the terms of the Independence JV, Independence can earn up to 80% in Alchemy’s interests (excluding iron ore rights) through earn-in expenditure of $6M within five years, with Alchemy free-carried on further exploration to completion of a Pre-Feasibility Study and then carried on an interest-free deferred basis for a further $5M of Definitive Feasibility Study expenditure.

The Independence JV area contains more than 40km of strike extent of the Narracoota volcanic sequence, host to Sandfire Resources’ DeGrussa copper-gold deposit and its recent copper-gold discovery at the Monty prospect ( Figure 1 ), and is prospective for discovery of VMS-style copper-gold deposits.

Alchemy Resources Limited Annual Report 2015

4

Review of Activities

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Figure 1. Bryah Basin Project – Independence JV and Northern Star JV areas and gold and base metal prospects.

Since commencement of funding base metal exploration in 2014, Independence has completed an extensive ground electromagnetic (“ EM ”) survey as well as initial aircore drilling programs. The movingloop EM survey covered the Neptune and Churchill prospect areas where previous limited exploration has returned broad base metal anomalism and targets defined from single lines of ground EM.

The aircore drilling programs targeted the Neptune and Moby South areas as well as reconnaissance drilling over the southern part of the Independence JV area to follow-up base metal and/or gold geochemical anomalies from previous drilling, as well as to better define the base metal prospective horizons to further the understanding of the project stratigraphy and identify additional zones of anomalism.

In the Neptune area, aircore drilling has defined a 2.5km zone of strike-parallel, high-order, multi-element VMS pathfinder anomalism. This anomalism is localised within the underlying Karalundi Formation and on the prospective basal contact of the Narracoota Formation ( Figure 2 ), the interpreted ore horizon at DeGrussa.

The anomalism is also coincident with several linear moderate to strong EM conductors ( Figure 2 ), along with several potential basin-forming growth faults. Additional linear zones of base metal anomalism are localised higher in the stratigraphy in the Narracoota Formation.

The size and amplitude of the geochemical and geophysical anomalism at Neptune suggests that there is good potential for the discovery of a high-grade/tonnage copper-gold VMS deposit.

At Moby South, aircore drilling tested a previously delineated zone of gold anomalism that had not been assayed for multi-element geochemistry, as well as the Narracoota – Karalundi contact. A key result was the intersection of strong gold anomalism of 18m at 483ppb gold to the end-of-hole in 14BRAC046 associated with quartz veining and up to 10% disseminated pyrite.

Alchemy Resources Limited Annual Report 2015

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Review of Activities

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Figure 2: Bryah Basin Project – Neptune prospect – planned RC/diamond drilling over geochemical anomalies and EM conductors over gravity image.

The reconnaissance aircore drill traverses completed along the largely untested prospective Narracoota – Karalundi contact returned low order copper and VMS pathfinder anomalism. Gold anomalism was identified within strongly weathered sedimentary rocks close to the contact position. The drilling by Independence further defines the prospective contact position, which can now be tested for evidence of VMS mineralisation by systematic geochemistry, geophysics and drilling.

In June 2015, Independence commenced an initial, broad-spaced RC and diamond drilling program at the Neptune prospect ( Figure 2 ). The drilling is targeting mineralisation at the lower Narracoota – Karalundi contact at vertical depths of between 220 and 400m and is co-funded by a WA Government EIS grant.

The diamond drilling component of the program is providing important stratigraphic and structural information in an area with no previous cored-drilling. Follow-up down-hole EM will also provide constraints on any off-hole EM conductors in the near vicinity.

Independence is integrating results from the drilling programs with existing data sets to identify priority exploration targets along the prospective Narracoota volcanic sequence. Further phases of drilling and/or follow-up EM surveys will be undertaken on identified targets in the following period.

Alchemy Resources Limited Annual Report 2015

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Review of Activities

Gold Exploration – Northern Star Resources earning up to 80%

In April 2015, leading Australian gold producer Northern Star Resources Ltd commenced a Farm-in and Joint Venture (“ Northern Star JV ”) to explore Alchemy’s tenements covering the gold prospective part of the Bryah Basin Project ( Figure 1 ).

Under the terms of the Northern Star JV, Northern Star can earn up to 80% in Alchemy’s interests through earn-in expenditure of $1.2M within three years on the gold prospective tenements. Upon Northern Star fulfilling its earn-in expenditure, Alchemy’s interest is carried on an interest-free deferred basis to production, with Alchemy to repay Northern Star the deferred amount at the rate of 50% of its share of free cash flow from production following commencement of mining.

A pipeline of advanced to grass roots gold targets requiring further systematic exploration and targeted drilling has been identified over the gold prospective landholding in the Bryah Basin Project. The Northern Star JV will enable near-term exploration to drill test high-grade gold targets at the Wilgeena, Central Bore and Seaborg areas, and test historic gold intercepts and gold-in-soil anomalies along strike from these prospects and other high priority targets.

The Bryah Basin Project currently has Indicated Resources of 87,373 ounces of gold (1.36Mt @ 1.99g/t gold) at Wilgeena ( Table 1 ), and the immediate area shows the potential of the district to host large gold deposits. The mineralisation at Wilgeena is open at depth and further drilling has excellent potential to add to the known resource and expand the area of gold mineralisation outside of the Indicated Resource.

Table 1. Indicated Mineral Resource Estimate (0.5g/t cut-off) – October 2012

Deposit		Indicated
	Tonnes (Mt)	Au grade (g/t)	Au (oz)
Wilgeena	1.36	1.99	87,373

Regolith geochemical sampling at Seaborg, Flamel, Henry and Troy has previously delineated multiple drill targets in areas with thin transported cover. The Seaborg and Central Bore gold prospects are two high priority targets that have returned high-grade gold results. Based on drilling results to date, gold mineralisation at Seaborg and Central Bore remains open at depth and potentially along strike, and targeted deeper drilling is required.

Corporate Activities

In February 2015, Alchemy announced that it had purchased the Reserve Payment over the Three Rivers Gold Project (“ Three Rivers ”) held by Troy Resources Limited (ASX: TRY ) (“ Troy ”) via the issue of 10 million fully paid ordinary Alchemy shares. Three Rivers is a part of Alchemy’s Bryah Basin Project. In 2008 Alchemy and Troy entered into an Asset Sale Agreement whereby Alchemy acquired Troy's interest in Three Rivers for $2 million, with $1,310,000 paid at the time in cash and Alchemy shares, and the balance of $690,000 due when Alchemy makes an announcement that it has delineated gold reserves of not less than 50,000 ounces, or on the lodgement of a notice of intent to mine (" Reserve Payment ").

In March 2015, the Hermes Sale and Purchase Agreement (“ Hermes Agreement ”) with Northern Star was completed. Pursuant to the Hermes Agreement Northern Star purchased the tenement containing the Hermes gold resource and adjacent tenements for $1.45M cash and a royalty payable on refined gold recovered from the Hermes tenements. Northern Star also invested $500,000 in Alchemy in return for 33.33M fully paid ordinary shares in the Company, making Northern Star Alchemy’s largest shareholder

Alchemy Resources Limited Annual Report 2015

7

Review of Activities

with 14.57% of issued capital. Alchemy appointed Ms Liza Carpene to the Board of the Company as Northern Star’s nominee director.

Following completion of the Hermes Agreement, Alchemy has sufficient funds to focus on identification and exploration of additional high-value gold and base metal projects. A key element of the Hermes Agreement is that Northern Star has expressed an intention to introduce Alchemy, where possible, to projects which do not fit the Northern Star business model. In addition, Alchemy has engaged a leading corporate advisory group to assist in the identification of high-value projects with the potential to create significant value for Alchemy and its shareholders, with a short list of suitable opportunities currently being prepared for consideration.

Competent Person’s Statement

The information in this report that relates to Exploration Results is based on information compiled by Dr Kevin Cassidy, who is an employee and security holder of Alchemy Resources Limited and fairly represents this information. Dr Cassidy is a Fellow of the Australian Institute of Geoscientists and has sufficient experience of relevance to the styles of mineralisation and the types of deposits under consideration, and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (‘JORC 2012’). Dr Cassidy consents to the inclusion in this report of the matters based on information in the form and context in which it appears.

The information in this report that relates to Mineral Resources at the Wilgeena Gold Deposit is based on information compiled by Simon Coxhell, who is an employee of CoxsRocks Pty Ltd, a consultant to Alchemy Resources Limited, and fairly represents this information. Mr Coxhell is a Member of the Australian Institute of Geoscientists and the Australasian Institute of Mining and Metallurgy and has sufficient experience of relevance to the styles of mineralisation and the types of deposits under consideration, and to the activities undertaken, to qualify as a Competent Person as defined in the 2004 Edition of the Joint Ore Reserves Committee ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (‘JORC 2004’). Mr Coxhell consents to the inclusion in this report of the matters based on information in the form and context in which it appears.

Alchemy confirms that the Exploration Results and the Indicated Mineral Resource at the Wilgeena Gold Deposit were prepared and first disclosed under JORC 2004. These have not been updated since to comply with JORC 2012 on the basis that the information has not materially changed since last reported on 22 October 2012, and is not aware of any new information or data that materially affects the information included in that announcement and that all material assumptions and technical parameters underpinning the estimates in that announcement continue to apply and have not materially changed.

Alchemy Resources Limited Annual Report 2015

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Directors’ Report

Your directors present their report on the consolidated entity consisting of Alchemy Resources Limited and the entities it controlled at the end of, or during, the year ended 30 June 2015. Throughout the report, the consolidated entity is referred to as the Group.

Directors

The following persons were directors of Alchemy Resources Limited during the whole of the financial year and up to the date of this report unless noted otherwise:

Oscar Aamodt Sofia Bianchi Liza Carpene (appointed 18 March 2015) Lindsay Dudfield Anthony Ho

Principal activities

During the year the principal continuing activity of the Group was exploration for copper and gold. During the year there was no change in the nature of this activity.

Financial results

The consolidated loss of the Group after providing for income tax for the year ended 30 June 2015 was $4,776,086 (2014: $1,673,690).

Dividends

No dividends have been paid or declared since the start of the financial year. No recommendation for the payment of a dividend has been made by the Directors.

Operations and financial review

Information on the operations of the Group and its prospects is set out in the “Review of Activities” section in this Annual Report.

Exploration and evaluation costs totalling $494,947 (2014: $1,047,926) were expensed during the year in accordance with the Group’s accounting policy. The expensed exploration and evaluation costs primarily comprise previously capitalised costs in relation to relinquished tenements. The Group also recognised an impairment expense during the year of $3,958,878 (2014: $Nil) being the write-down of the Hermes and adjacent tenements sold to Northern Star from their carrying amount to their sale value.

The Group has continued to reduce its corporate, employee and administration expenses to $541,084 (2014: $696,277) mainly due to a reduction in staff through natural attrition, a reduction in non-executive directors’ fees and the re-negotiation of contract services.

As at 30 June 2015 the Group had net assets of $14,279,849 (2014: $18,380,744) including cash and cash equivalents of $1,821,765 (2014: $553,173).

Alchemy Resources Limited Annual Report 2015

9

Directors’ Report

Significant changes in the state of affairs

Significant changes in the state of affairs of the Group during the financial year were as follows:

Contributed equity increased by $650,000 (from $28,635,022 to $29,285,022) as a result of an issue of shares to Troy Resources Limited and a placement to Northern Star Resources Limited. Details of the changes in equity are disclosed in note 15 to the financial statements.

Alchemy Resources Limited announced in February 2015 that it had purchased the contingent Reserve Payment of $690,000 due to Troy Resources Limited via the issue of 10 million fully paid Alchemy Resources Limited shares (see note 20).

In March 2015 Alchemy Resources Limited completed a Sale and Purchase Agreement whereby the tenement containing the Hermes gold resource and adjacent tenements were sold to Northern Star Resources Limited (“Northern Star”) for a purchase price of $1,450,000, a placement of 33.33M ordinary fully paid Alchemy Resources Limited shares at a subscription price of $0.015 each to raise $500,000 and a 1% of Net Smelter Return Royalty payable on refined gold recovered from the Hermes tenements in excess of 70,000 ounces and up to 90,000 ounces (see note 20).

There were no other significant changes in the state of affairs of the Group during the financial year.

Events since the end of the financial year

There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors, to affect significantly the operations, the results of those operations, or the state of affairs of the Group in future financial years.

Likely developments and expected results of operations

The Directors are not aware of any developments that might have a significant effect on the operations of the Group in subsequent financial years not already disclosed in this report.

Environmental regulation

The Group is subject to significant environmental regulation in respect of its exploration activities. Tenements in Western Australia are granted subject to adherence to environmental conditions with strict controls on clearing, including a prohibition on the use of mechanised equipment or development without the approval of the relevant government agencies, and with rehabilitation required on completion of exploration activities. These regulations are controlled by the Department of Mines and Petroleum.

Alchemy Resources Limited conducts its exploration activities in an environmentally sensitive manner and the Group is not aware of any breach of statutory conditions or obligations.

Greenhouse gas and energy data reporting requirements

The Directors have considered compliance with both the Energy Efficiency Opportunity Act 2006 and the National Greenhouse and Energy Reporting Act 2007 which requires entities to report annual greenhouse gas emissions and energy use. The Directors have assessed that there are no current reporting requirements for the year ended 30 June 2015, however reporting requirements may change in the future.

Alchemy Resources Limited Annual Report 2015

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Directors’ Report

Information on directors

The following information is current as at the date of this report.

O AamodtIndependent Chair – non-executive (appointed 25 November 2011)	O AamodtIndependent Chair – non-executive (appointed 25 November 2011)	O AamodtIndependent Chair – non-executive (appointed 25 November 2011)
Experience and expertise	Mr Aamodt is a member of the Governance Institute of Australia and has more than 30 years’ experience in the administration and management of mining and exploration companies in Australia and overseas. Mr Aamodt was a Director of the highly successful ASX-listed mining house Independence Group NL from August 2005 until his resignation in July 2011. He had been Chairman since March 2009 until his resignation. Mr Aamodt also served as a Non-Executive Director and Chairman of Energy Metals Ltd from July 2005 until the completion of a friendly proportional cash takeover by China Guangdong Nuclear Power Corporation in December 2009.
Other current directorships	None
Former directorships in last 3 years	None
Special responsibilities	Chair of the Board Chair of the Remuneration Committee Chair of the Nomination Committee Member of the Audit Committee
Interests in shares and options	Ordinary Shares – Alchemy Resources Limited	4,420,201
S Bianchi BA, MBANon-executive director (appointed 1 March 2012)
Experience and expertise	Ms Bianchi is Portfolio Manager at BlueCrest Capital Management. Ms Bianchi served as Deputy Managing Director of the Emerging Africa Infrastructure Fund with Standard Bank London from 2002 to 2007. She has previously held a senior position with the European Bank for Reconstruction & Development. Ms Bianchi has extensive experience in banking, fund management and mergers & acquisitions. She holds a BA in Economics from George Washington University, Washington, DC and an MBA from Wharton School, University of Pennsylvania.
Other current directorships	None
Former directorships in last 3 years	None
Special responsibilities	None
Interests in shares and options	Ordinary Shares – Alchemy Resources Limited	Nil

Alchemy Resources Limited Annual Report 2015

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Directors’ Report

L CarpeneNon-executive director (appointed 18 March 2015)	L CarpeneNon-executive director (appointed 18 March 2015)	L CarpeneNon-executive director (appointed 18 March 2015)
Experience and expertise	Ms Carpene has worked in the resources industry for more than 19 years and is currently Company Secretary and Head of Business Administration Services for Northern Star Resources Ltd. In this role, Ms Carpene is part of the executive team responsible for acquiring the Plutonic, Kanowna Belle, Kundana and Jundee operations in 2014, and has significant experience in corporate administration, HR, legal, IT and stakeholder relations. Prior to Northern Star Resources Ltd., Ms Carpene was Company Secretary/CFO for listed explorers Venturex Resources and Newland Resources, and previously held various site and Perth based management roles with Great Central Mines, Normandy Mining, Newmont Australia, Agincourt Resources and Oxiana.
Other current directorships	None
Former directorships in last 3 years	None
Special responsibilities	None
Interests in shares and options	Ordinary Shares – Alchemy Resources Limited	Nil
L Dudfield BSc.Non-executive director (appointed 25 November 2011)
Experience and expertise	Mr Dudfield is a qualified geologist with over 32 years’ experience exploring for gold and base metals in Australia and abroad, including close involvement with a number of greenfields discoveries. He was a founding director of Jindalee Resources, Alchemy’s third largest shareholder, and is currently the Managing Director of Jindalee. Mr Dudfield is a member of the Australasian Institute of Mining and Metallurgy, the Australian Institute of Geoscientists, the Geological Society of Australia and the Society of Economic Geologists.
Other current directorships	Managing director of Jindalee Resources Limited (director since 1996) Non-executive director of Energy Metals Limited (director since 2004)
Former directorships in last 3 years	Extract Resources Limited (appointed 16 March 2012, resigned 25 June 2012)
Special responsibilities	Member of the Remuneration Committee Member of the Nomination Committee Member of the Audit Committee
Interests in shares and options	Ordinary Shares – Alchemy Resources Limited	28,985,706

Alchemy Resources Limited Annual Report 2015

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Directors’ Report

A HoIndependent non-executive director (appointed 25 November 2011)	A HoIndependent non-executive director (appointed 25 November 2011)	A HoIndependent non-executive director (appointed 25 November 2011)
Experience and expertise	Mr Ho is a Chartered Accountant and a partner in a consulting practice focused principally on corporate and financial services to listed companies. He has significant experience in the resource industry, having served as director and secretary of companies listed on ASX.
Other current directorships	Executive director of Newfield Resources Limited (director since 2011) Non-executive director of Australian Agricultural Projects Australia Limited (director since 2003) Non-executive director of Mustera Property Group Limited (director since 2014) Non-executive director of Glory Resources Limited (now de-listed) (director since 2014)
Former directorships in last 3 years	Non-executive director of Siburan Resources Limited (appointed 12 November 2009, resigned 25 November 2014) Dragon Energy Limited (appointed 18 December 2008, resigned 13 June 2012) Audalia Resources Limited (appointed 27 August 2010, resigned 17 August 2011)
Special responsibilities	Chair of the Audit Committee Member of the Remuneration Committee Member of the Nomination Committee
Interests in shares and options	Ordinary Shares – Alchemy Resources Limited	Nil

Company secretary

Mr Bernard Crawford was appointed Company Secretary on 1 December 2010. Mr Crawford is a Chartered Accountant with over 20 years’ experience in the resources industry in Australia and overseas. He has held various positions in finance and management with NYSE, TSX and ASX listed companies.

Meetings of directors

The number of meetings of the Company’s board of directors and of each board committee held during the year ended 30 June 2015, and the numbers of meetings attended by each director were:

	Board	of		Audit	Nomination	Nomination	Remuneration	Remuneration
	Directors		Committee		Committee		Committee
	A	B	A	B	A	A	A	B
O Aamodt	8	8	2	2	1	1	1	1
S Bianchi	5	8	*	*	*	*	*	*
L Carpene
(appointed 18 March 2015)	2	2	*	*	*	*	*	*
L Dudfield	8	8	2	2	1	1	1	1
A Ho	5	8	1	2	1	1	1	1

A = Number of meetings attended

B = Number of meetings held during the time the director held office or was a member of the committee during the year

• = Not a member of the relevant committee

Alchemy Resources Limited Annual Report 2015

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Directors’ Report

Retirement, election and continuation in office of directors

Ms Carpene was appointed to the Board on 18 March 2015 and by virtue of clause 11.12 of the Company’s Constitution will stand for re-election at the Annual General Meeting.

Ms Bianchi and Mr Dudfield, being directors retiring by rotation who, being eligible, may offer themselves for re-election at the Annual General Meeting.

REMUNERATION REPORT (Audited)

The directors present the Alchemy Resources Limited 2015 remuneration report, outlining key aspects of our remuneration policy and framework, and remuneration awarded this year.

The report contains the following sections:

• (a) Key management personnel covered in this report

• (b) Remuneration governance and the use of remuneration consultants

• (c) Executive remuneration policy and framework

• (d) Relationship between remuneration and the Group’s performance

• (e) Non-executive director remuneration policy

• (f) Voting and comments made at the Company’s 2014 Annual General Meeting

• (g) Details of remuneration

• (h) Service agreements

• (i) Details of share-based compensation and bonuses

• (j) Equity instruments held by key management personnel

• (k) Loans to key management personnel

• (l) Other transactions with key management personnel

(a) Key management personnel covered in this report

Non-executive and executive directors (see pages 11 to 13 for details about each director)	Non-executive and executive directors (see pages 11 to 13 for details about each director)
O Aamodt	Chair – Non-executive
S Bianchi	Non-executive director
L Carpene	Non-executive director
L Dudfield	Non-executive director
A Ho	Non-executive director

Other key management personnel

Name	Position
K Cassidy	Chief Executive Officer
B Crawford	Company Secretary and Chief Financial Officer

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Directors’ Report

(b) Remuneration governance and the use of remuneration consultants

The Remuneration Committee is a committee of the Board. It is primarily responsible for making recommendations to the Board on:

• the over-arching executive remuneration framework;

• operation of the incentive plans which apply to executive directors and senior executives (the executive team), including key performance indicators and performance hurdles;

• remuneration levels of executives; and

• non-executive director fees.

Their objective is to ensure that remuneration policies and structures are fair and competitive and aligned with the long-term interests of the company.

In addition, all matters of remuneration will continue to be in accordance with the Corporations Act requirements, especially with regard to related party transactions. That is, none of the directors participate in any deliberations regarding their own remuneration or related issues.

Independent external advice is sought from remuneration consultants when required, however no advice has been sought during the period ended 30 June 2015.

The Corporate Governance Statement provides further information on the role of the Remuneration Committee.

(c) Executive remuneration policy and framework

In determining executive remuneration, the Board aims to ensure that remuneration practices are:

• competitive and reasonable, enabling the Company to attract and retain key talent;

• aligned to the Company’s strategic and business objectives and the creation of shareholder value;

• transparent and easily understood; and

• acceptable to shareholders.

All executives receive consulting fees or a salary, part of which may be taken as superannuation, and from time to time, options. The Board reviews executive packages annually by reference to the executive’s performance and comparable information from industry sectors and other listed companies in similar industries.

All remuneration paid to specified executives is valued at the cost to the Group and expensed. Options are valued using a Black-Scholes option pricing model.

Alchemy Resources Limited Annual Report 2015

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Directors’ Report

(d) Relationship between remuneration and the Group’s performance

Emoluments of Directors are set by reference to payments made by other companies of similar size and industry, and by reference to the skills and experience of directors. Fees paid to directors are not linked to the performance of the Group. This policy may change once the exploration phase is complete and the Group is generating revenue. At present the existing remuneration policy is not impacted by the Group’s performance including earnings and changes in shareholder wealth (e.g. changes in share price).

The Board has not set short term performance indicators, such as movements in the Company’s share price, for the determination of director emoluments as the Board believes this may encourage performance which is not in the long term interests of the Company and its shareholders. The Board has structured its remuneration arrangements in such a way it believes is in the best interests of building shareholder wealth in the longer term. The Board believes participation in the Company’s Incentive Option Scheme motivates key management and executives with the long term interests of shareholders.

(e) Non-executive director remuneration policy

On appointment to the Board, all non-executive directors enter into a service agreement with the Company in the form of a letter of appointment. The letter summarises the Board policies and terms, including remuneration relevant to the office of director.

The Board policy is to remunerate non-executive directors at commercial market rates for comparable companies for their time, commitment and responsibilities. Non-executive directors receive a Board fee but do not receive fees for chairing or participating on Board committees. Board members are allocated superannuation guarantee contributions as required by law, and do not receive any other retirement benefits. From time to time, some individuals may choose to sacrifice their salary or consulting fees to increase payments towards superannuation.

The maximum annual aggregate directors’ fee pool limit is $250,000 and was approved by shareholders at the Annual General Meeting held on 22 July 2008.

Fees for non-executive directors are not linked to the performance of the Group. Non-executive directors’ remuneration may also include an incentive portion consisting of options, subject to approval by shareholders.

(f) Voting and comments made at the Company’s 2014 Annual General Meeting

Alchemy Resources Limited received more than 87% of “yes” votes on its remuneration report for the 2014 financial year. The Company did not receive any specific feedback at the AGM or throughout the year on its remuneration practices.

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Directors’ Report

(g) Details of remuneration

The following tables show details of the remuneration received by the Group’s key management personnel for the current and previous financial year.

2015 Name Directors O Aamodt S Bianchi L Carpene L Dudfield A Ho Executives K Cassidy B Crawford Totals 2014 Name Directors O Aamodt S Bianchi L Dudfield A Ho Executives K Cassidy B Crawford Totals

Short-term benefits Post- employment benefits Share- based payment % of Remuneration to total from Salary and Fees $ Cash Bonus $ Non- Monetary Benefit $ Super- annuation $ Options $ Total $ Options % Bonus % 25,000 - - - - 25,000 - - - - - - - - - - - - - - - - - - - - - - - - - - 19,998 - - - - 19,998 - - 147,807 - - 12,160 16,794 176,761 11% - 112,800 - - - 2,519 115,319 2% - 305,605 - - 12,160 19,313 337,078 Short-term benefits Post- employment benefits Share- based payment % of Remuneration to total from Salary and Fees $ Cash Bonus $ Non- Monetary Benefit $ Super- annuation $ Options $ Total $ Options % Bonus % 25,000 - - - - 25,000 - - - - - - - - - - - - - - - - - - 19,998 - - - - 19,998 - - 192,000 - - 17,760 - 209,760 - - 100,800 - - - - 100,800 - - 337,798 - - 17,760 - 355,558

(h) Service agreements

On appointment to the Board, all non-executive directors enter into a service agreement with the Company in the form of a letter of appointment. The letter summarises the Board policies and terms of appointment, including compensation relevant to the office of director. Remuneration and other terms of employment for other members of key management personnel are formalised in service agreements as summarised below.

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Directors’ Report

K Cassidy, Chief Executive Officer

Dr Cassidy is remunerated pursuant to an ongoing Executive Employment Agreement. Due to reduced hours during the financial year Dr Cassidy was paid a salary and superannuation of $140,160 for the year ended 30 June 2015.The notice period (other than for gross misconduct) is three months.

B Crawford, Chief Financial Officer and Company Secretary

Mr Crawford is remunerated pursuant to the terms of a Consultancy Agreement to fulfil the duties of the Company Secretarial and Chief Financial Officer. Fees paid during the year totalled $112,800 and were charged at usual commercial rates on a daily basis. The agreement may be terminated by either party on three months’ written notice.

(i) Details of share-based compensation and bonuses

Options

Options over shares in Alchemy Resources Limited are granted under the Incentive Option Scheme. Participation in the scheme and any vesting criteria are at the Board’s discretion and no individual has a contractual right to participate in the scheme or to receive any guaranteed benefits. Any options issued to directors of the Company are subject to shareholder approval.

Details of options over ordinary shares in the Company provided as remuneration to senior management are set out below. All options are fully vested on grant date.

Option	Grant date	Vesting and	Expiry date	Exercise	Value per	% Vested
series		exercise		price	option at
		date			grant date
10	23 Sep 2014	23 Sep 2014	31 Oct 2017	$0.10	$0.009458	100%
11	23 Sep 2014	23 Sep 2014	31 Oct 2017	$0.20	$0.007336	100%

The fair value of options at grant date are independently determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option.

Further information on the fair value of share options and assumptions is set out in note 24 to the financial statements.

(j) Equity instruments held by key management personnel

The following tables detail the number of fully paid ordinary shares and options over ordinary shares in the Company that were held during the financial year and the previous financial year by key management personnel of the Group, including their close family members and entities related to them.

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Directors’ Report

Options

2015 Executives K Cassidy B Crawford 2014 Executives K Cassidy B Crawford	Opening Balance 1 July Granted as remuneration Options exercised Net change other Balance at 30 June Vested but not exercisable Vested and exercisable Vested during the year 400,000 2,000,000 - (400,000) 2,000,000 - 2,000,000 2,000,000 200,000 300,000 - (200,000) 300,000 - 300,000 300,000
	600,000 2,300,000 - (600,000) 2,300,000 - 2,300,000 2,300,000
	400,000 - - - 400,000 - 400,000 - 200,000 - - - 200,000 - 200,000 -
	600,000 - - - 600,000 - 600,000 -

During the year, no ordinary shares in the Company were provided as a result of the exercise of remuneration options.

Shareholdings

2015 Directors O Aamodt L Dudfield Executives K Cassidy B Crawford 2014 Directors O Aamodt L Dudfield Executives K Cassidy B Crawford	Opening Balance 1 July Granted as remuneration Options exercised Net change other Balance at 30 June 4,420,201 - - - 4,420,201 28,687,482 - - 298,224 28,985,706 500,000 - - - 500,000 900,000 - - - 900,000
	34,507,683 - - 298,224 34,805,907
	280,134 - - 4,140,067 4,420,201 18,114,907 - - 10,572,575 28,687,482 100,000 - - 400,000 500,000 600,000 - - 300,000 900,000
	19,095,041 - - 15,412,642 34,507,683

As at the date of this report the shareholdings of key management personnel were the same as at 30 June 2015.

(k) Loans to key management personnel

There were no loans to individuals or members of key management personal during the financial year or the previous financial year.

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Directors’ Report

(l) Other transactions with key management personnel

There were no other transactions with key management personnel during the financial year or the previous financial year.

End of Remuneration Report (Audited)

Shares under option

Unissued ordinary shares of the Company under option at the date of this report are as follows:

Date options granted Expiry Date Issue price of shares 23 September 2014 31 October 2017 $0.10 23 September 2014 31 October 2017 $0.20	Number under option 1,500,000 1,500,000
	3,000,000

No option holder has any right under the options to participate in any other share issue of the Company or any other entity.

Shares issued on the exercise of options

There were no shares issued on the exercise of options during the year and up to the date of this report.

Corporate Governance Statement

The Company’s 2015 Corporate Governance Statement has been released as a separate document and is located on the Company’s website at http://www.alchemyresources.com.au/index.php/corporatelist?id=25

Proceedings on Behalf of the Consolidated Entity

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.

Indemnification and Insurance of Directors and Officers

During the financial year, the Company paid a premium to insure the directors and officers of the consolidated entity against any liability incurred as a director or officer to the extent permitted by the Corporations Act 2001 . The contract of insurance prohibits the disclosure of the nature of the liabilities covered or the amount of the premium paid.

The Group has not entered into any agreement with its current auditors indemnifying them against claims by a third party arising from their position as auditor.

Non-Audit Services

The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the Company and/or the Group are important.

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Directors’ Report

Details of the amounts paid or payable to the auditor (BDO Audit (WA) Pty Ltd) for audit and non-audit services provided during the year are set out in note 19. During the year ended 30 June 2015 no fees were paid or were payable for non-audit services provided by the auditor of the consolidated entity (2014: $Nil).

The Board of Directors has considered the position and is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 . The Directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

• all non-audit services have been reviewed by the Board to ensure they do not impact the impartiality and objectivity of the auditor; and

• none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants .

Auditor’s Independence Declaration

The copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 22.

Signed in accordance with a resolution of the Directors

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Oscar Aamodt Chairman Perth, 16 September 2015

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Tel: +61 8 6382 4600 38 Station Street Fax: +61 8 6382 4601 Subiaco, WA 6008 www.bdo.com.au PO Box 700 West Perth WA 6872 Australia

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DECLARATION OF INDEPENDENCE BY DEAN JUST TO THE DIRECTORS OF ALCHEMY RESOURCES LIMITED

As lead auditor of Alchemy Resources Limited for the year ended 30 June 2015, I declare that, to the best of my knowledge and belief, there have been:

1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

2. No contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Alchemy Resources Limited and the entities it controlled during the period.

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Dean Just Director

BDO Audit (WA) Pty Ltd

Perth, 16 September 2015

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, 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.

22

Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended 30 June 2015

Notes Continuing operations Other income 3 Corporate expense 3 Employee expense 3 Administration expense 3 Impairment expense 9 Exploration expense Finance costs Loss from continuing operations before income tax Income tax benefit 5 Loss after income tax for the period attributable to the owners of Alchemy Resources Limited Other comprehensive income Other comprehensive income for the period, net of tax Total comprehensive loss for the period attributable to the owners of Alchemy Resources Limited Loss per share attributable to the owners of Alchemy Resources Limited - basic loss per share 18 - diluted loss per share 18	Consolidated 2015 2014 $ $ 74,273 40,289 (232,913) (195,519) (110,096) (163,525) (198,075) (337,233) (3,958,878) - (494,947) (1,047,926) (3,172) (5,886) (4,923,808) (1,709,800) 147,722 36,110
	(4,776,086) (1,673,690) - -
	- -
	(4,776,086) (1,673,690)
	Cents Cents per share per share 2.41 1.00 n/a n/a

This Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes

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Consolidated Statement of Financial Position At 30 June 2015

Notes ASSETS Current Assets Cash and cash equivalents 6 Trade and other receivables 7 Other current assets 8 Total Current Assets Non-Current Assets Exploration and evaluation 9 Property, plant and equipment 10 Total Non-Current Assets TOTAL ASSETS LIABILITIES Current Liabilities Trade and other payables 12 Provisions 13 Interest bearing liabilities 14 Total Current Liabilities Non-Current Liabilities Interest bearing liabilities 14 Total Non-Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity 15 Reserves 16 Accumulated losses 17 TOTAL EQUITY	Consolidated 2015 2014 $ $ 1,821,765 553,173 42,620 61,270 5,744 5,757
	1,870,129 620,200
	12,453,879 17,809,030 52,590 150,906
	12,506,469 17,959,936
	14,376,598 18,580,136
	71,434 117,877 25,315 32,800 - 38,077
	96,749 188,754
	- 10,638
	- 10,638
	96,749 199,392
	14,279,849 18,380,744
	29,285,022 28,635,022 444,647 419,456 (15,449,820) (10,673,734)
	14,279,849 18,380,744

This Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes

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Consolidated Statement of Changes in Equity For the year ended 30 June 2015

At 1 July 2013 Loss for the period Other comprehensive income Total comprehensive loss for the period net of tax Transactions with owners in their capacity as owners Issue of shares Transaction costs of issuing shares At 30 June 2014 At 1 July 2014 Loss for the period Other comprehensive income Total comprehensive loss for the period net of tax Transactions with owners in their capacity as owners Issue of shares Share based payments At 30 June 2015	Attributable to equity holders of the entity
	Issued Capital Option Reserves Accumulated Losses Total Equity $ $ $ $ 27,932,586 419,456 (9,000,044) 19,351,998
	- - (1,673,690) (1,673,690) - - - -
	- - (1,673,690) (1,673,690) 715,044 - - 715,044 (12,608) - - (12,608)
	28,635,022 419,456 (10,673,734) 18,380,744
	Attributable to equity holders of the entity
	Issued Capital Option Reserves Accumulated Losses Total Equity $ $ $ $ 28,635,022 419,456 (10,673,734) 18,380,744
	- - (4,776,086) (4,776,086) - - - -
	- - (4,776,086) (4,776,086) 650,000 - - 650,000 - 25,191 - 25,191
	29,285,022 444,647 (15,449,820) 14,279,849

This Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes

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Consolidated Statement of Cash Flows For the year ended 30 June 2015

Notes Cash flows from operating activities Payments to suppliers and employees Interest income Interest expense Research and development tax rebate received Net cash flows from/(used in) operating activities 25 Cash flows from investing activities Proceeds from sale of prospects Proceeds from sale of plant & equipment Payment for exploration assets Net cash flows from/(used in) investing activities Cash flows from financing activities Proceeds from issue of shares Payments for capital raising Payment of finance lease Net cash flows from/(used in) financing activities Net increase / (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period 6	Consolidated 2015 2014 $ $ (449,560) (544,613) 12,267 45,144 (3,172) (5,886) 183,832 -
	(256,633) (505,355)
	1,450,000 - 60,000 908 (436,060) (1,238,960)
	1,073,940 (1,238,052)
	500,000 715,044 - (12,608) (48,715) (47,434)
	451,285 655,002
	1,268,592 (1,088,405) 553,173 1,641,578
	1,821,765 553,173

This Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes

Alchemy Resources Limited Annual Report 2015

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

1. Corporate Information

The consolidated financial report of Alchemy Resources Limited for the year ended 30 June 2015 was authorised for issue in accordance with a resolution of the directors on 16 September 2015.

Alchemy Resources Limited is a for profit company incorporated in Australia and limited by shares which are publicly traded on the Australian Securities Exchange. The nature of the operation and principal activities of the consolidated entity are described in the attached Directors’ Report.

The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below and have been applied consistently to all periods presented in the consolidated financial statements and by all entities in the consolidated entity.

2. Statement of Compliance

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001 .

Compliance with IFRS

The consolidated financial statements of Alchemy Resources Limited also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

New and amended accounting standards and interpretations adopted by the Group

The following standards and interpretations relevant to the operations of the Group and effective from 1 July 2014 have been adopted. The adoption of these standards did not have any impact on the current period or any prior period and is not likely to affect future periods.

• AASB 2013-3: Amendments to AASB 136 – Recoverable Amount Disclosures for Non-Financial Assets

• AASB 2013-4: Amendments to Australian Accounting Standards – Novation of Derivatives and Continuation of Hedge Accounting

• AASB 2014-1: Amendments to Australian Accounting Standards

New accounting standards and interpretations

The following new and amended accounting standards and interpretations have been published but are not mandatory for the current financial year. The Group has decided against early adoption of these standards, and has not yet determined the potential impact on the financial statements from the adoption of these standards and interpretations.

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

New or revised requirement	Application date of standard	Application date for Group
AASB 9:Financial Instruments AASB 9 replaces AASB 139: Financial Instruments: Recognition and Measurement. The objective of this Standard is to establish principles for the financial reporting of financial assets and financial liabilities that will present relevant and useful information to users of financial statements for their assessment of the amounts, timing and uncertainty of an entity’s future cash flows.	1 Jan 2018	1 Jul 2018
AASB 15:Revenue from Contracts with Customers AASB 15 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. AASB 15 will supersede the current revenue recognition guidance including AASB 118: Revenue, AASB 111: _Construction Contracts_and the related Interpretations when it becomes effective.	1 Jan 2018	1 Jul 2018

(a) Basis of measurement

Historical Cost Convention

These consolidated financial statements have been prepared under the historical cost convention, except where stated.

Critical Accounting Estimates

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed where appropriate.

(b) Going Concern

These consolidated financial statements have been prepared on the going concern basis, which contemplates continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.

(c) Principles of consolidation

Subsidiaries

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the Company as at 30 June 2015 and the results of all subsidiaries for the year then ended. The Company and its subsidiaries together are referred to in this financial report as the Group or the consolidated entity.

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its investment with the entity and has the ability to affect those returns through its power to direct the activities of the entity.

The acquisition method of accounting is used to account for business combinations by the Group.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit or loss and other comprehensive income, consolidated statement of financial position and the consolidated statement of changes in equity respectively.

Joint arrangements

Under AASB 11: Joint Arrangements investments in joint arrangements are classified as either joint operations or joint ventures. The classification depends on the contractual rights and obligations of each investor, rather than the legal structure of the joint arrangement.

A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Those parties are called joint operators. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Those parties are called joint venturers.

(d) Critical accounting judgements and key sources of estimation uncertainty

The application of accounting policies requires the use of judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are recognised in the period in which the estimate is revised if it affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Share-based payment transactions

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using a Black-Scholes option pricing model.

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

Exploration and evaluation costs carried forward

The recoverability of the carrying amount of exploration and evaluation costs carried forward has been reviewed by the directors. In conducting the review, after impairment indicators are identified, the recoverable amount has been assessed by reference to the higher of “fair value less costs to sell” and, if applicable, “value in use”.

In determining value in use, future cash flows are based on estimates of ore reserves and mineral resources for which there is a high degree of confidence of economic extraction, production and sales levels, future commodity prices, future capital and production costs and future exchange rates.

Variations to any of these estimates, and timing thereof, could result in significant changes to the expected future cash flows which in turn could result in significant changes to the impairment test results, which in turn could impact future financial results.

(e) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors of Alchemy Resources Limited.

(f) Functional and presentation of currency

The consolidated financial statements are presented in Australian dollars, which is the Group’s functional and presentation currency.

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss, except when they are deferred in equity as qualifying cash flow hedges and qualifying net investment hedges or are attributable to part of the net investment in a foreign operation.

Foreign exchange gains and losses that relate to borrowings are presented in the statement of profit or loss and other comprehensive income, within finance costs. All other foreign exchange gains and losses are presented in the statement of profit or loss and other comprehensive income on a net basis within other income or other expenses.

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss.

(g) Revenue recognition

Revenue is measured at fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances, rebates and amounts collected on behalf of third parties. Interest income is recognised as it accrues.

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

(h) Income tax

The income tax expense or benefit for the period is the tax payable on the current period's taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Alchemy Resources Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation. As a consequence, these entities are taxed as a single entity and the deferred tax assets and liabilities of these entities are set off in the consolidated financial statements. Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

(i) Leases

Leases of property, plant and equipment where the Group, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases (note 14). Finance leases are capitalised at the lease's inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in other short-term and long-term payables.

Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

finance leases is depreciated over the asset's useful life or over the shorter of the asset's useful life and the lease term if there is no reasonable certainty that the Group will obtain ownership at the end of the lease term.

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Group as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease.

(j) Impairment of assets

Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.

The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

(k) Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of six months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the statement of financial position.

(l) Trade and other receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. Trade receivables are due for settlement within 30 days. They are presented as current assets unless collection is not expected for more than 12 months after the reporting date.

Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off by reducing the carrying amount directly. A provision for doubtful receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.

Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial. The amount of the provision is recognised in the profit or loss.

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

(m) Exploration and evaluation expenditure

Exploration and evaluation expenditure, including the costs of acquiring licences and permits, are capitalised as exploration and evaluation assets on an area of interest basis. Costs incurred before the Group has obtained the legal rights to explore an area are recognised in the statement of profit or loss and other comprehensive income.

Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either:

• (i) the expenditures are expected to be recouped through successful development and exploitation or from sale of the area of interest; or

• (ii) activities in the area of interest have not at the reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing.

Exploration and evaluation assets are assessed for impairment if (i) sufficient data exists to determine technical feasibility and commercial viability, and (ii) facts and circumstances suggest that the carrying amount exceeds the recoverable amount. For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating units to which the exploration activity relates. The cash generating unit shall not be larger than the area of interest.

Once the technical feasibility and commercial viability of the extraction of minerals in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mineral property and development assets within property, plant and equipment.

When an area of interest is abandoned or the directors decide that it is not commercial, any accumulated costs in respect of that area are written off in the financial period the decision is made.

(n) Property, plant and equipment

Property, plant and equipment is stated at historical cost less accumulated depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. The cost of selfconstructed assets includes the cost of materials, direct labour, the initial estimate, where relevant, of the costs of dismantling and removing the items and restoring the site on which they are located, and an appropriate proportion of production overheads.

Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.

Depreciation is calculated using the straight-line method to allocate their cost, net of their residual values, over their estimated useful lives, or in the case of certain leased plant and equipment, the shorter lease term as follows:

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

�	Motor vehicles	5 – 7 years
�	Office and computer equipment	3 – 5 years
�	Furniture, fittings and equipment	3 – 5 years

The assets residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These are included in profit or loss. When re-valued assets are sold, it is Group policy to transfer any amounts included in other reserves in respect of those assets to retained earnings.

(o) Trade and other payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date.

(p) Employee benefits

Short–term Obligations

Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees’ services up to the end of reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liability for annual leave and accumulating sick leave is recognised in the provision for employee benefits. Liabilities for non-accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable. All other short-term employee benefit obligations are presented as payables.

The obligations are presented as current liabilities in the statement of financial position if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting date, regardless of when the actual settlement is expected to occur.

Other Long-term Obligations

The liability for long service leave and annual leave which is not expected to be settled within 12 months after the end of the period in which the employees render the related service is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the end of the reporting period on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

Share-Based Payments

The Group provides benefits to employees of the Company in the form of share options. The fair value of options granted is recognised as an employee benefits expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the employees become unconditionally entitled to the options. The fair value of the options granted is measured using a Black-Scholes option pricing model, taking into account the terms and conditions upon which the options were granted.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, on a straight line basis over the vesting period. The amount recognised as an expense is adjusted to reflect the actual number that vest.

The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share.

Termination Benefits

Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value. No termination benefits, other than accrued benefits and entitlements, were paid during the period.

(q) Equity

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

(r) Earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing:

• the profit attributable to owners of the Group, excluding any costs of servicing equity other than ordinary shares

• by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year and excluding treasury shares.

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:

• the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and

• the weighted average number of additional ordinary shares that would have been outstanding

• assuming the conversion of all dilutive potential ordinary shares.

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

(s) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the statement of financial position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.

(t) Financial assets

Financial assets are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale investments, as appropriate. When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. The Group determines the classification of its financial assets after initial recognition and, when allowed and appropriate, re-evaluates this designation at each financial year-end. All regular way purchases and sales of financial assets are recognised on the trade date i.e. the date that the Group commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets under contracts that require delivery of the assets within the period established generally by regulation or convention in the marketplace.

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

3. Revenue and Expenses Other income Finance income – banks Other Total other income Expenses Corporate expense Company secretary fees Other corporate expenses Total corporate expense Employee expense Employee benefit and director compensation expense Expense of share based payments Training & development costs Other employee expenses Total employee expense Administration expense Depreciation Occupancy Loss / (gain) on sale of assets Other administration expenses Total administration expense	Consolidated 2015 2014 $ $ 20,944 28,016 53,329 12,273
	74,273 40,289
	112,800 101,209 120,113 94,310
	232,913 195,519
	79,164 136,695 25,191 - - 989 5,741 25,841
	110,096 163,525
	57,866 91,782 61,455 125,140 (19,550) 2,911 98,304 117,400
	198,075 337,233

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

4. Segment information

The Group operates in one geographical segment, being Western Australia and in one operating category, being mineral exploration. Therefore, information reported to the chief operating decision maker (the Board of Alchemy Resources Limited) for the purposes of resource allocation and performance assessment is focused on mineral exploration within Western Australia.

2015 Segment income Other income Total income Segment expense Exploration expense Net other costs Profit / (loss) before amortisation and depreciation Amortisation and depreciation Profit / (loss) before income tax benefits R&D concession Total comprehensive income / (loss) for the period Segment assets and liabilities Assets Liabilities Net assets 2014 Segment income Other income Total income Segment expense Exploration expense Net other costs Profit / (loss) before amortisation and depreciation Amortisation and depreciation Profit / (loss) before income tax benefits R&D concession Total comprehensive income / (loss) for the period Segment assets and liabilities Assets Liabilities Net assets	Mineral Exploration Unallocated Consolidation $ $ $ 53,398 20,875 74,273
	53,398 20,875 74,273
	(4,453,825) - (4,453,825) (2,041) (484,349) (486,390)
	(4,402,468) (463,474) (4,865,942) - (57,866) (57,866)
	(4,402,468) (521,340) (4,923,808) 147,722 - 147,722
	(4,254,746) (521,340) (4,776,086)
	12,459,958 1,916,640 14,376,598 2,883 93,866 96,749
	12,457,075 1,822,774 14,279,849
	14,282 26,007 40,289
	14,282 26,007 40,289
	(1,047,926) - (1,047,926) (5,017) (605,364) (610,381)
	(1,038,661) (579,357) (1,618,018) - (91,782) (91,782)
	(1,038,661) (671,139) (1,709,800) 36,110 - 36,110
	(1,002,551) (671,139) (1,673,690)
	17,860,348 719,788 18,580,136 16,718 182,674 199,392
	17,843,630 537,114 18,380,744

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

5. Income Tax Major components of income tax expense are as follows: Consolidated Statement of Profit or Loss and Other Comprehensive Income Current income tax - Current income tax charge - R&D tax concession Deferred income tax - Utilisation of prior year tax losses Income tax expense / (benefit) reported in the Consolidated Statement of Profit or Loss and Other Comprehensive Income A reconciliation of income tax expense / (benefit) applicable to accounting profit / (loss) before income tax at the statutory income tax rate to income tax expense / (benefit) at the Company’s effective income tax is as follows: Accounting loss from continuing operations before income tax At the statutory income tax rate of 30% (2014: 30%) Add - Non-deductible expenses - Share based payment - Tax loss not brought to account as a deferred tax asset - Capital raising costs - R&D tax concession Income tax expense / (benefit) reported in the Consolidated Statement of Profit or Loss and Other Comprehensive Income	Consolidated 2015 2014 $ $ 115,289 - (147,722) (36,110) (115,289) -
	(147,722) (36,110)
	(4,923,808) (1,709,800)
	(1,477,142) (512,940) - 61 7,557 - 1,488,138 576,099 (18,553) (63,220) (147,722) (36,110)
	(147,722) (36,110)

Tax Consolidation

The Company and its 100% owned controlled entities have formed a tax consolidated group. The head entity of the tax consolidated group is Alchemy Resources Limited.

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

5. Income Tax (continued) Deferred income tax Recognised on the statement of financial position Deferred income tax at the end of the reporting period relates to the following: Deferred income tax liabilities - Capitalised expenditure deductible for tax purposes - Trade and other receivables Deferred income tax assets - Trade and other payables - Employee benefits - Capitalised expenditure non-deductible for tax purposes - Tax losses Net deferred tax asset / (liability) Deferred tax assets have not been recognised in respect of the following items: - Capital raising costs - Tax losses Potential unrecognised tax benefit at 30% (2014: 30%)	Consolidated 2015 2014 $ $ 3,736,163 5,342,709 5,085 2,562
	3,741,248 5,345,271
	(7,761) (5,778) (7,595) (9,840) (3,280) (1,335) (3,722,612) (5,328,318)
	- -
	17,793 38,627 4,580,389 3,092,251
	4,598,182 3,130,878

The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the Group can utilise benefits.

The utilisation of tax losses is dependent on the Group satisfying the continuity of ownership test or the same business test at the time the tax losses are applied against taxable income.

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

6. Cash and cash equivalents Cash at bank and on hand Deposits at call	Consolidated 2015 2014 $ $ 306,965 405,273 1,514,800 147,900
	1,821,765 553,173

The weighted average interest rate for the year was 2.07% (2014: 2.97%).

The Group’s exposure to interest rate risk is set out in note 23. The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of cash and cash equivalents mentioned above.

7. Trade and other receivables

Current GST receivable Other	9,002 17,623 33,618 43,647
	42,260 61,270

The amounts held in trade and other receivables do not contain impaired assets and are not past due. Based on the credit history of these trade and other receivables, it is expected that these amounts will be received when due. The Group’s financial risk management objectives and policies are set out in note 23.

Due to the short term nature of these receivables their carrying value is assumed to approximate their fair value.

8. Other current assets

Prepayments Exploration and evaluation Opening balance Carrying value of tenements sold Impairment expense Exploration expenditure incurred during the year Exploration expenditure written off Closing balance	5,744 5,757
	5,744 5,757
	17,809,030 17,650,082 (1,450,000) - (3,958,878) - 548,674 1,206,874 (494,947) (1,047,926)
	12,453,879 17,809,030

9. Exploration and evaluation

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

9. Exploration and evaluation (continued)

The recoverability of the carrying amount of deferred exploration and evaluation expenditure is dependent on the successful development and commercial exploitation, or alternatively the sale, of the respective areas of interest.

The carrying value of tenements sold represents the value previously recognised as exploration assets in the Group’s Consolidated Statement of Financial Position for the Hermes and adjacent tenements sold in March 2015. The impairment expense represents the write-down of the Hermes and adjacent tenements from their carrying amount to their sale value.

10. Property, plant and equipment Motor vehicle - At cost - Accumulated depreciation Total motor vehicle Mobile accommodation - At cost - Accumulated depreciation Total mobile accommodation Office equipment - At cost - Accumulated depreciation Total office equipment Computer equipment - At cost - Accumulated depreciation Total computer equipment Field equipment - At cost - Accumulated depreciation Total field equipment Total property, plant and equipment	Consolidated 2015 2014 $ $ 70,096 192,559 (57,593) (119,837)
	12,503 72,722
	164,296 164,296 (124,685) (101,214)
	39,611 63,082
	6,968 6,968 (6,968) (6,045)
	- 923
	83,581 83,581 (83,105) (80,627)
	476 2,954
	82,138 82,138 (82,138) (70,913)
	- 11,225
	52,590 150,906

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42

Notes to the Consolidated Financial Statements For the year ended 30 June 2015

10. Property, plant and equipment (continued)

Movement in carrying amounts

Movements in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the year:

2015 Consolidated: Balance at the beginning of the year Depreciation expense Disposals Carrying amount at the end of the year 2014 Consolidated: Balance at the beginning of the year Depreciation expense Disposals Carrying amount at the end of the year	Motor Mobile Office Computer Field Total Vehicles Accomm. Equipment Equipment Equipment $ $ $ $ $ $ 72,722 63,082 923 2,954 11,225 150,906 (19,769) (23,471) (923) (2,478) (11,225) (57,866) (40,450) - - - - (40,450)
	12,503 39,611 - 476 - 52,590
	Motor Mobile Office Computer Field Total Vehicles Accomm. Equipment Equipment Equipment $ $ $ $ $ $ 106,675 86,553 9,181 13,758 30,340 246,507 (33,953) (23,471) (4,439) (10,804) (19,115) (91,782) - - (3,819) - - (3,819)
	72,722 63,082 923 2,954 11,225 150,906

11 . Subsidiaries

Details of the Company’s subsidiaries are as follows:

	Principal	Country of	Proportion of	Proportion of
	Activity	Incorporation	Ownership
Subsidiary			2015	2014
Alchemy Resources (Murchison) Pty Ltd	Exploration	Australia	100%	100%
Alchemy Resources (Three Rivers) Pty Ltd	Exploration	Australia	100%	100%
Goldtribe Corporation Pty Ltd	Exploration	Australia	100%	100%

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

		Consolidated
		2015	2014
		$	$
12.	Trade and other payables
	Trade creditors and accruals	71,434	117,877

Trade creditors are non-interest bearing and are normally settled on 30 day terms. The Group’s financial risk management objectives and policies are set out in note 23. Due to the short term nature of these payables their carrying value is assumed to approximate their fair value.

13. Provisions

Current

Employee benefits Interest bearing liabilities Current Secured Lease liabilities Non-current Secured Lease liabilities	25,315 32,800
	- 38,077
	- 10,638

14. Interest bearing liabilities

Details of the Group’s exposure to risk arising from current and non-current borrowings are set out in note 23.

a) Assets pledged as security

Lease liabilities are effectively secured as the rights to hire purchase assets, recognised in the financial statements and revert to the lessor in the event of default.

The carrying amounts of assets pledged as security for current and non-current borrowings are:

Hire purchase
Motor vehicle	-	28,239
Term deposit	-	61,000
Total assets pledged as security	-	89,239
b) Fair value
The carrying amounts and fair values of borrowings at reporting date
On statement of financial position
Non-traded financial liabilities
Lease liabilities	-	48,715

None of the classes are readily traded on an organised market in standardised form. Fair value is inclusive of costs which would be incurred on settlement of a liability.

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

14. Interest bearing liabilities (continued)

c) Interest rate risk exposure

The following table sets out the Group’s exposure to interest rate risk, including the contractual repricing dates and the effective weighted average interest rate by maturity periods.

2015 Lease Lease liabilities 2014 Lease Lease liabilities	Fixed Interest rates 1 Year or Less Over 1 Yr to 2 Yrs Over 2Yrs to 3 Yrs Over 3 Yrs to 4 Yrs - - - -
	- - - - Fixed Interest rates 1 Year or Less Over 1 Yr to 2 Yrs Over 2Yrs to 3 Yrs Over 3 Yrs to 4 Yrs 1,859 333 - -
	7.96% 7.12% - -

The Group has provided a bank guarantee amounting to $14,800, secured by a term deposit to the landlord for the rental of the Company’s office premises.

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45

Notes to the Consolidated Financial Statements For the year ended 30 June 2015

15. Contributed equity a) Share capital Ordinary shares fully paid b) Movements in ordinary shares on issue Balance at 1 July 2013 Non-renounceable issue to shareholders Share issue costs Balance at 30 June 2014 Issue of shares to Troy Resources Limited Placement to Northern Star Resources Limited Balance at 30 June 2015	Consolidated 2015 2014 $ $ 29,285,022 28,635,022
	Consolidated Number $ 156,852,955 27,932,586 28,601,746 715,044 - (12,608)
	185,454,701 28,635,022
	10,000,000 150,000 33,333,334 500,000
	228,788,035 29,285,022

Ordinary shares have the right to receive dividends as declared, and in the event of winding up the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid upon on shares held.

Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.

c) Movements in options on issue Balance at beginning of the financial year Options granted Options expired Balance at end of the financial year	Consolidated 2015 2014 Number Number 975,000 975,000 3,000,000 - (975,000) -
	3,000,000 975,000

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

		Consolidated	Consolidated
		2015		2014
		$		$
16.	Reserves
	Options Reserve
	Opening balance	419,456		419,456
	Options issued	25,191		-
	Balance at the end of the financial year	444,647		419,456
	The options reserve is used to recognise the fair value of options issued to employees and
	contractors.
17.	Accumulated losses
	Balance at the beginning of the financial year	(10,673,734)	(9,000,044)
	Net loss attributable to members	(4,776,086)	(1,673,690)
	Balance at the end of the financial year	(15,449,820)	(10,673,734)
18.	Earnings per share
	- basic loss per share (cents per share)	2.41		1.00
	- diluted loss per share	n/a		n/a
	The following reflects the income and share data used in the
	calculations of basic and diluted loss per share:
		$		$
	Profits / (losses) used in calculating basic and diluted
	earnings per share	(4,776,086)	(1,673,690)
		2015		2014
		Number	Number
	Weighted average number of ordinary shares used in
	calculating basic and diluted loss per share	198,212,692	166,726,434
		Consolidated
		2015		2014
19.	Auditor’s remuneration	$		$
	Audit services
	BDO Audit (WA) Pty Ltd
	- Audit and review of the financial reports	23,292		22,215
	Total remuneration	23,292		22,215

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47

Notes to the Consolidated Financial Statements For the year ended 30 June 2015

20. Contingent assets and liabilities

The Group had contingent liabilities at 30 June 2015 in respect of :

Guarantees

For information about guarantees given by the Group and the parent entity, refer to note 14.

Future success and royalty payments

In 2008 Alchemy Resources Limited (“Alchemy”) and Troy Resources Limited (“Troy”) entered into an Asset Sale Agreement whereby Alchemy acquired Troy's interest in the Three Rivers Gold Project (“Three Rivers”) for $2 million, with $1,310,000 paid at the time in cash and Alchemy shares and the balance of $690,000 due when Alchemy makes an announcement that it has delineated gold reserves of not less than 50,000 ounces, or on the lodgement of a notice of intent to mine ("Reserve Payment").

In March 2015, Alchemy completed the purchase of the Reserve Payment from Troy via the issue of 10 million fully paid Alchemy shares.

Troy retains a 1% Net Smelter Return Royalty on gold production from 50,000 ounces to 70,000 ounces from Three Rivers and a $0.75 per tonne royalty on iron ore produced from the landholding.

The Group had contingent assets at 30 June 2015 in respect of :

Future royalty payments

In March 2015 Alchemy completed a Sale and Purchase Agreement with Northern Star Resources Limited (“Northern Star”) whereby the tenement containing the Hermes gold resource and adjacent tenements were acquired by Northern Star for a purchase price of $1,450,000 and a placement of 33.33M ordinary fully paid Alchemy shares to Northern Star at a subscription price of $0.015 each to raise $500,000.

In addition, Alchemy retains a 1% of Net Smelter Return Royalty payable on refined gold recovered from the Hermes tenements in excess of 70,000 ounces and up to 90,000 ounces.

There are no other material contingent assets or liabilities as at 30 June 2015.

21. Events occurring after the reporting period

There have been no events subsequent to reporting date which are sufficiently material to warrant disclosure.

22. Commitments

In order to maintain an interest in the exploration tenements in which the Group is involved, the Group is committed to meet the conditions under which the tenements were granted. The timing and amount of exploration expenditure commitments and obligations of the Group are subject to the minimum expenditure commitments required as per the Mining Act 1978 , as amended, and may vary significantly from the forecast based upon the results of the work performed which will determine the prospectivity of the relevant area of interest. Currently, the minimum expenditure commitments for the granted tenements are $1,206,620 (2014: $1,184,740) per annum.

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

22. Commitments (continued)

Commitments in relation to the lease of office premises are payable as follows:

	Consolidated
	2015	2014
	$	$
Within 1 year	13,449	12,137
Later than one year but not later than five years	-	-
Later than five years	-	-
	13,449	12,137
Commitments in relation to lease liabilities are payable as follows:
Within 1 Year	-	40,004
Later than one year but not later than five years	-	10,971
Later than five years	-	-
Less: Unexpired hire purchase charges	-	2,260
Recognised as a liability	-	48,715
Representing hire purchase liabilities:
Current	-	38,077
Non-current	-	10,638
	-	48,715

23. Financial risk management objectives and policies

Financial Risk Management

Overview

The Group has exposure to the following risks from their use of financial instruments:

• Interest rate risk

• Credit risk

• Liquidity risk

• Commodity risk

This note presents information about the Group’s exposure to each of the above risks, their objectives, policies and processes for measuring and managing risk, and the management of capital.

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.

Risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities.

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

23. Financial risk management objectives and policies (continued)

The Audit Committee oversees how management monitors compliance with the Group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.

The Group’s principal financial instruments are cash, short-term deposits, receivables and payables.

Interest rate risk

Interest rate risk is the risk that the value of a financial instrument of cash flows associated with the instrument will fluctuate due to changes in market interest rates. Interest rate risk arises from fluctuations in interest bearing financial assets and liabilities that the Group uses.

Interest bearing assets comprise cash and cash equivalents which are considered to be short-term liquid assets. It is the Group’s policy to settle trade payables within the credit terms allowed and therefore not incur interest on overdue balances.

The following table set out the carrying amount, by maturity, of the financial instruments that are exposed to interest rate risk:

Consolidated – 2015 Financial assets Cash and cash equivalents Trade and other receivables Weighted average interest rate Financial liabilities Trade and other payables Weighted average interest rate	Fixed interest rate maturing in Floating interest rate 1 Year or less Over 1 to 5 years More than 5 years Non interest bearing Total $ $ $ $ $ $ 301,309 1,514,800 - - 5,656 1,821,765 - - - - 42,620 42,620
	301,309 1,514,800 - - 48,276 1,864,385
	1.95% 2.24% - - - - - - - - 71,434 71,434
	- - - - 71,434 71,434
	- - - - - -

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

23. Financial risk management objectives and policies (continued)

Consolidated – 2014 Financial assets Cash and cash equivalents Trade and other receivables Weighted average interest rate Financial liabilities Trade and other payables Interest bearing liabilities Weighted average interest rate	Fixed interest rate maturing in Floating interest rate 1 Year or less Over 1 to 5 years More than 5 years Non interest bearing Total $ $ $ $ $ $ 400,318 147,900 - - 4,955 553,173 - - - - 61,270 61,270
	400,318 147,900 - - 66,225 614,443
	2.37% 3.53% - - - - - - - - 117,877 117,877 - 38,077 10,638 - - 48,715
	- 38,077 10,638 - 117,877 166,592
	- 8.75% 7.12% - - -

Fair value sensitivity analysis for fixed rate instruments

The Group does not account for any fixed rate financial assets or liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.

Cash flow sensitivity analysis for variable rate instruments

A change of 100 basis points in interest rates at the reporting date would have increased / (decreased) equity and profit or loss by the amounts shown below:

Consolidated - 2015 Carrying value at period end $ Financial assets 1,821,765 Cash and cash equivalents Cash flow sensitivity (net) Consolidated – 2014 Carrying value at period end $ Financial assets Cash and cash equivalents 553,173 Cash flow sensitivity (net)	Profit or loss Equity 100 bp increase 100 bp decrease 100 bp increase 100 bp decrease $ $ $ $ 10,117 (10,117) 10,117 (10,117)
	10,117 (10,117) 10,117 (10,117)
	Profit or loss Equity 100 bp increase 100 bp decrease 100 bp increase 100 bp decrease $ $ $ $ 9,437 (9,437) 9,437 (9,437)
	9,437 (9,437) 9,437 (9,437)

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

23. Financial risk management objectives and policies (continued)

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers and investment securities. The Group trades only with recognised, creditworthy third parties. It is the Group policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant. The maximum exposure to credit risk is the carry value of the receivable, net of any provision for doubtful debts.

With respect to credit risk arising from the other financial assets of the Group, which comprise cash and cash equivalents, the Group’s exposure to credit risk arises from default of the counter party, with a maximum exposure equal to the carrying amount of these instruments. This risk is minimised by reviewing term deposit accounts from time to time with approved banks of a sufficient credit rating which is AA and above.

Exposure to credit risk

The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s maximum exposure to credit risk at the reporting date was:

Cash and cash equivalents Trade & other receivables	Consolidated 2015 2014 $ $ 1,821,765 553,173 42,620 61,270
	1,864,385 614,443

Foreign currency risk

The Group’s exposure to foreign currency risk is minimal at this stage of its operations.

Commodity price risk

The Group’s exposure to commodity price risk is minimal at this stage of its operations.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

The Group’s objective is to maintain a balance between continuity of funding and flexibility. The following are the contractual maturities of financial liabilities:

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

23. Financial risk management objectives and policies (continued)

Consolidated - 2015 Trade and other payables Receivables Consolidated - 2014 Trade and other payables Interest bearing liabilities Receivables	Carrying amount Contractual cash flows 6 months or less $ $ $ 71,434 - 71,434
	71,434 - 71,434
	42,620 - 42,620
	42,620 - 42,620
	Carrying amount Contractual cash flows 6 months or less $ $ $ 117,877 - 117,877 48,715 50,975 19,038
	166,592 50,975 136,915
	61,270 61,270 61,270
	61,270 61,270 61,270

Fair value of financial assets and liabilities

The fair value of cash and cash equivalents and non-interest bearing financial assets and financial liabilities of the Group is equal to their carrying value.

Capital risk management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. The management of the Group’s capital is performed by the Board.

The capital structure of the Group consists of net debt (trade payables and provisions detailed in notes 12, 13, & 14 offset by cash and bank balances) and equity of the Group (comprising issued capital, reserves, offset by accumulated losses detailed in notes 15, 16 & 17).

The Group is not subject to any externally imposed capital requirements. None of the Group’s entities are subject to externally imposed capital requirements.

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

24. Share based payments

Share option plan

The Group has an Incentive Option Scheme (“Scheme”) for executives and employees of the Group. In accordance with the provisions of the Scheme, as approved by shareholders at a previous annual general meeting, executives and employees may be granted options at the discretion of the directors.

Each share option converts into one ordinary share of Alchemy Resources Limited on exercise. No amounts are paid or are payable by the recipient on receipt of the option. The options carry neither rights of dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.

Options issued to directors are not issued under the Scheme but are subject to approval by shareholders.

The following share-based payment arrangements were in existence during the reporting period:

Option	Number	Grant date	Expiry date	Vesting date	Exercise	Fair value at
series					price	grant date
9 (1)	975,000	29 Mar 2012	30 Apr 2015	Immediate	$0.40	$0.048980
10	1,500,000	23 Sep 2014	31 Oct 2017	Immediate	$0.10	$0.009458
11	1,500,000	23 Sep 2014	31 Oct 2017	Immediate	$0.20	$0.007336

(1) These options expired during the financial year

Fair value of share options granted during the year

The fair value of share options at grant date are determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the share price at grant date, the expected price volatility of the underlying share and the risk free rate for the term of the option. The fair value of share options issued during the year was $25,191 (2014:$Nil)

The model inputs for options granted during the year ended 30 June 2015 are as follows:

Inputs	Issue 10	Issue 11
Exercise Price	$0.10	$0.20
Grant date	23 Sep 2014	23 Sep 2014
Expiry date	31 Oct 2017	31 Oct 2017
Share price at grant date	$0.023	$0.023
Expected price volatility	124.9%	124.9%
Expected dividend yield	0%	0%
Risk-free interest rate	2.67%	2.67%

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

24. Share based payments (continued)

Movements in share options during the year

Movement in the number of share options held by directors, employees and advisors:

Outstanding at the beginning of the year Granted and vested during the year Expired during the year Outstanding at the end of the year Exercisable at the end of the year	2015 2014 No. of options Weighted average exercise price $ No. of options Weighted average exercise price $ 975,000 0.40 975,000 0.40 3,000,000 0.15 - - (975,000) 0.40 - -
	3,000,000 0.15 975,000 0.40
	3,000,000 0.15 975,000 0.40

The weighted average remaining contractual life of share options outstanding at the end of the year was 2.34 years (2014: 0.83 years).

Share options outstanding at the end of the year

Share options issued and outstanding at the end of the year have the following exercise prices:

Expiry Date Exercise price $ 30 April 2015 0.40 31 October 2017 0.10 31 October 2017 0.20	2015 No. 2014 No. - 975,000 1,500,000 - 1,500,000 -
	3,000,000 975,000

Share based payments

During the year Alchemy Resources Limited purchased the contingent Reserve Payment of $690,000 due to Troy Resources Limited via the issue of 10 million fully paid Alchemy Resources Limited shares (see notes 15 and 20).

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

25. Reconciliation of cash flows from operating activities Cash flows from operating activities Loss for the period Non-cash flows in profit/(loss): - Depreciation - Loss / (gain) on sale of assets - Share based remuneration - Exploration expenditure write-off Changes in assets and liabilities - Decrease/(increase) in trade receivables - Decrease/(increase) in prepayments - Increase/(decrease) in trade creditors and accruals - Increase/(decrease) in provisions Net cash used in operating activities

Consolidated 2015 2014 $ $ (4,776,086) (1,673,690) 57,866 91,782 (19,550) 2,911 25,191 - 4,453,825 1,047,926 31,305 18,291 14 3,992 (27,326) 5,958 (1,872) (2,525)

(256,633) (505,355)

Non-cash investing and financing activities

There were no non-cash investing and financing activities during the year.

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

26. Related party disclosure

Class Country of incorporation a) Parent entity Alchemy Resources Limited Ord Australia b) Subsidiaries Alchemy Resources (Murchison) Pty Ltd Ord Australia Alchemy Resources (Three Rivers) Pty Ltd Ord Australia Goldtribe Corporation Pty Ltd Ord Australia c) Key management personnel compensation Short-term employee benefits Post-employment benefits Share-based payments	Investment at cost Investment at cost 2015 2014 $ $ - - 100 100 100 100 1 1 2015 2014 $ $ 305,605 337,798 12,160 17,760 19,313 -
	337,078 355,558

Detailed remuneration disclosures are provided in the remuneration report on pages 14 to 20.

27. Parent entity disclosure

Financial Performance Profit / (loss) for the year Other comprehensive income Total comprehensive profit / (loss)	2015 2014 $ $ 610,470 (1,701,927) - -
	610,470 (1,701,927)

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Notes to the Consolidated Financial Statements For the year ended 30 June 2015

27. Parent entity disclosure (continued)

Financial Position ASSETS Current assets Non-current assets TOTAL ASSETS LIABILITIES Current liabilities Non-current liabilities TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated losses TOTAL EQUITY	2015 2014 $ $ 1,842,355 547,186
	54,877 153,193
	1,897,232 700,379
	93,866 172,036
	- 10,638
	93,866 182,674
	1,803,366 517,705
	29,285,022 28,635,022 444,647 419,456 (27,926,303) (28,536,773)
	1,803,366 517,705

No guarantees have been entered into by Alchemy Resources Limited in relation to the debts of its subsidiaries.

Alchemy Resources Limited had no expenditure commitments as at 30 June 2015 other than the commitment in relation to the lease of office premises as disclosed in note 22.

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Directors’ Declaration

The directors of Alchemy Resources Limited declare that:

• (a) in the directors’ opinion the financial statements and notes set out on pages 23 to 58 and the Remuneration Report in the Directors’ Report are in accordance with the Corporations Act 2001 , including :

• (i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015 and of its performance, for the financial year ended on that date; and

• (ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations), Corporations Regulations 2001 and mandatory professional reporting requirements.

• (b) the financial statements also comply with International Financial Reporting Standards as disclosed in note 2; and

• (c) there are reasonable grounds to believe that the consolidated entity will be able to pay its debts as and when they become due and payable.

The directors have been given the declarations required by Section 295A of the Corporations Act 2001 by the chief executive officer and chief financial officer for the financial year ended 30 June 2015.

Signed in accordance with a resolution of the directors.

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Oscar Aamodt Chairman

Perth, Western Australia 16 September 2015

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Tel: +61 8 6382 4600 38 Station Street Fax: +61 8 6382 4601 Subiaco, WA 6008 www.bdo.com.au PO Box 700 West Perth WA 6872 Australia

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INDEPENDENT AUDITOR’S REPORT

To the members of Alchemy Resources Limited

Report on the Financial Report

We have audited the accompanying financial report of Alchemy Resources Limited, which comprises the consolidated statement of financial position as at 30 June 2015, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation of the 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 financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 2, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Stat ements, that the financial statements comply with International Financial Reporting Standards .

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, 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.

60

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Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of Alchemy Resources Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.

Opinion

In our opinion:

• (a) the financial report of Alchemy Resources Limited is in accordance with the Corporations Act 2001 , including:

• (i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015 and of its performance for the year ended on that date; and

• (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001 ; and

• (b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 2.

Report on the Remuneration Report

We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2015. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Opinion

In our opinion, the Remuneration Report of Alchemy Resources Limited for the year ended 30 June 2015 complies with section 300A of the Corporations Act 2001 .

BDO Audit (WA) Pty Ltd

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Dean Just Director

Perth, 16 September 2015

61

Additional Shareholders Information As at 1 September 2015

Additional information required by the Australian Securities Exchange Limited and not shown elsewhere in this report is as follows.

1. Distribution of Holders of Equity Securities

Analysis of number of equity security holders by size of holding:

Shares Held 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over Total	Shareholders 131 209 191 581 206
	1,318

The number of holders of less than a marketable parcel of ordinary fully paid shares is 739.

2. Substantial Shareholders

Substantial shareholders (i.e. shareholders who hold 5% or more of the issued capital):

	Number of	Percentage
	shares	held
Northern Star Resources Limited	33,333,334	14.57
Citicorp Nominees Pty Limited	26,944,077	11.78
Jindalee Resources Limited	17,469,759	7.64

3. Voting Rights

(a) Ordinary Shares

Each shareholder is entitled to receive notice of and attend and vote at general meetings of the Company. At a general meeting, every shareholder present in person or by proxy, representative of attorney will have one vote on a show of hands and on a poll, one vote for each share held.

(b) Options

No voting rights

4. Quoted Securities on Issue

The Company has 228,788,035 quoted shares on issue. No options on issue by the Company are quoted.

5. On-Market Buy Back

There is no current on-market buy back.

6. Unquoted Equity Securities

nquoted Equity Securities
					Number	Number of
					on issue	holders
Options exercisable at $0.10	on or before	31	October	2017	1,500,000	4
Options exercisable at $0.20	on or before	31	October	2017	1,500,000	4

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Additional Shareholders Information As at 1 September 2015

7. Twenty Largest Holders of Quoted Ordinary Shares

Shareholder Northern Star Resources Limited Citicorp Nominees Pty Ltd Jindalee Resources Limited LG Dudfield Pension Fund Troy Resources Limited Grandor Pty Ltd Cardinal Management Services Pty Ltd Mrs Stella Emily Downey Dr Colin Rose Rossdale Superannuation Pty Ltd Mr Richard Barry Canaccord Capital (Australia) Pty Ltd Wythenshawe Pty Ltd Kale Capital Corporation Ltd Bouta Pty Ltd Wavet Fund No 2 Pty Ltd KE & PW Holdings Pty Ltd Warramboo Holdings Pty Ltd Prodigy Management Pty Ltd Novus Capital Limited

Number of shares Percentage held 33,333,334 14.57 26,944,077 11.78 17,469,759 7.64 10,259,721 4.48 10,000,000 4.37 7,394,213 3.23 4,420,201 1.93 3,467,750 1.52 3,440,399 1.50 3,246,000 1.42 3,000,000 1.31 2,785,500 1.22 2,700,000 1.18 2,512,650 1.10 2,480,360 1.08 2,265,000 0.99 2,000,000 0.87 2,000,000 0.87 1,900,000 0.83 1,218,750 0.53

142,837,714 62.43

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Tenement Schedule

Project / Tenement	Location	Interest	Co-Holder	Notes
Bryah Basin Project	Western Australia
E52/1668		80%	Jackson Minerals Pty Ltd	1, 2, 3
E52/1678		80%	Jackson Minerals Pty Ltd	1, 2, 3
E52/1722		80%	Jackson Minerals Pty Ltd	1, 2
E52/1723-I		100%	PepinNini Robinson Range Pty Ltd	2, 4, 5
E52/1730		80%	Jackson Minerals Pty Ltd	1, 2, 3
E52/1731		100%		2, 4
E52/1810		100%		2
E52/1852		100%		4
E52/2360		100%		2, 4, 6
E52/2362		100%		2, 4, 6
M52/722		100%		2, 4, 6
M52/723		100%		2, 4, 6
M52/737		100%		4, 6
M52/795		100%		2, 4, 6
M52/844-I		100%		2, 6
M52/1049		100%		4, 6
P52/1195		80%	Jackson Minerals Pty Ltd	1, 3
P52/1196		80%	Jackson Minerals Pty Ltd	1, 3
P52/1199		100%		2
P52/1200		100%		2
P52/1314		100%		4, 6
P52/1315		100%		4, 6
P52/1316		100%		4, 6
P52/1317		100%		2, 6
P52/1318		100%		2, 6
P52/1320		100%		2, 6
P52/1321		100%		4, 6
P52/1322		100%		4, 6
P52/1323		100%		2, 6
P52/1327		100%		4, 6
P52/1365		100%		4, 6
P52/1425		100%		2
P52/1427		100%		2
P52/1428		100%		2
P52/1429		100%		4
P52/1467		100%		2
P52/1468		100%		2
P52/1469		100%		2
P52/1470		100%		2
SE Yilgarn Project	Western Australia
E28/2475		100%
E28/2476		100%

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Tenement Schedule

Notes:

• 1) Jackson Minerals Pty Ltd, a subsidiary of Fe Ltd (ASX: FEL), retains a 20% interest free-carried to a decision to mine.

• 2) Independence Group NL (ASX: IGO) has a right to explore and earn a 70-80% interest (excludes iron ore) in whole or part tenement free-carried to a pre-feasibility study.

• 3) Northern Star Resources Ltd (ASX: NST) has a right to explore and earn a 70% interest in whole or part tenement by sole funding a total $1,200,000 on exploration expenditure over tenements or parts of tenements marked (3) & (4).

• 4) Northern Star Resources Ltd (ASX: NST) has a right to explore and earn a 80% interest in whole or part tenement by sole funding a total $1,200,000 on exploration expenditure over tenements or parts of tenements marked (3) & (4).

• 5) 100% "Other" mineral rights (excludes iron ore); Robinson Range Iron Ore JV - 100% iron ore.

• 6) 100% minerals rights for all minerals, excluding iron ore; Carey Mining Iron Ore JV - Alchemy Resources 50%, Carey Mining 50% iron ore.

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