ARUMA RESOURCES LIMITED — Interim / Quarterly Report 2017

Mar 14, 2017

==> picture [254 x 148] intentionally omitted <==

ARUMA RESOURCES LIMITED ABN 77 141 335 364

INTERIM FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2016

ARUMA RESOURCES LIMITED
Contents	Page
Corporate Information	2
Directors’ Report	3
Auditor’s Independence Declaration	9
Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income	10
Condensed Consolidated Statement of Financial Position	11
Condensed Consolidated Statement of Cash Flows	12
Condensed Consolidated Statement of Changes in Equity	13
Notes to the Condensed Consolidated Financial Statements	14
Directors’ Declaration	18
Independent Review Report to the members of Aruma Resources Limited	19

ARUMA RESOURCES LIMITED

CORPORATE INFORMATION

Directors

Paul Boyatzis (Non-Executive Chairman) Peter Schwann (Managing Director) Ki Keong Chong (Non-Executive Director)

Company secretary Phillip MacLeod

Registered office Level 1, 6 Thelma Street West Perth WA 6005 Australia

Principal place of business

Level 1, 6 Thelma Street West Perth WA 6005 Australia Postal: Locked Bag 2000, Nedlands WA 6009

Telephone: +61 8 9321 0177 Facsimile: +61 8 9226 3764 Email: info@arumaresources.com Website: www.arumaresources.com.au ABN: 77 141 335 364

ASX code Ordinary shares - AAJ

Auditors

Nexia Perth Audit Services Pty Ltd Level 3 88 William Street Perth WA 6000 Australia

Solicitors

Fairweather Corporate Lawyers 595 Stirling Highway Cottesloe WA 6011 Australia

Share register

Advanced Share Registry Services 110 Stirling Highway Nedlands WA 6009 Australia

2

ARUMA RESOURCES LIMITED

DIRECTORS’ REPORT

The directors of Aruma Resources Limited (“Aruma”) submit herewith the financial report of Aruma Resources Limited and its subsidiary (“Consolidated entity” or “Group”) for the half-year ended 31 December 2016. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:

The names of the directors of the Company during or since the end of the half-year are:

Mr. P. Boyatzis Non-Executive Chairman Mr. P. Schwann Managing Director Mr. K. K. Chong Non-Executive Director

Directors were in office for the entire period.

REVIEW OF OPERATIONS

Exploration

==> picture [304 x 317] intentionally omitted <==

Figure 1 Aruma's Project areas in Western Australia

3

ARUMA RESOURCES LIMITED

DIRECTORS’ REPORT (CONTINUED)

REVIEW OF OPERATIONS (CONTINUED)

Glandore Hub Projects

Aruma’s initial flagship gold project at Glandore (now known as the Glandore JV) is approximately 40km east of Kalgoorlie-Boulder. Previous exploration of the Glandore Project identified several adjacent exploration areas and these are referred to as the Glandore Hub Projects.

==> picture [459 x 372] intentionally omitted <==

Figure 2 Glandore Hub Project Tenements and Basement Geology

In addition to the Company’s Glandore JV Project, Aruma is advancing exploration at a number of regional projects, all of which can be readily accessed from Kalgoorlie-Boulder.

Glandore JV (28.7km[2] )

The Glandore joint venture is underway with Southern Gold Limited to spend a minimum of $300,000 on exploration in the first year.

4

ARUMA RESOURCES LIMITED

DIRECTORS’ REPORT (CONTINUED)

REVIEW OF OPERATIONS (CONTINUED)

Glandore Hub Projects (continued)

Slate-Mulga Dams (142.6km[2] )

New exploration licences (ELA25/553 and ELA25/556) have been applied for (26 and 20 graticular blocks over 142.6km2) over a large belt of covered felsic sediments to the north and east of Glandore. The intention is to investigate the gold potential in sulphidic sediments with associated granites and mineralisation that might host economic grades.

Open file data from the Department of Mines and Petroleum on this ground identified a large area that is highly anomalous for gold. The area was previously explored by Croesus Mining NL and various joint venture partners such as Delta Gold, Placer and Barrick Gold. The leases were relinquished due to the then gold price.

==> picture [380 x 345] intentionally omitted <==

Figure 3 Slate Dam and Mulga Dam Applications, (ELA25/553 and 556) on magnetics and showing the historical drill defined gold anomaly. (Glandore leases in black)

5

ARUMA RESOURCES LIMITED

DIRECTORS’ REPORT (CONTINUED)

REVIEW OF OPERATIONS (CONTINUED)

Glandore Hub Projects (continued)

Slate-Mulga Dams (142.6km[2] ) (continued)

==> picture [217 x 269] intentionally omitted <==

==> picture [202 x 268] intentionally omitted <==

Figure 4 Slate Dam drilling generated gold anomaly from previous figure showing the drilling values and contoured at >200ppm Au. Note the anomaly is open in all directions.

==> picture [268 x 241] intentionally omitted <==

Figure 5 Slate Dam and Mulga applications, (ELA25/553 and 556) on magnetics with the historical drill defined open gold anomaly. Also shown are the orange granite centre and the red Kalgoorlie Superpit outline for scale.

6

ARUMA RESOURCES LIMITED

DIRECTORS’ REPORT (CONTINUED)

REVIEW OF OPERATIONS (CONTINUED)

Glandore Hub Projects (continued)

Clinker Hill (5.2km[2] )

A study by a Curtin University Masters student has identified new stratigraphic relationships and generated new targets for drilling. This new information will be evaluated in the coming year.

Projects Summary

• Glandore Gold Project - JV underway with Southern Gold Limited (SAU)

• ▪ Goddards Dam PoW is approved and cleared for RC drilling ▪ Slate and Mulga Dams 142km[2] ELs applied for over anomalous areas ▪ Clinker Hill has the PoW approved for south east extensions

Table 2 Project Status and Activity Table

Proposed Exploration Activities for H2 FY2017

• Glandore – JV underway

• Goddards – PoW approved

• Clinker Hill – PoW approved

• Slate and Mulga Dam – data search approvals and awaiting approvals

• Lease Acquisitions – the Company will be seeking outcomes from the Wardens Court and ballots for leases at Norseman and Gundockerta Hill respectively

• Lease Pegging – Aruma will continue to monitor the ground around Kalgoorlie for resource carrying leases

Aruma will also be appraising leases that are becoming available in the Kalgoorlie terrain, especially where adjacent to current projects or with resources or intersections.

In addition to its current projects in Western Australia, Aruma continues to evaluate other potential project opportunities.

Competent Person’s Statement

The information in this release that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Peter Schwann who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Schwann is a full time employee of the Company. Mr Schwann has sufficient relevant experience to qualify as a Competent Person as defined in the JORC Code (2012) and consents to the inclusion of this information in the form and context in which it appears All exploration results reported have previously been released to ASX and are available to be viewed on the Company website www.arumaresources.com.au. The Company confirms it is not aware of any new information that materially affects the information included in the original announcement. The Company confirms that the form and context in which the Competent Person’s findings are present have not been materially modified from the original announcements.

7

ARUMA RESOURCES LIMITED

DIRECTORS’ REPORT (CONTINUED)

REVIEW OF OPERATIONS (CONTINUED)

The Group incurred an after tax loss for the half-year ended 31 December 2016 of $144,478 (2015: $115,122). The Group held a balance at 31 December 2016 of $1,396,062 in cash and term deposit investments.

Corporate

During the period the Company completed a placement of 50 million shares at an issue price of 0.8 cents per share to raise $400,000 before issue costs. The Company also completed a pro-rata nonrenounceable rights offer on the basis of 1 new share for every 4 shares held at an issue price of 0.8 cents per share. The offer raised $562,913 before issue costs. The placement and rights issue were made through brokers, DJ Carmichael Pty Limited. Funds will be used to identify and evaluate new resource projects, existing projects and for working capital.

Subsequent to the reporting date the Company received an R&D tax refund of $323,586 (2015: $623,032) before costs under the 2016 Research & Development Tax Incentive Program.

EVENTS SUBSEQUENT TO THE BALANCE DATE

No matter or circumstance has arisen subsequent to the balance date, which has significantly affected, or may significantly affect the operations of the Group, the result of those operations, or the state of affairs of the Group in subsequent financial years.

AUDITOR’S INDEPENDENCE DECLARATION

Section 307C of the Corporations Act 2001 requires our auditors, Nexia Perth Audit Services Pty Ltd, to provide the Directors of the Company with an Independence Declaration in relation to the review of the interim financial report. This Independence Declaration is set out on page 9 and forms part of the directors’ report for the half-year ended 31 December 2016.

This report is signed in accordance with a resolution of the Board of Directors made pursuant to Section 306(3) of the Corporations Act 2001.

On behalf of the Directors

P Boyatzis Director Perth, 15th March 2017

8

Auditor’s independence declaration under section 307C of the Corporations Act 2001

To the directors of Aruma Resources Limited,

I declare that, to the best of my knowledge and belief, in relation to the review for the half year ended 31 December 2016 there have been:

• (i) no contraventions of the auditor’s independence requirements as set out in the Corporations Act 2001 in relation to the review; and

• (ii) no contraventions of any applicable code of professional conduct in relation to the review.

==> picture [80 x 49] intentionally omitted <==

Nexia Perth Audit Services

==> picture [111 x 61] intentionally omitted <==

PTC Klopper Director

Perth

15 March 2017

9

ARUMA RESOURCES LIMITED

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2016

Note Revenue from continuing operations Exploration expenditure expensed as incurred Impairment of exploration assets Depreciation Non-executive directors’ fees Employee benefits Legal and professional fees Occupancy expenses Travel expenses Other expenses Loss from operating activities Financial income Financial expenses Net financing income Loss before income tax expense Income tax benefit/(expense) Loss for the period Total comprehensive loss for the period Loss per share Basic and diluted loss per share (cents per share)	CONSOLIDATED
	Half-year ended 31 December 2016 Half-year ended 31 December 2015 $ $
	350,486 758,016 (294,415) (499,736) - (70,960) (5,928) (6,048) (30,600) (37,400) (31,344) (68,165) (62,714) (101,818) (8,060) (15,331) (3,542) (4,385) (68,907) (74,101)
	(155,024) (119,928)
	10,546 4,808 - (2)
	10,546 4,806
	(144,478) (115,122) - -
	(144,478) (115,122)
	(144,478) (115,122)
	(0.05) cents (0.07) cents

The accompanying notes form part of these financial statements.

10

ARUMA RESOURCES LIMITED

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2016

Note Current assets Cash and cash equivalents Trade and other receivables Term deposit investments Other current assets Total current assets Non-current assets Plant and equipment Deferred exploration expenditure Total non-current assets Total assets Current liabilities Trade and other payables Provisions Total current liabilities Total liabilities Net assets Equity Issued capital 2 Reserves 3 Accumulated losses Total equity	CONSOLIDATED	CONSOLIDATED
	31 December 2016 $ 627,193 358,151 768,869 17,687 1,771,900 33,772 129,773 163,545 1,935,445 102,186 24,320 126,506 126,506 1,808,939 10,060,842 127,684 (8,379,587) 1,808,939	30 June 2016 $
		499,702 4,920 503,802 3,793
		1,012,217
		38,565 129,773
		168,338
		1,180,555
		47,174 45,688
		92,862
		92,862
		1,087,693
		9,195,118 127,684 (8,235,109)
		1,087,693

The accompanying notes form part of these financial statements.

11

ARUMA RESOURCES LIMITED

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2016

Cash flows from operating activities Cash receipts from customers Interest received Interest paid Exploration expenditure Payments to staff Payments to suppliers Net cash used in operating activities Cash flows from investing activities Acquisition of plant and equipment Transfer to term deposit investments Net cash used in investing activities Cash flows from financing activities Proceeds from the issue of shares Payment of capital raising expenses Net cash from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period		CONSOLIDATED Half-year ended 31 December 2016 Half-year ended 31 December 2015 $ $ 26,899 86,984 11,388 8,933 - (2) (314,201) (516,967) (42,374) (76,701) (153,743) (159,984) (472,031) (657,737) (1,135) (236) (265,067) - (266,202) (236) 962,913 462,912 (97,189) (25,554) 865,724 437,358 127,491 (220,615) 499,702 916,457 627,193 695,842	CONSOLIDATED Half-year ended 31 December 2016 Half-year ended 31 December 2015 $ $ 26,899 86,984 11,388 8,933 - (2) (314,201) (516,967) (42,374) (76,701) (153,743) (159,984) (472,031) (657,737) (1,135) (236) (265,067) - (266,202) (236) 962,913 462,912 (97,189) (25,554) 865,724 437,358 127,491 (220,615) 499,702 916,457 627,193 695,842
		Half-year ended 31 December 2016 $ 26,899 11,388 - (314,201) (42,374) (153,743) (472,031) (1,135) (265,067) (266,202) 962,913 (97,189) 865,724 127,491 499,702 627,193
			86,984 8,933 (2) (516,967) (76,701) (159,984)
			(657,737)
			(236) -
			(236)
			462,912 (25,554)
			437,358
			(220,615) 916,457
			695,842

The accompanying notes form part of these financial statements.

12

ARUMA RESOURCES LIMITED

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2016

Consolidated	Issued capital	Share based	Accumulated	Accumulated	Total
		payment reserve		losses
	$	$		$	$
Balance at 1 July 2015	8,729,961		211,967	(7,932,007)		1,009,921
Loss for the period		-	-	(115,122)		(115,122)
Total comprehensive loss for the period		-	-	(115,122)		(115,122)
Issue of shares for cash		462,912	-	-		462,912
Issue of shares for exploration payment		35,000	-	-		35,000
Share issue expense		(32,754)	-	-		(32,754)
Balance at 31 December 2015	9,195,119		211,967	(8,047,129)		1,359,957
Balance at 1 July 2016	9,195,118		127,684	(8,235,109)		1,087,693
Loss for the period		-	-	(144,478)		(144,478)
Total comprehensive loss for the period		-	-	(144,478)		(144,478)
Issue of shares for cash		962,913	-	-		962,913
Share issue expense		(97,189)	-	-		(97,189)
Balance at 31 December 2016	10,060,842		127,684	(8,379,587)		1,808,939

The accompanying notes form part of these financial statements.

13

ARUMA RESOURCES LIMITED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF-YEAR ENDED 31 DECEMBER 2016

1. SIGNIFICANT ACCOUNTING POLICIES

Statement of compliance

The interim financial report is a general purpose financial report prepared in accordance with the requirements of the Corporations Act 2001 and AASB 134 ‘Interim Financial Reporting’. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 ‘Interim Financial Reporting’.

The condensed consolidated interim financial report does not include full disclosure of the type normally included in an annual financial report, and accordingly this report should be read in conjunction with the most recent annual financial report and any public announcements made by the Company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001 and the ASX listing rules.

Basis of preparation

The condensed consolidated financial statements have been prepared on the basis of historical cost, except for the revaluation of certain financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. The Company, Aruma Resources Limited and its subsidiary, Aruma Exploration Pty Ltd, are domiciled in Australia and all amounts are presented in Australian dollars, unless otherwise indicated.

The accounting policies and methods of computation adopted in the preparation of the half-year financial report are consistent with those adopted and disclosed in the Company’s financial report for the financial year ended 30 June 2016.

For the purpose of preparing the report the half-year has been treated as a discrete reporting period.

Amendments to AASBs and new Interpretations which are mandatorily effective for the current reporting period

There were no new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) applicable to the Consolidated entity for the current half-year.

Significant Accounting Judgements and Key Estimates

The preparation of the interim financial report requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

In preparing this half-year report the significant judgements made by management in applying the Consolidated entity’s accounting policies and key sources of estimation uncertainty were the same as those that applied to the financial report for the year ended 30 June 2016.

(a) Research & development tax concession

The Company lodged a claim for a refund under the R&D tax concession scheme for 2016 and received $323,586 subsequent to the period ended 31 December 2016.

14

ARUMA RESOURCES LIMITED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF-YEAR ENDED 31 DECEMBER 2016

2. ISSUED CAPITAL

Issued and paid up capital Fully paid ordinary shares Movements in fully paid shares on issue At beginning of period Shares issued for exploration payment Shares issued for cash Balance at end of period Movements in options on issue At beginning of period Expired during the period Balance at end of period	31 December 2016 30 June 2016 $ $
	10,060,842 9,195,118
	6 months to 12 months to 31 December 2016 30 June 2016 Number Number
	231,456,254 149,304,167 - 5,000,000 120,364,063 77,152,087
	351,820,317 231,456,254
	7,125,000 13,500,000 - (6,375,000)
	7,125,000 7,125,000

3. RESERVES

3. RESERVES
Share based payment reserve Balance at beginning of period Transfer to accumulated losses on expiry of options Balance at end of period	6 months to 31 December 2016 12 months to 30 June 2016 $ $
	127,684 211,967 - (84,283)
	127,684 127,684

15

ARUMA RESOURCES LIMITED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF-YEAR ENDED 31 DECEMBER 2016

4. COMMITMENTS

COMMITMENTS Exploration expenditure commitments Minimum exploration expenditure: Not later than 1 year Later than 1 year but not later than 5 years	31 December 30 June 2016 2016 $ $
	280,220 886,140 1,120,880 3,544,560
	1,401,100 4,430,700

5. CONTINGENT LIABILITIES

In the opinion of the directors there were no contingent liabilities at the date of this report.

6. SEGMENT INFORMATION

The Group’s operating segments have been determined with reference to the monthly management accounts used by the chief operating decision maker to make decisions regarding the Group’s operations and allocation of working capital.

Due to the size and nature of the Group, the Board as a whole has been determined as the chief operating decision maker.

The Group operates in one business segment and one geographical segment, namely mineral exploration industry in Australia only. AASB 8 Operating Segments states that similar operating segments can be aggregated to form one reportable segment. Also, based on the quantitative thresholds included in AASB 8, there is only one reportable segment, namely mineral exploration industry.

The revenues and results of this segment are those of the Group as a whole and are set out in the statement of profit or loss and other comprehensive income. The segment assets and liabilities of this segment are those of the Group and are set out in the statement of financial position.

7. EVENTS AFTER THE BALANCE DATE

No matter or circumstance has arisen subsequent to the balance date, which has significantly affected, or may significantly affect the operations of the Group, the result of those operations, or the state of affairs of the Group in subsequent financial years.

16

ARUMA RESOURCES LIMITED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF-YEAR ENDED 31 DECEMBER 2016

8. RELATED PARTIES

Transactions with directors and director-related entities continue to be in place. For details on these arrangements, please refer to the 30 June 2016 annual report. The Company paid an entity related to Managing Director, Peter Schwann the sum of $11,061 (2015: $6,856) inclusive of GST for vehicle and caravan hire on commercial terms. No other related party transactions were entered into during the half year ended 31 December 2016.

Key management personnel continue to receive compensation in the form of short term employee benefits, post-employment benefits and share based payments.

17

ARUMA RESOURCES LIMITED

DIRECTORS’ DECLARATION

In the opinion of the Directors of the Company:

1. The attached financial statements and notes thereto are in accordance with the Corporations Act 2001 including:

2. (a) complying with Accounting Standard AASB 134 “Interim Financial Reporting” and the Corporations Regulations 2001 ; and

3. (b) giving a true and fair view of the Consolidated entity’s financial position as at 31 December 2016 and of its performance for the half-year then ended.

4. There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of the Directors made pursuant to s.303(5) of the Corporations Act 2001 .

On behalf of the Directors

P. Boyatzis Director

Perth, 15th March 2017

18

Independent Auditor’s Review Report to the members of Aruma Resources Limited

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Aruma Resources Limited and its controlled entity (the “Group”), which comprises the condensed consolidated statement of financial position as at 31 December 2016, the condensed consolidated statement of profit or loss and other comprehensive income, condensed consolidated statement of changes in equity and condensed consolidated statement of cash flows for the period ended on that date, other selected explanatory notes and the directors’ declaration of the Group comprising the Company and the entities it controlled at the half-year end or from time to time during the period.

Directors’ Responsibility for the Half-Year Financial Report

The directors of the Group are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001. This responsibility includes: establishing and maintaining internal controls relevant to the preparation and fair presentation of the half-year financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the Group’s financial position as at 31 December 2016 and its performance for the period ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Aruma Resources Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

==> picture [159 x 85] intentionally omitted <==

19

Independence

In conducting our review, 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 Aruma Resources Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Aruma Resources Limited and its controlled entities is not in accordance with the Corporations Act 2001 including:

• (a) giving a true and fair view of the Group’s financial position as at 31 December 2016 and of its performance for the half-year ended on that date; and

• (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001.

==> picture [77 x 46] intentionally omitted <==

Nexia Perth Audit Services Pty Ltd

==> picture [114 x 62] intentionally omitted <==

PTC Klopper Director

Perth

15 March 2017

20