ASARA RESOURCES LIMITED — Annual Report 2017

Sep 26, 2017

Golden Rim Resources Ltd ABN 39 006 710 774

Annual Report For the Year Ended 30 June 2017

Golden Rim Resources Ltd

Table of Contents

Table of Contents
Corporate Directory	3
Chairman’s Report	4
Review of Operations	5
Directors’ Report	11
Corporate Governance Statement	17
Remuneration Report	17
Auditor’s Independence Declaration	23
Consolidated Statement of Profit or Loss and Other Comprehensive Income	24
Consolidated Statement of Financial Position	25
Consolidated Statement of Changes in Equity	26
Consolidated Statement of Cash Flows	27
Notes to the Financial Statements	28
Directors’ Declaration	51
Independent Audit Report to the Members	52
Additional Shareholder Information	57

Terms used in this Annual Report

ASX	Australian Securities Exchange
Board	Board of Directors of Golden Rim
Company	Golden Rim Resources Ltd
Golden Rim	Golden Rim Resources Ltd
Group	Golden Rim and the entities that it controls
Reporting period	1 July 2016 to 30 June 2017

Golden Rim Resources Ltd

Corporate Directory

Directors Glenister Lamont BEng-Min(Hon); MBA; FAICD; FAusIMM; FFIN Non Executive Chairman Craig Mackay BApp. Sc-App.Geol; BSc(Hons); MSc; MAusIMM; MAICD Managing Director Rick Crabb BJuris(Hons); LLB; MBA; FAICD Non Executive Director Kathryn Davies BBus; CPA; GAICD Non Executive Director Company Secretary Hayley Butcher BFA; MScL; AGIA; ACIS; GAICD Registered Office Office 7, Level 2, 609 Canterbury Road and Business Address Surrey Hills VIC 3127 AUSTRALIA T: + 61 3 9836 4146 E: info@goldenrim.com.au W: goldenrim.com.au Share Registry Link Market Services Limited Level 12 QV1 Building 250 St Georges Terrace Perth WA 6000 AUSTRALIA T: + 61 1300 554 474 W: linkmarketservices.com.au Home Exchange Australian Securities Exchange Limited Home Branch - Perth ASX Code GMR Auditors Deloitte Touche Tohmatsu Tower 2, Brookfield Place 123 St Georges Terrace Perth WA 6000 AUSTRALIA

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Golden Rim Resources Ltd

Chairman’s Report

Dear Fellow Shareholders

Last year the Company set a number of targets and was very active in its efforts to reach these goals. A busy work program was set and completed, with projects in Chile and Burkina Faso both significantly advanced. Despite the notable achievements reached, the market has not rewarded the Company and shareholders with an increased valuation.

Most significantly, Golden Rim finalised the acquisition of a majority interest in the Paguanta Zinc-Lead-Silver Project in Chile at what it believed to be an attractive price. Since acquisition, the zinc price on the London Metal Exchange has increased 55%, a major drilling program has led to an updated Mineral Resource complying with JORC 2012 and the discovery of high grade zinc-silver shoots which remain open at depth. The Company has developed key relationships with local government, communities and surface landowners.

The expected recognition and support for these accomplishments, as reflected in Golden Rim’s share price on the Australian Securities Exchange, has not been forthcoming. This has necessitated Golden Rim seeking a corporate transaction for Paguanta. The Company believes substantial value can be achieved from Paguanta, particularly with potential market support from the Canadian or other international markets. Significant improvement by Golden Rim in most of the project’s parameters should position it well to obtain value from such a transaction.

The other major achievement of the Company was the granting of a new exploration license and obtaining sole ownership of the Kouri Gold Project in Burkina Faso. A short drilling program confirmed the technical interpretation and attractiveness of Golden Rim’s previous work and this project will become the main focus of the Company. The exploration team at Kouri will be led by the same country exploration manager who was responsible for the discovery, a number of years ago, of the Company’s high grade Balogo resource in Burkina Faso.

Kouri presents an exciting opportunity, with significant drilling and geophysical work already completed and an existing Exploration Target. Importantly, subject to the availability of funds, the Company intends to convert the Exploration Target to a maiden Mineral Resource by the end of 2017. Our recent drilling results suggest the Mineral Resource may be larger than the Exploration Target. As well as an attractive gold exposure, Kouri also provides shareholders with potential upside opportunities from positive developments both within a relatively short timeframe and in the long term. The Company looks forward to moving ahead with a significant exploration program at Kouri.

I wish to thank our Managing Director, Craig Mackay, the respective country exploration managers and the whole team, who worked hard and reached these significant goals. We look forward to seeing value from their endeavours in the current year.

Thank you also to those many shareholders who have remained loyal. The support of you all is very much appreciated.

Yours sincerely

==> picture [138 x 30] intentionally omitted <==

GLENISTER LAMONT Chairman

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Golden Rim Resources Ltd

Review of Operations

During the reporting period, the Company’s primary focus was on its Paguanta Zinc-LeadSilver-Gold Project ( Paguanta ) in Chile. Golden Rim finalised the acquisition of a majority interest (70%) in Paguanta in July 2016.

Substantial work was undertaken at Paguanta from the time of the acquisition (see below). However, subsequent to the end of the reporting period, Golden Rim announced a major shift in its focus to its Kouri Gold Project ( Kouri ) in Burkina Faso. The Company believes it can generate substantial value for Paguanta from markets outside of Australia and to that end, has executed a mandate with a leading Canadian broking firm, Eight Capital, to secure a corporate transaction for Paguanta.

Going forward, the Company’s flagship project is Kouri where a recent reverse circulation ( RC ) drilling program was completed and where substantial further work is planned for the July 2017 to June 2018 reporting period.

The Group made a loss of $7,330,119 for the reporting period of which exploration and evaluation expenditure amounted to $5,789,744 (refer accounting policy treatment note 9). The vast majority of this expenditure was due to the substantial work programs at Paguanta where both RC drilling and diamond drilling programs were undertaken. The loss represents a significant increase over the previous year ($274,423). During the previous year, the Company incurred significantly less exploration expenditure as its focus was on acquiring a new project.

The Company undertook fundraising activities during the reporting period including a successful share purchase plan which closed over-subscribed and raised approximately $2.77 million. Three share placements were also undertaken around the end of the reporting period. The total amount raised under the three share placements was $994,905 (before costs), of which the Company received $328,000 prior to the end of the reporting period. Subsequent to the end of the reporting period, the Company completed a rights issue. The shortfall under the rights issue was also placed so that a total of approximately $2.57 million was raised under the rights issue.

Through one of the share placements Acorn Capital became the Company’s largest shareholder, holding 8.3% of the Company’s shares at that time.

The Board appointed a new non-executive chairman, Glenister Lamont, during the reporting period. Mr Lamont was previously a non-executive director on the Board. Further, on 1 January 2017, Kathryn Davies was appointed to the Board as a non-executive director.

Details of exploration work undertaken through the reporting period with respect to each of the Company’s projects held during the period are set out below.

Kouri Gold Project (previously Korongou Gold Project), Burkina Faso

Kouri (formerly known as the Korongou Gold Project) lies on a major mineralised fault zone that extends to the north-east into western Niger, where the 2.5Moz Samira Hill gold deposit is located. To the south-west, the fault zone is connected to the Markoye Fault system which controls several large gold deposits in Burkina Faso, including Kiaka (5.9Moz gold), Bombore (5.2Moz gold) and Essakane (6.2Moz gold).

During the reporting period, the Company was granted a new exploration licence over the project area. The new exploration licence, Kouri, replaced the Korongou licence, and has a 3

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Golden Rim Resources Ltd

year tenure with 2 further periods of 3 year renewal, effectively providing a 9 year licence. Kouri covers an area of 57km2.

Significantly, Golden Rim is now the 100% owner of Kouri. It acquired the remaining 10% interest for US$115,000 and with no ongoing obligations to the previous owner.

Reverse Circulation Drilling

The Company completed a 19 hole (2,747m) RC drilling program at the Banouassi Prospect ( Banouassi ) at Kouri. The RC drilling included infill and strike extensional drilling of the Guitorga Lodes (within Banouassi) and targeted several east-south-east trending crossstructures that have the potential to host high grade gold mineralisation.

Multiple new zones of gold mineralisation outside the current Exploration Target of approximately 500,000 – 611,000 oz of gold were discovered. The combined true width of the mineralisation in the major shear zone corridor ranges approximately from 20m to 40m.

New significant results include:

• 10m at 11.0 g/t gold from 111m, including 1m at 104.7 g/t gold (Hole BARC118);

• 7m at 8.4 g/t gold from 34m, including 2m at 27.3 g/t gold (Hole BARC125);

• 2m at 45.6 g/t gold from 18m, including 1m at 82.9 g/t gold (Hole BARC114); and

• 2m at 11.6 g/t gold from 38m, including 1m at 22.5 g/t gold (Hole BARC114).

• 6m at 3.8 g/t gold from 109m, including 1m at 22.1 g/t gold (Hole BARC112);

• 10m at 3.0 g/t gold from 67m, including 1m at 12.0 g/t gold (Hole BARC114); and

• 11m at 1.3 g/t gold from 98m (BARC116).

New gold intercepts (in BARC112 and BARC114) have extended the known mineralisation 200m to the northeast. The intercept of 10m at 11 g/t gold in BARC118 has extended one of the southern mineralised lodes a further 200m south-west.

Infill drilling in a 900m gap in the previous drilling that was used to define the Exploration Target has outlined significant mineralisation over a further 250m. The gap in the drilling in this area has now been reduced to 650m.

Golden Rim believes several of the new high grade gold intercepts and some of the highgrade intercepts from previous drilling may be influenced by their proximity to several distinct east-south-east trending cross-structures. Further drilling along the trend of these crossstructures is required to assess the continuity of the high-grade mineralisation in these areas.

Paguanta Zinc-Silver-Lead Project, Chile

Paguanta lies in the Tarapacá Region of northern Chile, approximately 120km northeast of Iquique and 30km west of the Chile-Bolivia border. The project area hosts both epithermal zinc-silver-lead-gold mineralisation and porphyry copper mineralisation.

Paguanta is situated approximately 40km northeast of BHP Billiton’s Cerro Colorado Mine, which is exploiting a large porphyry copper deposit with a Mineral Resource of 400Mt @ 0.62% copper for 5.5Blb of copper and annual copper cathode production of approximately 175Mlb.

During the reporting period an easement agreement was executed with the landowners over a 260 hectare area at the Patricia Prospect ( Patricia ) at Paguanta. The agreement secures

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Golden Rim Resources Ltd

full access to conduct both exploration and, importantly, mining at Patricia and is effective up until the end of 2029.

Mineral Resource Estimate

In May 2017 Mining One Consultants completed an updated Mineral Resource estimate for Patricia. The resource estimate was based on historical drilling and Golden Rim’s sevenhole (3,189m) diamond drilling program.

Using a cut-off grade of 6% zinc equivalent ( Zn Eq ), the new Mineral Resource is 2.4Mt at 5.0% zinc, 1.4% lead, 88 g/t silver and 0.3 g/t gold (or 2.4Mt at 8.0% Zn Eq) for 190,000t of contained Zn Eq metal.

Almost 50% of the resource is in the Measured and Indicated categories.

Table 2. Total Mineral Resource Estimates by Cut-off Grade

Zn Eq (%) Cut-off	Tonnes	Zn (%)	Pb (%)	Ag (g/t)	Au (g/t)	ZnEq (%)	Contained ZnEq (tonnes)
3	6,198,000	3.4	1.1	67	0.2	5.6	347,000
4	4,134,000	4.1	1.2	76	0.3	6.7	277,000
5	3,148,000	4.6	1.3	82	0.3	7.4	233,000
6	2,380,000	5.0	1.4	88	0.3	8.0	190,000
7	1,093,000	6.0	1.8	108	0.3	9.6	105,000

Notes:

1. Tonnages and grades are rounded. Discrepancies in totals may exist due to rounding.

2. Zn Eq has been calculated as follows: Zn Eq% = (Zn %) + (Pb %0.63) + (Ag g/t0.019) + (Au g/t*1.38). Using metal prices (and recoveries and other assumptions) of: zinc US$1.1911/lb; lead US$0.9411/lb; silver US$17.07/oz; gold US$1,252/oz. It is Golden Rim’s opinion that all elements included in the metal equivalent calculation have a reasonable potential to be recovered and sold.

This resource figure is not comparable with earlier resource estimates due to the use of a Zn Eq cut-off grade rather than just a zinc cut-off grade, which allows both the zinc-rich and silver-rich mineralisation at Patricia to be incorporated in a single resource estimate (previously this mineralisation was quoted as two resources). In addition, a top cut of 400 g/t silver was used in the new resource. In previous estimates by the former owners no top cut seems to have been utilised.

The new resource estimate for Patricia remains open at depth and along strike.

Diamond Drilling

Golden Rim carried out a diamond drilling program designed to infill and test for depth extensions to the current Mineral Resource area at Patricia. The diamond drilling program was comprised of seven holes for a total of 3,189m. All seven holes intercepted zinc-silverlead mineralisation.

The drilling extended the mineralisation of the Cathedral Vein at Patricia for a further 80m beneath previous drilling. The drilling also discovered a broad, new zone of zinc-silver-lead veining, named the Lell Vein, approximately 100m to the south of the current Mineral Resource.

Significant results included:

• 5.65m at 3.8% zinc, 1.1% lead, 50g/t silver and 0.1g/t gold (from 60m) in hole PTDD-17131, including 0.55m at 25.3% zinc, 11% lead, 457g/t silver and 0.6g/t gold followed by

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Golden Rim Resources Ltd

• a 1.4m open stope on historically mined high grade massive sulphide mineralisation (from 65.65m).

• 33.65m at 2.7% zinc, 0.8% lead, 32g/t silver and 0.2g/t gold (from 323.65m) in hole PTDD-17- 131, including 1.65m at 3.8% zinc, 3.4% lead, 102 g/t silver and 0.3g/t gold) and 9.8m at 5.5% zinc, 0.9% lead, 43 g/t silver and 0.5g/t gold).

• 11.6m at 5.4% zinc, 2.5% lead, 99 g/t silver and 0.1g/t gold (from 201.9m) in hole PTDD-17-133; including 4.4m at 11.6% zinc, 5% lead, 194 g/t silver and 0.2g/t gold).

• 6.55m at 6.3% zinc, 0.6% lead, 33 g/t silver (from 462.1m) in hole PTDD-17-136; including 1.95m at 16.1% zinc, 0.6% lead, 53 g/t silver and 0.1g/t gold.

• 8.6m at 4.8% zinc, 0.9% lead, 34 g/t silver and 0.1g/t gold (from 489.7m) in hole PTDD17-136; including 1.7m at 11.3% zinc, 1.1% lead, 48 g/t silver and 0.2g/t gold.

• 0.75m at 12.0% zinc, 7.5% lead, 1765g/t silver and 1.7g/t gold (from 526.9m) in hole PTDD-17- 136.

• 5.5m at 7.6% zinc, 2.3% lead, 69 g/t silver and 0.3g/t gold (from 215.5m) in hole PTDD17-137; including 3.6m at 10.6% zinc, 3.0% lead, 81 g/t silver.

The diamond drilling outlined depth extensions of high grade zinc and silver mineralisation up to approximately 400m below surface. This highly significant mineralisation remains open at depth.

RC Drilling

The diamond drilling program, was followed by a 12 hole (3,462m) RC drilling program, designed to test for strike extensions to the current Mineral Resource area. The RC drilling program outlined further high grade mineralisation on the Cathedral, Carlos and New Veins.

Highlights included:

An intercept of 6m at 2.0% zinc, 0.8% lead, 346 g/t silver, 0.3 g/t gold (9.5% Zn Eq) (from 93m), including 1m at 5.6% zinc, 3.0% lead, 1,750 g/t silver, 0.7 g/t gold (41.7% Zn Eq) (Hole PTRC-17- 123) obtained 100m closer to surface than previous intercepts on a southeast extension of the Cathedral Vein.

An intercept of 2m at 9.4% zinc, 2.7% lead, 96 g/t silver, 0.1 g/t gold (13.1% Zn Eq) (from 214m) (Hole PTRC-17-115) obtained on the Carlos and New Veins 150m to the west of the current Mineral Resource.

Exploration Target

Mining Plus Pty Ltd ( Mining Plus ) estimated an initial Exploration Target for the potential strike and depth extensions to the higher-grade mineralisation at Patricia that lie outside the current Mineral Resource. The results of this study are presented in Table 1.

Table 1. Patricia Exploration Target Estimation

Tonnage Range (Mt)	Tonnage Range (Mt)	Zinc Grade Range (%)	Zinc Grade Range (%)	Lead Grade Range (%)	Lead Grade Range (%)	Silver Grade Range (g/t)	Silver Grade Range (g/t)	Gold Grade Range (g/t)	Gold Grade Range (g/t)
80%	120%	80%	120%	80%	120%	80%	120%	80%	120%
4.5	6.8	4.5	6.7	1.5	2.3	100	150	0.16	0.24

Notes:

1. Cautionary Statement: The potential quantity (tonnage) and grade of the Exploration Target is conceptual in nature. There has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of Mineral Resources.

2. Mining Plus created an indicative mineralisation model to identify the potential location and size of the immediate strike and dip extensions to the current mineralised system utilising Leapfrog Geo implicit modelling software to create solids at a 3% cut-off grade and a maximum vein width of 5m.

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Golden Rim Resources Ltd

1. The Exploration Target was based on drilling data, surface geochemical data and a 3D model of Induced polarisation ( IP ) chargeability data. The surface geochemical data (1,930 samples) and IP geophysical data (survey by Zonge, Chile, 2012) were utilised to support the continuity of mineralisation in areas where drilling was sparser.

2. A total of 28 RC drill holes (3,626m) and 11 diamond drill holes (1,338m) were used to prepare the Exploration Target. The holes are generally drilled on lines spaced from 20m – 250m apart, with spacing along the lines ranging from 30m – 200m. The holes used for the Exploration Target are depicted on Figure 4.

3. A base for the Exploration Target was set at 3250mRL – 200m below the base of the current drilling. The Exploration Target extends along strike for 250m from the eastern-most drill hole.

4. The Exploration Target was calculated using a SG of 3.2 g/cm3

Geophysical Studies

Previous ground magnetic and IP / Resistivity geophysical data from Patricia was reviewed and remodelled. Following the review, a 12 line-km Magneto-Telluric ( MT ) geophysical survey on 200m spaced lines was conducted at Patricia with the objective of better defining the extensions of the mineralisation at depth and along strike to the east.

Inversion model results have defined coherent resistivity anomalies that appear consistent with the location of zinc-silver-lead mineralisation delineated through previous exploration activities. The results of the MT survey more clearly define the target areas for further drilling at Patricia and suggest that major extensions to the mineralisation in the current Mineral Resource are possible both along strike and at depth.

Geological Mapping

Detailed geological mapping has demonstrated strong continuity of the mineralised veins at Patricia and has successfully defined significant surface extensions to the mineralisation included in the current Mineral Resource.

Babonga Gold Project, Burkina Faso

The Babonga Gold Project ( Babonga ) has a highly coherent gold-in-soil anomaly approximately 2.1km long and 300m wide, which was defined in the southern part of the licence. The anomaly is coincident with a major regional fault that is connected to the major fault zone that hosts gold mineralisation at Kouri, which is located 70km to the southwest. Golden Rim owns a 100% interest in Babonga.

An air core drilling program of 10 lines of drilling (69 holes, for 2,319m) across the best areas of the soil anomaly was completed. The drilling intersected widespread bedrock gold mineralisation and discovered a coherent zone of bedrock gold mineralisation, over an area of 1km x 200m, and comprising a series of stacked gold mineralised veins. Peak values included:

• 7m at 1.6 g/t gold from 28m depth (BABAC011); including 1m at 4.8 g/t gold.

• 2m at 3.1 g/t gold from 4m depth (BABAC017); including 1m at 5.4 g/t gold.

• 6m at 1.1 g/t gold from 14m depth (BABAC019).

• 2m at 3.0 g/t gold from 12m depth (BABAC055).

Yako Gold Project, Burkina Faso

No field work was completed on the Yako Gold Project during the year. Golden Rim is actively seeking divestment opportunities and is currently in advanced negotiations with a third party.

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Golden Rim Resources Ltd

Mali Gold Project (Sepola)

Golden Rim’s licences at Sepola have now expired. During the year, the Company’s subsidiary sold some of its intellectual property with respect to Sepola for US$25,000.

Competent Persons Statement

The information in this report relating to previous results, Mineral Resources and Exploration Targets is extracted from the announcements Golden Rim Completes Acquisition of the Paguanta Zinc-SilverLead Project dated 28 July 2016; Magneto-Telluric (MT) Survey Suggests Significant Extensions to the Mineralisation at Paguanta dated 24 October 2016; Amended: Paguanta Zinc-Silver-Lead Project Update dated 20 January 2017; Bedrock Gold Discovered at Babonga, Burkina Faso dated 27 February 2017; Zinc-Silver-Lead Mineralisation Extended and a New Discovery at Paguanta dated 7 March 2017; Diamond Drilling Significantly Extends Mineralisation at Paguanta dated 3 May 2017; New Resource Estimation for Paguanta dated 30 May 2017; New Ore Grade Intersections to Expand Paguanta Resource dated 14 June 2017; New High Grade Gold Intercepts Move Kouri Closer to Maiden Resource dated 6 July 2017 and has been reported in accordance with the 2012 edition of the JORC Code. These announcements are available on the Company’s website (www.goldenrim.com.au). The Company confirms that it is not aware of any new information or data that materially affects the information included in these announcements.

Forward Looking Statements

Certain statements in this document are or maybe “forward-looking statements” and represent Golden Rim’s intentions, projections, expectations or beliefs concerning among other things, future exploration activities. The projections, estimates and beliefs contained in such forward looking statements necessarily involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Golden Rim, and which may cause Golden Rim’s actual performance in future periods to differ materially from any express or implied estimates or projections. Nothing in this document is a promise or representation as to the future. Statements or assumptions in this document as to future matters may prove to be incorrect and differences may be material. Golden Rim does not make any representation or warranty as to the accuracy of such statements or assumptions.

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Golden Rim Resources Ltd

Directors’ Report

The directors present their report on the consolidated entity consisting of Golden Rim and the entities it controlled at the end of or during the year ended 30 June 2017.

Directors

The following persons were directors of Golden Rim during or since the end of the reporting period and up to the date of this Directors’ Report:

Glenister Lamont Craig Mackay Rick Crabb Kathryn Davies (appointed 1 January 2017)

Principal Activities

The principal activities of the consolidated entity during the course of the reporting period were mineral exploration and investment. There were no significant changes in the nature of those activities during the reporting period.

Operating Results

During the reporting period the consolidated entity incurred an loss after tax of $7,330,119 (2016: $274,423), after mineral exploration and evaluation expenditure of $5,789,744 (2016: $765,387).

Dividends

No dividends have been paid or declared since the end of the previous financial year and no dividend is recommended in respect of this financial year.

Subsequent Events

Since the end of the reporting period, except as stated elsewhere in this Annual Report and below, there has not been any matter or circumstance occurring subsequent to the end of the reporting period that has significantly affected, or may significantly affect the operations of the consolidated entity, or the state of affairs of the consolidated entity in future financial years.

Under ASX listing rule 7.1, the Company issued 178,782,000 shares at an issue price of 0.25 cents per share together with a free attaching unlisted option on the basis of one option, exercisable at 0.5 cents and expiring on 6 July 2020, for every two shares subscribed for, to raise up to $446,955 (before costs). Of this amount, the Company received $328,000 prior to the end of the reporting period.

Further, under ASX listing rule 7.1A, the Company issued 178,782,000 shares at an issue price of 0.25 cents per share to raise up to $446,955 (before costs).

The Company also completed a non-renounceable rights issue of two shares for every five shares held, at an issue price of 0.3 cents per share. For every two new shares subscribed for, subscribers were offered one free attaching option exercisable at 0.5 cents each on or before 31 January 2019. Subsequently the Company placed the shortfall under the rights

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issue so that a total of 858,153,589 shares were issued, raising approximately $2.57 million (before costs).

Future Developments

Details of important developments occurring in this reporting period have been covered in the Review of Operations. As the outcome of exploration and subsequent development is uncertain, it is impossible to determine the effect on the results of the consolidated entity’s operations. Exploration activities on existing projects are expected to be funded for the next reporting period from current funds and/or additional capital.

Further information on future developments in the operations of the consolidated entity and the expected results of operations have not been included in this Annual Report, as the directors believe it is likely to result in unreasonable prejudice to the consolidated entity.

Review of Operations

The Review of Operations has been disclosed separately in this Annual Report.

Significant Changes in the State of Affairs

In the opinion of the directors, there were no significant changes in the state of affairs of the consolidated entity that occurred during the reporting period except as stated elsewhere in this Annual Report.

Corporate Information

Golden Rim is a public listed company incorporated and domiciled in Australia. Golden Rim has prepared a consolidated financial report incorporating the entities that it controlled during the reporting period. Set out below is Golden Rim’s relationship to its controlled entities.

Golden Rim SAR Exploration SARL	90% owned controlled entity
Golden Rim Mali SA	100% owned controlled entity
Golden Rim ResourcesBurkina SARL	100% owned controlled entity
Golden Rim Resources Chile Pty Ltd	100% owned controlled entity
Paguanta Resources (Chile) SA	100% owned controlled entity
Compania Minera Paguanta SA	72.6% owned controlled entity

Golden Rim Mali SA was de-registered on 23 July 2016.

Paguanta Resources (Chile) SA and its controlled entity Compania Minera Paguanta SA were acquired on 28 July 2016.

Information on Directors

Details of the directors of the Company in office at any time during or since the end of the reporting period are:

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Golden Rim Resources Ltd

Glenister Lamont BEng–Min(Hon); MBA; FAICD; FAusIMM; FFIN Non Executive Chairman

Experience and Expertise

Glenister Lamont has an Honours degree in Mining Engineering and a Masters of Business Administration from IMD, Switzerland. Mr Lamont is a Fellow of the Financial Services Institute of Australasia, a Fellow of the Australian Institute of Company Directors and a Fellow of the Australian Institute of Mining and Metallurgy. He has worked as an engineer and manager in gold, base metal and coal mines. Previously as General Manager for Ashton Mining Ltd, he led strategic planning and commercial implementation of business development. Before that, as an Executive Director at UBS, he undertook financial, technical and strategic evaluation of companies and participated in many corporate transactions. Mr Lamont is a professional non executive director and consultant on investor relations. Mr Lamont has been a director of Golden Rim since 17 July 2007.

Other Directorships

During the reporting period, Mr Lamont was a director of Valence Industries Ltd (appointed 17 December 2008, resigned 17 November 2016), a public listed company.

In addition to the above, during the past 3 years Mr Lamont was a director of Strategic Energy Resources Ltd (appointed 11 December 2008, resigned October 2015), a public listed company.

Special Responsibilities

Mr Lamont was appointed Chairman of the Board on 6 October 2016. From the beginning of the reporting period until 6 February 2017, he was Chairman of the Board’s Audit Committee after which time he remained a committee member. He is also a member of the Remuneration Committee.

Interests in Shares and Options

Mr Lamont and his associates hold directly and indirectly the following securities in the capital of the Company at the date of this Directors’ Report:

Fully paid ordinary shares	1,503,051
Class O Options expiring 28 November 2017 exercisable at 2.0 cents	2,000,000
Class P Options expiring28 November2018 exercisable at2.5 cents	2,000,000
Class Q Options expiring 28 November 2019 exercisable at 3.0 cents	3,000,000

Craig Mackay BApp.Sc-App.Geol; BSc(Hons); MSc; MAusIMM; MAICD Managing Director

Experience and Expertise

Craig Mackay is a geologist with 30 years’ experience and holds a Bachelor of Applied Science – Applied Geology, Bachelor of Science (Honours) and Master of Science degrees. He is also a Member of the Australian Institute of Mining and Metallurgy and the Australian Institute of Company Directors. Mr Mackay has held positions with a number of major resource companies, including Shell, Acacia Resources Ltd and AngloGold Ashanti Ltd. Mr Mackay has been a director of Golden Rim since 8 October 2004 and Managing Director since 19 February 2007.

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Golden Rim Resources Ltd

Other Directorships

Mr Mackay does not hold any other directorships in public listed companies and he has not held any such directorships during the last 3 years.

Special Responsibilities

Mr Mackay is the Managing Director of Golden Rim.

Interests in Shares and Options

Mr Mackay and his associates hold directly and indirectly the following securities in the capital of the Company at the date of this Directors’ Report:

Fully paid ordinary shares	34,370,500
Class L Options expiring 27 November 2017 exercisable at 1.45 cents	3,000,000
Class O Options expiring28November 2017exercisable at2.0 cents	4,000,000
Class P Options expiring 28 November 2018 exercisable at 2.5 cents	4,000,000
Class Q Options expiring 28 November 2019 exercisable at 3.0 cents	6,000,000

Rick Crabb BJuris(Hons); LLB; MBA; FAICD Non Executive Director

Experience and Expertise

Rick Crabb holds degrees of Bachelor of Jurisprudence (Honours), Bachelor of Laws and Master of Business Administration from the University of Western Australia. He practiced as a solicitor from 1980 to 2004 specialising in mining, corporate and commercial law. He has advised on all legal aspects including financing, marketing, government agreements and construction contracts for many resource development projects in Australia and Africa. Mr Crabb now focuses on his public company directorships and investments. He has been involved as a director and strategic shareholder in a number of successful public companies. Mr Crabb is a Councillor on the Western Australian Division of the Australian Institute of Company Directors. Mr Crabb has been a director of Golden Rim since 22 August 2001.

Other Directorships

During the reporting period, Mr Crabb was a director of Paladin Resources Ltd (appointed 8 February 1994), a public listed company.

In addition to the above, Mr Crabb was a director of the following public listed companies during the last 3 years.

Platypus Minerals Limited (appointed 1 September 1999, resigned 16 October 2015)

Otto Energy Limited (appointed 19 November 2004, resigned 25 November 2015)

Special Responsibilities

From the beginning of the reporting period until 6 February 2017, Mr Crabb was Chairman of the Board. He is a member of the Board’s Audit Committee and Remuneration Committee. He is Chairman of the Remuneration Committee.

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Golden Rim Resources Ltd

Interests in Shares and Options

Mr Crabb and his associates hold directly and indirectly the following securities in the capital of the Company at the date of this Directors’ Report:

Fully paid ordinary shares	41,601,384
Class O Options expiring28November 2017exercisable at2.0 cents	2,000,000
Class P Options expiring 28 November 2018 exercisable at 2.5 cents	2,000,000
Class Q Options expiring28November 2019 exercisable at 3.0 cents	3,000,000

Kathryn Davies BBus; CPA; GAICD Non Executive Director

Experience and Expertise

Kathryn Davies has a Bachelor of Business with a double major in Accounting and Business Law, is a Certified Practicing Accountant and a Graduate of the Australian Institute of Company Directors. Ms Davies is an experienced executive across mining, oil and gas, industrial, healthcare and technology groups. She has significant experience in negotiating and delivering on multi jurisdiction transactions, international stakeholder management and capital markets. She also has extensive commercial and corporate governance experience and has worked with both developed and developing economies.

Ms Davies is Company Secretary of Integral Diagnostics and has previously been Company Secretary of Japara Healthcare Ltd and interim Chief Financial Officer of Planet Innovation Pty Ltd. Ms Davies has been a director of Golden Rim since 1 January 2017.

Other Directorships

Ms Davies does not hold any other directorships in public listed companies and she has not held any such directorships during the last 3 years.

Special Responsibilities

Ms Davies is Chairman of the Board’s Audit Committee and is also a member of the Board’s Remuneration Committee.

Interests in Shares and Options

Ms Davies and her associates did not hold directly and indirectly any securities in the capital of the Company at the date of this Directors’ Report:

In relation to special responsibilities of the directors, due to the relative small size of the Company, all directors are generally involved in the decision making process of material matters affecting the Company.

Company Secretary

Hayley Butcher has extensive governance and commercial experience, working with and advising board and board committees in the natural resources, industry group, and not-forprofit sectors. Ms Butcher has deep experience working across multi-jurisdictions navigating complex tax and legal inter-country considerations. She holds a Master of Science in Leadership and is a Chartered Secretary. Ms Butcher is an Associate of the Governance

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Golden Rim Resources Ltd

Institute of Australia, a member of the Institute of Chartered Secretaries and Administrators and a Graduate of the Australian Institute of Company Directors. Ms Butcher is currently the General Manager, Corporate and Company Secretary of Golden Rim.

Meetings of Directors

The following table sets out the number of meetings held during the year ended 30 June 2017 by directors and Board committees, and the attendances.

	Board Meetings	Audit	Remuneration	Nomination
		Committee	Committee	Meetings1
		Meetings	Meetings
		Attended / Number eligible to attend
G Lamont	9/10	2/2	2/2	7/7
C Mackay	9/10	1/22	2/21	7/7
R Crabb	10/10	2/2	2/2	7/7
K Davies3	5/5	1/1	1/1	3/3

1. Board meetings where Board performed the function of a nomination committee (the Board does not have a separate nomination committee)

2. Attendance by invitation.

3. Appointed 1 January 2017, attended all meetings held after appointment.

Shares under Option

The unissued ordinary shares of Golden Rim under option at the date of this Directors’ Report are as follows:

• 4,500,000 unlisted Class L options, expiring on 27 November 2017 with an exercise price of 1.45 cents each;

• 119,382,500 unlisted Class M options, expiring on 30 October 2017 with an exercise price of 1.65 cents each;

• 13,500,000 unlisted Class O options, expiring on 28 November 2017 with an exercise price of 2 cents each;

• 13,500,000 unlisted Class P options, expiring on 28 November 2018 with an exercise price of 2.5 cents each;

• 21,500,000 unlisted Class Q options, expiring on 28 November 2019 with an exercise price of 3 cents each;

• 89,391,000 unlisted Class R options, expiring on 6 July 2020 with an exercise price of 0.5 cents each;

• 429,076,817 listed options, expiring on 31 January 2019 with an exercise price of 0.5 cents each.

No person entitled to exercise any of the options has any right, by virtue of the options, to participate in any share issue of any other body corporate.

The names of all persons who currently hold options, granted at any time, are entered in the register kept by the Company pursuant to section 216C of the Corporations Act 2001 and the register may be inspected free of charge.

Proceedings on Behalf of the Company

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

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Golden Rim Resources Ltd

which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.

No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the Corporations Act 2001 .

Environmental Regulation

The consolidated entity has assessed whether there are any particular or significant environmental regulations which apply. It has determined that the risk of non compliance is low, and has not identified any compliance breaches during the year.

Auditor’s Independence

A copy of the Auditor’s Independence Declaration, as required under section 307C of the Corporations Act 2001, is set out on page 23 of this Annual Report.

Non Audit Services

The Auditor did not provide any non-audit services during the reporting period.

Insurance of Directors and Officers

During the reporting period, the Company paid a premium in respect of a contract insuring the Directors and the Company Secretary against a liability incurred to the extent permitted by the Corporations Act 2001 . The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. The Company has not otherwise, during or since the end of the reporting period, except to the extent permitted by law, indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred as such an officer or auditor.

Corporate Governance Statement

A copy of Golden Rim’s Corporate Governance Statement is available on its website at www.goldenrim.com.au, under the section marked “About Us”.

Remuneration Report (Audited)

This Remuneration Report which forms part of the Directors’ Report, sets out information about the remuneration of the directors and other senior management of the Company.

Names and Positions of Key Management Personnel

Names and positions of key management personnel of the consolidated entity in office at any time during or since the end of the reporting period are as follows:

Key Management Personnel	Position
G Lamont	Chairman, Non Executive Director
C Mackay	Managing Director
R Crabb	Director, Non Executive
K Davies	Director, Non Executive (appointed 1 January 2017)
H Butcher	Company Secretary

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Golden Rim Resources Ltd

Compensation Practices

Non executive directors’ fees include superannuation. The aggregate fees are fixed and approved by shareholders.

The Company does not have a bonus or incentive option scheme for the directors. The Company has an Employee Share Option Plan, in which the directors may participate. To date, any options granted by the Board to executives do not have associated specific performance hurdles.

The Board also has a Remuneration Committee, details of which are contained in the Corporate Governance Statement.

Remuneration Policy

Remuneration of directors and senior executives is set by reference to payments made by other companies of similar size and industry, and by reference to the skills and experience of the directors and executives. Details of the nature and amount of remuneration of each director of the Company are disclosed annually in the Company's remuneration report in its annual report.

Non-executive directors

The Company's policy is to remunerate non-executive directors at a fixed fee for time, commitment and responsibilities. Remuneration for non-executive directors is not linked to individual performance. From time to time, and subject to shareholder approval, the Company may grant options to non-executive directors. The grant of options is designed to attract and retain suitably qualified non-executive Directors.

The maximum aggregate amount of fees (including superannuation payments) that can be paid to non-executive directors is subject to approval by shareholders at General Meeting. To the extent that any non-executive directors participate in any equity-based remuneration schemes, they are prohibited from entering into transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the scheme.

Executive directors and senior executives

The Company's remuneration policy for executive directors and senior executives is designed to promote superior performance and long term commitment to the Company.

Executives receive a base remuneration, which is market related. Overall, the remuneration policy is subject to the discretion of the Board and can be altered to reflect the competitive market and business conditions, where it is in the best interests of the Company and shareholders, to do so.

The Board's reward policy is designed to retain appropriately qualified executive talent for the benefit of the Company. The main principles of the policy are:

• reward reflects the competitive market in which the Company operates;

• individual reward should be linked to performance criteria; and

• executives should be rewarded for both financial and non-financial performance.

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Golden Rim Resources Ltd

Directors' and senior executives' remuneration is reviewed by the Board, having regarding to various goals set. This remuneration and other terms of employment are commensurate with those offered within the exploration and mining industry.

Long term performance incentives may include options granted at the discretion of the Board and subject to the successful completion of performance hurdles.

Where the Company has any equity-based remuneration scheme, executive directors and other senior executives are prohibited from entering into transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the scheme.

Relationship between Remuneration of Key Management Personnel and Shareholder Wealth

During the Company’s new acquisition, exploration and development phases of its business, the Board anticipates that the Company will retain earnings (if any) and other cash resources for the exploration and development of its resource projects. Accordingly the Company does not currently have a policy with respect to the payment of dividends and returns of capital. Therefore there was no relationship between the Board’s policy for determining the nature and amount of remuneration of key management personnel, and dividends paid and returns of capital by the Company during the current and previous four financial years.

The Board does not determine, and there was no relationship between, the nature and amount of remuneration of key management personnel and changes in the price at which shares in the Company traded between the beginning and end of the current and the previous four financial years.

Key Management Personnel Compensation

Details of non-executive director fees as at 30 June 2017 are set out below.

Non-ExecutiveDirector	Annual fee as at 30 June2017
Glenister Lamont (Chairman)	$70,000including superannuation
RickCrabb	$50,000including superannuation
Kathryn Davies	$50,000including superannuation

Remuneration of key management personnel for financial year ended 30 June 2017

Name				Post Employment		Share Based	Total $
		Short Term
	Salary & fees $
			Non		Tii
		Cash	Monetary	Super-	ermnaton Bfi
		Bonus $	benefits	annuation	enets $	Options $
			$	$
GLamont	57,584	-	-	5,470	-	17,500	80,554
CMackay	285,219	-	-	19,616	-	35,000	339,835
RCrabb	42,082	-	-	7,638	-	17,500	67,220
K Davies~~1~~	22,831			2,169		-	25,000
H Butcher	143,119	-	-	13,596	-	17,500	174,215
**Total **	550,835	-	-	48,489	-	87,500	686,824

1. Appointed 1 January 2017

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Golden Rim Resources Ltd

Remuneration of key management personnel for financial year ended 30 June 2016

Name				Post Employment		Share Based	Total $
		ShortTerm
	Salary & fees $	Cash Bonus $	Non
			Monetary	Super-	Termination
			benefits	annuation	Benefits	Options
			$	$	$	$
GLamont	35,000	-	-	3,325	-	-	38,325
CMackay	259,692	-	-	19,308	-	-	279,000
RCrabb	31,675	-	-	6,650	-	-	38,325
H Butcher	128,120	-	-	12,171	-	-	140,291
**Total **	**454,487 **	-	-	**41,454 **	-	-	495,941

Share options

As noted below, a number of key management personnel have received options of the ordinary shares in the Company which generally will only be of value should the value of the Company’s shares increase sufficiently to warrant exercising the options. Options provide a means of ensuring remuneration offered to key management personnel is competitive with market standards and/or practice while maintaining the Company’s cash reserves. The exercise price of the options is determined at the time of their issuance with consideration given to the Company’s underlying share price at the time of issue. The conversion price is usually higher than the price of the shares at the time.

Options granted as compensation to key management personnel during the financial year ended 30 June 2017

Name	Number Granted	Grant Date	Value of Options at Grant Date $	Exercise price per option $	Vesting Date	Vested %	Expiry Date	Number of Options Vested
GLamont	2,000,000	12/01/17	2,600	0.020	12/01/17	100	28/11/17	2,000,000
	2,000,000	12/01/17	5,000	0.025	12/01/17	100	28/11/18	2,000,000
	3,000,000	12/01/17	9,900	0.030	12/01/17	100	28/11/19	3,000,000
CMackay	4,000,000	12/01/17	5,200	0.020	12/01/17	100	28/11/17	4,000,000
	4,000,000	12/01/17	10,000	0.025	12/01/17	100	28/11/18	4,000,000
	6,000,000	12/01/17	19,800	0.030	12/01/17	100	28/11/19	6,000,000
RCrabb	2,000,000	12/01/17	2,600	0.020	12/01/17	100	28/11/17	2,000,000
	2,000,000	12/01/17	5,000	0.025	12/01/17	100	28/11/18	2,000,000
	3,000,000	12/01/17	9,900	0.030	12/01/17	100	28/11/19	3,000,000
H Butcher	2,000,000	12/01/17	2,600	0.020	12/01/17	100	28/11/17	2,000,000
	2,000,000	12/01/17	5,000	0.025	12/01/17	100	28/11/18	2,000,000
	3,000,000	12/01/17	9,900	0.030	12/01/17	100	28/11/19	3,000,000

The value of options granted during the financial year was calculated as at the grant date using the Black Scholes option pricing model.

Options granted to key management personnel as part of their remuneration that lapsed during the financial year ended 30 June 2017

Name	Date on which the options were granted	Number of options lapsed during the year
CMackay	28/11/14	2,000,000
H Butcher	13/01/12	500,000
H Butcher	28/11/14	1,000,000

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Golden Rim Resources Ltd

Options of key management personnel at 30 June 2017

Name	Number Granted	Grant Date	Value per Option at Grant Date $	Exercise price per option $	Vesting Date	Vested %	Expiry Date	Number of Options Vested
GLamont	2,000,000	12/01/17	0.0013	0.020	12/01/17	100	28/11/17	2,000,000
	2,000,000	12/01/17	0.0025	0.025	12/01/17	100	28/11/18	2,000,000
	3,000,000	12/01/17	0.0033	0.030	12/01/17	100	28/11/19	3,000,000
CMackay	3,000,000	28/11/14	0.0027	0.0145	28/11/14	100	27/11/17	3,000,000
	4,000,000	12/01/17	0.0013	0.020	12/01/17	100	28/11/17	4,000,000
	4,000,000	12/01/17	0.0025	0.025	12/01/17	100	28/11/18	4,000,000
	6,000,000	12/01/17	0.0033	0.030	12/01/17	100	28/11/19	6,000,000
RCrabb	2,000,000	12/01/17	0.0013	0.020	12/01/17	100	28/11/17	2,000,000
	2,000,000	12/01/17	0.0025	0.025	12/01/17	100	28/11/18	2,000,000
	3,000,000	12/01/17	0.0033	0.030	12/01/17	100	28/11/19	3,000,000
H Butcher	1,500,000	28/11/14	0.0027	0.0145	28/11/14	100	27/11/17	1,500,000
	2,000,000	12/01/17	0.0013	0.020	12/01/17	100	28/11/17	2,000,000
	2,000,000	12/01/17	0.0025	0.025	12/01/17	100	28/11/18	2,000,000
	3,000,000	12/01/17	0.0033	0.030	12/01/17	100	28/11/19	3,000,000

Key management personnel equity holdings

Shares of key management personnel for year ended 30 June 2017

Name	At start of year Received during the year on the exercise of options Other changes during the year At end of year
R Crabb C Mackay G Lamont H Butcher Total	39,726,384 - 1,875,000 41,601,384 34,058,000 - 312,500 34,370,500 878,051 - 625,000 1,503,051 11,531,500 - 1,875,000 13,406,500
	86,193,935 - 4,687,500 90,881,435

Options of key management personnel for year ended 30 June 2017

Name	At start of year Granted during year as remuneration Exercised during year Expired during year At end of year Vested and exercisable at end of year
G Lamont C Mackay R Crabb H Butcher Total	- 7,000,000 - - 7,000,000 7,000,000 5,000,000 14,000,000 - 2,000,000 17,000,000 17,000,000 - 7,000.000 - - 7,000,000 7,000,000 3,000,000 7,000,000 - 1,500,000 8,500,000 8,500,000
	8,000,000 35,000,000 - 3,500,000 39,500,000 39,500,000

Service and Employment Agreements

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

Details of the employment agreements between the Company and other key management personnel, as at 30 June 2017, are set out below.

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Golden Rim Resources Ltd

Name	Duration of contract	Period of notice under the contract	Termination provision underthe contract1
CraigMackay	Nofixed term	6months	6months
HayleyButcher	Nofixed term	2 months	2 months

1. In addition, statutory entitlements of accrued leave and superannuation benefits form part of termination provisions.

Signed 27 September 2017 for and on behalf of the Board in accordance with a resolution of the directors.

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Glenister Lamont Chairman

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Deloitte Touche Tohmatsu ABN 74 490 121 060

==> picture [148 x 28] intentionally omitted <==

Tower 2 Brookfield Place 123 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia

The Board of Directors Golden Rim Resources Ltd Level 2, 609 Canterbury Road Surrey Hills VIC 3127

Tel: +61 8 9365 7000 Fax: +61 8 9365 7001 www.deloitte.com.au

27 September 2017

Dear Board Members

Golden Rim Resources Ltd

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Golden Rim Resources Ltd.

As lead audit partner for the audit of the financial statements of Golden Rim Resources Ltd for the financial year ended 30 June 2017, I declare that to the best of my knowledge and belief, there have been no contraventions of:

• (i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

• (ii) any applicable code of professional conduct in relation to the audit.

Yours sincerely

==> picture [272 x 46] intentionally omitted <==

DELOITTE TOUCHE TOHMATSU

John Sibenaler Partner Chartered Accountant

Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited

Golden Rim Resources Ltd

Consolidated Statement of Profit or Loss and Other Comprehensive Income For the Year Ended 30 June 2017

Comprehensive Income For the Year Ended 30 June 2017
Notes Interest income Other gains / losses 3 Administration expenses 4 Depreciation expense 8 Impairment losses Exploration and evaluation expenditure 9 Share of profit / (loss) of joint venture Profit / (Loss) before tax Income tax 5 Profit / (Loss) for the year Other comprehensive income Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations Reclassification adjustments relating to investments disposed of during the year Other comprehensive income for the year, net of income tax Total comprehensive income for the year Profit / (Loss) attributable to: Owners of the Company Non-controlling interests 19(d) Total comprehensive income attributable to: Owners of the Company Non-controlling interests 19(d) Earnings per share Basic (cents per share) 6 Diluted (cents per share) 6	Consolidated
	2017 $ 4,438 (129,987) (1,364,126) (50,700) - (5,789,744) -	2016
		$
		31,647
		1,671,385
		(1,037,838)
		(24,811)
		(150,000)
		(765,387)
		581
	(7,330,119) -	(274,423)
		-
	(7,330,119)
		(274,423)
	(24,035) 986
		44,542
		5,810
	(23,049)	50,352
	(7,353,168)	(224,071)
	(6,109,230) (1,220,889)
		(274,609)
		186
	(7,330,119)	(274,423)
	(6,129,788) (1,223,380)
		(223,730)
		(341)
	(7,353,168)	(224,071)
	(0.37) (0.37)
		(0.02)
		(0.02)

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

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Golden Rim Resources Ltd

Consolidated Statement of Financial Position As at 30 June 2017

As at 30 June 2017
Notes Current Assets Cash and cash equivalents 20(a) Trade and other receivables 7 Other assets Total Current Assets Non Current Assets Other financial assets Plant and equipment 8 Exploration expenditure 9 Total Non Current Assets Total Assets Current Liabilities Trade and other payables 10 Provisions 11 Total Current Liabilities Non Current Liabilities Provisions 11 Total Non-Current Liabilities Total Liabilities Net Assets Equity Share capital 12 Reserves 13 Accumulated losses Equity attributable to owners of the Company Non-controlling interests 19(d) Total Equity	Consolidated
	2017 $ 702,575 24,000 46,743	2016 $
		6,675,153
		20,874
		8,255
	773,318
		6,704,282
	30,421 144,800 4,361,106
		30,426
		69,437
		2,000,229
	4,536,327
		2,100,092
	5,309,645
		8,804,374
	534,714 121,870
		114,549
		58,727
	656,584
		173,276
	80,500
		61,215
	80,500	61,215
	737,084
		234,491
	4,572,561
		8,569,883
	66,680,957 (635,176) (59,852,436)
		63,607,959
		(516,854)
		(53,963,220)
	6,193,345 (1,620,784)	9,127,885
		(558,002)
	4,572,561
		8,569,883

The above 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 2017

Note	Share Capital $ Accumulated Losses $ Goodwill on Acquisition Reserve $ Option Reserve $ Foreign Currency Translation Reserve $ Asset Revaluation Reserve $ Non- controlling Interests $ Total Equity $
Balance at 1 July 2015 Profit / (Loss) for the year Other comprehensive income for the year, net of income tax 13 Total comprehensive income for the year Transactions with owners recorded directly in equity Fair value of expired options 13 Balance at 30 June 2016 Profit / (Loss) for the year Other comprehensive income for the year, net of income tax 13 Total comprehensive income for the year Non-controlling interest acquired from asset acquisition 19 Transactions with owners recorded directly in equity Issue of fully paid shares 12 Share issue costs 12 Fair value of options issued 13 Fair value of expired options 13 Balance at 30 June 2017	63,607,959 (56,423,411) (870,599) 2,967,036 89,767 (19,137) (557,661) 8,793,954
	- (274,609) - - - - 186 (274,423) - - - - 50,879 - (527) 50,352
	- (274,609) - - 50,879 - (341) (224,071)
	- 2,734,800 - (2,734,800) - - - -
	63,607,959 (53,963,220) (870,599) 232,236 140,646 (19,137) (558,002) 8,569,883
	- (6,109,230) - - - - (1,220,889) (7,330,119) - - - - (20,558) - (2,491) (23,049)
	- (6,09,230) - - (20,558) - (1,223,380 (7,353,168)
	- - - - - - 160,598 160,598 3,122,400 - - - - - - 3,122,400 (49,402) - - - - - - (49,402) - - 122,250 - - - 122,250 - 220,014 - (220,014) - - - -
	66,680,957 (59,852,436) (870,599) 134,472 120,088 (19,137) (1,620,784) 4,572,561

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

Golden Rim Resources Ltd

Consolidated Statement of Cash Flows For the Year Ended 30 June 2017

Consolidated Statement of Cash Flows For the Year Ended 30 June 2017
Notes Cash Flow From Operating Activities Payments to suppliers and employees Payments for exploration and evaluation Interest received Interest and borrowing costs paid Other receipts Net Cash Outflows From Operating Activities 20(b) Cash Flows from Investing Activities Acquisition of asset net of cash acquired 19(b) Acquisition of exploration interests Proceeds from sale of exploration interests Purchase of plant and equipment Proceeds from sale of plant and equipment Loan to unrelated entity Net Cash (Outflows) / Inflows From Investing Activities Cash Flows From Financing Activities Proceeds from issue of shares Share issue costs Net Cash Inflows From Financing Activities Net (decrease) / increase in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Translation differences on cash held in foreign currencies Cash and cash equivalents at the end of the financial year 20(a)	Consolidated
	2017 2016 $ $ (1,040,027) (894,848) (5,569,123) (969,439) 4,438 2,256 - - - -
	(6,604,712) (1,862,031)
	(1,986,063) (308,275) (155,331) - 26,803 3,949,092 (83,770) (57,277) - 188,560 - (150,000)
	(2,198,361) 3,622,100
	3,122,400 - (49,401) -
	3,072,999 -
	(5,730,074) 1,760,069 6,675,153 4,846,453 (242,504) 68,631
	702,575 6,675,153

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

Page | 27

Golden Rim Resources Ltd

Notes to the Financial Statements For the Year Ended 30 June 2017

1. Corporate Information

Golden Rim is a listed public company incorporated in Australia. The nature of the operations and principal activity of Golden Rim is mineral exploration focused on the discovery of significant gold resources.

2. Basis of Accounting

(a) Statement of Compliance

These financial statements are general purpose financial statements which have been prepared in accordance with the Corporations Act 2001, Australian Accounting Standards and Interpretations, and comply with other requirements of the law.

The financial statements comprise the consolidated financial statements of the Group. For the purposes of preparing the consolidated financial statements, the Company is a for-profit entity. Accounting Standards include Australian Accounting Standards. Compliance with Australian Accounting Standards and Interpretations ensures that the financial statements and notes also comply with International Financial Reporting Standards.

The financial statements are prepared on an accruals basis and based on historical costs except for certain financial assets which have been measured at fair value. Cost is based on the fair values of consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted.

Except as disclosed in notes 2(c) through to 2(g) the company’s accounting policies are set out within each note disclosure.

The financial statements for the year ended 30 June 2017 were authorised for issue in accordance with a resolution of the directors on 26 September 2017.

(b) Changes to accounting policies

(i) New and Amended Standards and Interpretations Adopted

None of the new standards and amendments to standards that are mandatory for the first time for the financial year beginning 1 July 2016 affected any of the amounts recognised in the reporting period or any prior period and are not likely to affect future periods.

(ii) Standards and Interpretations in issue not yet adopted

At the date of authorisation of the financial statements, the Group has not applied the following new and revised Australian Accounting Standards, Interpretations and amendments that have been issued but are not yet effective. The potential effect of these standards and interpretations on the Group’s financial statements has not yet been determined.

Standard/Interpretation/Amendment

AASB 9 ‘Financial Instruments’, and the relevant amending standards[2]

Effective for annual reporting periods beginning on or after

1 January 2018

AASB 15 ‘Revenue from Contracts with Customers’, AASB 2014-5 ‘Amendments to Australian Accounting Standards arising from AASB 15’, AASB 2015-8 ‘Amendments to Australian Accounting Standards – Effective Date of AASB 15’, and AASB 2016-3

1 January 2018

‘Amendments to Australian Accounting Standards – Clarifications to AASB 15’

Page | 28

Golden Rim Resources Ltd Notes to the Financial Statements for the Year Ended 30 June 2017

AASB 16 ‘Leases’	1 January 2019
AASB 2015-10 ‘Amendments to Australian Accounting Standards – Effective Date of:	1 January 2018
Amendments to AASB 10 and AASB 128’
AASB 2016-1 ‘Amendments to Australian Accounting Standards – Recognition of	1 January 2017
Deferred Tax Assets for Unrealised Losses (AASB 112)’
AASB 2014-10 Amendments to Australian Accounting Standards – Sale or Contribution	1 January 2017
of Assets between an Investor and its Associate or Joint Venture (AASB 10 & AASB
128), 2016-2 Amendments to Australian Accounting Standards – Disclosure Initiative:
Amendments to AASB 107
AASB 2016-5 Amendments to Australian Accounting Standards - Classification and	1 January 2018
Measurement of Share-based Payment Transactions
AASB 2017-2 Amendments to Australian Accounting Standards – Further Annual	1 January 2017
Improvements 2014-2016 Cycle
Interpretation 22 Foreign Currency Transactions and Advance Consideration	1 January 2018

(c) Going Concern

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

During the reporting period, the Group incurred a net loss after tax of $7,330,119 (2016 - $274,423) and had net cash outflows from operating and investing activities of $8,803,073 (2016 net cash inflows - $1,760,069). At 30 June 2017 the Company has net assets of $4,572,561 (2016 - $8,569,883) and net current assets of $116,734 (2016 - $6,531,006).

As detailed in note 24, since balance date the Company has made share placements raising a total of 994,905 (before costs). Of this amount, the Company received $328,000 prior to the end of the reporting period. The Company also completed a rights issue and subsequently placed the shortfall under the rights issue raising a total of approximately $2.57 million (before costs).

In addition, the Company is actively seeking to raise further funds through either the divestment or strategic sale of interests in certain of its projects.

Based on the cash flow forecasts prepared by the directors and the other factors referred to above, the directors are satisfied that the going concern basis of preparation is appropriate.

(d) Foreign Currency Translation

(i) Functional and presentation currency

The individual financial statements of each Group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). The consolidated financial statements are presented in Australian dollars which is the functional currency of the Company and the presentation currency for the consolidated financial statements.

The functional currency of the subsidiaries, Golden Rim SAR Exploration SARL, Golden Rim Mali SA and Golden Rim Resources Burkina SARL, is CFA Franc.

The functional currency of the subsidiaries, Paguanta Resources (Chile) SA and Compania Minera Paguanta SA, is Chilean Peso.

(ii)

Transaction and balances

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year

Page | 29

Golden Rim Resources Ltd

Notes to the Financial Statements for the Year Ended 30 June 2017

end exchange rate. Non-monetary items measured at historical costs continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

(iii) Group Companies

The financial results and position of foreign operations whose functional currency is different from the Group’s presentation currency are translated as follows:

• Assets and liabilities are translated at exchange rates prevailing at the reporting date.

• Income and expenses are translated at average exchange rates for the reporting period.

• Equity transactions are translated at exchange rates prevailing at the dates of the transaction.

Exchange differences arising on translation of foreign operations are recognised in other comprehensive income and accumulated in the Group’s foreign currency translation reserve. These differences are recognised in the income statement in the period in which the operation is disposed.

(e) Impairment of Assets

At each reporting date, the Group reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case, the impairment loss is treated as a revaluation decrease.

When an impairment loss subsequently reverses, the carrying amount of the asset (or cashgenerating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

(f) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST is not recoverable from the Australian Taxation Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST.

Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

Page | 30

Golden Rim Resources Ltd Notes to the Financial Statements for the Year Ended 30 June 2017

(g) Comparative Figures

When required by the Standards, comparative figures are adjusted to conform to changes in presentation for the current financial year.

3. Other Gains / Losses

Gain on sale of exploration interests (Loss) / Gain on sale of plant and equipment Foreign exchange gains / (losses)	Consolidated
	2017 $ 2016 $ 26,803 1,327,004 (672) 75,819 (156,118) 268,562
	(129,987) 8,708,930

Gains or losses arising from the sale of assets are recognised at the later of the date on which all conditions of sale are met and the risks and rewards of ownership have been transferred.

4. Expenses

Administration expenses comprise: Directors’ fees Employee benefits expenses Defined contribution superannuation expense Share based payments Other employee benefit expenses Investor relations expense Other administration expenses	Consolidated
	2017 $ 2016 $ 137,775 76,650 57,185 55,655 122,250 - 745,242 685,458 122,991 55,120 178,683 164,955
	1,364,126 1,037,838

5. Income Tax

Numerical reconciliation of income tax expense to prima facie tax payable: Profit / (Loss) before income tax expense Income tax benefit calculated at 30% (2016: 30%) Effect of amounts which are not deductible/(taxable) in calculating taxable income Share issue costs Share based payments Other expenses Movement in temporary differences not recognised Effect of tax losses for which no deferred tax asset has been recognised Income tax expense	Consolidated
	2017 $ 2016 $ (7,330,119) (274,423)
	(2,199,036) (82,327) (14,820) - 36,675 - 1,058 666
	(2,176,123) (81,661) 111,599 31,908 2,064,524 49,753
	- -

Page | 31

Golden Rim Resources Ltd

Notes to the Financial Statements for the Year Ended 30 June 2017

Deferred Tax Asset (30%) Loans (provisions) Investments (provisions) Capital raising costs Other Carry forward tax losses	Consolidated
	2017 $ 2016 $ 1,378,379 1,370,575 75,302 75,302 330,475 299,900 95,065 21,845 17,484,718 15,420,195
	19,363,939 17,187,817

No income tax is payable by the Company. The consolidated entity has un-recouped Australian income tax losses comprising revenue losses of approximately $28.4 million (2016 - $26.7 million), foreign losses of approximately $27.4 million (2016 - $22.2 million) and capital losses of approximately $2.5 million (2016 - $2.5 million).

Such benefits have not been recognised and will only be obtained if:

• (a) the consolidated entity derives future assessable income of a nature and an amount sufficient to enable the benefit from the deductions for the loss to be realised;

• (b) the losses are transferred to an eligible entity in the consolidated entity;

• (c) the consolidated entity continues to comply with the conditions for deductibility imposed by tax legislation; and

• (d) no changes in taxation legislation adversely affect the economic entity in realising the benefit from the deductions for the losses.

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable income for the reporting period. Taxable income differs from profit as reported in the consolidated statement of comprehensive income because of items of income or expense that are assessable or deductible in other periods and items that are never assessable or deductible.

Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable income. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that assessable income will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither taxable income nor accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient assessable income against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient assessable income will be available to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have

Page | 32

Golden Rim Resources Ltd Notes to the Financial Statements for the Year Ended 30 June 2017

been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax for the period

Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case the current and deferred tax is also recognised in other comprehensive income or directly in equity, respectively. Where current or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

6. Earnings per Share

6. Earnings per Share
Basic and diluted loss per share Weighted average number of shares outstanding during the year used in the calculation of basic loss per share	2017 2016
	Cents Cents
	(0.37) (0.02)
	1,640,444,110 1,438,520,000

(i) Basic earnings per share

Basic earnings per share is determined by dividing net profit/loss after income tax attributable to members of the Company, 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.

(ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share by taking 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 shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

The profit or loss attributable to the owners of the Company has been used in the calculation of basic loss per share.

As detailed in note 13(a) the Company had on issue 172,382,500 (2016: 143,358,400) unlisted options to subscribe for fully paid ordinary shares exercisable between 1.45 cents and 3.0 cents each at any time on or before the expiry dates. As the exercise price of these options at balance date was greater than the market price of the shares, it is considered the options are unlikely to be exercised and consequently have not been considered dilutive. None of the options have been included in the determination of basic and diluted earnings per share.

7. Trade and Other Receivables

7. Trade and Other Receivables
Current GST refundable Other receivables	Consolidated
	2017 $ 2016 $ 21,489 20,874 2,511 -
	24,000 20,874

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables are measured at amortised cost using the

Page | 33

Golden Rim Resources Ltd

Notes to the Financial Statements for the Year Ended 30 June 2017

effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the effect of discounting is immaterial. They are included in current assets, except for those with maturities greater than 12 months after the reporting period which are classified as non-current assets.

8. Plant and Equipment

8. Plant and Equipment
Office equipment, at cost Less: accumulated depreciation Motor vehicles, at cost Less: accumulated depreciation Field equipment, at cost Less: accumulated depreciation	Consolidated
	2017 $ 2016 $ 309,879 266,694 (229,543) (197,257)
	80,336 69,437
	105,874 - (83,680) -
	22,194 -
	254,816 - (212,546) -
	42,270 -
	144,800 69,437

Reconciliations of the carrying amounts of each class of plant and equipment at the beginning and end of the reporting period are set out below.

	Office Equipment Motor Vehicles Field Equipment Total
Carrying amount at 30 June 2015 Additions Disposals Depreciation Foreign exchange movement Carrying amount at 30 June 2016 Additions On acquisition of subsidiary Disposals Depreciation Foreign exchange movement Carrying amount at 30 June 2017	$ $ $ $
	57,371 33,490 55,468 146,329
	57,277 - - 57,277 (25,947) (31,882) (54,912) (112,741) (19,985) (3,417) (1,409) (24,811) 721 1,809 853 3,383
	69,437 - - 69,437 35,216 27,130 21,424 83,770 - - 44,446 44,446 (672) - - (672) (23,834) (4,429) (22,437) (50,700) 189 (507) (1,163) (1,481)
	80,336 22,194 42,270 144,800

Each class of plant and equipment is carried at cost, less, where applicable, any accumulated depreciation and impairment losses.

Depreciation is recognised so as to write off the cost or valuation of plant and equipment less their residual values over their useful lives, using either the straight line basis or diminishing value method, commencing from the time the assets are held ready for use. The depreciation rates used for plant and equipment vary between 10% and 40%. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

The carrying values of plant and equipment are tested for impairment in accordance with the policy in note 2(e) when facts and circumstances suggest that the carrying amount may exceed its recoverable amount. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from an asset’s employment and subsequent disposal. The expected net cash flows are discounted to their present values in determining recoverable amounts. An asset’s carrying amount is written down immediately to its recoverable amount, if the asset’s carrying value is greater than its estimated recoverable amount.

An item of plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Gains and losses on disposals, being the

Page | 34

Golden Rim Resources Ltd Notes to the Financial Statements for the Year Ended 30 June 2017

difference between the sale proceeds and the carrying amount of the asset are recognised in profit or loss.

9. Exploration Expenditure

9. Exploration Expenditure
Acquisition costs brought forward Acquisition of Paguanta Project (note 19(b)) Acquisition of remaining interest in Kouri Project Foreign exchange movement Acquisition costs carried forward	Consolidated
	2017 $ 2016 $ 2,000,229 1,637,052 2,241,118 308,275 155,331 - (35,572) 54,902
	4,361,106 2,000,229

Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an exploration and evaluation asset in the year in which they are incurred where the following conditions are satisfied:

• (i) the rights to tenure of the area of interest are current; and

• (ii) at least one of the following conditions is also met:

• (a) the exploration and evaluation expenditures are expected to be recouped through successful development and exploration of the area of interest, or alternatively, by its sale; or

• (b) exploration and evaluation 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 initially measured at cost and include the acquisition of permits / licenses that provide the right to explore. All other exploration and evaluation expenditure including studies, exploratory drilling, trenching and sampling and associated activities is expensed as incurred.

Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset (or the cash-generating unit(s) to which it has been allocated, being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years.

Where a decision is made to proceed with development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified.

The ultimate recoupment of acquisition costs carried forward is dependent upon successful development and commercial exploitation, sale or farm out of the respective areas. The carrying values are based upon the Group’s assumption that the exploration licences will be renewed when required, subject to the Group meeting agreed budgets and work programs. No impairment indicators have been identified by management and the exploration program continues on each area of interest.

The Group assesses impairment of all assets at each reporting date by evaluating conditions specific to the Group and to the particular asset that may lead to impairment. These include prospectivity of an area of interest and economic and political environments. If an impairment trigger exists, the recoverable amount of the asset is determined.

There is some subjectivity involved in the carrying forward as capitalised or writing off to the income statement exploration and evaluation expenditure, however management give due consideration to areas of interest on a regular basis and are confident that decisions to either write off or carry forward such expenditure reflect fairly the prevailing situation.

Page | 35

Golden Rim Resources Ltd

Notes to the Financial Statements for the Year Ended 30 June 2017

Exploration Commitments

The Group has the following expenditure commitments in respect of exploration interests, subject to the right to withdraw at any time.

Not later than one year Later than one year, but not later than 5 years Later than 5 years	Consolidated
	2017 $ 2016 $ 175,887 197,281 689,680 201,924 393,573 -
	1,259,140 399,205

10. Trade and Other Payables

10. Trade and Other Payables
Trade creditors Accrued expenses Other creditors	Consolidated
	2017 $ 2016 $ 384,843 68,634 36,292 27,300 113,579 18,615
	534,714 114,549

These amounts represent liabilities for goods and services provided to the consolidated entity 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.

11. Provisions

Current Employee entitlements – annual leave Non Current Employee entitlements – long service leave	Consolidated	Consolidated
	2017 $ 121,870	2016 $
		58,727
	80,500
		61,215

Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.

Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits.

12. Issued Capital

12. Issued Capital
Issued Capital Fully paid ordinary shares 1,787,820,000 (2016: 1,438,520,000) Funds received at balance date for placement of shares made on 7 July 2017 (note 24)	Consolidated
	2017 $ 2016 $ 66,352,957 63,607,959 328,000 -
	66,680,957 63,607,959

Page | 36

Golden Rim Resources Ltd Notes to the Financial Statements for the Year Ended 30 June 2017

Movements in ordinary share capital of the Company during the past 2 years were as follows:

30/06/2015 Opening Balance 01/12/2016 Placement Cost of share issues 30/06/2017	Number of Shares Cents $
	1,438,520,000 63,607,959 349,300,000 0.8 2,794,400 (49,402)
	1,787,820,000 66,352,957

Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of, and amounts paid, on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

13. Reserves

3. Reserves
Options Reserve (a) Goodwill on Acquisition Reserve (b) Foreign Currency Translation Reserve (c) Asset Revaluation Reserve (d)	Consolidated
	2017 2016 $ $ 134,472 232,236 (870,599) (870,599) 120,088 140,646 (19,137) (19,137)
	(635,176) (516,854)

(a) Option Reserve

The Company had the following options on issue:

Option series	No. of options 2017 No. of options 2016 Exercise price (cents) Expiry date
ESOP Class K Class L Class M Class N Class O Class P Class Q	- 2,150,000 14.00 12/01/2017 - 3,000,000 0.95 27/11/2016 4,500,000 4,500,000 1.45 27/11/2017 119,382,500 119,382,500 1.65 30/10/2017 - 14,325,900 1.65 02/11/2016 13,500,000 - 2.00 28/11/2017 13,500,000 - 2.50 28/11/2018 21,500,000 - 3.00 28/11/2019 172,382,500 143,358,400

Movements in the number of options and the Option Reserve in the past two years were as follows:

01/07/2015 Opening Balance Options expired during year 10/07/2015 Class G 21/11//2015 Class H 21/11//2015 ESOP 30/06/2016 Options issued during year 12/01/2017 Class O 12/01/2017 Class P 12/01/2017 Class Q Options expired during year 02/11/2016 Class N 27/11/2016 Class K	Number of Options Fair value cents	$
	163,258,400 (1,000,000) (15,000,000) (3,900,000) (19,900,000) 143,358,400 13,500,000 0.13 13,500,000 0.25 21,500,000 0.33 48,500,000 (14,325,900) (3,000,000)	2,967,036
		(144,000) (2,115,000) (475,800)
		(2,734,800)
		232,236
		17,550 33,750 70,950
		122,250
		(50,069) (7,620)

Page | 37

Golden Rim Resources Ltd

Notes to the Financial Statements for the Year Ended 30 June 2017

12/01/2017 ESOP 30/06/2017	Number of Options Fair value cents	$
	(2,150,000) (19,475,900) 172,382,500	(162,325)
		(220,014)
		134,472

The option reserve relates to the fair value of options granted by the Company. The fair values of options are transferred to share capital on exercise or to accumulated losses on expiry.

The Class O, P and Q options were issued as share based payments (note 14).

(b) Goodwill on Acquisition Reserve

Goodwill on acquisition arising from the increase in shareholding in Golden Rim SAR Exploration SARL	Consolidated
	2017 $ 2016 $
	(870,599) (870,599)

(c) Foreign Currency Translation Reserve

At beginning of year Foreign currency (loss) / gain for year Translation reserves reclassified to profit or loss	Consolidated
	2017 $ 2016 $ 140,646 89,767 (20,558) 45,069 - 5,810
	120,088 140,646

Exchange differences relating to the translation of the results and net assets of the Group’s foreign operations from their functional currencies to Australian dollars are recognised directly in other comprehensive income and accumulated in the foreign currency translation reserve. Exchange differences previously accumulated in the foreign currency translation reserve are reclassified to profit or loss on the disposal of the foreign operation.

(d) Asset Revaluation Reserve

At beginning of year	Consolidated
	2017 $ 2016 $ (19,137) (19,137)
	(19,137) (19,137)

The asset revaluation reserve represents the cumulative gains and losses arising on the revaluation of available-for-sale financial assets that have been recognised in other comprehensive income, net of amounts reclassified to profit or loss when those assets have been disposed of or are determined to be impaired.

14. Share Based Payments

Equity-settled share-based payments to directors, employees and other providing service providers are measured at the fair value of the equity instruments at the grant date.

The value of these option payments are based on reasonable estimates using a recognised option pricing model.

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 by an external valuer using a Trinomial or Black Scholes option pricing model, with appropriate assumptions. The accounting estimates and assumptions relating to equity-settled transactions

Page | 38

Golden Rim Resources Ltd Notes to the Financial Statements for the Year Ended 30 June 2017

would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact expenses and equity.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve.

In 2010, the Board considered it desirable to establish an employee incentive scheme pursuant to which certain employees and Directors may be offered the opportunity to be granted options in order to attract persons of experience and ability to employment with the Company and provide incentive to the employees to remain in their employment in the long term. Accordingly, the Directors adopted the Golden Rim Resources Limited Employee Share Option Plan ( ESOP ). The ESOP was consistent with ASIC Class Order 03/184 (CO 03/184), which provides relief from certain provisions of the Corporations Act relating to disclosure, on-sale, licensing and hawking. The ESOP was last approved by Shareholders at the Company’s annual general meeting held on 22 November 2013. At the end of the reporting period, all options issued under the ESOP had expired.

ASIC has issued a new class order, ASIC Class Order 14/1000 (CO 14/1000), which expanded the category of persons who can participate under an employee incentive scheme to include nonexecutive directors and certain contractors and casual employees, defined the identity of permitted nominees to whom offers under a plan can be renounced, simplified the ASIC notification requirements and made some other changes. During the reporting period the Board resolved to adopt a new share option plan called the Golden Rim Resources Limited Option Incentive Plan ( Plan ) that is consistent with CO 14/1000. The Plan was approved by shareholders on 28 November 2016.

The Plan is designed to attract, retain and motivate eligible employees, promote and foster loyalty and support amongst eligible employees for the benefit of the Company, enhance the relationship between the Company and eligible employees for the long term mutual benefit of all parties and provide eligible employees with the opportunity to share in any future growth in value of the Company through the issue of options.

Each employee share option converts into one ordinary share in the Company on exercise. Unless the Board determines otherwise, no amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. The options may be exercised at any time from the date of vesting to the date of their expiry. The options granted under the Plan are offered to employees and directors on the basis of the Board’s view of the contribution of the person to the company.

In terms of ASX Listing Rules, securities issued under an employee incentive scheme which has been approved by shareholders within three years of the date of issue, are issued as an exception to a company’s 15% placement capacity under the rules.

The Company also issues, from time to time, share options to directors, employees and consultants either under the 15% placement capacity or with the prior approval of shareholders.

The following share based payment arrangements were in existence during the current and prior reporting periods:

Option series	Grant date	Grant date fair	Exercise price	Expiry date	Number of
		value (cents)	(cents)		options
Class E	06/10/2009	13.39	21.00	5/10/2014	600,000
Class F	23/11/2009	11.29	27.00	22/11/2014	7,000,000
Class G	22/11/2010	14.40	21.00	10/07/2015	1,000,000
Class H	22/11/2010	14.10	29.00	21/11/2015	15,000,000
ESOP	22/11/2010	12.20	29.00	21/11/2015	3,900,000
ESOP	13/01/2012	7.55	14.00	12/01/2017	2,150,000

Page | 39

Golden Rim Resources Ltd

Notes to the Financial Statements for the Year Ended 30 June 2017

Option series	Grant date	Grant date fair	Exercise price	Expiry date	Number of
		value (cents)	(cents)		options
Class N	03/11/2014	0.35	1.65	02/11/2016	14,325,900
Class K	28/11/2014	0.25	0.95	27/11/2016	3,000.000
Class L	28/11/2014	0.27	1.45	27/11/2017	4,500,000
Class O Plan	12/01/2017	0.13	2.00	28/11/2017	13,500,000
Class P Plan	12/01/2017	0.25	2.50	28/11/2018	13,500,000
Class Q Plan	12/01/2017	0.33	3.00	28/11/2019	21,500,000

All share options were fully vested on the grant date and there has been no alteration to the terms and conditions of the above share based payment arrangements since the grant date.

Movement, in the current and prior year, in the number and weighted average exercise price (WAEP) of share options issued as share based payments were as follows:

Outstanding at the beginning of the year Granted during the year Expired during the year Outstanding at the end of the year	2017 2016
	Number WAEP Cents Number WAEP Cents
	23,975,900 2.63 43,875,900 27.01 48,500,000 2.58 - - (19,475,900) (2.91) (19,900,000) (28.60)
	53,000,000 2.49 23,975,900 2.63

The weighted average remaining contractual life of outstanding options issued as share based payments as at 30 June 2017 is 1.48 years (2016: 0.57 years).

The weighted average fair value of the share options granted as share based payments during the financial year is 0.25 cents. The options were priced using the Black Scholes option pricing model as follows:

	Class O	Class P	Class Q
Grant date share price	0.90 cents	0.90 cents	0.90 cents
Exercise price	2.00 cents	2.50 cents	3.00 cents
Expected volatility	100%	100%	100%
Option life	10.5 months	22.5 months	34.5 months
Dividend yield	Nil	Nil	Nil
Risk-free interest rate	2.24%	2.24%	2.24%

Historical volatility has been the basis of determining the basis of expected share price volatility and it is assumed that this is indicative of future trends, which may not eventuate.

The life of options is based on historical exercise patterns, which may not eventuate in the future.

15. Key Management Personnel Disclosure

Names and positions of key management personnel of the Company and the Group in office at any time during the reporting period were:

Name	Position
G Lamont	Non Executive Chairman (Director for all of reporting period, appointed Chairman on 6
	October 2016)
C Mackay	Managing Director
R Crabb	Non Executive Director (resigned as Chairman on 6 October 2016)
K Davies	Non Executive Director (from 1 January 2017)
H Butcher	General Manager, Corporate and Company Secretary

Page | 40

Golden Rim Resources Ltd Notes to the Financial Statements for the Year Ended 30 June 2017

Compensation for Key Management Personnel

Compensation for Key Management Personnel
Short-term employee benefits Post-employment benefits Termination benefits Share based payments	Consolidated
	2017 $ 2016 $ 550,834 454,487 48,490 41,454 - - 87,500 -
	686,824 495,941

Other Transactions with Directors

The spouse of Mr Mackay is employed by the Company on a casual basis and earned a gross remuneration of $5,924 (2016: $30,178) during the year.

All transactions between related parties are on normal commercial terms and conditions and are conducted on an arms’ length basis.

16. Remuneration of Auditors – Deloitte Touche Tohmatsu

Audit or review of the financial statements	Consolidated
	2017 $ 2016 $ 42,525 38,985

17. Related Parties

Directors and Key Management Personnel

Disclosures relating to directors and key management personnel are set out in the Directors’ Report and note 15.

Subsidiaries

Balances and transactions between the Company and its subsidiaries (detailed in note 19), which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note.

18. Parent Entity Disclosures

Financial Position Assets Current assets Non-current assets Total assets Liabilities Current liabilities Non-current liabilities Total liabilities Net assets Equity Issued capital Reserves Option reserve Asset revaluation reserve Accumulated losses	Parent Entity	Parent Entity
	2017 $ 648,645 6,947,524	2016 $
		6,700,118
		407,340
	7,596,169	7,107,458
	374,597 80,500
		172,690
		61,215
	455,097	233,905
	7,141,072
		6,873,553
	66,680,957 134,472 (19,137) (59,655,220)
		63,607,959
		232,236
		(19,137)
		(56,947,505)

Page | 41

Golden Rim Resources Ltd

Notes to the Financial Statements for the Year Ended 30 June 2017

Financial Position Total equity Financial Performance (Loss) / Profit for the year Other comprehensive income Total comprehensive Income	Parent Entity
	2017 $ 2016 $
	7,141,072 6,873,553
	Parent Entity
	2017 $ 2016 $ (2,927,730) 2,333,402 - -
	(2,927,730) 2,333,402

In 2016 and 2017 the parent entity did not enter into any guarantees in relation to the debts of its subsidiaries, enter into any commitments for the acquisition of property, plant and equipment or have any contingent liabilities.

19. Subsidiaries and transactions with Non-Controlling Interests

(a) Interest in subsidiaries

Name of Subsidiary Country of Incorporation Golden Rim Chile Pty Ltd Australia Golden Rim SAR Exploration SARL Mali Golden Rim Mali SA1 Mali Golden Rim Resources Burkina SARL Burkina Faso Paguanta Resources (Chile) SA Chile Compania Minera Paguanta SA2 Chile	Cost of Company’s Investment Ownership Interest	Cost of Company’s Investment Ownership Interest
	2017 $ 2016 $ 2017 % 100 100 100 338,834 338,834 90 22,602 - 2,141 2,141 100 6,421,125 - 100 - - 72.7 6,784,802 367,532	2016 %
		100
		90
		100
		100
		-
		-

1 Golden Rim Mali SA was de-registered on 23 July 2016.

2 Paguanta Resources (Chile) SA owns the shares in Compania Minera Paguanta SA.

Shares in the other subsidiaries are held directly by the Company. The subsidiaries have share capital consisting solely of ordinary shares, and the proportion of ownership interests held is equal to the voting rights held by the Group. The country of incorporation is also their principal place of business.

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the Company as at 30 June 2017 and the results of all subsidiaries for the year then ended.

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 involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated 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 the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Page | 42

Golden Rim Resources Ltd Notes to the Financial Statements for the Year Ended 30 June 2017

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

(b) Acquisition of Subsidiaries

On 28 July 2016, the Company announced that it had finalised the transaction with Herencia Resources plc ( Herencia ) to acquire all the issued shares in Herencia’s wholly owned subsidiary Paguanta Resources (Chile) SA ( PRC ). At the date of acquisition PRC held 70% of the shares in Compania Minera Paguanta S.A. ( CMP ) which holds mineral concessions at the Paguanta zinc-silverlead project in northern Chile.

This transaction has been considered to be an asset acquisition rather than a business combination under AASB 3.

The fair value of assets acquired and liabilities assumed at the date of acquisition were as follows:

Cash Receivables Plant and equipment Exploration project Liabilities Non-controlling interest Cash consideration	$ 59,174 68 44,446 2,549,393 (138,971) (160,598)
	2,353,512

In addition to the cash consideration (which included $308,275 paid in the previous financial year), Golden Rim will issue USD0.8 million in fully paid ordinary shares to Herencia at a deemed issue price equal to the 20 day volume weighted average price (VWAP), in the event of a decision to mine at Paguanta.

Chilean exporters may recover the value added tax ( VAT ) paid with respect to their exports. Under certain circumstances, exporters may claim VAT credits in advance before exports are completed or the VAT has been incurred. CMP has received such VAT credits in advance of Chilean Unidad Tributaria Mensual (UTM) 31,341 (approximately AUD2.88 million at 30 June 2017 exchange rates). It is expected that upon export, the VAT credit received will be applied to reduce this advanced VAT credit over time. If CMP does not carry out the exports as approved, such amounts of VAT credits claimed in advanced must be paid back to the tax authorities. These VAT credits have not been reflected in the fair value of assets acquired and liabilities assumed above.

(c) Significant restrictions

There are no significant restrictions noted in relation to these subsidiaries.

(d) Non-controlling interests (NCI)

Set out below is summarised financial information for Golden Rim SAR Exploration SARL in which a 10% ownership interest is held by non-controlling interests. The amounts disclosed are before intercompany eliminations.

Summarised Financial Position

Current assets Non current assets Total assets Non current liabilities Total liabilities Net liabilities Accumulated NCI	2017 $ 2016 $
	12,777 1,514 - -
	12,777 1,514 5,565,097 5,581,534
	5,565,097 5,581,534
	(5,552,320) (5,580,020)
	(555,232) (558,002)

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Golden Rim Resources Ltd

Notes to the Financial Statements for the Year Ended 30 June 2017

Summarised Financial Position

Summarised Financial Performance Profit for the period Other comprehensive income Total comprehensive income Profit allocated to NCI Other comprehensive income allocated to NCI Summarised Cash Flows Cash outflow from operating activities Cash inflow from investing activities Cash (outflow) / inflow from financing activities Net increase / (decrease) in cash and cash equivalents	2017 $	2016 $
	24,629 3,069
		1,857
		(5,257)
	27,698	(3,400)
	2,463	186
	307	(341)
	(2,175) 26,803 (13,365)
		(17,822)
		-
		5,481
	11,263	(12,341)

Set out below is summarised financial information for Compania Minera Paguanta SA in which a 27.3% ownership interest is held by non-controlling interests. The amounts disclosed are before intercompany eliminations.

Summarised Financial Position

Current assets Non current assets Total assets Current liabilities Non current liabilities Total liabilities Net assets Accumulated NCI Summarised Financial Performance Loss for the period Other comprehensive income Total comprehensive income Profit / (Loss) allocated to NCI Other comprehensive income allocated to NCI Summarised Cash Flows Cash outflow from operating activities Cash inflow from financing activities Net increase in cash and cash equivalents	2017 $
	77,636 932,151
	1,009,787
	238,644 566,086
	804,730
	205,057
	(1,065,552)
	(4,328,917) (32,330)
	(4,361,247)
	(1,223,352)
	(2,798)
	(4,208,478) 4,224,517
	16,039

20. Notes to the Statement of Cash Flows

(a) Reconciliation of Cash and Cash Equivalents

For the purposes of the Statement of Cash Flows, cash and cash equivalents includes cash on hand and at call, deposits with banks, and investments in money market instruments net of outstanding bank overdrafts. Cash and cash equivalents at the end of the financial year as shown in the Statement of Cash Flows is reconciled to the related items in the Consolidated Statement of Financial Position as follows:

Page | 44

Golden Rim Resources Ltd

Notes to the Financial Statements for the Year Ended 30 June 2017

Cash at bank

Consolidated
2017	2016
$	$
702,575	6,675,153

(b) Reconciliation of Loss after Income Tax to Net Cash Flow from Operating Activities

Operating profit / (loss) after income tax Depreciation Gain on sale of exploration interests Loss / (Gain) on sale of plant and equipment Interest on unwinding discount on receivable Share based payments Impairment loss on loan Effect of foreign currency translation Change in operating assets and liabilities: Decrease in receivables (Increase) / Decrease in other current assets Decrease in rental bonds Increase / (Decrease) in trade and other payables Increase in provision for employee entitlements Net cash outflow from operating activities	Consolidated
	2017 $ 2016 $ (7,330,119) (274,423) 50,700 24,811 (26,803) (1,327,004) 672 (75,819) - (29,391) 122,250 - - 150,000 256,511 (197,479) (3,058) (8,669) (38,488) 37,786 - 26,866 281,195 (218,791) 82,428 30,082
	(6,604,712) (1,862,031)

21. Financial Instruments

Net Fair Value of Financial Assets and Liabilities

Available for sale investments included in other financial assets are measured at fair value on a recurring basis, using quoted bid prices in an active market (Level 1 hierarchy).

The carrying amounts of financial assets and financial liabilities of the Group approximate their fair values.

The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the Consolidated Statement of Financial Position and in the notes to and forming part of these financial statements.

Page | 45

Carrying Amounts of Financial Assets and Liabilities of the Group

Financial Assets Cash and cash equivalents Trade and other receivables Other current assets Other financial assets Total financial assets Interest rate Financial Liabilities Trade and other payables Total financial liabilities Interest rate	Fixed Interest Rate Floating Interest Rate Non interest Bearing Total
	2017 $ 2016 $ 2017 $ 2016 $ 2017 $ 2016 $ 2017 $ 2016 $ 30,000 20,000 348,378 13,385 324,197 6,641,768 702,575 6,675,153 - - - - 24,000 20,874 24,000 20,874 - - - - - 8,255 - 8,255 - - - - 30,421 30,426 30,421 30,426
	30,000 20,000 348,378 13,385 378,618 6,701,323 757,996 6,734,708
	2.25% 2.58% 0.56% 0.41%
	- - - - 534,714 114,549 534,714 114,549
	- - - - 534,714 114,549 534,714 114,549
	- - - -

The fixed interest rate cash and cash equivalents is held in a six month term deposit.

Interest Rate Risk

The economic entity’s exposure to interest rate risk is the risk that a financial instrument’s value will fluctuate as a result of changes in market interest rates and the effective weighted average interest rate on classes of financial assets and liabilities. The Group does not have a major exposure in this area as the interest rate earned on deposited funds does not vary greatly from month to month.

Sensitivity Analysis

The Company has performed a sensitivity analysis relating to its exposure to interest rate risk at balance date. This sensitivity analysis demonstrates the effect on the current year results and equity which could result from a change in these risks.

The effect on loss and total equity as a result of changes in the interest rate with all other variables remaining constant would be as follows:

Golden Rim Resources Ltd

Notes to the Financial Statements for the Year Ended 30 June 2017

Change in loss - Increase interest rate by 1% (one basis point) - Decrease interest rate by 1% (one basis point) Change in equity - Increase interest rate by 1% (one basis point) - Decrease interest rate by 1% (one basis point)	Consolidated
	2017 $ 2016 $ 6,183 258 (375) (252) 6,183 258 (375) (252)

Credit Risk

The maximum exposure to credit risk, excluding the value of any collateral or other security at balance date to recognised financial assets is the carrying amount of those assets, net of any provisions for doubtful debts, as disclosed in the Consolidated Statement of Financial Position and notes to and forming part of the financial statements. The Group does not have any material credit risk exposure to any single debtor or group of debtors under financial instruments it has entered into.

Foreign Currency Risk and Sensitivity

The Group undertakes transactions denominated in foreign currencies, hence exposures to exchange rate fluctuations arise. The Group does not hedge to reduce the foreign exchange risk as the directors believe the risk is not significant. The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the reporting date in Australian dollars are as follows:

Assets - CLP (Chilean peso) - USD (US dollar) - XOF (CFA franc) Foreign currency denominated monetary assets Liabilities - CLP (Chilean peso) - USD (US dollar) - XOF (CFA franc) Foreign currency denominated monetary liabilities	Consolidated
	2017 $ 2016 $ 95,353 202,828 6,638,522 28,383 2,864
	326,564 6,641,386
	277,025 - 69,119 24,696 41,444 586
	387,588 25,282

Sensitivity Analysis

The table below details the Group’s sensitivity to a 10% increase or decrease in the Australian dollar against the relevant foreign currencies.

gainst the relevant foreign currencies.
		Consolidated
	AUD	2017	2016
		$	$
Change in loss and equity
- Increase in CLP rate by 10%	+10%	(16,516)	-
- Decrease in CLP rate by 10%	-10%	20,455	-
- Increase in USD rate by 10%	+10%	12,155)	(601,257)
- Decrease in USD rate by 10%	-10%	(14,856)	734,870
- Increase in XOF rate by 10%	+10%	(1,187)	207
- Decrease in XOF rate by 10%	-10%	1,451)	(253)

Page | 47

Notes to the Financial Statements for the Year Ended 30 June 2017

Golden Rim Resources Ltd

Market Price Risk

The Group is not exposed to any material market price risk.

Liquidity Risk

The Group manages liquidity risk by monitoring forecast cash flows.

The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The table includes both interest and principal cash flows.

Liquidity risk table of Financial Liabilities

Weighted average effective interest rate %	Less than 1 month $ 1-3 months $ 3 months to 1 year $ Total $
2017
Non-interest bearing	428,949 105,765 - 534,714
2016
Non-interest bearing	87,249 27,300 - 114,549

The following table details the Group’s expected maturity for its non-derivative financial assets. The table has been drawn up based on the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets. The inclusion of information on non-derivative financial assets is necessary in order to understand the Group’s liquidity risk management as the liquidity is managed on a net asset and liability basis.

Liquidity risk table of Financial Assets Weighted average effective interest rate %	Less than 1 month $ 1-3 months $ 3 months to 1 year $ 1-5 years Total $
2017
Non interest bearing - Variable interest rate instruments 0.56- Fixed interest rate instruments 2.25	348,198 - - 30,421 378,619 348,541 - - - 348,541 - - 30,675 - 30,675
	696,739 - 30,675 30,421 757,835
2016
Non interest bearing - Variable interest rate instruments 0.41 Fixed interest rate instruments 2.58	6,662,642 8,255 - 30,426 6,701,323 13,389 - - - 13,389 - - 20,516 - 20,516
	6,676,031 8,255 20,516 30,426 6,735,228

The amounts included above for variable interest rate instruments for both non-derivative financial assets and liabilities is subject to change if changes in variable interest rates differ to those estimates of interest rates determined at the end of the reporting period.

Page | 48

Golden Rim Resources Ltd Notes to the Financial Statements for the Year Ended 30 June 2017

22. Segment Information

The Group operates in one business, namely exploration for mineral resources in various geographical regions. The financial results from this business are presented to the Board on a geographical basis. Information on a geographical segment basis is presented below:

2017

	Australia	South	Africa	Eliminations /	Economic
		America		Unallocated	Entity
	$	$	$	$	$
Interest revenue	4,438	-	-	-	4,438
Gains / (losses)	(126,406)	(29,398)	25,817	-	(129,987)
Mineral exploration expenditure
written off	-	4,998,473	791,271	-	5,789,744
Depreciation expense	22,568	27,385	747	-	50,700
Segment result	(1,508,662)	(5,055,256)	(766,201)	-	(7,330,119)
Income tax expense	-	-	-	-	-
Segment assets	744,520	2,679,420	1,885,705		5,309,645
Segment liabilities	455,098	277,025	4,961	-	737,084
Additions to non-current assets	20,051	49,101	14,618	-	83,770
2016
	Australia	Europe	Africa	Eliminations /	Economic
				Unallocated	Entity
	$	$	$	$	$
Interest revenue	31,647	-	-	-	31,647
Gains and losses	224,888	-	1,446,497	-	1,671,385
Mineral exploration expenditure
written off	-	508,100	209,617	47,670	765,387
Depreciation expense	20,545	-	4,266	-	24,811
Share of loss of joint venture	-	403,212	-	-	403,212
Segment result	235,990	(508,100)	1,184,945	(1,187,258)	(274,423)
Income tax expense	-	-	-	-	-
Segment assets	6,799,183	308,275	1,696,916		8,804,374
Segment liabilities	231,965	-	2,526	-	234,492
Additions to non-current assets	57,277	-	-	-	57,277

The accounting policies of the reportable segments are the same as the Group’s accounting policies described in note 2. Segment result represents the results of each segment without allocation of central administration costs and directors’ salaries, share of losses of associates, investment income, gains and losses, finance costs and income tax expense. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.

23. Expenditure Commitments

Operating Lease Commitments

Non-cancellable leases contracted for the lease of premises that have not been capitalised in the financial statements.

Not later than one year Later than one year, but not later than 5 years	Consolidated
	2017 $ 2016 $ 49,751 60,422 31,671 50,807
	81,422 111,229

Page | 49

Golden Rim Resources Ltd

Notes to the Financial Statements for the Year Ended 30 June 2017

24. Events Occurring after Balance Date

Since the end of the reporting period, except as stated below and elsewhere in this Annual Report, there has not been any matter or circumstance occurring subsequent to the end of the reporting period that has significantly affected, or may significantly affect the operations of the consolidated entity, or the state of affairs of the consolidated entity in future financial years.

Under ASX listing rule 7.1, the Company issued 178,782,000 shares at an issue price of 0.25 cents per share together with a free attaching unlisted option on the basis of one option, exercisable at 0.5 cents and expiring on 6 July 2020, for every two shares subscribed for, to raise up to $446,955 (before costs). Of this amount, the Company received $328,000 prior to the end of the reporting period.

Further, under ASX listing rule 7.1A, the Company issued 178,782,000 shares at an issue price of 0.25 cents per share to raise up to $446,955 (before costs).

The Company also completed a non-renounceable rights issue of two shares for every five shares held, at an issue price of 0.3 cents per share. For every two new shares subscribed for, subscribers were offered one free attaching option exercisable at 0.5 cents each on or before 31 January 2019. Subsequently the Company placed the shortfall under the rights issue so that a total of 858,153,589 shares were issued, raising approximately $2.57 million (before costs).

Page | 50

Golden Rim Resources Ltd

Directors’ Declaration

The directors declare that:

• (a) in the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable;

• (b) in the directors’ opinion, the attached financial statements are in compliance with International Financial Reporting Standards, as stated in note 2(a) to the financial statements;

• (c) in the directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the consolidated entity; and

• (d) the directors have been given the declarations required by section 295A of the Corporations Act 2001.

Signed in accordance with a resolution of the directors made pursuant to section 295(5) of the Corporations Act 2001

On behalf of the Directors

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Glenister Lamont Chairman

27 September 2017

Page | 51

Deloitte Touche Tohmatsu ABN 74 490 121 060

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Tower 2 Brookfield Place 123 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia

Independent Auditor’s Report to the members of Golden Rim Resources Ltd

Tel: +61 8 9365 7000 Fax: +61 8 9365 7001 www.deloitte.com.au

Report on the Audit of the Financial Report

Opinion

We have audited the financial report of Golden Rim Resources Ltd ( the “Company”) and its subsidiaries (the “Group”) which comprises the consolidated statement of financial position as at 30 June 2017, 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, and notes to the financial statements, including a summary of significant accounting policies and the directors’ declaration.

In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:

• (i) giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its financial performance for the year then ended; and

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

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report.

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report for the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Touche Tohmatsu Limited

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Key Audit Matter How the scope of our audit responded to the Key Audit Matter	Key Audit Matter How the scope of our audit responded to the Key Audit Matter
Carrying value of capitalised exploration and evaluation expenditure
As at 30 June 2017 the Group has $4.3m of capitalised exploration expenditure as disclosed in Note 9. Significant judgement is applied in determining the treatment of exploration and evaluation expenditure including:  Whether the conditions for capitalisation are satisfied;  Which elements of exploration and evaluation expenditures qualify for recognition; and  Whether the facts and circumstances indicate that the exploration and expenditure assets should be tested for impairment.	Our procedures included, but were not limited:  Obtaining an understanding of management’s process to evaluate the carrying value of capitalised mineral exploration assets;  Obtaining a schedule of the areas of interest held by the Group and assessing whether the rights to tenure of those areas of interest remained current at balance date and challenging management’s consideration of the ability to recoup the capitalised costs through future development or sale of the area of interest;  Evaluating whether any such areas of interest had reached a stage where a reasonable assessment of economically recoverable reserves existed;  Testing on a sample basis, evaluation expenditure to confirm the nature of the costs incurred, and the appropriateness of the classification between asset and expense;  Assessing whether any facts or circumstances existed to suggest impairment testing was required; and  Assessing the appropriateness of the disclosures in Note 9 to the financial statements.

Other Information

The directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 2017, but does not include the financial report and our auditor’s report thereon.

Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

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Responsibilities of the Directors 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 preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit 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 Group’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

• Conclude on the appropriateness of the director’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of

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our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group’s audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on the Remuneration Report

Opinion on the Remuneration Report

We have audited the Remuneration Report included in pages 17 to 22 of the Director’s Report for the year ended 30 June 2017.

In our opinion, the Remuneration Report of Golden Rim Resources Ltd, for the year ended 30 June 2017, complies with section 300A of the Corporations Act 2001.

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Responsibilities

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.

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DELOITTE TOUCHE TOHMATSU

John Sibenaler Partner Chartered Accountants Perth, 27 September 2017

Golden Rim Resources Ltd

Additional Shareholder Information

The following additional information is current as at 18 September 2017 and is provided in compliance with the requirements of ASX.

Distribution of Listed Ordinary Shares and Options

The following is an analysis of the number of shareholders by size of holding.

Distribution	No. of Shareholders No. of unquoted Option holders No. of quoted Option holders
1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over Total holders	160 17 61 15 48 14 848 253 2,064 92 212
	3,181 92 511

There were 1,470 shareholders holding less than a marketable parcel of shares.

The percentage of the total of the 20 largest holders of ordinary shares was 29.91%.

261,773,500 unquoted options are held by 92 individual option holders. 211,308,917 quoted Options are held by 511 individual option holders. No options carry a right to vote.

20 Largest Shareholders

The names of the 20 largest shareholders of shares (unconsolidated) are listed below:

Name	No of Shares Held	%
BNP PARIBAS NOMS PTY LTD	252,095,929	9.82
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED	118,034,529	4.60
MR DAVID JOHN DWYER & MRS LYNETTE MAREE DWYER	67,710,240	2.64
MR DAVID JOHN DWYER & MRS LYNETTE MAREE DWYER	65,865,306	2.56
PAL TECHNOLOGY SERVICES LLC	52,521,875	2.05
WARREGO INVESTMENTS PTY LTD	40,000,000	1.56
MR DAVID JAMES PORTER	26,235,641	1.02
MR NEVRES CRLJENKOVIC	25,150,000	0.98
MR HAILONG LI	23,285,000	0.91
MR YUNG WING HO & MRS KATHERINE KAM LING HO	21,170,271	0.82
MR MARK ANDREW TKOCZ & MS SUSAN ELIZABETH EVANS	21,000,000	0.82
MISS BIANCA PREMRAJ	16,800,000	0.65
DR CHRISTOPHER KONG LENG SHUN & MRS SOOK LENG CHOY	16,800,000	0.65
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED	15,699,575	0.61
WESTESSA HOLDINGS PTY LTD	15,466,203	0.60
CITICORP NOMINEES PTY LIMITED	15,154,825	0.59
MR CHRISTOPHER JOHN GIRLING & MS YVETTE LOUISE CLARK	13,864,012	0.54
MR ROHAN LEWIS	13,608,824	0.53
HT WOOL CONSULTANT PTY LTD	12,630,187	0.49
MRS LILIANA TEOFILOVA	12,023,000	0.47
MR IANAKI SEMERDZIEV	11,599,000	0.45
TOTAL	641,719,843	29.91

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Golden Rim Resources Ltd

Substantial Shareholders

Acorn Capital Limited is a substantial shareholder holding 9.82% of the Company’s shares.

Voting Rights

The Company's share capital is of one class being ordinary shares. The voting rights attached to those shares are that on a show of hands every shareholder present in person or by proxy shall have one vote and upon a poll each share shall have one vote.

Restricted Securities

There are no shares on issue that have been classified by ASX, as restricted securities.

Securities Exchange Listing

Golden Rim shares are listed on the Australian Securities Exchange. The home branch of the exchange is in Perth.

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