ATHENA RESOURCES LIMITED

ANNUAL REPORT 2014

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ACN 113 758 900

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NT
QLD
WA
SA
NSW
VIC
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113° E 115° E 117° E 119° E
Carnarvon
Gascoyne
Junction
Carnarvon [] Mullewa Road Robinson Range
Iron Ore
Jack Hills
Shark
Bay BYRO Iron Ore
PROJECT
AREA
(2500 km [2] )
Weld Range
Iron Ore
Meekatharra
North West [] Coastal Highway
Cue
Proposed Midwest Railway
Kalbarri
Tallering Peak
Mt Magnet
Iron Ore
Oakajee
(Proposed Port) Mullewa Karara / Mungada
Iron Ore
Geraldton
0 75km
120° E 126° E
Figure 1 0 500km
WYNDHAM
DERBY
BROOME
HALLS CREEK
20° S
PORT HEDLAND
EXMOUTH NEWMAN
BYRO PROJECT • Base Metals - Iron Ore
CARNARVON
26° S MEEKATHARRA
GERALDTON
32° S PERTH
The photographs contained in this Annual Report are for illustration
purposes only and are not necessarily assets of the Company. ALBANY
Dampier - Bunbury Gas Pipeline
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01	Company Information��2
02	Review of Operations��3
03	Directors’ Report��16
04	Corporate Governance Statement��22
05	Auditor’s Independence Declaration��31
06	Statement of Comprehensive Income��32
07	Statement of Financial Position��33
08	Statement of Changes In Equity��34
09	Statement of Cash Flows��35
10	Notes to and Forming Part of the Financial Statements��36
11	Directors’ Declaration��51
12	Independent Auditor’s Report��52
13	Shareholder Details��54
14	Interest In Mining Tenements��56

Athena Resources I Annual Report 2014

ABN

69 113 758 900

Directors

Secretaries

Registered Office

D A Webster (Chairman) E W Edwards (Managing Director) R P Kandiah (Non Executive Director) E W Edwards P J Newcomb 24 Colin Street West Perth, WESTERN AUSTRALIA 6005

Telephone: +61 8 9222 5888 Facsimile: +61 8 9222 5810 Email: [email protected]

Postal Address Share Registry

PO Box 1970 West Perth, WESTERN AUSTRALIA 6872

Computershare Investor Services Pty Ltd Level 2, Reserve Bank Building 45 St Georges Terrace Perth, WESTERN AUSTRALIA 6000 Telephone: +61 8 9323 2000 Facsimile: +61 8 9323 2033

Auditor

HLB Mann Judd Level 4, 130 Stirling Street Perth, WESTERN AUSTRALIA 6000

Telephone: +61 8 9227 7500 Facsimile: +61 8 9227 7533

Bankers

Westpac Banking Corporation 1257 Hay Street West Perth, WESTERN AUSTRALIA 6005

Securities Exchange Listing

Athena Resources Limited shares are listed on the Australian Securities Exchange (Home Exchange – Perth) ASX Code: Shares AHN

Website

www.athenaresources.com.au

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Company Information I Review of Operations

REVIEW OF OPERATIONS

ThE BYRO PROJECT

1. INTRODUCTION

LOCATION AND TENURE

Athena’s Byro Project is located 210km north of Mullewa and 250 km north east of Geraldton. It covers approximately 2,500 square kilometres and consists of nine exploration licences. Athena has a 100% interest in the project. The Company has applied and received authorisation to explore for iron ore on the exploration licences.

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Figure 1
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Athena Resources I Annual Report 2014

REVIEW OF OPERATIONS (Continued)

GEOLOGY AND MINERALISATION

Athena’s Byro Project is located along the north-western margin of the Yilgarn Craton, within an Archaean Gneiss Belt which trends north-northeast for approximately 200km. The geology is predominately quartzo-feldspathic gneisses and migmatites with amphibolites, quartzites, BIF’s, felsic volcanics and layered mafic-ultramafic intrusions. Regional folding and thrusting has resulted in a steep dominant westerly dip and north-northeast strike, although locally this varies from north to east. The iron ore at Byro has been characterised by a coarse metamorphic grain size, super low impurities during development of thick migmatite layers in the upper amphibolite - granulite metamorphic terrain.

Outcropping sequences of mafic to ultramafic lithologies suggest a series of prospective intrusions, the extent of which has been refined with gravity and detailed magnetic surveys where alluvial cover persists. Past exploration in the region indicates the presence of anomalous copper-nickel-PGE and chromite mineralisation. Two altered, layered mafic-ultramafic bodies are found at Taccabba Well and Imagi Well where iron-rich chromite occurrences have been discovered. Copper gossans exist at the edge of the Milly Milly Intrusion. Nearby historic drilling intersected copper and nickel mineralisation. Further drilling by Athena has advanced the understanding of this intrusive body as being a highly prospective fertile system.

2. BASE METALS - NICKEL-COPPER AND PGE

In 2006, Athena was introduced to the prodigious geological credentials and potential for base metal exploration within the Byro area hosting the Milly-Milly intrusion and the Chromite discovery within the Imiagi Well layered ultramafic intrusion, Athena has since identified three new layered intrusive systems at Moonborough, Central Byro and at Mt Narryar.

Athena considers the Byro area to be highly prospective for Ni-Cu and PGE’s, The deep sutures adjacent to the Byro tenements could have sourced Ni-Cu-PGE bearing fluids from depth as seen in the Milly-Milly Ni-Cu and PGE intrusion.

Athena in 2010 confirmed the fertility of the previously under explored 6.5km × 1.5km Milly-Milly intrusion and successfully demonstrated its potential to host concentrations of Ni-Cu and PGE’s. Here, copper appears in the form of native copper and has been shown to form in aggregates with the pentlandite nickel sulphide. The Ultramafic to mafic intrusions found at Byro are rare on a global scale due to the unique geological environment. Successful exploration of these systems can be extremely valuable.

The Milly Milly Intrusive is in a tectonic setting of large scale crustal sutures and extensional rifting, broadly comparable to the major Jinchuan, Voisey’s Bay and Raglan deposits. Athena has confirmed the coincidence of undifferentiated mafics, mineralised pyroxenite, gabbros and dunite ultramafic rocks intruding through deeply buried high grade metamorphic country rocks common throughout the Byro tenements. This derivation is indicative of a pyroxenitic intrusive parentage in an extensional environment through deep feeder conduits incorporating potential assimilation of country rock. Ni-Cu and PGE development in conjunction with high MgO of 40% to 45% and an Mg number between 80 and 90 determined by assays demonstrate a fertile system.

The prospective attributes of the Milly Milly Intrusive include,

Fertile altered Serpentine Antigorite c/w abundant olivine adcumulate of consistently high MgO (37.3 %< 44.8%).
Consistent primary Ni sulphide averaging 2736 ppm.
Anomalous zones of increased sulphur, chrome, nickel, copper and PGE’s.
Upgrade of pentlandite to millerite during serpentinisation.
Remobilised sulphides into veinlets.
High tenor nickel sulphide, millerite from SEM analyses, (76% Ni).

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Review of Operations 5

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435,000 mE 440,000 mE
Milly Milly Gravity Survey
September 2014
Colour Gravity Over
Aeromagnetics
Gravity Contours
E09/1637
E09/1507
0 1,000
metres
435,000 mE 440,000 mE
Figure 2
7,125,000 mN
7,125,000 mN
7,120,000 mN
7,120,000 mN
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Athena Resources I Annual Report 2014

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435,000 mE 440,000 mE
Milly Milly Gravity Survey
September 2014
Colour Residual Gravity
Over Aeromagnetics
Gravity
Anomaly 3
Gravity
Anomaly 2
E09/1637
E09/1507
Gravity
Anomaly 1
0 1,000
metres
435,000 mE 440,000 mE
7,125,000 mN
7,125,000 mN
7,120,000 mN
7,120,000 mN
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Figure 3
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Review of Operations 7

REVIEW OF OPERATIONS (Continued)

high Resolution Gravity Survey

In August 2014 Athena completed a high resolution gravity survey (Figure 1) identifying three significant and untested anomalous zones. The anomalous zones rise in amplitude by up to 10 milliGals compared to background amplitudes commonly associated with the bulk of the intrusive body. Data was acquired over an area of 39 square kilometres and included 950 stations for a total of 65 line kilometres. The sample stations were at 50m, 100m and 200m spacings.

Anomalies 1 and 2 identified by the gravity survey (Figure 2), are interpreted to be at a depth within drilling range and will form a DHEM platform to further define the potential of the anomalies.

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7
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Anomaly 1 (Figure 3), is located at the western contact of the northern lobe where the gravity gradient is aligned with the western magnetic contact for a strike length of 2.5 kilometres.

Anomaly 2 (Figure 3), is located approximately 1 km northwest of anomaly 1 and carries amplitude of -3.2 milliGals which is a significant 10 milliGals higher than the central southern lobe of the intrusion and significantly higher than the density of the overlying sedimentary package.

Anomaly 3 (Figure 3) is located approximately 2 kms north of anomaly 1 and carries amplitude of -3.6 milliGals which is a significant 9.6 milliGals higher than the central northern lobe.

The high resolution gravity stations processed over anomaly 2 indicate testing the anomaly could be achieved by drilling but depths are greater than 800m. The gravity response suggests the sediment package is not as thick or deep as previously interpreted.

Electromagnetic surveys, DHEM and Ground EM are being planned to follow up on the gravity anomalies.

To date one drill hole has been completed following the recently completed detailed gravity survey (AHDH0006) targeting in the region of Anomaly 1, a local gravity anomaly, coincident with a nickel soils anomaly and a structural dilation zone. This hole was completed and intercepted disseminated and stringer sulphides in core from two zones of mineralisation. AHDH0006 was ended at 279.7m. Interpretation and targeting has been completed and drilling is underway for a second diamond drill hole, AHDH0007 targeting the high amplitude gravity at Anomaly 1 on the western contact of the Milly Milly Intrusion with an estimated target depth between 200 and 450m.

3. BYRO IRON ORE

LOCATION AND ACCESS

The Byro Iron project is strategically located in the Midwest Iron province which includes a substantial mining sector. The projects southern boundary is 210km north of the Mullewa Rail Siding by road and 250km from the Port of Geraldton. Development of the Byro Iron project is expanding the overall resource in the Midwest region along with neighbours at the Gindalbie and Ansteel’s Karara Iron Project, Sinosteel’s Weld Range Project, the proposed Jack Hills Expansion Project, Padbury’s Robinson Range Project and Mt Gibson’s Extension Hill mine amongst others. Access and improved infrastructure to the maturing iron ore province is growing with development of the CSIRO SKA Project and increased capacity and further development at the Port of Geraldton. The region is also awaiting the inevitable development of the Oakajee deep water bulk shipping port north of Geraldton to cater for the export of many billions of tonnes of iron ore currently in JORC compliant resources in the region.

The Byro Iron Ore project comprises three types of iron ore which are magnetite, insitu hematite and pisolite including lateritic hematite. All the iron ore sourced from Byro has been characterised by a coarse metamorphic grain size, super low impurities during development of thick migmatite layers in the upper amphibolite - granulite metamorphic terrain. This year a proportion of the company’s work has been focused on mapping and sampling potential direct shipping hematite ore (DSO) at Byro. This work builds on the magnetite iron resource and beneficiation test work on hematite ore in the previous year. As a result of work completed the company has built up a large number of highly prospective magnetite, DSO and beneficiation hematite targets with positive assay and metallurgical test results now being included in the Byro Iron Project.

Results received during the year have further advanced the Byro Iron Ore Project in the the southern tenements at Mt Narryar and hematite ore metallurgy in the north.

Athena Resources I Annual Report 2014

REVIEW OF OPERATIONS (Continued)

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MAGNETITE AT MT NARRYAR

At Mt Narryar East, magnetite assay results were consistently above 40% Fe along the length of the outcrop, with only one result, MBCR483 below. This sample was from a weathered hematite pisolite. The surface exposure of magnetite confirms the aeromagnetic anomaly of up to 5.4 kilometres length.

The Mt Narryar East outcrop displays variable thickness. At the widest point up to 80m wide and narrows to 25m in some cases. Average width is estimated around 40m. The anomaly is a first order magnetite target given its location, continuity of geology and potential volume.

The Northwest magnetite anomaly at Mt Narryar, comprises a series of close spaced interbedded parallel magnetite sequences colated with sheared granite and gneiss. Fe from assay results ranging from 35% to 40.5% Fe, taken from asporadic outcrop.

Table 1 Magnetite Assays from Outcrop at Mt Narryar East

Sample	East	North	Fe	SiO2	Al2O3	P XRF	S XRF	LOI

MBCR483 MBCR484 MBCR485 MBCR487 MBCR488 MBCR489 MBCR490 MBCR491	395840 396108 396115 396206 396410 396541 396027 397041	7062566 7063029 7063143 7063646 7063709 7063755 7063704 7064174	23.27 40.04 43.58 40.33 46.38 43.84 39.17 36.35	54.27 39.93 34.31 38.38 27.90 34.99 39.20 44.99	4.25 0.76 0.99 0.92 1.87 0.97 1.56 1.13	0.026 0.02 0.03 0.02 0.04 0.04 0.03 0.03	0.084 0.11 0.12 0.04 0.11 0.05 0.07 0.06	6.36 1.39 1.77 2.47 2.95 0.94 3.02 1.39
MBCR492	397969	7063379	37.42	42.49	0.70	0.07	0.09	0.87

Review of Operations

REVIEW OF OPERATIONS (Continued)

Table 2. Magnetite Outcrop at Mt Narryar North West

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Sample East North Fe SiO2 Al2O3 P XRF S XRF LOI
MBCR477 390500 7066836 35.31 47.38 0.84 0.02 0.08 0.83
MBCR478 390441 7066679 40.53 38.83 0.28 0.02 0.24 1.98
MBCR479 390384 7066674 37.59 44.62 0.72 0.01 0.06 0.64
MBCR480 390302 7066450 39.66 41.23 0.77 0.07 0.08 0.52
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Table 3. Wet Low Intensity Magnetic Separation Resultst

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Grind Magnetite Concen- Fe Grade in Concen- Fe Mass
Size trate trate Recovery Recovery
P80 250µm 94.8% Fe3O4 68.6% Fe 94.10% 49.40%
P80 150µm 97.9% Fe3O4 70.8% Fe 93.70% 47.40%
P80 125µm 98.5% Fe3O4 71.3% Fe 93.10% 46.50%
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These results were achieved from an iron head grade of 35.5% Fe.

Figure 4. Grind Size Vs. Time to grind in seconds

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300
250
y = 3966.6x [-0.5865]
200 R = 0.99682
Series 1
um 150
Power (Series 1)
100
300
0
0 500 1000 1500 2000 2500 3000 3500
Sec
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FIRST PASS UPGRADE OF BYRO BENEFICIABLE hEMATITE

At the Think Big Prospect, a 5.4 Km long hematite body outcropping at kilometre scale exposures, the average iron content from surface samples to date is 43% Fe. A composite of samples was processed to test potential for upgrade to a furnace grade product. The samples were from outcrop in three separate locations over a 1 kilometre strike. The composite was crushed to 500µm and assayed, results below, in Table 3 show the composite sample had an Fe assay 44.6%. The sample was then processed through a gravity separation Wilfley table dividing the sample into seven fractions based on density. The various cuts were assayed and the cumulative results listed in Table 4.

Athena Resources I Annual Report 2014

REVIEW OF OPERATIONS (Continued)

Table 4. Composite feed grade

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Conc Scaled Grade (%) and Distribution
Mass (g) % Retain
Sample Mass (g) Fe SiO2 Al2O3 P S LOI1000
Calc head 2985 3000 100.00 44.9 31.77 1.55 0.02 0.07 1.76
Assay Head 44.6 32.22 1.63 0.02 0.08 1.76
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The whole rock feed grade iron content of 44.6% and silica 32.2% combined is approaching 77% of the rock mass. Removal of the silica from the rock mass by simple gravity has been proven possible in the first stage, (Rougher Phase).

Table 5. Wilfley Table Concentrates Assays.

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Cumulative Concentrate Grade (%) and Retained Distribution
Cumulative Cum.%
Retain
Conc Retain Fe SiO2 Al2O3 P S LOI
Cut 1 5.5 5.5 61.3 7.5 9.0 1.6 1.2 4.1 0.02 4.1 0.07 5.3 1.37
Cut 1 - 2 5.9 11.4 58.6 14.9 12.9 4.6 1.2 9.1 0.02 9.4 0.07 11.7 1.49
Cut 1 - 3 5.4 16.8 58.5 21.8 13.0 6.8 1.3 13.5 0.02 13.9 0.07 16.2 1.50
Cut 1 - 4 12.8 29.5 57.4 37.8 14.5 13.5 1.3 24.3 0.02 24.7 0.06 26.3 1.52
Cut 1 - 5 23.9 53.4 55.3 65.8 17.4 29.3 1.3 45.0 0.02 44.8 0.06 45.9 1.59
Cut 1 - 6 20.4 73.8 50.7 83.4 24.0 55.7 1.3 62.9 0.02 62.9 0.06 63.0 1.57
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Table 5 shows the cumulative grades achieved with the cut 1 cumulate to cut 6, Cut 7 being dominantly fine clays, silica and Al2O3. The assay shows very low levels of contaminant minerals, sulphur Al2O3 and phosphorous. The results also show contaminant minerals are similar to the Byro magnetite both in JORC resource and from drilling at other locations. Grain size of the hematite within the rock varies from 0.25mm to 1.5mm with distinctive boundaries between the hematite and quartz. A grind size of 500µm was chosen on the basis of grain size and style of grain boundary. These initial results suggest this could be further optimized and will be confirmed with petrological study of the master composite grinds.

Further Surface Sampling and Mapping

The 2,500 square kilometers of tenements held by Athena host multiple locations where whole rock assays from surface sampling have demonstrated iron grades in excess of 50% Fe.

At the Heppenstal Prospect within tenement E09/1507, a new and untested hematite outcrop adjacent to previously reported high grade assays from float rock was mapped and sampled. Assays received and announced in this period range from 46.1% Fe up to 52.4% Fe.

Hematite/martite in samples from this location display a grain size of up to 4mm under reflected light microscopy. Some of the martite grains display occasional octahedral shapes easing identification. The very coarse grain hematite/martite presents favourable processing options. Four samples were assayed and are presented in Table 5.

Table 6. heppenstal Prospect Assay Results

Sample	ID	East	North	RL	Fe	SiO2	Al2O3	P XRF	S XRF	LOI

MBCR504 MBCR505 MBCR506 MBCR507 UNITS DETECTION METHOD		418153 418167 418412 418205	7122835 7122834 7122707 7122800	352 355 353 356	46.10 47.25 52.40 47.89 % 0.01 XRF202	25.83 24.22 16.55 27.02 % 0.01 XRF202	3.41 4.08 1.94 0.86 % 0.01 XRF202	0.036 0.100 0.073 0.015 % 0.001 XRF202	0.106 0.061 0.071 0.139 % 0.001 XRF202	3.73 3.80 5.50 2.71 % 0.01 ROBTGA

Direct Shipping Ore

Three potential DSO ore bodies were defined by surface mapping are the Tabaroa South Ore Body, the Heppenstall Ore Body, and the Olvidado Ore Body.

The Tabaroa South DSO Ore Body.

At Tabaroa South surface mapping and sampling followed up surface assays in excess of 56% Fe and structural interpretation. Assays have revealed high grades of up to 58.56% Fe in hematite, Table 6. Samples were taken from out crop which was mapped with a significant total length 1048m.

The body has substantial width, up to 60m in places and dips below surface at variable angles from 30 to 70 degrees. Accurate average widths cannot be calculated until drilling is completed and dip is determined. The body is marked by a 30m rise in the local topography and is bounded by shallow preferentially eroded valleys in a region of complex geology.

The northern section is strongly strained and truncated by faulting. The eastern contact appears to be constrained by an oblique thrust while the southern section is also truncated by faulting. The larger mid section is mostly competent and less fractured. Overall outcrop extends for 1040m within a topographic prominence of 20m above local drainage. This first substantial body discovered in Athena tenements to date has returned assays equivalent to direct shipping ore grade.

Table 7. Tabaroa South Assay Results

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Sample ID East North Fe SiO2 Al2O3 CaO P XRF S XRF LOI
MBCR531 422940 7128692 55.87 10.90 1.87 0.03 0.017 0.122 6.22
MBCR532 422954 7128654 57.04 7.10 0.85 0.08 0.028 0.134 9.18
MBCR533 422986 7128631 57.11 5.88 0.81 0.04 0.014 0.085 10.73
MBCR534 423048 7128587 56.97 6.43 1.25 0.03 0.027 0.078 9.46
MBCR535 423070 7128553 56.10 9.31 1.04 0.03 0.022 0.135 8.02
MBCR536 423060 7128498 54.73 7.23 2.15 0.12 0.039 0.252 10.41
MBCR537 423041 7128463 57.87 5.65 1.81 0.09 0.019 0.154 8.53
MBCR539 423031 7128395 57.91 5.34 1.45 0.04 0.013 0.143 9.04
MBCR540 423027 7128312 55.58 7.64 0.90 0.16 0.019 0.172 10.62
MBCR541 423059 7128251 57.40 5.89 0.59 0.13 0.017 0.105 10.26
MBCR542 423099 7128211 54.22 11.50 0.43 0.25 0.014 0.181 9.02
MBCR543 423133 7127978 58.56 6.98 1.10 0.20 0.025 0.158 6.86
MBCR544 423268 7128083 56.74 4.88 2.68 0.06 0.156 0.103 8.77
MBCR545 423264 7128020 55.98 7.05 3.03 0.11 0.086 0.148 8.10
MBCR546 423203 7127888 49.81 12.06 7.42 0.08 0.027 0.171 7.63
MBCR547 423165 7127819 53.99 8.03 3.02 0.03 0.022 0.127 10.58
MBCR548 423139 7127731 56.41 8.83 3.27 0.13 0.020 0.175 5.91
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Note: Fe: Iron; SiO2: Silicon Dioxide; AI2O3 : Aluminium Oxide; P: Phosphorus; LOI: Loss On Ignition. All assays are XRF.

The heppenstall DSO Ore Body.

Surface mapping and sampling, found the origin of the high grade hematite iron previously identified in float rock assays. The DSO is a component of the larger Granular Iron Formation (GIF), which has had successful beneficiation test work completed to test potential concentration to a furnace grade, discussed later in hematite beneficiation in this quarterly. Assays revealed DSO hematite grades at Heppenstall of up to 60.5% Fe from surface float and average grade from out crop samples of 55.55% Fe. Outcrop was mapped with a significant total length of 500m and variable width of up to15 meters, where the contact was visible. In both surface float and outcrop the hematite is massive and lacks the characteristic banding seen in the adjacent GIF formation.

Athena Resources I Annual Report 2014

REVIEW OF OPERATIONS (Continued)

Table 8. heppenstall Surface Sample Assays

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Sample Id East North Al2O3 Fe P S SiO2 LOI
MBCR180 418500 7122732 na 55.64 0.019 na 4.74 na
MBCR181 418455 7122774 na 55.42 0.017 na 7.92 na
MBCR182 418460 7122775 na 48.54 0.028 na 13.65 na
MBCR183 418439 7122747 na 58.25 0.067 na 5.61 na
MBCR184 418358 7122854 na 56.13 0.015 na 12.08 na
MBCR312 418415 7122923 5.01 55.37 0.039 0.157 7.15 7.17
MBCR313 418419 7122922 1.17 60.50 0.024 0.062 5.86 5.05
MBCR504 418153 7122835 3.41 46.10 0.036 0.106 25.83 3.73
MBCR505 418167 7122834 4.08 47.25 0.100 0.061 24.22 3.80
MBCR506 418412 7122707 1.94 52.40 0.073 0.071 16.55 5.50
MBCR507 418205 7122800 0.86 47.89 0.015 0.139 27.02 2.71
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Note: Fe - Iron; SiO2 - Silicon Dioxide; AI2O3 - Aluminium Oxide; P - Phosphorus; LOI - Loss On Ignition. na = not assayed at the time

Table 9 Olvidado Surface Sample Assay Results

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Sample ID East North Fe SiO2 Al2O3 P XRF S XRF LOI
MBCR517 416625 7127244 56.26 6.49 1.00 0.115 0.092 10.98
MBCR518 416616 7127219 55.34 7.43 1.38 0.094 0.103 10.51
MBCR519 416624 7127239 56.41 6.80 1.51 0.071 0.113 9.90
MBCR520 416629 7127255 52.48 14.75 0.88 0.054 0.123 8.40
MBCR521 416615 7127283 55.05 9.68 1.19 0.047 0.124 9.16
MBCR522 416621 7127309 52.18 13.12 1.03 0.037 0.229 9.58
MBCR523 416618 7127337 53.57 10.39 0.84 0.021 0.254 10.07
MBCR524 416557 7127349 43.83 26.16 2.24 0.062 0.138 7.74
MBCR525 417487 7127690 52.39 20.88 0.90 0.060 0.026 2.50
MBCR526 417345 7127842 47.45 22.80 1.51 0.192 0.042 6.74
MBCR527 417121 7127557 51.9 14.87 1.69 0.031 0.137 8.10
MBCR528 417086 7127673 55.92 7.55 1.21 0.027 0.163 9.57
MBCR529 420302 7125916 55.84 5.23 2.79 0.263 0.071 10.83
MBCR530 420305 7125944 57.36 8.47 0.63 0.049 0.090 7.95
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Surface mapping and sampling followed up on Fe oxide anomaly and structural mapping. The body of the Olvidado DSO is of limited strike length, at this stage, ~300m but the extent of the Iron formations it is associated with is greater than 2.5 kilometers. Further detailed mapping will be carried out to test the areas within these iron formations that fit the modeled structural constraints.

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Review of Operations 13

REVIEW OF OPERATIONS (Continued)

The Think Big North DSO Ore Body.

During the June 2014, 18 samples were taken from an enriched zone at the northern section of the Think Big Prospect. Assays have revealed high grades of up to 58.67% Fe in hematite. Samples were taken from out crop which was mapped with a significant length of greater than 500m.

The rock type mapped is dominantly massive hematite plus goethite with little evidence of banding or visible discrete silica as grains. The deposit is structurally bound by contact to the east with a magnetic banded iron formation and to the west by a sheared intercalated granite and gneiss schist. The northern and southern extents appear to be truncated by faulting. The surface exposure of the hematite / goethite is pervasive between neigbouring lithologies, with an average width of approximately 40m, striking to the north and dipping to the west. The body of the deposit has a marked rise in local topography bounded by shallow preferentially eroded drainage channels within a region of ancient geology.

Table 10 Think Big Assay Result

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Sample_Id Lith East North Al2O3 Fe P S SiO2 LOI
MBCR286 BIF 418497 7129958 0.59 42.1 0.019 0.062 37.94 0.81
MBCR287 BIF 418492 7129815 0.37 41.1 0.031 0.028 37.76 0.48
MBCR288 BIF 418405 7129331 0.89 35.3 0.038 0.010 45.58 0.43
MBCR289 BIF 418369 7128920 0.81 32.6 0.043 0.010 49.19 0.55
MBCR451 BIF 418376 7128972 1.06 41.2 0.076 0.064 38.03 1.48
MBCR567 Hem 418382 7129157 1.62 56.2 0.047 0.100 5.32 11.12
MBCR568 Hem 418398 7129159 1.36 56.4 0.050 0.112 8.19 8.12
MBCR569 Hem 418399 7129177 1.00 57.8 0.044 0.153 5.31 9.38
MBCR570 Hem 418379 7129180 0.76 56.3 0.058 0.118 7.56 9.40
MBCR571 Hem 418382 7129203 1.02 58.5 0.057 0.116 5.39 8.13
MBCR572 Hem 418367 7129221 1.29 56.6 0.052 0.160 4.32 11.20
MBCR573 Hem 418366 7129254 0.86 57.6 0.041 0.118 4.88 10.04
MBCR574 Hem 418379 7129306 1.49 56.8 0.066 0.087 5.17 10.47
MBCR575 Hem 418397 7129348 1.49 57.4 0.061 0.087 4.28 10.24
MBCR576 Hem 418383 7129282 0.56 57.5 0.039 0.107 5.57 10.16
MBCR577 Hem 418394 7129210 0.63 58.7 0.061 0.133 5.30 9.16
MBCR578 Hem 418369 7128988 1.18 57.1 0.034 0.057 3.35 12.02
MBCR579 Hem 418365 7128947 0.91 56.5 0.027 0.132 4.77 11.86
MBCR580 Hem 418346 7128922 0.88 53.1 0.024 0.154 10.40 11.15
MBCR582 Hem 418700 7130599 1.25 54.0 0.100 0.108 12.29 7.72
MBCR583 Hem 418393 7129162 3.20 54.2 0.021 0.079 6.49 12.09
----- End of picture text -----

Note: Fe: Iron; SiO2: Silicon Dioxide; AI2O3 : Aluminum Oxide; P: Phosphorus; LOI: Loss On Ignition. All assays are XRF %.

This substantial size body with average Fe grades above 56% Fe adds to the other outcrops at Tabaroa South, Olvidado and Heppenstall within Athena tenements. It is Athena’s highest priority to drill test the depth of these bodies.

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Athena Resources I Annual Report 2014

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Cautionary Notes

Forward Looking Statements

This announcement contains certain statements that may constitute “forward looking statements”. Such statements are only predictions and are subject to inherent risks and uncertainties, which could cause actual values, results, performance achievements to differ materially from those expressed, implied or projected in any forward looking statements.

JORC Code Compliance Statement

Some of the information contained in this announcement is historic data that have not been updated to comply with the 2012 JORC Code. The information referred to in the announcement was prepared and first disclosed under the JORC Code 2004 edition. It has not been updated since to comply with the JORC Code 2012 edition on the basis that the information has not materially changed since it was last reported.

Competent Persons Statement

The information included in the announcement was compiled by Mr Liam Kelly, an employee of Athena Resources Limited. Mr Kelly is a Member of the Australasian Institute of Mining and Metallurgy, and has sufficient relevant experience in the styles of mineralisation and deposit styles under consideration to qualify as a Competent Person as defined in “The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2012 Edition)”. Mr Kelly consents to the inclusion of the information in the announcement in the context and format in which it appears and that the historical information was compliant with the relevant JORC Code, 2004 Edition , and new information announced in this report is compliant with the JORC Code 2012 Edition.

Competent Persons Disclosure

Mr Kelly is an employee of Athena Resources and currently holds securities in the company.

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Athena Resources I Annual Report 2014

DIRECTORS’ REPORT

Your Directors submit their report on the consolidated entity consisting of Athena Resources Limited and its controlled entities (“Athena”) for the financial year ended 30 June 2014.

DIRECTORS

The names of directors who held office during or since the end of the year and until the date of this report are as follows. Directors were in office for this entire period;

David Arthur Webster Chairman Edmond William Edwards Managing Director Rajakumar Paul Kandiah Non-Executive Director

PARTICULARS OF DIRECTORS AND COMPANY SECRETARIES

David Arthur Webster Chairman

Experience

Mr Webster’s career in Australian agriculture includes developing an extensive run of farming properties in Western Australia and restructuring the Australian wool industry. More recently Mr Webster has been involved in significant Chinese investments in agriculture and associated infrastructure in Australia. He is currently a director of Australian Wool Innovation Limited (AWI) where he is also Chairman of the Finance and Audit Committee and he is a director of the Australian Wool Testing Authority Limited.

Mr Webster’s considerable commercial expertise together with many years of experience of working with government at the highest level, both in Australia and overseas, is of substantial value to Athena Resources.

Interest in Shares and Options

2,924,056 Fully Paid Shares

Special Responsibilities

Mr D Webster is Chairman of the Audit Committee.

Directorships held in listed entities

In the 3 years immediately before the end of the financial year Mr D Webster did not serve as a director of any other listed companies.

Edmond William Edwards

Managing Director and Joint Company Secretary

Qualifications

Mr Edwards is a Chartered Accountant with a Bachelor of Commerce from the University of Western Australia. He is a Fellow of The Australian Institute of Company Directors.

Experience

Mr Edwards has over 36 years of experience in the mining industry in Western Australia. He has previously been Managing Director or Finance director of a number of listed mining and exploration companies having taken many of these companies through the initial public offering, then exploration, feasibility and finally into production. These companies include Taruga Gold Limited, Scotgold Resources Ltd, Resource Mining Corporation Ltd, Fox Resources Ltd, Aztec Resources Ltd, Acclaim Exploration NL and Matlock Mining NL.

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Director’s Report 17

DIRECTORS’ REPORT(Continued)

Interest in Shares

16,876,435 Fully Paid Shares

Special Responsibilities

Mr Edwards is responsible for the management of the company and is also a Joint Company Secretary.

Directorships held in listed entities

In the 3 years immediately before the end of the financial year Mr Edwards also served as a director of the following listed companies:

Company Name Appointed Resigned Taruga Gold Limited 21/10/2011 02/09/2013

Rajakumar Paul Kandiah

Non Executive Director

Qualification

Mr Kandiah holds a Bachelor of Science from Deakin University and a Masters of Business Administration (Executive) from the Australian Graduate School of Management. He is also a Graduate of the Australian Institute of Company Directors.

Experience

Mr Kandiah is currently a Director of Kokatu Pty Ltd, a management consultancy firm specialising in business development, strategy, supply chain management, sales, marketing and corporate finance in mining and minerals.

With over 20 years experience in the mining industry he has a wealth of commercial knowledge in commodities from iron ore to bauxite, through to diamonds and base metals. He has held a number of senior management positions in Rio Tinto, Alcoa and Orica as well as junior mining companies. He has also been responsible for business critical strategy and business development initiatives in the companies he has worked for.

Raj has been an adjunct faculty member of the Australian Graduate School of Management for two years. He brings to Athena his vast commercial experience and in particular in the sale of commodities including iron ore into China, Japan and Korea.

Interest in Shares and Options

60,000 Fully Paid Shares

Special Responsibilities

Mr Kandiah is a member of the Audit Committee.

Directorships held in listed entities

In the 3 years immediately before the end of the financial year Mr Kandiah did not serve as a director of any other listed companies.

Peter John Newcomb

Joint Company Secretary

Qualification

Mr Newcomb is a Fellow of the Institute of Chartered Accountants in England and Wales and a member of the Institute of Chartered Accountants in Australia.

Athena Resources I Annual Report 2014

DIRECTORS’ REPORT(Continued)

Experience

He has over thirty years professional and commercial experience working in a number of industries and locations including London, Scotland, Singapore and Perth. The majority of his experience over the last ten years has been in the Resources industry in Western Australia. Mr Newcomb is an executive director of Taruga Gold Limited and Company Secretary and CFO of several other public companies in WA.

PRINCIPAL ACTIVITIES

The principal activity of the consolidated entity during the year was mineral exploration in Australia.

OPERATING AND FINANCIAL REVIEW

Review of Operations

A review of operations of the group during the financial year is contained in the Review of Operations section of this annual report.

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2014 2013
Operating Results $ $
Consolidated (loss) / profit after income tax for the financial year (330,843) 26,126
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Financial Position

At 30 June 2014 the Company has cash reserves of $78,869 and other short term assets readily realisable in cash of $23,151.

Dividends

No dividends were paid during the year and no recommendation is made as to dividends.

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 financial year under review not otherwise disclosed in this report or in the consolidated accounts.

MATTERS SUBSEQUENT TO ThE END OF FINANCIAL YEAR

Since the end of the financial year under review and the date of this report, there has not arisen any matter, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to significantly affect the operations of the consolidated entity, in the current or subsequent financial years.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS

The Company intends to continue its exploration activities with a view to the commencement of mining operations as soon as possible.

Further information on likely developments in the operations of the consolidated entity and the expected results of operations have not been included in this report because the Directors believe it would be likely to result in unreasonable prejudice to the Company.

MEETINGS OF DIRECTORS

The following table sets out the number of meetings of the Company’s Directors held during the year ended 30 June 2014, and the number of meetings attended by each Director. These meetings included matters relating to the Remuneration and Nomination Committees of the Company.

Director’s Report 19

DIRECTORS’ REPORT(Continued)

Number eligible to attend Number attended

Edmond William Edwards	5	5
David Arthur Webster	5	5
Rajakumar Paul Kandiah	5	5

AUDIT COMMITTEE

The audit committee is comprised of the non-executive directors Mr D Webster and Mr R Kandiah. During the year ended 30 June 2014 Mr D Webster and Mr R Kandiah attended two meetings of the Audit Committee.

REMUNERATION REPORT (Audited)

This report details the nature and amount of remuneration for each member of the key management personnel of Athena Resources Limited.

The following persons acted as directors during or since the end of the financial year:

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David Arthur Webster Chairman
Edmond William Edwards Managing Director
Rajakumar Paul Kandiah
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The Company has no other key management personnel.

The information provided in the remuneration report includes remuneration disclosures that are required under Accounting Standards AASB 124 “Related Party Disclosures”. These disclosures have been transferred from the financial report and have been audited.

Remuneration policy

The board policy is to remunerate directors at market rates for time, commitment and responsibilities. The board determines payment to the directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of directors’ fees that can be paid is subject to approval by shareholders in general meeting, from time to time. Fees for non-executive directors are not linked to the performance of the consolidated entity. However, to align directors’ interests with shareholder interests, the directors are encouraged to hold securities in the company.

The company’s aim is to remunerate at a level that will attract and retain high-calibre directors and employees. Company officers and directors are remunerated to a level consistent with the size of the company.

All remuneration paid to directors and executives is valued at the cost to the company and expensed.

Performance-based remuneration

The company does not pay any performance-based component of remuneration.

Details of remuneration for year ended 30 June 2014

Directors’ Remuneration

No salaries, commissions, bonuses or superannuation were paid or payable to directors during the year. Remuneration was by way of fees paid monthly in respect of invoices issued to the Company by the Directors or Companies associated with the Directors in accordance with agreements between the Company and those entities. Details of the agreements are set out below.

Athena Resources I Annual Report 2014

DIRECTORS’ REPORT(Continued)

Agreements in respect of cash remuneration of Directors:

Mr. Edwards is the Managing Director responsible for the day-to-day operations of the Company. The Company has an agreement with Tied Investments Pty Ltd to provide the management services of Mr. Edwards to the Company in relation to its corporate activities on normal commercial terms and conditions. An annual fee of $180,000 excluding GST was paid during the year. Mr. Edwards is a director of Tied Investments Pty Ltd. The Company may terminate the contract by giving three months notice. Tied Investments Pty Ltd may terminate by giving three months notice.

Mr David Webster and Mr Rajakumar Kandiah are Non-Executive Directors. Fees payable to Mr Webster and Mr Kandiah are detailed below.

The Directors’ are entitled to reimbursement of out-of-pocket expenses incurred whilst on company business.

The total remuneration paid to directors is summarised below:

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Director Associated Company Fees Total
Year ended 30 June 2014 $ $
E W Edwards Tied Investments Pty Ltd 180,000 180,000
D A Webster Cobpen Co Investments Pty Ltd 48,000 48,000
R P Kandiah Kokatu Pty Ltd 48,000 48,000
276,000 276,000
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Director Associated Company Fees Total
Year ended 30 June 2013 $ $
E W Edwards Tied Investments Pty Ltd 180,000 180,000
D A Webster Cobpen Co Investments Pty Ltd 48,000 48,000
R P Kandiah Kokatu Pty Ltd 54,000 54,000
282,000 282,000
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Aggregate amounts payable to Directors and their personally related entities.

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2014 2013
$ $
Current
Accounts payable 491,484 286,884
Borrowings from Related Parties 346,000 66,000
837,484 352,884
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During the year, loans of $280,000 were extended to the Company by Directors, Mr Edwards, ($180,000) and Mr Webster ($100,000) for the purposes of supporting short-term cash flow. The loans are unsecured. The maximum amount outstanding during the period was $346,000. The balance of the loans outstanding at 30 June 2014 of $346,000 is interest free. The loans were converted to equity on 26 September 2014 (see Note 23).

There were no performance related payments, option or share based payments, superannuation payments or other benefits made during the year.

Corporate Governance Statement 21

DIRECTORS’ REPORT(Continued)

Director Shareholdings in the Company

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Balance Purchase Balance
Director
1 July 2013 Sale on market 30 June 2014
E W Edwards 15,260,790 1,615,645 16,876,435
D A Webster 2,494,230 429,826 2,924,056
R P Kandiah 60,000 - 60,000
17,815,020 2,045,471 19,860,491
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21
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End of Remuneration Report

ShARE OPTIONS

As at the date of this report, there were 4,000,000 options over unissued ordinary shares in the parent entity. The 4,000,000 are unlisted, and are exercisable at $0.06 on or before 30 April 2016. Option holders do not have any right, by virtue of the option, to participate in any share issue of the company or any related body corporate or in the interest issue of any other registered scheme.

ENVIRONMENTAL ISSUES

The consolidated entity has conducted exploration activities on mineral tenements. The right to conduct these activities is granted subject to environmental conditions and requirements. The consolidated entity aims to ensure a high standard of environmental care is achieved and, as a minimum, to comply with relevant environmental regulations. There have been no known breaches of any of the environmental conditions.

INDEMNIFICATION OF DIRECTORS

During the financial year, the Company has given an indemnity or entered into an agreement to indemnity as follows: The Company has entered into agreements with Mr E Edwards, Mr D Webster and Mr R Kandiah to indemnify them against any liability incurred by them as an officer of the Company including costs and expenses of successfully defended legal proceedings.

AUDITOR

HLB Mann Judd continues in office in accordance with section 327 of the Corporations Act 2001.

NON-AUDIT SERVICES

No non-audit services were provided by our auditors, HLB Mann Judd, during the year ended 30 June 2014.

AUDITOR’S INDEPENDENCE DECLARATION

The auditor’s independence declaration as set out on page 26 has been received for the year ended 30 June 2014 and forms part of this directors’ report.

PROCEEDINGS ON BEhALF OF COMPANY

No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the year.

Signed in accordance with a resolution of the directors.

E W EDWARDS

Managing Director Dated at Perth this 30 day of September, 2014.

Athena Resources I Annual Report 2014

CORPORATE GOVERNANCE STATEMENT

The Board of Directors of Athena Resources Limited is responsible for the corporate governance of the Company. The Board guides and monitors the business and affairs of Athena Resources Limited on behalf of the shareholders by whom they are elected and to whom they are accountable. This statement reports on Athena Resources Limited’s key governance principles and practices.

1. COMPLIANCE WITh BEST PRACTICE RECOMMENDATIONS

The Company, as a listed entity, must comply with the Corporations Act 2001 and the Australian Securities Exchange Limited (ASX) Listing Rules. The ASX Listing Rules require the Company to report on the extent to which it has followed the Corporate Governance Recommendations published by the ASX Corporate Governance Council (ASXCGC). Where a recommendation has not been followed, that fact is disclosed, together with the reasons for the departure.

The table below summaries the Company’s compliance with the Corporate Governance Council’s Recommendations:

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Principle # ASX Corporate Governance Council Recommendations Reference Comply
Principle 1 Lay solid foundations for management and oversight
1.1 Establish the functions reserved to the board and those delegated
2(a) Yes
to senior executives and disclose those functions.
1.2 Disclose the process for evaluating the performance of senior 2(h), 3(b),
Yes
executives. Remuneration Report
1.3 Provide the information indicated in the Guide to reporting on 2(a), 2(h), 3(b),
Yes
principle 1. Remuneration Report
Principle 2 Structure the board to add value
2.1 A majority of the board should be independent directors. 2(e) Yes
2.2 The chair should be an independent director. 2(c), 2(e) Yes
2.3 The roles of chair and chief executive officer should not be
2(b), 2(c) Yes
exercised by the same individual.
2.4 The Board should establish a nomination committee. 2(d) No
2.5 Disclose the process for evaluating the performance of the board,
2(h) Yes
its committees and individual directors.
2.6 Provide the information indicated in the Guide to reporting on
2(b), 2(c), 2(d), 2(e), 2(h) Yes
principle 2.
Principle 3 Promote ethical and responsible decision-making
3.1 Establish a code of conduct and disclose the code or a summary
as to:
· the practices necessary to maintain confidence in the company’s
integrity;
· the practices necessary to take into account the company’s legal
obligations and the reasonable expectations of its stakeholders; 4(a) Yes
and
· the responsibility and accountability of individuals for reporting
and investigating reports of unethical practices.
3.2 Establish a policy concerning achieving gender diversity and for the
4(c) No
Board to establish measurable objectives.
3.3 Disclose in each Annual Report the measurable objectives for
No
achieving gender diversity
3.3 Provide the information indicated in the Guide to reporting on
4(a), 4(c)
principle 3.
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Corporate Governance Statement 23

CORPORATE GOVERNANCE STATEMENT(Continued)

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Principle # ASX Corporate Governance Council Recommendations Reference Comply
Principle 4 Safeguard integrity in financial reporting
4.1 The Board should establish an audit committee. 3(a) Yes
4.2 The audit committee should be structured so that it:
· consists only of non-executive directors;
· consists of a majority of independent directors; 3(a) No
· is chaired by an independent chair, who is not chair of the
Board; and
· has at least three members.
4.3 The audit committee should have a formal charter 3(a) Yes
4.4 Provide the information indicated in the Guide to reporting on
3(a) Yes
principle 4.
Principle 5 Make timely and balanced disclosure
5.1 Establish written policies designed to ensure compliance with ASX
Listing Rule disclosure requirements and to ensure accountability
5(a), 5(b) Yes
at senior executive level for that compliance and disclose those
policies or a summary of those policies.
5.2 Provide the information indicated in the Guide to reporting on
5(a), 5(b) Yes
principle 5.
Principle 6 Respect the rights of shareholders
6.1 Design a communications policy for promoting effective
communication with shareholders and encouraging their
5(a), 5(b) Yes
participation at general meetings and disclose the policy or a
summary of that policy.
6.2 Provide the information indicated in the Guide to reporting on
5(a), 5(b) Yes
principle 6.
Principle 7 Recognise and manage risk
7.1 Establish policies for the oversight and management of material
6(a) Yes
business risks and disclose a summary of those policies.
7.2 The Board should require management to design and implement
the risk management and internal control system to manage the
company’s material business risks and report to it on whether those
6(a), 6(b), 6(d) Yes
risks are being managed effectively. The Board should disclose
that management has reported to it as to the effectiveness of the
company’s management of its material business risks.
7.3 The Board should disclose whether it had received assurance
from the chief executive officer and the chief financial officer
that the declaration provided in accordance with section 295A
of the Corporations Act is founded on a sound system of risk 6(c) Yes
management and internal control and that the system is operating
effectively in all material respects in relation to financial reporting
risks.
7.4 Provide the information indicated in the Guide to reporting on
6(a), 6(b), 6(c), 6(d) Yes
principle 7.
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Athena Resources I Annual Report 2014

CORPORATE GOVERNANCE STATEMENT(Continued)

Principle #	ASX Corporate Governance Council Recommendations	Reference	Comply
Principle 8	Remunerate fairly and responsibly
8.1 The Board should establish a remuneration committee. 3(b) No
8.2 Clearly distinguish the structure on non-executive directors’ remuneration from that of executive directors and senior executives. 3(b), Remuneration Report No
8.3 Provide the information indicated in the Guide to reporting on principle 8. 3(b), Yes

2. ThE BOARD OF DIRECTORS

2(a) Roles and Responsibilities of the Board

The Board is accountable to the shareholders and investors for the overall performance of the Company and takes responsibility for monitoring the Company’s business and affairs and setting its strategic direction, establishing and overseeing the Company’s financial position.

The Board is responsible for:

Appointing, evaluating, rewarding and if necessary the removal of the Chief Executive Officer (“CEO”) and senior management;
Development of corporate objectives and strategy with management and approving plans, new investments, major capital and operating expenditures and major funding activities proposed by management;
Monitoring actual performance against defined performance expectations and reviewing operating information to understand at all times the state of the health of the Company;
Overseeing the management of business risks, safety and occupational health, environmental issues and community development;
Satisfying itself that the financial statements of the Company fairly and accurately set out the financial position and financial performance of the Company for the period under review;
Satisfying itself that there are appropriate reporting systems and controls in place to assure the Board that proper operational, financial, compliance, risk management and internal control process are in place and functioning appropriately;
Approving and monitoring financial and other reporting;
Assuring itself that appropriate audit arrangements are in place;
Ensuring that the Company acts legally and responsibly on all matters and assuring itself that the Company has adopted a Code of Conduct and that the Company practice is consistent with that Code; and other policies; and
· Reporting to and advising shareholders.

Other than as specifically reserved to the Board, responsibility for the day-to-day management of the Company’s business activities is delegated to the Chief Executive Officer and Executive Management.

2(b) Board Composition

The Directors determine the composition of the Board employing the following principles:

the Board, in accordance with the Company’s constitution must comprise a minimum of three Directors;
the roles of the Chairman of the Board and of the Chief Executive Officer should be exercised by different individuals;
the majority of the Board should comprise Directors who are non-executive;
the Board should represent a broad range of qualifications, experience and expertise considered of benefit to the Company; and
the Board must be structured in such a way that it has a proper understanding of, and competency in, the current and emerging issues facing the Company, and can effectively review management’s decisions

The Board is currently comprised of two Non-Executive Directors and an Executive Director. The skills, experience, expertise, qualifications and terms of office of each director in office at the date of the annual report is included in the Directors’ Report.

Corporate Governance Statement 25

CORPORATE GOVERNANCE STATEMENT(Continued)

The Company’s constitution requires one-third of the Directors (or the next lowest whole number) to retire by rotation at each Annual General Meeting (AGM). The Directors to retire at each AGM are those who have been longest in office since their last election. Where Directors have served for equal periods, they may agree amongst themselves or determine by lot who will retire. A Director must retire in any event at the third AGM since he or she was last elected or re-elected. Retiring Directors may offer themselves for re-election.

A Director appointed as an additional or casual Director by the Board will hold office until the next AGM when they may be re-elected.

The Chief Executive Officer is not subject to retirement by rotation and, along with any Director appointed as an additional or casual Director, is not to be taken into account in determining the number of Directors required to retire by rotation.

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25
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2(c) Chairman and Chief Executive Officer

The Chairman is responsible for:

leadership of the Board;
the efficient organisation and conduct of the Board’s functions;
the promotion of constructive and respectful relations between Board members and between the Board and management;
contributing to the briefing of Directors in relation to issues arising at Board meetings;
facilitating the effective contribution of all Board members; and
committing the time necessary to effectively discharge the role of the Chairman.

The Chief Executive Officer is responsible for:

implementing the Company’s strategies and policies; and
the day-to-day management of the Company’s business activities

2(d) Nomination Committee

The Company does not comply with ASX Recommendation 2.4. The Company is not of a relevant size to consider formation of a nomination committee to deal with the selection and appointment of new Directors and as such a nomination committee has not been formed.

Nominations of new Directors are considered by the full Board in accordance with the Company’s “Selection of New Directors Policy”.

2(e) Independent Directors

The Company recognises that independent Directors are important in assuring shareholders that the Board is properly fulfilling its role and is diligent in holding senior management accountable for its performance. The Board assesses each of the directors against specific criteria to decide whether they are in a position to exercise independent judgment.

Directors of Athena Resources Limited are considered to be independent when they are independent of management and free from any business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with, the exercise of their unfettered and independent judgement.

In making this assessment, the Board considers all relevant facts and circumstances. Relationships that the Board will take into consideration when assessing independence are whether a Director:

is a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company;
is employed, or has previously been employed in an executive capacity by the Company or another Company member, and there has not been a period of at least three years between ceasing such employment and serving on the Board;
has within the last three years been a principal of a material professional advisor or a material consultant to the Company or another Company member, or an employee materially associated with the service provided;
is a material supplier or customer of the Company or other Company member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer; or
has a material contractual relationship with the Company or another Company member other than as a Director.

Athena Resources I Annual Report 2014

CORPORATE GOVERNANCE STATEMENT(Continued)

The Board currently includes two independent non-executive Directors.

In accordance with the definition of independence above, and the materiality thresholds set, the following Directors of Athena Resources Limited are considered to be independent:

Name Position Mr D Webster Chairman Mr R Kandiah Non Executive Director

The term in office held by each Director in office at the date of this report is as follows:

Name Term in Office Mr D Webster Since 9 December 2011 Mr E Edwards Since 11 April 2005 Mr R Kandiah Since 14 May 2012

In recognition of the importance of independent views and the Board’s role in supervising the activities of management the Chairman should be a Non-Executive Director.

2(f) Avoidance of conflicts of interest by a Director

In order to ensure that any interests of a Director in a particular matter to be considered by the Board are known by each Director, each Director is required by the Company to disclose any relationships, duties or interests held that may give rise to a potential conflict. Directors are required to adhere strictly to constraints on their participation and voting in relation to any matters in which they may have an interest.

2(g) Board access to information and independent advice

Directors are able to access members of the management team at any time to request relevant information.

There are procedures in place, agreed by the Board, to enable Directors, in furtherance of their duties, to seek independent professional advice at the company’s expense.

2(h) Review of Board performance

The performance of the Board is reviewed regularly by the Chairman. The Chairman conducts performance evaluations which involve an assessment of each Board member’s performance against specific and measurable qualitative and quantitative performance criteria. The performance criteria against which directors and executives are assessed is aligned with the financial and non-financial objectives of Athena Resources Limited. Directors whose performance is consistently unsatisfactory may be asked to retire.

3. BOARD COMMITTEES

3(a) Audit Committee

The board has established an Audit Committee. Due to the size of the board the Audit Committee comprises the Chairman Mr D Webster and non-executive Director Mr R Kandiah. The role and responsibilities of the Audit Committee are summarised below.

The Audit Committee is responsible for reviewing the integrity of the Company’s financial reporting and overseeing the independence of the external auditors. The Board sets aside time to deal with issues and responsibilities usually delegated to the Audit Committee to ensure the integrity of the financial statements of the Company and the independence of the auditor.

The Board reviews the audited annual and half-year financial statements and any reports which accompany published financial statements and recommends their approval to the members. The Board also reviews annually the appointment of the external auditor, their independence and their fees.

The Board is also responsible for establishing policies on risk oversight and management. The Company has not formed a separate Risk Management Committee due to the size and scale of its operations.

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Corporate Governance Statement 27

CORPORATE GOVERNANCE STATEMENT(Continued)

External Auditors

The Company’s policy is to appoint external auditors who clearly demonstrate quality and independence. The performance of the external auditor is reviewed annually and applications for tender of external audit services are requested as deemed appropriate, taking into consideration assessment of performance, existing value and tender costs. It is HLB Mann Judd’s policy to rotate engagement partners on listed companies at least every five years in accordance with the Corporations Act 2001.

An analysis of fees paid to the external auditors, including a break-down of fees for non-audit services, is provided in the notes to the financial statements in the Annual Report.

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27
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There is no indemnity provided by the company to the auditor in respect of any potential liability to third parties.

The external auditor is requested to attend the annual general meeting and be available to answer shareholder questions about the conduct of the audit and preparation and content of the audit report.

There were no non-audit services provided by the auditors during the year.

3(b) Remuneration Committee

The role of a Remuneration Committee is to assist the Board in fulfilling its responsibilities in respect of establishing appropriate remuneration levels and incentive policies for employees.

The Board has not established a separate Remuneration Committee due to the size and scale of its operations. This does not comply with Recommendation 8.1 however the Board as a whole takes responsibility for such issues.

The responsibilities include setting policies for senior officers remuneration, setting the terms and conditions for the CEO, reviewing and making recommendations to the Board on the Company’s incentive schemes and superannuation arrangements, reviewing the remuneration of both executive and non-executive directors and undertaking reviews of the CEO’s performance.

The Company has structured the remuneration of its senior executive, where applicable, such that it comprises a fixed salary, statutory superannuation and participation in the Company’s employee share option plan. The Company believes that by remunerating senior executives in this manner it rewards them for performance and aligns their interests with those of shareholders and increases the Company’s performance.

Non-executive directors are paid their fees out of the maximum aggregate amount approved by shareholders for nonexecutive director remuneration. The Company does not adhere to Recommendation 8.2 ‘Non-executive directors should not receive options or bonus payments’. The Company may, in the future, grant options to non-executive directors. The Board is of the view that options (for both executive and non-executive directors) are a cost effective benefit for small companies such as Athena Resources Limited that seek to conserve cash reserves. They also provide an incentive that ultimately benefits both shareholders and the optionholders, as optionholders will only benefit if the market value of the underlying shares exceeds the option strike price. Ultimately, shareholders will make that determination.

The remuneration received by directors and executives in the current period is contained in the “Remuneration Report” within the Directors’ Report of the Annual Report.

4. EThICAL AND RESPONSIBLE DECISION MAKING

4(a) Code of Ethics and Conduct

The Board endeavours to ensure that the Directors, officers and employees of the Company act with integrity and observe the highest standards of behaviour and business ethics in relation to their corporate activities. The “Code of Conduct” sets out the principles, practices, and standards of personal behaviour the Company expects people to adopt in their daily business activities.

All Directors, officers and employees are required to comply with the Code of Conduct. Senior managers are expected to ensure that employees, contractors, consultants, agents and partners under their supervision are aware of the Company’s expectations as set out in the Code of Conduct.

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Athena Resources I Annual Report 2014

CORPORATE GOVERNANCE STATEMENT(Continued)

All Directors, officers and employees are expected to:

comply with the law;
act in the best interests of the Company;
be responsible and accountable for their actions; and
observe the ethical principles of fairness, honesty and truthfulness, including prompt disclosure of potential conflicts.

4(b) Policy concerning trading in Company securities

The Company’s “Dealings in Company Shares and Options Policy” applies to all Directors, officers and employees. This policy sets out the restrictions on dealing in securities by people who work for, or are associated with the Company and is intended to assist in maintaining market confidence in the integrity of dealings in the Company’s securities. The policy stipulates that the only appropriate time for a Director, officer or employee to deal in the Company’s securities is when they are not in possession of price sensitive information that is not generally available to the market.

As a matter of practice, Company shares may only be dealt with by Directors and officers of the Company under the following guidelines:

No trading is permitted in the period of 14 days preceding release of each quarterly report, half-yearly report and annual financial report of the Company or for a period of 2 trading days after the release of such report;
Guidelines are to be considered complementary to and not replace the various sections of the Corporations Act 2001 dealing with insider trading; and
Prior approval of the Chairman, or in his absence, the approval of two directors is required prior to any trading being undertaken.

4(c) Policy Concerning Gender Diversity

Athena is committed to establishing a policy concerning diversity and disclosure of the policy. The policy will include requirements for the board to establish measurable objectives for achieving gender diversity and for the Board to assess annually the objectives and report in the Annual Report.

As a company with a small market capitalisation, the company has a small board. The company has no established policy in relation to gender diversity at present but is aware of the principle and will be alert for opportunities when board changes are contemplated. Given the size of the company and the limited number of employees, reporting the numbers of employees by gender is not regarded as a meaningful statistic.

5. TIMELY AND BALANCED DISCLOSURE

5(a) Shareholder communication

The Company believes that all shareholders should have equal and timely access to material information about the Company including its financial situation, performance, ownership and governance. The Company’s “ASX Disclosure Policy” encourages effective communication with its shareholders by requiring that Company announcements:

be factual and subject to internal vetting and authorisation before issue;
be made in a timely manner;
not omit material information;
be expressed in a clear and objective manner to allow investors to assess the impact of the information when making investment decisions;
be in compliance with ASX Listing Rules continuous disclosure requirements; and
be placed on the Company’s website promptly following release.

Shareholders are encouraged to participate in general meetings. Copies of addresses by the Chairman or Chief Executive Officer are disclosed to the market and posted on the Company’s website. The Company’s external auditor attends the Company’s annual general meeting to answer shareholder questions about the conduct of the audit, the preparation and content of the audit report, the accounting policies adopted by the Company and the independence of the auditor in relation to the conduct of the audit.

Corporate Governance Statement

CORPORATE GOVERNANCE STATEMENT(Continued)

5(b) Continuous disclosure policy

The Company is committed to ensuring that shareholders and the market are provided with full and timely information and that all stakeholders have equal opportunities to receive externally available information issued by the Company. The Company’s “ASX Disclosure Policy” described in 5(a) reinforces the Company’s commitment to continuous disclosure and outline management’s accountabilities and the processes to be followed for ensuring compliance.

The policy also contains guidelines on information that may be price sensitive. The Company Secretary has been nominated as the person responsible for communications with the ASX. This role includes responsibility for ensuring compliance with the continuous disclosure requirements with the ASX Listing Rules and overseeing and coordinating information disclosure to the ASX.

6. RECOGNISING AND MANAGING RISK

The Board is responsible for ensuring there are adequate policies in relation to risk management, compliance and internal control systems. The Company’s policies are designed to ensure strategic, operational, legal, reputation and financial risks are identified, assessed, effectively and efficiently managed and monitored to enable achievement of the Company’s business objectives. A written policy in relation to risk oversight and management has been established (“Risk Management and Internal Control Policy”). Considerable importance is placed on maintaining a strong control environment. There is an organisation structure with clearly drawn responsibilities.

6(a) Board oversight of the risk management system

The Board is responsible for approving and overseeing the risk management system. The Board reviews, at least annually, the effectiveness of the implementation of the risk management controls and procedures.

The principle aim of the system of internal control is the management of business risks, with a view to enhancing the value of shareholders’ investments and safeguarding assets. Although no system of internal control can provide absolute assurance that the business risks will be fully mitigated, the internal control systems have been designed to meet the Company’s specific needs and the risks to which it is exposed.

Annually, the Board is responsible for identifying the risks facing the Company, assessing the risks and ensuring that there are controls for these risks, which are to be designed to ensure that any identified risk is reduced to an acceptable level.

The Board is also responsible for identifying and monitoring areas of significant business risk. Internal control measures currently adopted by the Board include:

at least quarterly reporting to the Board in respect of operations and the Company’s financial position, with a comparison of actual results against budget; and
regular reports to the Board by appropriate members of the management team and/or independent advisers, outlining the nature of particular risks and highlighting measures which are either in place or can be adopted to manage or mitigate those risks.

6(b) Risk management roles and responsibilities

The Board is responsible for approving and reviewing the Company’s risk management strategy and policy. Executive management is responsible for implementing the Board approved risk management strategy and developing policies, controls, processes and procedures to identify and manage risks in all of the Company’s activities.

The Board is responsible for satisfying itself that management has developed and implemented a sound system of risk management and internal control.

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Athena Resources I Annual Report 2014

CORPORATE GOVERNANCE STATEMENT(Continued)

6(c) Chief Executive Officer and Chief Financial Officer Certification

The Chief Executive Officer and Chief Financial Officer, or equivalent, provide to the Board written certification that in all material respects:

The Company’s financial statements present a true and fair view of the Company’s financial condition and operational results and are in accordance with relevant accounting standards;
The statement given to the Board on the integrity of the Company’s financial statements is founded on a sound system of risk management and internal compliance and controls which implements the policies adopted by the Board; and
The Company’s risk management an internal compliance and control system is operating efficiently and effectively in all material respects.

6(d) Internal review and risk evaluation

Assurance is provided to the Board by executive management on the adequacy and effectiveness of management controls for risk on a regular basis.

7. OTHER INFORMATION

Further information relating to the company’s corporate governance practices and policies has been made publicly available on the company’s web site at www.athenaresources.com.au

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AUDITORS INDEPENDENCE DECLARATION

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AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the audit of the consolidated financial report of Athena Resources Limited for the year ended 30 June 2014, I declare that to the best of my knowledge and belief, there have been no contraventions of:

a) the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
b) any applicable code of professional conduct in relation to the audit.

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Perth, Western Australia 30 September 2014

M R W Ohm Partner

HLB Mann Judd (WA Partnership) ABN 22 193 232 714

Level 4 130 Stirling Street Perth 6000 PO Box 8124 Perth BC 6849 Western Australia. Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: [email protected]. Website: http://www.hlb.com.au

Liability limited by a scheme approved under Professional Standards Legislation

HLB Mann Judd (WA Partnership) is a member of International, a world-wide organisation of accounting firms and business advisers

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Athena Resources I Annual Report 2014

STATEMENT OF COMPREHENCIVE INCOME FOR THE YEAR ENDED 30 JUNE 2014

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Note Consolidated Entity
2014 2013
$ $
REVENUE 2 1,810 2,672
EXPENSES
Depreciation 3(a) (13,535) (12,656)
Employee and Consultant Costs (337,448) (357,050)
-
Exploration Written Off (762)
-
Loss on Sale of Exploration Tenements (97,554)
Listing and Share Registry Costs (23,981) (27,821)
Share Issue Costs 3(a) (147,598) -
Office and Communication Costs (57,262) (63,290)
Other expenses (138,881) (146,979)
LOSS BEFORE INCOME TAX BENEFIT (717,657) (702,678)
Income tax benefit 4 386,814 728,806
NET (LOSS) / PROFIT FOR THE YEAR (330,843) 26,128
- -
Other comprehensive income
TOTAL COMPREHENSIVE (LOSS) / PROFIT FOR THE YEAR (330,843) 26,128
Basic (loss) / earnings per share (cents per share) 21 (0.27) 0.02
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These financial statements should be read in conjuction with the accompaning notes.

STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2014

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Note Consolidated Entity
2014 2013
$ $
CURRENT ASSETS
Cash and cash equivalents 5 78,869 259,458
Trade and other receivables 6 23,151 38,206
Prepayments 7 - 81,185
Total Current Assets 102,020 378,849
NON CURRENT ASSETS
Plant and equipment 8 12,619 26,154
Mineral exploration and evaluation 9 6,185,350 5,725,313
Total Non Current Assets 6,197,969 5,751,467
TOTAL ASSETS 6,299,989 6,130,316
CURRENT LIABILITIES
Trade and other payables 10 999,568 471,443
Total Current Liabilities 999,568 471,443
TOTAL LIABILITIES 999,568 471,443
NET ASSETS 5,300,421 5,658,873
EQUITY
Issued capital 11 10,969,162 10,996,771
Reserves 12 40,000 52,500
Accumulated losses 12 (5,708,741) (5,390,398)
TOTAL EQUITY 5,300,421 5,658,873
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These financial statements should be read in conjuction with the accompaning notes.

Athena Resources I Annual Report 2014

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2014

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Share
Issued Accumulated
Consolidated Entity Option Total
Capital Losses
Reserve
$ $ $ $
Year ended 30 June 2014
Balance at 1 July 2013 10,996,771 (5,390,398) 52,500 5,658,873
- -
Shares issued (net of issue costs) (27,609) (27,609)
- -
Expiry of Options 12,500 (12,500)
- -
Comprehensive loss for the year (330,843) (330,843)
Balance at 30 June 2014 10,969,162 (5,708,741) 40,000 5,300,421
Year ended 30 June 2013
Balance at 1 July 2012 10,980,031 (5,436,526) 32,500 5,576,005
- -
Shares issued (net of issue costs) 16,740 16,740
- -
Issue of Options 40,000 40,000
-
Expiry of Options 20,000 (20,000)
- -
Comprehensive profit for the year 26,128 26,128
Balance at 30 June 2013 10,996,771 (5,390,398) 52,500 5,658,873
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These financial statements should be read in conjuction with the accompaning notes.

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2014

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Note Consolidated Entity
2014 2013
$ $
CASh FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers (318,916) (332,735)
Interest received 1,810 2,672
Interest and other finance costs paid (340) (4,479)
Research and Development tax offset 386,814 728,806
Net Cash Inflow From Operating Activities 17 69,368 394,264
CASh FLOWS FROM INVESTING ACTIVITIES
Payments for exploration expenditure (435,935) (597,240)
-
Payment for other fixed assets (7,737)
-
Proceeds from sale of exploration assets 15,000
Net Cash (Outflow) From Investing Activities (435,935) (589,977)
CASh FLOWS FROM FINANCING ACTIVITIES
- -
Proceeds from issue of shares and options
Share and option issue transaction costs (94,022) (24,445)
Proceeds from borrowings from related party 280,000 266,000
-
Repayment of borrowings from related party (200,000)
Net Cash Inflow From Financing Activities 185,978 41,555
Net (decrease) in cash held (180,589) (154,158)
Cash and cash equivalents at beginning of the financial year 259,458 413,616
Cash and cash equivalents at the end of this financial year 5 78,869 259,458
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These financial statements should be read in conjuction with the accompaning notes.

Athena Resources I Annual Report 2014

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2014

NOTE 1 – STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation

The financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, Accounting Standards and Interpretations and complies with other requirements of the law.

The financial report has also been prepared on a historical cost basis. The financial report is presented in Australian dollars.

The company is a listed public company, incorporated in Australia and operating in Australia. The entity’s principal activities are mineral exploration.

The accounting policies detailed below have been consistently applied to all years presented unless otherwise stated. The financial statements are for the consolidated entity consisting of Athena Resources Limited and its subsidiaries.

Reporting Basis and Conventions

The financial report has been prepared on the basis of accounting principles applicable to a going concern, which assumes the commercial realisation of the future potential of Athena’s assets and the discharge of its liabilities in the normal course of business.

The Board considers that Athena is a going concern and recognises that additional funding is required to ensure that it can continue to fund its operations and further develop its mineral exploration and evaluation assets during the twelve month period from the date of approval of this financial report. The company has access to the following potential source of funding:

The placement of securities under the ASX Listing Rule 7.1 or otherwise;
An excluded offer pursuant to the Corporations Act 2001; or
The sale of assets.

Accordingly, the Directors believe that subject to prevailing equity market conditions, Athena will obtain sufficient funding to enable it to continue as a going concern and that it is appropriate to adopt that basis of accounting in the preparation of the financial report. Should Athena be unable to obtain sufficient funding as outlined above, there is a material uncertainty that may cast significant doubt whether it will be able to continue as a going concern and therefore, whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should it not continue as a going concern.

Statement of Compliance

The financial report was authorised for issue on 30 September 2014.

The financial report complies with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the financial statements and notes thereto, complies with International Financial Reporting Standards (IFRS).

Adoption of new and revised standards

Changes in accounting policies on initial application of Accounting Standards

In the year ended 30 June 2014, the Directors have reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for the current annual reporting period.

It has been determined by the Directors that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and therefore, no change is necessary to accounting policies of the consolidated entity.

Notes to and Forming Part of the Financial Statements 37

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 (Note 1 Continued)

The Directors have also reviewed all new Standards and Interpretations that have been issued but are not yet effective for the year ended 30 June 2014. As a result of this review the Directors have determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change necessary to consolidated entity accounting policies.

Segment Reporting

Operating segments are reported in a manner that is consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as the Board of Athena Resources Limited.

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37
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Accounting Policies

(a) Principles of Consolidation

A controlled entity is any entity controlled by Athena Resources Limited. Control exists where Athena Resources Limited has the capacity to dominate the decision making in relation to the financial and operating policies of another entity so that the other entity operates with Athena Resources Limited to achieve the objectives of Athena Resources Limited. All controlled entities have a 30 June financial year-end.

All intercompany balances and transactions between entities in the consolidated entity, including any unrealised profit or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistencies with those policies applied by the parent entity.

Where controlled entities have entered or left the consolidated entity during the year, their operating results have been included from the date control was obtained or until the date control ceased.

(b) Income Tax

The charge for current income tax expenses is based on the profit for the year adjusted for any non-assessable or disallowable items. It is calculated using tax rates that have been enacted or are substantively enacted by the balance date.

Deferred tax is accounted for in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amount in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the statement of comprehensive income except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the consolidated entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

(c) Plant and Equipment

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

Plant and equipment

Plant and equipment are measured on the cost basis less accumulated depreciation and accumulated impairment losses.

Athena Resources I Annual Report 2014

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 (Note 1 Continued)

The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows which will be received from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future consolidated benefits associated with the item will flow to the consolidated entity and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred.

Depreciation

The depreciable amount of all fixed assets including capitalised lease assets, but excluding computers, is depreciated on a reducing balance commencing from the time the asset is held ready for use. Computers are depreciated on a straight line basis over their useful lives to the consolidated entity commencing from the time the asset is held ready for use.

The depreciation rates used for each class of depreciable assets are:

Class of Fixed Asset Depreciation Rate Plant and Equipment 15 – 50%

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date.

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

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of comprehensive income. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to accumulated losses.

(d) Mineral Exploration and Evaluation Expenditure

Exploration and evaluation expenditure incurred is either written off as incurred or accumulated in respect of each identifiable area of interest. Tenement acquisition costs are initially capitalised. Costs are only carried forward to the extent that they are expected to be recouped through the successful development of the areas, sale of the respective areas of interest or where activities in the area have not yet reached a stage, which permits reasonable assessment of the existence of economically recoverable reserves.

Accumulated costs in relation to an abandoned area are written off in full in the year in which the decision to abandon the areas is made.

When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Restoration, rehabilitation and environmental costs necessitated by exploration and evaluation activities are expensed as incurred and treated as exploration and evaluation expenditure.

(e) Impairment of Assets

At each reporting date, the Directors review the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the assets, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the statement of comprehensive income.

Notes to and Forming Part of the Financial Statements 39

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014 (Note 1 Continued)

Where it is not possible to estimate the recoverable amount of an individual asset, the consolidated entity estimates the recoverable amount of the cash-generating unit to which the asset belongs.

(f) Provisions

Provisions are recognised where there is 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.

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39
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Cash and Cash Equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less.

(g) Revenue

Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

All revenue is stated net of the amount of goods and service tax (GST).

(h) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax 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 expenses. Receivables and payables in the statement of financial position are shown inclusive of GST.

(j) Issued Capital

Issued and paid up capital is recognised at the fair value of the consideration received by the company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.

(i) Comparative Figures

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

(k) Critical accounting estimates and judgements

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

(l) Key Estimates – Impairment of exploration expenditure

The Directors assess impairment at each reporting date by evaluating conditions specific to the consolidated entity that may lead to impairment of exploration expenditure. In making this assessment, the Directors have considered the existence of any possible indicators of impairment per AASB 6.

On the basis of this review, the Directors are satisfied that no impairment is present at June 30 2014.

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Athena Resources I Annual Report 2014

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

NOTE 2 - REVENUE

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Consolidated Entity
2014 2013
$ $
Revenue from non-operating activities
Interest received 1,810 2,672
Total revenue 1,810 2,672
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NOTE 3 - LOSS FROM ORDINARY ACTIVITIES BEFORE TAX EXPENSE

(a) Expenses

Depreciation of non-current assets:

Plant and equipment	1,059 1,914 10,562 13,535 147,598	375
Offce furniture and equipment		1,719
Motor vehicles		10,562
Total depreciation of non-current assets		12,656
Share issue costs expensed (i)		-

(i) During the year, $147,598 of prepaid share issue costs were expensed as the anticipated capital raisings to which they related did not occur.

(b) Loss on sale of tenements

During the prior year, the group disposed of tenements E08/1954, M08/474 and P08/493 for consideration of $15,000. The associated capitalised exploration was written off realising a loss on sale of $97,554.

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Notes to and Forming Part of the Financial Statements 41

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

NOTE 4 - INCOME TAX

No income tax is payable by Athena as each entity in the consolidated entity incurred a loss for tax purposes for the year and each has available recoupable income tax losses at balance date. The aggregate of income tax attributable to the financial year differs from the amount calculated on the operating loss. The differences are calculated as follows:

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Consolidated Entity
2014 2013
$ $
Loss for the year (717,657) (702,678)
Income tax calculated at 30% (215,297) (210,803)
Tax effect of permanent differences:
-
Non-allowable provisions and write-downs
-
Non-allowable expenditure
R&D Tax Offset 386,814 728,806
Deferred tax asset not recognised 215,297 210,803
Income Tax Attributable To Operating Loss 386,814 728,806
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41
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The directors estimate the unrecognised deferred tax asset attributable to the company and its controlled as follows: Revenue Losses 3,300,785	entities at 30% is
Revenue Losses	3,227,930

The potential deferred tax asset has not been brought to account in the financial report at 30 June 2014 as the Directors do not believe it is appropriate to regard the realisation of the asset as probable. This asset will only be obtained if:

(a) The company and its controlled entity derive future assessable income of an amount and type sufficient to enable the benefit from the deductions for the tax losses and the unrecouped exploration expenditure to be realised;
(b) The company and its controlled entity continue to comply with the conditions for deductibility imposed by tax legislation; and
(c) No changes in tax legislation adversely affect the company and its controlled entity in realising the benefit from the deductions for the tax losses and unrecouped exploration expenditure.

Franking Credits

No franking credits are available at balance date for the subsequent financial year.

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42 Athena Resources I Annual Report 2014

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

NOTE 5 - CASH AND CASH EQUIVALENTS

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Consolidated Entity
2014 2013
$ $
Cash at bank and on hand 78,869 259,458
78,869 259,458
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NOTE 6 - TRADE AND OTHER RECEIVABLES

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Current
GST Receivable 5,283 20,668
Other 17,868 17,538
23,151 38,206
NOTE 7 - PREPAYMENTS
-
Prepaid Share Issue Costs (i) 81,185
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(i) The Group engaged external consultants during the prior year to assist in raising capital and issued 500,000 shares and 4,000,000 options exercisable at 6 cents on or before 30 April 2016 as consideration (see Note 11). These costs have been expensed in the current period

NOTE 8 - PLANT AND EQUIPMENT

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Plant and equipment
Cost 179,282 179,282
Provision for depreciation (166,663) (153,128)
12,619 26,154
Movement for the year
Opening balance 26,154 31,073
Additions - 7,737
Depreciation expensed (13,535) (12,656)
Closing balance 12,619 26,154
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Notes to and Forming Part of the Financial Statements 43

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

NOTE 9 - MINERAL EXPLORATION AND EVALUATION

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Consolidated Entity
2014 2013
$ $
At cost brought forward – exploration and evaluation phase 5,725,313 5,331,186
Expenditure during the year 460,799 491,680
-
Expenditure arising on purchase of Byro Tenement 15,000
Loss on Sale of Ashburton Tenements - (112,553)
-
Expenditure written off (762)
At cost less impairment 6,185,350 5,725,313
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43
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The ultimate recoupment of exploration expenditure carried forward is dependent upon successful development and commercial exploration, or sale of the respective areas

NOTE 10 - TRADE AND OTHER PAYABLES

Current Note

Trade creditors and accruals	102,984 491,484 59,100 346,000 999,568	118,559
Due to directors - remuneration		246,227
Due to other offcers - remuneration		40,657
Borrowings from Related Party 19		66,000
		471,443

NOTE 11 - ISSUED CAPITAL

a) Issued capital

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123,019,392 ordinary shares fully paid
10,969,162 10,996,771
(2013: 123,019,392 ordinary shares fully paid)
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(b) Movements in ordinary share capital of the Company were as follows :

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No. Of Issue Price Value
Date Details
Shares Cents / Share $
01/05/13 Balance June 30 2012 122,519,392 10,980,031
Placement (i) 500,000 4.00 20,000
-
Less: Transaction costs arising on share issues (3,260)
Balance June 30 2013 123,019,392 10,996,771
-
Less: Transaction costs arising on share issues (27,609)
Balance June 30 2014 123,019,392 10,969,162
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(i) Shares issued in payment of Share Issue Costs and included as Prepaid Share Issue Costs (Note 7)

Athena Resources I Annual Report 2014

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

(c) Movement in Options :

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Issue Price Value
Details No. Of Options
Cents / Share $
Balance June 30 2012 1,500,000 32,500
Transfer to Accumulated Losses on (20,000)
(500,000)
Expiry of Options
01/05/13 Incentive Options Issued (ii) 4,000,000 1.0 40,000)
Balance June 30 2013 5,000,000 52,500
Expiry of Options (1,000,000) (12,500)
Balance June 30 2014 4,000,000 40,000
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(ii) Issue of Incentive Options and included as prepaid Share Issue Costs (Note 7). Options exercisable at 6 cents on or before 30 April 2016.

(d) Voting and dividend rights

Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held.

At shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

NOTE 12 - RESERVES AND ACCUMULATED LOSSES

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Consolidated Entity
2014 2013
$ $
Share Option Reserve (a) 40,000 52,500
Accumulated Losses (b) (5,708,743) (5,390,398)
(a) Share Option Reserve
Balance at beginning of the year 52,500 32,500
Transfer to Accumulated Losses on Expiry of Options (12,500) (20,000)
-
Issue of Options (ii) 40,000
Balance at end of the year 40,000 52,500
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(i) Nature and purpose of reserve

The Share Option Reserve contains amounts received on the issue of options over unissued capital of the company

(ii) The issue of options during the year at no consideration was valued at 1.0 cent (1 May 2013) per option using the Black-Scholes model with the following assumptions:

The underlying value of each share in the company was the closing share price of 2.5 cents as at 1 May 2013.
Risk free rate of return – 5.00%;
A volatility of the share price of 1.25%;
The Incentive Options issued are exercisable at 6 cents per share on or before 30 April 2016;
The appropriate discount factor to be applied to the value of each of the options due to the lack of marketability would be 30%.

Notes to and Forming Part of the Financial Statements

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

(b) Accumulated Losses

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Consolidated Entity
2014 2013
$ $
Balance at beginning of the year (5,390,398) (5,436,526)
Net Profit / (Loss) for the year (330,843) 26,128
Transfer to Accumulated Losses on Expiry of Options 12,500 20,000
Balance at end of the year (5,708,741) (5,390,398)
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NOTE 13 - COMMITMENTS FOR EXPENDITURE

Mineral Tenement Leases

In order to maintain current rights of tenure to mining tenements, the consolidated entity will be required to outlay amounts of $6,659,185 (2013: $6,540,405) in respect of minimum tenement expenditure requirements and lease rentals. The obligations are not provided for in the financial report and are payable as follows

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Not later than one year 1,331,837 1,308,081
Later than 1 year but not later than 2 years 1,331,837 1,308,081
Later than 2 years but not later than 5 years 3,995,511 3,924,243
6,659,185 6,540,405
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The Company has a number of avenues available to continue the funding of its current exploration program and as and when decisions are made, the Company will disclose this information to shareholders.

The commitments referred to above represent the Company’s share of obligations under joint venture agreements without allowing for dilution.

NOTE 14 - CONTINGENT LIABILITIES

Athena Resources Limited and its controlled entities have no known material contingent liabilities as at 30 June 2014

NOTE 15 - INVESTMENT IN CONTROLLED ENTITIES

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Book Value of Athena’s
Class of Shares
Investments
2014 2013
$ $
Athena Resources Limited - Parent Entity Ordinary 100% - -
Complex Exploration Pty Ltd Ordinary 100% 100 100
Capricorn Resources Pty Ltd Ordinary 100% 200 200
Byro Exploration Pty Ltd (c) Ordinary 100% 1,390,000 1,390,000
1,390,300 1,390,300
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(a) The above controlled entities are incorporated in Australia.
(b) The book value of Athena Resources Limited’s investment in the ordinary shares of controlled entities, is at cost which does not exceed the underlying net assets of the entity.
(c) Wholly owned subsidiary of Complex Exploration Pty Ltd.

Athena Resources I Annual Report 2014

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

NOTE 16 - SEGMENT INFORMATION

During the year the Group operated principally in one business segment being mineral exploration within Australia

NOTE 17 - NOTES TO THE STATEMENT OF CASH FLOWS

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Consolidated Entity
2014 2013
Reconciliation of (loss) / profit after income tax to net
$ $
operating cash flows
(Loss) / Profit from ordinary activities (330,843) 26,128
Depreciation 13,535 12,656
- -
Value of Incentive Options Issued
Write off of Mineral Exploration 762 -
-
Loss on Sale of Mining Tenements 97,554
Movement in assets and liabilities
Receivables 14,300 (41,054)
Payables 371,614 298,980
Net cash used in operating activities 69,368 394,264
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NOTE 18 - KEY MANAGEMENT PERSONNEL

(a) Directors

The names and positions of Directors in office at any time during the financial year are:

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David Arthur Webster Chairman
Edmond William Edwards Managing Director
Rajakumar Paul Kandiah Non Executive Director
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(b) Remuneration Polices

Remuneration policies are disclosed in the Remuneration Report which is contained in the Directors’ Report.

(c) The total remuneration paid to Directors is summarised below:

Short-term employee benefts Post-employment benefts Other-long term benefts Other – based payments	276,000 - - -		282,000 - - -
	276,000		282,000

Notes 47

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

d) Aggregate amounts payable to Directors and their personally related entities

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Consolidated Entity
2014 2013
Current $ $
Accounts payable 491,484 286,884
Borrowings from Related Parties 346,000 66,000
837,484 352,884
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NOTE 19 - RELATED PARTY INFORMATION

Transactions within the Consolidated Entity Aggregate amount receivable within the consolidated entities at balance date	7,740,837 (1,554,985) 6,185,852
Non-current receivables – Controlled Entities		7,280,800
Less : Provision for non recovery		(1,554,985)
		5,725,815

All loans to related parties and controlled entities are interest free and repayable on demand.

NOTE 20 - REMUNERATION OF AUDITORS

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Amount received, or due and receivable, by the auditors for: Auditing and
reviewing of the financial statements of Athena Resources Limited and of its 23,245 21,850
controlled entities
23,245 21,850
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NOTE 21 - (LOSS) / PROFIT PER SHARE

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Number of Shares
2014 2013
Weighted average number of ordinary shares outstanding during the year used in
123,019,392 122,602,954
the calculation of basic loss per share
(Loss) / Profit used in the calculation of loss per share in $ (330,843) 26,128
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NOTE 22 - FINANCIAL RISK MANAGEMENT

(a) Financial Risk Management Policies

The consolidated entity’s financial instruments consist mainly of deposits with banks, accounts receivable and accounts payable.

Athena Resources I Annual Report 2014

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

The board’s overall risk management strategy seeks to assist the group in meeting its financial targets, whilst minimising potential adverse effects on financial performance. The group has developed a framework for a risk management policy and internal compliance and control systems that covers the organisational, financial and operational aspects of the consolidated entity’s affairs. The Chairman is responsible for ensuring the maintenance of, and compliance with, appropriate systems.

(i) Financial Risk Exposures and Management

The main risks the group is exposed to through its financial instruments are interest rate risk and liquidity risk.

Interest Rate Risk

The consolidated entity’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result of change in the market, interest rate and the effective weighted average interest rate on these financial assets, is as follows:

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Weighted Average
Non-Interest Bearing Floating Interest Rate
Effective Interest Rate
$ $
%
2014 2013 2014 2013 2014 2013
Financial Assets
Cash at bank - - 2.01 1.22 78,869 259,458
Trade debtors 23,151 38,206 - -
Total Financial Assets 23,151 38,206 78,869 259,458
Financial Liabilities
- -
- Payable and accruals 162,084 118,559
- -
- Amounts payable related parties 837,484 352,884
Total Financial Liabilities 999,568 471,443 - -
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Liquidity Risk

The consolidated entity manages liquidity risk by monitoring forecast cash flows.

Credit Risk

The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date, is the carrying amount net of any allowance for doubtful debts, as disclosed in the statement of financial position and notes to the financial statement.

In the case of cash deposited, credit risk is minimised by depositing with recognised financial intermediaries such as banks, subject to Australian Prudential Regulation Authority supervision.

The consolidated entity does not have any material risk exposure to any single debtor or group of debtors under financial instruments entered into by it.

Capital Management Risk

Management controls the capital of the consolidated entity in order to maximise the return to shareholders and ensure that the consolidated entity can fund its operations and continue as a going concern.

Management effectively manages the consolidated entity’s capital by assessing the consolidated entity’s financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of expenditure and debt levels and share and option issues. There have been no changes in the strategy adopted by management to control capital of the consolidated entity since the prior year.

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Notes 49

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

(b) Financial Instruments

Net Fair Values

For financial assets and liabilities, the net fair value approximates their carrying value. The consolidated entity has no financial assets or liabilities that are readily traded on organised markets at balance date and has no financial assets where the carrying amount exceeds net fair values at balance date.

The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the statement of financial position and in the notes to and forming part of the financial statements.

Interest Rate Sensitivity Analysis

The consolidated entity has performed a sensitivity analysis relating to its exposure to interest rate risk. This sensitivity analysis demonstrates the effect on the current year results and equity which could result in a change in these risks. At 30 June 2014 the effect on the loss and equity as a result of a 2% change in the interest rate with all other variables remaining constant is as follows:

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2014 2013
$ $
Change in Loss
Increase in interest by 2% 1,803 4,390
Decrease in interest by 2% (1,803) (4,390)
Change in equity
Increase in interest by 2% 1,803 4,390
Decrease in interest by 2% (1,803) (4,390)
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NOTE 23 - EVENTS AFTER THE REPORTING PERIOD

On 5 August 2014 the Company announced a placement had been completed raising $402,000 by the issue of 13,400,000 shares at 3 cents per share. A further placement was announced on 12 September 2014 raising $45,000 by the issue of 1,500,000 shares at 3 cents per share. In addition a Share Purchase Plan (SPP) was announced to raise up to $1,200,000 by the issue of shares to existing shareholders at 3.1 cents per share. The SPP closed on 24 September and raised $256,000. Further the Company announced that it would seek shareholder approval to the issue of a total of 20,000,000 shares at 3.1 cents per share in satisfaction of remuneration due and loans advanced by the directors totalling $620,000. Shareholders approved the resolution on 25 September and the shares were issued on 26 September 2014.

NOTE 24 - PARENT ENTITY DISCLOSURES

	2014	2013
Financial Position	$	$
CURRENT ASSETS Cash and cash equivalents Trade and other receivables Prepayments	78,069 23,151 -	258,658 38,206 81,185
Total Current Assets	101,220	378,049

Athena Resources I Annual Report 2014

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014

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2014 2013
Financial Position $ $
NON CURRENT ASSETS
Plant and equipment 12,619 26,154
Investment in subsidiaries 300 300
- -
Mineral exploration and evaluation
Loans to subsidiaries (i) 6,185,852 5,270,010
Total Non Current assets 6,198,771 5,296,534
TOTAL ASSETS 6,299,991 5,674,583
CURRENT LIABILITIES
Trade and other payables 999,570 471,445
Total Current Liabilities 999,570 471,445
TOTAL LIABILITIES 999,570 471,445
NET ASSETS 5,300,421 5,203,138
EQUITY
Issued capital 10,969,162 10,996,771
Share Option Reserve 40,000 52,500
Accumulated losses (5,708,741) (5,846,133)
TOTAL EQUITY 5,300,421 5,203,138
Financial Performance
Profit (Loss) for the year (330,843) 26,128
- -
Other comprehensive income
Total comprehensive income (330,843) 26,128
Accumulated losses prior year (5,846,133) (5,892,261)
Transfer to Reserve on expiry of options 12,500 20,000
(5,708,741) (5,846,133)
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The parent entity has not entered into any guarantees in relation to debts of its subsidiaries, has no contingent liabilities, and has no commitments for acquisition of property, plant and equipment.

(i) The ultimate recovery of the loans to the subsidiaries is dependent on the successful development and/or commercial exploitation or sale of the subsidiaries’ exploration assets.

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Directors declaration 51

DIRECTORS’ DECLARATION

In the opinion of the directors of Athena Resources Limited (the ‘Company’):
a. the accompanying financial statements and notes are in accordance with the Corporations Act 2001 including:
i. giving a true and fair view of the consolidated entity’s financial position as at 30 June 2014 and of its performance for the year then ended; and
ii. complying with Australian Accounting Standards, the Corporations Regulations 2001, professional reporting requirements and other mandatory requirements.
b. there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
c. the financial statements and notes thereto are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board.
This declaration has been made after receiving the declarations required to be made to the directors in accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2014.

E W Edwards Managing Director

Date at Perth this 30 September 2014

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Athena Resources I Annual Report 2014

INDEPENDENT AUDITOR’S REPORT

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INDEPENDENT AUDITOR’S REPORT

To the members of Athena Resources Limited

Report on the Financial Report

We have audited the accompanying financial report of Athena Resources Limited (“the company”), which comprises the consolidated statement of financial position as at 30 June 2014, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration for the consolidated entity. The consolidated entity comprises the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ responsibility for the financial report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error.

In Note 1, the directors also state, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements , that the financial report complies with International Financial Reporting Standards.

Auditor’s responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company’s preparation and fair presentation of the financial report 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 internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

Our audit did not involve an analysis of the prudence of business decisions made by directors or management.

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

HLB Mann Judd (WA Partnership) ABN 22 193 232 714

Level 4 130 Stirling Street Perth 6000 PO Box 8124 Perth BC 6849 Western Australia. Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: [email protected]. Website: http://www.hlb.com.au

Liability limited by a scheme approved under Professional Standards Legislation

HLB Mann Judd (WA Partnership) is a member of International, a world-wide organisation of accounting firms and business advisers

Independent Auditors Report 53

INDEPENDENT AUDITOR’S REPORT(Continued)

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Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 .

Auditor’s opinion

In our opinion:

(a) the financial report of Athena Resources Limited is in accordance with the Corporations Act 2001 , including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2014 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001 ; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.

Emphasis of matter

Without modifying our opinion, we draw attention to Note 1 in the financial report, which indicates that the Board recognises that additional funding is required to ensure that it can continue to fund its operations and further develop its mineral exploration and evaluation assets during the twelve month period from the date of approval of this financial report. These conditions, along with other matters as set forth in Note 1, indicate the existence of a material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern and therefore, the company may be unable to realise its assets and discharge its liabilities in the normal course of business.

Report on the Remuneration Report

We have audited the remuneration report included in the directors’ report for the year ended 30 June 2014. 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.

Auditor’s opinion

In our opinion the remuneration report of Athena Resources Limited for the year ended 30 June 2014 complies with section 300A of the Corporations Act 2001 .

M R W Ohm HLB Mann Judd Partner Chartered Accountants

Perth, Western Australia 30 September 2014

Athena Resources I Annual Report 2014

SHAREHOLDER DETAILS

FOR THE YEAR ENDED 30 JUNE 2014

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ANALYSIS OF ShAREhOLDING – 26 September 2014 ShARES
1 – 1,000 19
1,001 – 5,000 52
5,001 – 10,000 83
10,001 – 100,000 312
100,001 – or more 155
621
Total on issue 166,177,455
Shareholders holding less than marketable parcel 211
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Voting Rights

Article 16 of the Constitution specifies that on a show of hands every member present in person, by attorney or by proxy shall have:

(a) for every fully paid share held by him one vote

(b) for every share which is not fully paid a fraction of the vote equal to the amount paid up on the share over the nominal value of the shares.

Substantial Shareholders

The following substantial shareholders have notified the Company in accordance with Corporations Act 2001.

Edmond William Edwards 30,344,177 18.26% David Arthur Webster 9,891,798 5.95%

Directors’ Shareholding

Interest of each director in the share capital of the Company is detailed in the Remuneration Report.

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Shareholder details 55

SHAREHOLDER DETAILS (Continued)

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TOP TWENTY ShAREhOLDERS 26 September 2014
NAME AND ADDRESS ShARES % RANK
Tied Nominees Pty Ltd (T P Edwards Superfund A/c) 17,712,806 10.66 1
Tied Nominees Pty Ltd (E Edwards Family Trust) 12,587,371 7.51 2
Ishine International Resources Limited 8,300,000 4.99 3
Kelanco Pty Ltd 8,261,721 4.97 4
Cobpen Co Investments Pty Ltd 8,077,301 4.86 5
Mr Andrew Peter Thomson 4,432,500 2.67 6
Julia Edwards Superannuation Pty Ltd 4,020,000 2.42 7
Corridor Nominees Pty Ltd 3,803,375 2.29 8
Mr Peter John Newcomb 3,710,250 2.23 9
Mr Terence Weston 3,661,000 2.20 10
Lightwave Investments (WA) Pty Ltd 3,322,581 2.00 11
Befavo Pty Ltd (H G Shore Super Fund) 2,504,409 1.51 12
Mr James Gregory Puklowski 2,183,225 1.31 13
Mr Andrew Peter Puklowski 2,019,471 1.22 14
B C & K D Kelly 1,973,047 1.19 15
Mr Liam Kelly 1,954,889 1.18 16
Rasco Holdings Pty Ltd 1,925,972 1.16 17
Tandem Technical Consultants Pty Ltd 1,850,000 1.11 18
Mr J M Burrell & Ms J M Burrell (Burrell Family Super) 1,666,667 1.00 19
Symbios Pty Ltd 1,650,000 0.99 20
TOP 20 TOTAL 67,685,703 57.54
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Athena Resources I Annual Report 2014

INTEREST IN MINING TENEMENTS AS AT JUNE 30 2014

INTEREST IN MINING TENEMENTS Byro E09/1507 E09/1508 E09/1552 E09/1637 E09/1638 E09/1656 E09/1657 E09/1781 E09/1938 LA09/30 LA09/37 LA09/38

E – Exploration License

L – Miscellaneous Water Search Licence Application

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ABN 69 113 758 900

24 Colin Street I West Perth I Western Australia I 6005 PO Box 1970 I West Perth I Western Australia I 6872 Ph 08 9222 5888 I Fx 08 92225 5810 I W athenaresources�com�au

AI assistant

ATHENA RESOURCES LIMITED — Annual Report 2014

64341_rns_2014-10-26_ff594cfd-3429-4076-92ad-4c1a73ed9013.pdf

ANNUAL REPORT 2014

Contents

Company Information

ABN

REVIEW OF OPERATIONS

ThE BYRO PROJECT

1. INTRODUCTION

LOCATION AND TENURE

REVIEW OF OPERATIONS (Continued)

GEOLOGY AND MINERALISATION

2. BASE METALS - NICKEL-COPPER AND PGE

REVIEW OF OPERATIONS (Continued)

high Resolution Gravity Survey

3. BYRO IRON ORE

LOCATION AND ACCESS

REVIEW OF OPERATIONS (Continued)

MAGNETITE AT MT NARRYAR

REVIEW OF OPERATIONS (Continued)

FIRST PASS UPGRADE OF BYRO BENEFICIABLE hEMATITE

REVIEW OF OPERATIONS (Continued)

Table 4. Composite feed grade

Further Surface Sampling and Mapping

Direct Shipping Ore

The Tabaroa South DSO Ore Body.

The heppenstall DSO Ore Body.

REVIEW OF OPERATIONS (Continued)

REVIEW OF OPERATIONS (Continued)

The Think Big North DSO Ore Body.

Cautionary Notes

Forward Looking Statements

JORC Code Compliance Statement

Competent Persons Statement

Competent Persons Disclosure

DIRECTORS’ REPORT

DIRECTORS

PARTICULARS OF DIRECTORS AND COMPANY SECRETARIES

David Arthur Webster Chairman

Experience

Interest in Shares and Options

Special Responsibilities

Directorships held in listed entities

Edmond William Edwards

Managing Director and Joint Company Secretary

Qualifications

Experience

DIRECTORS’ REPORT(Continued)

Interest in Shares

Special Responsibilities

Directorships held in listed entities

Rajakumar Paul Kandiah

Non Executive Director

Qualification

Experience

Interest in Shares and Options

Special Responsibilities

Directorships held in listed entities

Peter John Newcomb

Joint Company Secretary

Qualification

DIRECTORS’ REPORT(Continued)

Experience

PRINCIPAL ACTIVITIES

OPERATING AND FINANCIAL REVIEW

Review of Operations

Financial Position

Dividends

SIGNIFICANT ChANGES IN ThE STATE OF AFFAIRS

MATTERS SUBSEQUENT TO ThE END OF FINANCIAL YEAR

LIKELY DEVELOPMENTS AND EXPECTED RESULTS

MEETINGS OF DIRECTORS

DIRECTORS’ REPORT(Continued)

AUDIT COMMITTEE

REMUNERATION REPORT (Audited)

Remuneration policy

Performance-based remuneration

Details of remuneration for year ended 30 June 2014

Directors’ Remuneration

ATHENA RESOURCES LIMITED Annual Report 2014