AUSQUEST LIMITED

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ABN 35 091 542 451

Annual Report for the financial year ended 30 June 2015

AusQuest Limited Contents

	Page No
Corporate directory	2
Chairman’s Letter	3
Operations review	4
Corporate governance statement	14
Directors’ report	23
Auditor’s independence declaration	31
Independent auditor’s report	32
Directors’ declaration	34
Consolidated statement of profit or loss and other comprehensive income	35
Consolidated statement of financial position	36
Consolidated statement of changes in equity	37
Consolidated statement of cash flows	38
Notes to the financial statements	39
Additional securities exchange information	67
Tenements	71

AusQuest Limited Corporate directory

Corporate directory

Board of Directors

Mr Greg Hancock Non-Executive Chairman Mr Graeme Drew Managing Director Mr John Ashley Non-Executive Director Mr Chris Ellis Non-Executive Director

Company Secretary Mr Henko Vos

Registered Office

C/-Nexia Perth Level 3, 88 William Street Perth WA 6000

Principal Office

8 Kearns Crescent Ardross WA 6153

Telephone: (61 8) 9364 3866 Facsimile: (61 8) 9364 4892 Website: www.ausquest.com.au

Auditors

HLB Mann Judd Level 4, 130 Stirling Street Perth WA 6000

Share Registry

Advanced Share Registry Services Pty Ltd 110 Stirling Highway Nedlands WA 6009 Telephone: (61 8) 9389 8033 Facsimile: (61 8) 9389 7871 Website: www.advancedshare.com.au

Securities Exchange

Australian Securities Exchange (Home Exchange: Perth, Western Australia) Code: AQD

AusQuest Limited Chairman’s letter

Dear Shareholder,

2014/2015 has been an active and productive year for AusQuest, both at our emerging porphyry and IOCG coppergold initiative in south-east Peru and with our Fraser Range nickel-copper portfolio in Western Australia.

Developments on both fronts during the year have positioned the Company for a period of significant exploration activity in the 2016 financial year, much of it externally funded.

The year began with the identification of new exploration prospects in the Fraser Range of Western Australia and the receipt of key drilling approvals from the Ministry of Energy and Mines in Peru. From these early beginnings, the Company went on to further extend its footprint in the Fraser Range and commence the process of attracting joint venture partners in Peru.

Considerable success followed on both fronts. Priority drill targets were identified at Balladonia South from ground electromagnetic surveys and a number of mafic intrusive bodies were interpreted from magnetic data at Gibson Soak. Drilling is planned at both of these areas in the second half of 2015.

In Peru, AusQuest was able to secure landmark joint venture agreements worth up to US$28 million in option payments and in-ground drilling with two significant South American copper companies, Southern Peru Copper Corporation Sucursal del Peru and Compania Minera Zahena SAC.

These four agreements will see five of the Company’s porphyry copper-gold targets drill tested in the next 12 months, with initial drilling activities set to commence shortly.

While negotiating these joint ventures, AusQuest was also active in advancing a number of its 100 per cent owned Peruvian properties to the drilling stage. It is envisaged that new joint ventures will be forthcoming over these properties over the coming 12 months.

In addition to activity in the Fraser Range and Peru, the Company’s gold properties in Burkina Faso, West Africa also saw a considerable increase in exploration activity as a result of our joint venture with Ressources Burkinor SARL.

Under this agreement Burkinor is required to spend US$7.5 million on the Banfora Gold Project over a three-year period to earn an 80% equity in the project. A total of 154 holes for 23,126 metres of reverse circulation drilling have been completed and the results are currently being compiled and assessed.

On the corporate front, we were able to secure additional funding to support both our exploration activities in Western Australia and the ongoing project identification and generation process in Peru.

In March 2015 the Company issued a Prospectus and successfully raised $3 million to fund ongoing work at Fraser Range and facilitate the continued advance of our Peruvian projects to the drilling stage, so they can attract joint venture partners.

Despite the poor market conditions during the year the Company has managed, through a combination of cost-cutting measures and attracting favourable joint venture funding, to give our shareholders exposure to one of the most active exploration programs being undertaken by any junior resource company in Australia – spanning two world-class mineral provinces.

In short, our shareholders have multiple opportunities for exposure to high quality exploration programs which, in the event of discovery success, could result in substantial value uplift.

In conclusion, I would like to thank my fellow Directors for their contribution and commitment during this eventful year; our staff and consultants who have worked diligently through the year to help create an impressive portfolio of opportunities; and our shareholders for their patience and support in trying share market circumstances.

Yours faithfully

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Greg Hancock Chairman

AusQuest Limited Operations review

Highlights – Year in Review

Peru: Copper-Gold

Landmark joint venture agreements worth up to US$28M in option payments and in-ground drilling expenditure signed with leading South American copper companies, Compania Minera Zahena SAC and Southern Peru Copper Corporation Sucursal del Peru.
These agreements will see five of the Company’s porphyry copper-gold targets in the south of Peru drill tested, with drilling expected to commence at the Lana Project in the second half of 2015.
The Company continued to expand its Peruvian copper portfolio with a new porphyry prospect identified, for which discussions with potential joint venture partners have commenced, and new applications submitted.

Fraser Range WA: Nickel-Copper

The Company’s strategic footprint in the Fraser Range was increased to ~2,900km² through successful tenement applications in the Balladonia and Gibson Soak areas.
High priority drill targets were identified at Balladonia South from ground EM surveys while numerous mafic intrusive bodies were interpreted from magnetic data over the Gibson Soak tenements.
Diamond drilling at Balladonia and aircore drilling at Gibson Soak are planned for the second half of 2015, subject to obtaining clearances and favourable ground conditions.

Burkina Faso, West Africa – Gold

Extensive drilling programs were completed over the Banfora Gold Joint Venture by the Company’s joint venture partner, Ressources Burkinor SARL, with narrow intersections of anomalous gold reported from the initial drilling.

Corporate

A $3.0M capital raising was successfully completed in March 2015 via a placement to sophisticated and professional investors and a Securities Purchase Plan (SPP) offered to shareholders.
At the end of June 2015, AusQuest had cash of ~$2.4M, putting the Company in a strong position to complete its planned exploration programmes for 2015 and beyond.

AusQuest Limited Operations review

OVERVIEW

While the 2015 financial year was a challenging time for junior explorers, it was in many respects a watershed period for AusQuest, with significant levels of expenditure on the Company’s overseas coppergold and gold projects in Peru and West Africa being funded by joint venture partners.

In Peru , the Company made significant progress with its strategy of securing joint venture agreements with major copper mining and exploration companies to access the funds required to drill test its large porphyry copper targets. Four agreements were successfully negotiated during the year which will result in five of the Company’s porphyry copper targets being drilled over the next 12 to 18 months – all of which have the potential to deliver transformational discoveries.

Exploration mapping and sampling continued over the Company’s ten remaining 100%-owned prospects to identify further porphyry copper targets for possible future joint venture and drilling. The Chololo porphyry copper prospect was identified by this process and is now the subject of discussions with three large companies which have expressed interest in the prospect.

The Company plans to continue its strategy of leveraging available funds through joint ventures over its projects in Peru and elsewhere, as a means of maximising benefits to shareholders in the current challenging market environment.

The Company’s copper-gold exploration venture in Peru represents an exciting growth opportunity in one of the world’s most prospective countries for the discovery of major new porphyry copper and iron-oxide copper-gold (IOCG) deposits.

In Australia , exploration efforts continued to focus in the highly prospective Fraser Range area of Western Australia, where the Company has secured two major areas of interest to the south of the world-class Nova-Bollinger nickel-copper discovery, which is being acquired by Independence Group through its merger with Sirius Resources for a reported transaction value of $1.8 billion.

Exploration during the year focused on identifying drill targets within the Balladonia and Gibson Soak Projects with a number of targets now ready for drilling when final access approvals are received.

Drilling is expected to commence during the second half of 2015.

Exploration activity for gold within the Company’s extensive exploration portfolio in Burkina Faso, West Africa received a major boost during the year with AusQuest’s joint venture partner, Ressources Burkinor SARL, a wholly-owned subsidiary of TSX-listed SEMAFO Inc., ramping up exploration activities and commencing reverse circulation drilling of the extensive gold auger anomalies outlined within the Banfora Gold Joint Venture tenements.

Under the Agreement, Burkinor must spend US$7.5 million on the Banfora Gold Project over three years to earn 80% equity in the project. Results from the initial drilling programs had just started to be analysed at the time of this report.

AusQuest Limited Operations review

PROJECT REVIEWS

PERU: COPPER-GOLD

Over the past four years AusQuest has assembled a world-class exploration opportunity in Peru, South America – one of the world’s most prominent destinations for international copper exploration.

Detailed aeromagnetic data acquired by the Company in 2011 were used to identify prospective areas beneath the extensive sand and sediment cover and a combination of geological mapping and sampling, together with ground-based geophysical surveys, were used to identify targets for drilling.

Five of these prospects are now the subject of joint venture agreements which will see a significant amount of externally funded drilling undertaken at each prospect over the next 12-18 months (Figure 1).

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Figure 1: Project Locations and Joint Venture Areas

The combined value of these agreements is up to US$28 million (~A$38 million), comprising staged option payments to AusQuest totalling ~A$13 million and in-ground exploration (drilling) expenditure totalling an estimated A$25 million. A summary of the commercial terms of these joint ventures, with Compania Minera Zahena SAC (Zahena) and with Southern Peru Copper Corporation Sucursal del Peru (Southern), has previously been released to the ASX.

Under the terms of the agreements at least 20,000m of diamond drilling will be completed across five of the Company’s porphyry copper-gold targets before the end of 2016, with initial cash payments of ~A$350,000 to be made to AusQuest by the end of 2015.

The joint venture agreements give AusQuest free-carried exposure to one of the more significant copper exploration programs for a junior explorer to be undertaken in Latin America, while at the same time securing a strong partnership with major companies in the region with the financial and technical expertise to advance any discovery through to development and production.

AusQuest Limited Operations review

Drilling of the large gravity target within the Lana Joint Venture Project is expected to commence in the second half of 2015 with contractors already secured for access preparation and drilling.

The Lana prospect is a large 8 milligal gravity anomaly covering a surface area of approximately 20km2 and occurring beneath an estimated 200m of volcanic and sedimentary cover. The gravity target is discordant with the underlying magnetic response, similar to the Olympic Dam deposit in South Australia, possibly reflecting buried IOCG-style mineralisation.

Drilling of four porphyry copper targets within the Cardonal and Puite-Colorada Joint Venture Projects is expected to start in late 2015 or early 2016 with access preparations likely to commence during October/November 2015 (Figure 2).

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Figure 2: Joint Ventures in the south of Peru showing Porphyry Copper targets

The Puite, Colorada and Cardonal prospects are large buried porphyry copper (+/- gold) targets, each covering a surface area of more than 2km[2] , which have been outlined by a combination of surface mapping and sampling (anomalous copper in rock and soils) as well as ground magnetic and induced polarisation (IP) surveys. They all occur within an area of ~100km² and could reflect a potential cluster of deposits.

The Ventana prospect, which was recently included under the Extended Cardonal Agreement, was recognised when new roadworks exposed copper mineralisation associated with propylitic alteration in dioritic dykes and the enclosing granodiorite host rocks. Up until that time, this mineralisation had been hidden by the extensive cover in the area.

During the year, the Company also continued to advance its 100%-owned prospects in south-eastern Peru with a view to securing additional joint venture agreements once prospects have reached the drilling stage.

As part of this program, detailed geological mapping, rock and soil sampling programs were initiated over the Chololo prospect where earlier reconnaissance had identified the potential for a buried porphyry copper system.

The Chololo prospect is located ~30km north-east of the port of Ilo, and is closely associated with the north-east trending Chololo Fault, which appears to control the location of other known porphyry copper systems in the area.

AusQuest Limited Operations review

Detailed mapping supported the presence of a buried porphyry system over an area of several square kilometres, defined by an arc of advanced argillic alteration believed to reflect a window into a mineralised porphyry at depth (Figure 3).

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Figure 3: Chololo Prospect showing geology and copper soil geochemistry

The inferred porphyry intrudes a mixed sequence of volcanics and sediments, and appears to be unconformably overlain by Moquegua sediments, which may have preserved the vertical extent of the porphyry from erosion.

Systematic soil sampling outlined broadly coincident copper (100ppm to 1220ppm) and molybdenum (8ppm to 306ppm) anomalies with elevated gold values (20ppb to 815ppb) concentrated around the western margin of the inferred porphyry.

Anomalous pathfinder elements such as lead (25ppm to 1070ppm), zinc (100ppm to 1820ppm) plus tin, tungsten and iron are strongly correlated in the soil geochemical data and appear displaced from the anomalous copper, molybdenum and gold which should occur in the core of the system.

A drilling programme has been designed to test the Chololo porphyry and discussions with potential joint venture partners have commenced in order to secure funding for the programme.

The Company continues to be encouraged by the results obtained from its Peruvian projects, and plans to continue evaluating its extensive portfolio of large porphyry copper and/or IOCG targets with a view to advancing further prospects to the drilling stage and possible joint venture discussions over the coming 12 months.

AusQuest Limited Operations review

FRASER RANGE (WA): NICKEL-COPPER

AusQuest now controls a total area of approximately 2,900km² of highly prospective ground within the Fraser Range Province of WA, which hosts the Nova–Bollinger nickel-copper deposit that is being acquired by Independence Group through its merger with Sirius Resources for a reported transaction value of $1.8 billion.

The region remains the focus of significant exploration activity by a range of companies and is considered to be one of the country’s premier locations for nickel and copper exploration (Figure 4).

New tenement applications submitted by the Company during the year cover magnetic targets reflecting possible mafic-ultramafic intrusions which are considered to be the preferred host rocks for nickel-copper mineralisation in this terrain.

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Figure 4: Fraser Range Projects showing current Prospect locations

Balladonia Nickel-Copper Project (100% AQD)

The Balladonia Project is located ~60km south of the Nova–Bollinger nickel-copper deposit and consists of four exploration licences covering an area of ~1,850km².

The project occurs within a structurally complex region of the Fraser Range terrain and is centred above a deep regional gravity anomaly (~30 milligals) thought to reflect buried mafic-ultramafic rocks similar to those that host the Nova-Bollinger deposit. Most of the tenements are located within the Dundas Nature Reserve.

During the year, reconnaissance surface sampling within the Balladonia South tenement suggested potential for mafic host rocks to occur within the tenements and moving loop electromagnetic (MLTEM) surveys were subsequently undertaken to locate possible sulphide accumulations within intrusions interpreted from the aeromagnetic data.

AusQuest Limited Operations review

Three high priority targets (Boorara, Gardner and Canterbury) were identified by these EM surveys, each one associated with dyke-like structures/intrusions (Figure 5).

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Figure 5: Balladonia South proposed drill targets

Computer modelling of the MLTEM data optimised the location of six drill sites to test these anomalies. The EM targets display moderate-to-strong late-time (156.8 to 194.5msec) responses, typical of sulphide mineralisation. Modelling suggests discrete targets of variable thickness, with strike lengths <800m, moderate conductance, and target depths ranging from 125m to 250m.

Native Title Heritage and Flora surveys were completed late in the year with final clearance advice awaited. The Company plans to commence drilling operations when all clearances have been obtained and weather conditions allow.

Gibson Soak Nickel-Copper Project (100% AQD)

The Gibson Soak Project is located ~30km north of the port of Esperance, within the broader Fraser Range terrain and consists of three exploration licences covering an area of ~960km². Tenements are centred on a regional north-east trending gravity high and major north-east trending structures, which are potential focal points for mafic-ultramafic intrusions that are considered to be key targets for nickel sulphide mineralisation within this terrain.

Recent drilling north of Gibson Soak by Mount Ridley Mines reported prospective nickel host rocks in the area, with aeromagnetic data providing a clear picture of the host intrusions. Similar potential intrusions evident within the Gibson Soak tenements, are considered prime exploration targets for nickel-copper mineralisation.

AusQuest Limited Operations review

Aircore drilling was planned to test selected targets and clearances obtained from Native Title holders and the Department on Minerals and Energy.

The Company plans to commence drilling operations as soon as ground conditions are suitable (Figure 6).

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Figure 6: Gibson Soak proposed aircore drilling of inferred mafic intrusions

Much of the Gibson Soak tenement is covered by farm land which requires access agreements to be completed before ground-based work can commence.

Meetings have been held with the Esperance Shire and local landowners to obtain access for drilling. Discussions are continuing.

Dundas Nickel-Copper Project (100% AQD)

The Dundas Project is located ~100km east-southeast of Norseman (WA) and ~80km south-west of the Nova-Bollinger nickel-copper deposit. The remaining tenements cover an area of ~90km².

During the year, fixed-loop EM surveys completed over elevated nickel and copper soil anomalies located a weak-to-moderate EM response partially coincident with the northern half of the anomaly. Shallow aircore drilling has been planned to confirm the rock types associated with this target before deeper drilling is considered.

Native Title Heritage and Flora surveys have been completed with final access approval pending.

AusQuest Limited Operations review

WEST AFRICA: GOLD

Banfora Joint Venture Project (AQD 100%, Burkinor earning to 80%)

The Banfora (Comoe) Project, which is located near the town of Banfora in south-west Burkina Faso, West Africa, covers an area of ~1430km² within an extensive greenstone belt that is relatively unexplored.

The project is subject to a Farm-In and Joint Venture Agreement with Ressources Burkinor SARL, a whollyowned subsidiary of TSX-listed SEMAFO Inc. Burkinor has the right to earn up to an 80% interest in the Banfora permits by spending a total of US$7.5 million over a three-year period commencing May 2014.

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Figure 7: Banfora JV showing location of RC drilling and auger sampling

During the year, grid-based auger drilling was used as the primary exploration tool to identify potential gold targets within the joint venture area. A total of 22,460 holes for 173,637m of drilling have been completed to date (Figure 7).

Extensive gold auger anomalism was located in a number of areas with exploration interest focusing particularly in the Kapogouan-Noumousso tenements where the Mouro Trend (>30km) was outlined along the eastern margin of the Banfora Greenstone Belt.

First-pass Reverse Circulation (RC) drilling has now been completed along a small portion of the Mouro Trend (eight drill sections completed over ~6km comprising 85 holes for 12,785m of drilling) as well as in the Komoe (36 holes/5369m) and Tondoura (33 holes/4972m) tenements, where anomalous gold trends have also been identified.

Narrow intersections (1m to 3m) of anomalous gold (0.4 up to 9.0g/t Au) were reported from this program with a best result of 5m @ 2.58g/t Au from the K1 prospect (Komoe permit).

The Company has been advised that Burkinor plans to compile and assess the multitude of results that have so far been collected under the joint venture over the coming months before deciding on future work programs.

AusQuest Limited Operations review

CORPORATE

During the year AusQuest successfully negotiated four Farm-in and Joint Venture Agreements with major companies in Peru to secure funding for drill testing its porphyry copper-gold prospects in the south of the country. This has resulted in a potential cash payment to AusQuest of up to US$10 million and work programs (drilling) estimated to be worth up to US$28 million to be completed within the Company’s tenements over a four-year period.

In March 2015, the Company successfully completed a $3.0 million capital raising via a placement to sophisticated and professional investors and a Securities Purchase Plan (SPP) offered to shareholders.

At the end of June 2015, AusQuest had cash of ~$2.4 million, putting the Company in a strong position to complete its planned exploration programmes for 2015 and beyond.

AusQuest Limited Corporate governance statement

INTRODUCTION

The Company is committed to implementing sound standards of corporate governance. In determining what those standards are, the Company has had regard to the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations – Third Edition (“Recommendations”).

Further information about the Company’s corporate governance practices is set out on the Company’s website at www.ausquest.com.au. In accordance with the Recommendations, information published on the Company’s website includes charters (for the Board and its sub-committees), the Company’s Code of Conduct and other policies and procedures relating to the Board and its responsibilities.

PRINCIPLE 1: LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT

Recommendation 1.1 – A listed entity should disclose:

(a) the respective roles and responsibilities of its board and management; and (b) those matters expressly reserved to the board and those delegated to management.

The roles and responsibilities of the Board compared with those delegated to management are reflective of the Recommendations.

The respective roles of the Board and Senior Management are summarised in the Company’s Board Charter which is available on the Company’s website. The Board charter also contains summaries of the responsibilities of the Board, Chair, Lead Independent Director, Managing Director, Non-Executive, Independent Directors as well as Senior Management.

The Board has established functions that are reserved for the Board, as separate from those functions discharged by the Managing Director and are also summarised in the Company’s Board Charter which is available on the Company’s website.

Recommendation 1.2 – A listed entity should:

(a) undertake appropriate checks before appointing a person, or putting forward to security holders a candidate for election, as a director; and
(b) provide security holders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a director.

The Company undertakes appropriate checks before appointing or re-appointing a person and when putting forward a candidate for election as a director. A copy of the entity’s Policy and Procedure for Selection and (Re) Appointment of Directors is available on the Company’s website, and is in line with the Recommendations.

Recommendation 1.3 – A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment.

The Company has entered into letters of appointment with Directors and employees. These contracts ensure that directors and senior executives have a clear understanding of their roles and responsibilities and of the entity’s expectations of them.

Recommendation 1.4 – The Company Secretary of a listed entity should be accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board.

The Company Secretary is appointed and removed by, and is accountable directly to, the Board.

The Company Secretary has access to all Board members and the main functions of the role are to assist in advising the Board on governance matters and monitoring compliance with board and committee procedures. The role of the Company Secretary is further summarised in the Company’s Board Charter which is available on the Company’s website, and are reflective of the Recommendations.

AusQuest Limited Corporate governance statement

Recommendation 1.5 – A listed entity should:

(a) have a diversity policy which includes requirements for the board or a relevant committee of the board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the entity’s progress in achieving them;
(b) disclose that policy or a summary of it, and
(c) disclose at the end of each reporting period the measurable objectives for achieving gender diversity set by the board or a relevant committee of the board in accordance with the entity’s diversity policy and its progress towards achieving them, and either:
i. the respective proportions of men and women on the board, in senior executive positions and across the whole organisation (including how the entity has defined “senior executive” for these purposes); or
ii. if the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s most recent “Gender Equality Indicators”, as defined in and published under that Act.

The Company’s Diversity Policy is set out on the Company’s website.

The Company’s Diversity Policy does not include measureable objectives as the Board believes that the Company will not be able to successfully meet these given the current size and stage of development of the Company. If the Company’s activities increase in size, nature and scope in the future, then appropriate measureable objectives will be set and put into place.

Notwithstanding the above, the Company strives to provide the best possible opportunities for current and prospective employees of all backgrounds in such a manner that best adds to overall shareholder value and which reflects the values, principles and spirit of the Company’s Diversity Policy.

During the 2015 financial year, the Company had a total of 2 women employees out of a total of 8 employees and contractors, however the Company had no women in senior executive positions or on the Board. A senior executive is defined by the Company as a member of the senior management team as distinct from the board, being those who have the opportunity to materially influence the integrity, strategy and operation of the company and its financial performance.

The Company is a not a ‘relevant employer’ under the Workplace Gender Equality Act 2012.

Recommendation 1.6 – A listed entity should:

a) have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors, and
b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.

The Company has adopted policies and procedures concerning the evaluation and development of the Board, Board committees and individual directors. This responsibility is allocated to the Board (in its capacity as the Nomination Committee) and the Nomination Committee Charter is available on the Company’s website.

Procedures include an internal Board performance assessment, an induction protocol and ongoing discussions with regard to the performance of the Board and its directors. The Company’s “Process for Performance Evaluation” is available on the Company’s website.

During the 2015 financial year, an internal Board performance assessment has been performed and assessed in accordance with the Company’s Process for Performance Evaluation. No material weaknesses were identified and no governance changes were deemed necessary.

AusQuest Limited Corporate governance statement

Recommendation 1.7 – A listed entity should:

a) have and disclose a process for periodically evaluating the performance of its senior executives; and

b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.

The Nomination Committee is charged with periodic review of the job description and performance of the Managing Director.

The Company’s website contains a section formally setting out the Company’s “Process for Performance Evaluation”.

The Managing Director was the subject of informal evaluations against both individual performance and overall business measures. These evaluations were undertaken progressively and periodically throughout the year.

PRINCIPLE 2: STRUCTURE THE BOARD TO ADD VALUE

Recommendation 2.1 – The board of a listed entity should:

a) have a nomination committee which: i) has at least three members, a majority of whom are independent directors; and ii) is chaired by an independent director.

and disclose:

iii) the charter of the committee;

iv) the members of the committee, and
v) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or
b) if it does not have a nomination committee, disclose that fact and the processes it employs to address board succession issues and to ensure that the board has the appropriate balance of skills, knowledge, experience, independence and diversity to enable it to discharge its duties and responsibilities effectively.

The full Board performs the function of the Nomination Committee. The Board considers that at this stage, no efficiencies or other benefits would be gained by establishing a separate Nomination Committee.

The Board, and therefore the Nomination Committee, comprises 4 members of which only 1 is independent. It is also chaired by the independent director. One meeting of the Board in its capacity as the Nomination Committee was held during the year and membership/ attendance at Board meetings is recorded in the Directors’ Report section of the 2015 Annual Report. The Board has adopted a Nomination Committee charter to assist it to fulfil its function as the Nomination Committee and this is available on the Company’s website.

Recommendation 2.2 – A listed entity should have and disclose a board skills matrix setting out the mix of skills and diversity that the board currently has or is looking to achieve in its membership.

The Company recognises the importance of having an appropriate mix of expertise and experience on its Board and Committees to enable it to effectively discharge its corporate governance and oversight responsibilities. The Board accordingly seeks to achieve a balance in its structure that best reflects the needs of the Company at any particular time. Appointment to the Board will be dependent on candidates demonstrating an appropriate breadth of experience in a field of expertise that is relevant to the ongoing supervision of the Company’s affairs. This diversity of experience may include a commercial, technical, legal, corporate finance, business development or other background as the Board and management determine as part of its selection processes.

Geographically the mix of skills extents to the international market, with a higher focus placed on operational and technical experience throughout Peruvian, African and Australian markets.

AusQuest Limited Corporate governance statement

The current Board composition addresses these desired skills, with details of each Director’s skills and experience noted in the Directors Report accompanying the Annual Report. The Board continues to assess and monitor this evaluation.

The policy and process for the nomination, selection and appointment of new directors is available on the Company’s website.

Recommendation 2.3 – A listed entity should disclose:

a) the names of the directors considered by the board to be independent directors;
b) if a director has an interest, position, association or relationship of the type described in Box 2.3 but the board is of the opinion that it does not compromise the independence of the director, the nature of the interest, position, association or relationship in question and an explanation of why the board is of that opinion; and
c) the length of service of each director.

The names and terms of office of each director, and their status as executive/non-executive/independent, for the year ended 30 June 2015 were as follows (with all directors noted as continuing in office as at 30 June 2015 and still being in office at the date of the 2015 Annual Report unless indicated otherwise):

Director	Status	Date of appointment	Length of service
Greg Hancock	Non-Executive/independent	16 September 2003	11 years
Graeme Drew	Executive/ non-independent	15 February 2000	15 years
John Ashley	Non-Executive/ non-independent	15 February 2000	15 years
Chris Ellis	Non-Executive/ non-independent	2 November 2006	8 years

The Company has accepted the definition of “independence” in the Recommendations in making the above assessments of independence.

On 1 May 2015 the Company entered into a 12 month corporate consulting agreement with Mr Hancock. Under the terms of the agreement Mr Hancock can receive up to $25,000 payable over 12 equal monthly payments for these services. Both the Board and Mr Hancock consider this agreement not to be material to them based on its nature and monetary value.

No director has an interest, position, association or relationship of the type described in Box 2.3 of the Recommendations that is considered to not compromise independence. Each director’s independence status is regularly assessed against Box 2.3.

Recommendation 2.4 –The majority of the board of a listed entity should be independent directors.

The Company did not have a majority of independent directors during the year. As at the year end, one out of the four directors, Mr Hancock, is independent. The remaining directors have been deemed non independent on the following bases - Mr Drew is involved in the day to day running of the Company, Mr. Ashley was also involved in an executive capacity of the Company during the pre-ceding three year period and Mr Ellis is a substantial shareholder of the Company.

Whilst this is not in accordance with the Recommendation, the Board considers that its current composition is the most appropriate blend of skills and expertise relevant to the Company's business, size and operations. The Board is aware of the importance of independent judgement and considers independence, amongst other things, when new appointments to the Board are made.

Recommendation 2.5 – The chair of the board of a listed entity should be an independent director and, in particular, should not be the same person as the CEO of the entity.

Mr Hancock, the Chairman of the company is an independent, non-executive Director. The role of the Managing Director and CEO is filled by Mr Drew, hence the Company complies with this Recommendation.

AusQuest Limited Corporate governance statement

Recommendation 2.6 – A listed entity should have a program for inducting new directors and provide appropriate professional development opportunities for directors to develop and maintain the skills and knowledge needed to perform their role as directors effectively.

The Board is responsible for Board member induction, and ongoing education and development. The Company’s Policy on Independent Professional Advice empowers a director to undertake training or take independent professional advice at the expense of the Company.

PRINCIPLE 3: ACT ETHICALLY AND RESPONSIBLY

Recommendation 3.1 – A listed entity should:

a) have a code of conduct for its directors, senior executives and employees; and b) disclose that code or a summary of it.

The Company has established a formal code of conduct to guide the Board and Executives with respect to the practices necessary to maintain confidence in the Company’s integrity, the practices necessary to take into account legal obligations and reasonable expectations of stakeholders, and the responsibility and accountability of individuals for reporting and investigating reports of unethical practices. The code of conduct is disclosed on the company’s website.

PRINCIPLE 4: SAFEGUARD INTEGRITY IN CORPORATE REPORTING

Recommendation 4.1 – The board of a listed entity should:

a) have an audit committee which:
i) has at least three members, all of whom are non-executive directors and a majority of whom are independent directors; and
ii) is chaired by an independent director, who is not the chair of the board,

and disclose:

iii) the charter of the committee;

iv) the relevant qualifications and experience of the members of the committee; and
v) in relation to each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or
b) if it does not have an audit committee, disclose that fact and the processes it employs that independently verify and safeguard the integrity of its corporate reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner.

The Board has established a separate Audit Committee comprising three non-executive directors, being Mr. Hancock, Mr Ashley and Mr Ellis. Only Mr Hancock is independent. It is noted that all Audit Committee members have industry experience.

The Chair of the Audit Committee is Mr Chris Ellis, who is not independent but is not the Chair of the Board. The Company does not meet the recommendation of the Audit Committee having a majority of independent directors, nor is the Chair of the Committee an independent director. However, whilst this is not in accordance with the Recommendation, the Board considers that its current composition is the most appropriate blend of skills and expertise relevant to the Company's business, size and operations. The Board is aware of the importance of independent judgement and considers independence, amongst other things, when new appointments to the Board are made.

A copy of the Company’s Audit Committee Charter is available on the Company’s website.

Details regarding the directors’ qualifications and experience is contained in the Director’s Report, with the Committee deemed to be structured so that it has the relevant accounting and financial expertise required to discharge its responsibilities.

AusQuest Limited Corporate governance statement

The Committee met twice during the year and attendances by committee members are recorded in the Directors’ Report section of this Annual Report.

Recommendation 4.2 – The board of a listed entity should, before it approves the entity’s financial statements for a financial period, receive from its CEO and CFO a declaration that, in their opinion, the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

In respect of each statutory financial reporting period, the Company’s Managing Director and CFO (or equivalent) provides the Board with a declaration in accordance with S.295A of the Corporations Act which is consistent with Recommendation 4.2. The Company complied with this recommendation.

Recommendation 4.3 – A listed entity that has an AGM should ensure that its external auditor attends its AGM and is available to answer questions from security holders relevant to the audit.

The Audit Committee Charter, which is available on the Company’s website, states that the Audit Committee is to ensure that the external auditor is requested to attend the annual general meeting of the Company and is available to answer questions from shareholders. HLB Mann Judd, the entity’s external auditor, attended the 2014 AGM and will be attending the AGM this year, where they will be available to answer questions from security holders.

PRINCIPLE 5: MAKE TIMELY AND BALANCED DISCLOSURE

Recommendation 5.1 – A listed entity should have a written policy for complying with its continuous disclosure obligations under the Listing Rules and disclose that policy or a summary of it.

The Company has established written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at senior executive level for that compliance. A copy of the Policy on ASX Listing Rule Compliance is available on the Company’s website.

PRINCIPLE 6: RESPECT THE RIGHTS OF SECURITY HOLDERS

Recommendation 6.1 – A listed entity should provide information about itself and its governance to investors via its website.

The Company’s website contains a separate section titled “Corporate Governance” which contains all key Corporate Governance documents including the Board and committee charters, Code of Conduct and other policies and procedures. The website also provides:

an overview of the entity’s current projects;
copies of its annual reports and financial statements;
copies of its announcements to ASX.

Recommendation 6.2 - A listed entity should design and implement an investor relations program to facilitate effective two-way communication with investors.

The Company has a Shareholder Communications Policy which is publicly available on the company’s website, including the effective use of electronic communications.

Recommendation 6.3 – A listed entity should disclose the policies and processes it has in place to facilitate and encourage participation at meetings of security holders.

The Board encourages the attendance of shareholders at the Shareholders’ Meetings and sets the time and place of each Shareholders Meeting in advance to allow maximum attendance by shareholders.

The Company provides information in the notice of meeting that is presented in a clear, concise and effective manner. Shareholders are provided the opportunity at general meetings to ask questions in relation to each resolution before they are put to the vote and discussion is encouraged by the Board.

AusQuest Limited Corporate governance statement

Recommendation 6.4 – A listed entity should give shareholders the option to receive communications from, and send communications to, the entity and its security registry electronically.

The Company provides shareholder materials directly to shareholders through electronic means. A shareholder may request a hard copy of the Company’s annual report to be posted to them.

The Company’s share registry is maintained electronically by Advanced Share Registry Services Pty Ltd. Their contact details are disclosed in the Corporate Directory of the Annual Report as well as the Company’s website.

PRINCIPLE 7: RECOGNISE AND MANAGE RISK

Recommendation 7.1 - The board of a listed entity should:

a) have a committee or committees to oversee risk, each of which: i) has at least three members, a majority of whom are independent directors; and ii) is chaired by an independent director;

and disclose:

iii) the charter of the committee;

iv) the members of the committee; and
v) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or

b) if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the processes it employs for overseeing the entity’s risk management framework.

The full Board performs the function of the Risk Committee. The Board considers that at this stage, no efficiencies or other benefits would be gained by establishing a separate risk committee.

The Board, and therefore the Risk Committee, comprises 4 members of which only 1 is independent. It is also chaired by the independent director.

The Board of Directors is responsible for overseeing and approving policies for the management and oversight of material business risks, internal compliance and internal controls. The objectives of AusQuest’s risk management program are contained in the Risk Management Policy which is available on the Company’s website. The Board has prepared a risk matrix and reviews this as a standing item at each board meeting to ensure it reflects the Company’s current risk profile.

Recommendation 7.2 - The Board or a committee of the board should review the entity’s risk management framework at least annually to satisfy itself that it continues to be sound and disclose, in relation to each reporting period, whether such a review has taken place.

The Board reviews, at least annually, the Company’s risk management framework. The risks identified are monitored on a continual basis and preventative measures are implemented as and when deemed necessary.

Recommendation 7.3 - A listed entity should disclose if it has an internal audit function, how the function is structured and what role it performs or if it does not have an internal audit function, that fact and the processes it employs for evaluating the continually improving the effectiveness of its risk management and internal control processes.

The Company does not have an internal audit function. The Board recognises that no cost effective internal control system will preclude all errors and irregularities. The Company’s risk management and internal control system is based upon written procedures, policies and guidelines, an organisational structure that provides an appropriate division of responsibility, and the selection and training of qualified service providers and personnel.

The Company 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.

AusQuest Limited Corporate governance statement

Details of the Company’s policy on these matters are set out under the risk management policy which is publicly available on the Company’s website.

Recommendation 7.4 - A listed entity should disclose whether it has any material exposure to economic, environmental and social sustainability risks and, if it does, how it manages or intends to manage those risks.

The Company has assessed its exposure to economic risks as high on the basis that it has no material income and is reliant on the potential exploration success to raise capital to fund exploration and operating costs. This risk is managed by regularly reviewing future cashflow requirements to ensure that fundraising is performed in a timely manner and that the Company remains in a position to pay its debts as and when they fall due. The company has no material exposure to environmental or sustainability risks.

A copy of the Company’s policies on risk oversight and management of material business risks is publicly available under the heading Risk Management Policy.

PRINCIPLE 8: REMUNERATE FAIRLY AND RESPONSIBLY

Recommendation 8.1 - The board of a listed entity should:

a) Have a remuneration committee which:
i) has at least three members, a majority of whom are independent directors; and ii) is chaired by an independent director;

and disclose:

iii) the charter of the committee: iv) the members of the committee; and v) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or

b) if it does not have a remuneration committee, disclose that fact and the processes it employs for setting the level and composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not excessive.

The Board has established a Remuneration Committee comprising three non-executive directors, being Mr. Hancock, Mr Ashley and Mr Ellis. Only Mr Hancock is independent, and acts as the chair of the committee.

The Company does not meet the recommendation of the Remuneration Committee having a majority of independent directors. Whilst this is not in accordance with the Recommendation, the Board considers that its current composition is the most appropriate blend of skills and expertise relevant to the Company's business, size and operations. The Board is aware of the importance of independent judgement and considers independence, amongst other things, when new appointments to the Board are made.

The Committee met once during the year and attendances by committee members are recorded in the Directors’ Report section of the 2015 Annual Report.

The Remuneration Committee Charter is publicly available on the Company’s website.

Recommendation 8.2 - A listed entity should separately disclose its policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives.

The structure of non-executive remuneration is clearly distinguishable from that of executive directors and senior executives. The Board’s policy for determining the nature and amount of remuneration for Board members and senior executives of the Company was as follows:

Non-executive directors are remunerated at a fixed fee for time, commitment and responsibilities. Remuneration for non-executive directors is not linked to the performance of the Company. There are no documented agreements providing for termination or retirement benefits to non-executive directors (other than for

AusQuest Limited Corporate governance statement

superannuation where appropriate). During the financial year ending 30 June 2015 the non-executive directors waived all entitlements to their director’s fees. The non-executive directors have also agreed to waive all director fees up to 31 December 2015, at which time they will re-assess the position.

Executive directors and senior executives are offered a competitive level of base pay at market rates and are reviewed annually to ensure market competitiveness. Long term performance incentives may include performance and production bonus payments, shares options granted at the discretion of the Board and subject to obtaining the relevant approvals.

The level of remuneration packages and policies applicable to directors are detailed in the Remuneration Report which forms part of the Directors’ Report to the 2015 Annual Report.

Recommendation 8.3 - A listed entity which has an equity-based remuneration scheme should have a policy on whether participants are permitted to enter into transactions (whether the use of derivatives or otherwise) which limit the economic risk of participating in the scheme and disclose that policy or a summary of it.

The Company has an equity-based remuneration scheme and also a Policy for Trading in Company securities which are publicly available on the Company’s website. Under the policy Directors, officers and employees are prohibited from entering into transactions or arrangements which operate to limit the economic risk of their security holding in the Company without first seeking and obtaining written acknowledgement from the Chair.

Executives are also prohibited from entering into transactions or arrangements which limit the economic risk of participating in unvested entitlements.

AusQuest Limited Directors’ report

The Directors of AusQuest Ltd herewith submit the annual financial report of the Company and the entities it controlled (“Group”) for the financial year ended 30 June 2015. In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows:

Information about Directors and senior management

The names and particulars of the Directors of the Company during or since the end of the financial year and up to the date of this report are noted below. Except where indicated, directors have held office during and since the end of the financial year:

Greg Hancock BA Econs., BEd Hons.,F.Fin

Non-Executive Director and Chairman

Greg has had over 25 years experience in capital markets practicing in the area of corporate finance. He maintains close links with the stockbroking and investment banking community on behalf of the Company.

Directorships held in listed companies over the last three years are as follows:

Norsve Resources PLC – December 2012 - current
Zeta Petroleum PLC – April 2015 – current
Strata-X Energy Limited – July 2015 - current

Graeme Drew B.Sc.Hons., FAIMM, MASEG

Managing Director

Graeme has over 40 years experience in the exploration industry in Australia and overseas. Prior to co-founding AusQuest Ltd he was an Exploration Manager for CRAE and Rio Tinto Exploration Pty Ltd in Western Australia (9 years) and Eastern Australia (4 years). He has wide experience in the search for, and evaluation of, most base and precious metals (notably nickel, copper, gold, uranium, zinc and diamonds). Graeme has developed a passion for the ‘big picture’ and ‘big project’ generation which he strongly believes are the building blocks for successful exploration outcomes.

Graeme has held no other Directorships in listed companies over the last three years.

John Ashley B.Sc.Hons.,M.Sc., FAIMM, MSEG, MASEG, MAIG Non-Executive Director

John is a former Director of Southern Geoscience Consultants (SGC), which he established in 1985, and is a former Director of Aerodata Holdings and Conquest Mines NL (unlisted). John has over 4 decades experience as a geophysicist in the exploration industry with government agencies, exploration companies, and consulting companies and has worked in many countries.

John has held no other Directorships in listed companies over the last three years.

Christopher Ellis B.Sc.Hons. Non-Executive Director

Chris is an experienced mining executive with over 30 years experience in geology, exploration, mine planning and project development in Australia and overseas. He was a founding member and Executive Director of Excel Coal Limited which was the subject of a take-over bid by the US coal giant Peabody Energy Inc, and has held senior positions within Shell Coal’s Exploration, BP Coal (London and USA), Agipcoal Australia and the Stratford Joint Venture.

Chris was appointed a Non-Executive Director of King Island Scheelite Limited on 8 November 2012.

AusQuest Limited Directors’ report

Company secretary

Henko Vos

Mr Vos is a member of the Governance Institute of Australia and Certified Practicing Accountants Australia with more than 15 years experience working within public practice, specifically within the area of audit and assurance both in Australia and South Africa. He holds similar secretarial roles in various other listed public companies in both industrial and resource sectors. He is an employee of Nexia Perth, a mid tier corporate advisory and accounting practice.

Directors’ shareholdings

The following table sets out each Director’s relevant interest in shares, debentures, and rights or options in shares or debentures of the Company or a related body corporate as at the date of this report.

Directors	Fully paid ordinary shares Number	Share options Number
Greg Hancock 4,586,415 1,250,000 Graeme Drew 11,612,466 3,000,000 Chris Ellis 82,813,586 16,973,684 John Ashley 12,348,209 2,638,290

Remuneration of Directors and senior management

Information about the remuneration of Directors and senior management is set out in the Remuneration Report of this Directors’ report.

Share options granted to Directors and senior management

During and since the end of the financial year there were no share options granted to Key Management Personnel of the Group as part of their remuneration.

Principal activities

The principal activity of the Group was mineral exploration throughout Australia, Africa and Peru.

Review of operations

A review of the Group’s exploration projects and activities during the year is discussed in the Operations Review included in this Annual Report.

The loss of the Group after income tax for the year was $814,779 (2014: $2,902,414).

Changes in state of affairs

During the financial year there was no significant change in the state of affairs of the Group other than as referred to in the financial statements or notes thereto.

Subsequent events

On 8 July 2015 the Company announced that it has completed a fourth joint venture agreement in Peru by amending the Cardonal Joint Venture Agreement with Compania Minera Zahena SAC (“Zahena”). This follows the signing of three agreements in February 2015 and means that a fifth porphyry copper-gold target in Peru will be tested by drilling over the next 12 - 18 months.

Under the agreement, Zahena can earn a 70% interest in the increased title area for an upfront cash payment of US$120,000, a structured series of cash option payments over a four year period totalling US$2,995,000 and a total drilling budget of 30,000 meters.

There has been no matter or circumstance, other than that referred to in the financial statements or notes thereto, that has arisen since the end of the financial year, that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.

AusQuest Limited Directors’ report

Future developments

Disclosure of information regarding the likely developments in the operations of the Group in future financial years and the expected results of those operations is likely to result in unreasonable prejudice to the Group. Accordingly, this information has not been disclosed in this report.

Safety and environmental regulations

The Company is aware of its occupational health and safety and environmental obligations with regard to its exploration activities and ensures that it complies with all regulations when carrying out exploration work.

Dividends

No dividends were paid or declared since the start of the financial year. No recommendation for the payment of dividends has been made.

Share options

Shares under option or issued on exercise of options

Details of unissued shares or interests under option as at the date of this report are:

Issuing entity	Number of shares under option	Class of shares	Exercise price of option	Expiry date of options
Listed AusQuest Ltd (AQDO) 68,750,000 Ordinary 4 cents each 30 Nov 2016 AusQuest Ltd (AQDOA) 78,946,976 Ordinary 3.5 cents each 30 Apr 2018 Unlisted AusQuest Ltd 9,900,000 Ordinary 7 cents each 30 Nov 2015

The holders of such options do not have the right, by virtue of the option, to participate in any share or other interest issue of any other body corporate or registered scheme.

Shares issued on the exercise of options

No shares were issued during the year on the exercise of options.

Share options that expired/lapsed

No share options expired or lapsed during or since the end of the financial year.

Directors’ meetings

The following table sets out the number of Directors’ meetings (including meetings of committees of Directors) held during the financial year and the number of meetings attended by each Director (while they were a Director or committee member).

During the financial year, 4 board meetings, 2 audit committee meetings, and 1 remuneration committee meeting were held.

	Board of Directors	Board of Directors	Remuneration committee	Remuneration committee	Audit committee	Audit committee
Directors	Eligible to attend	Attended	Eligible to attend	Attended	Eligible to attend	Attended
Greg Hancock 4 4 1 1 2 2 Christopher Ellis 4 4 1 1 2 2 John Ashley 4 4 1 1 2 2 Graeme Drew 4 4 - - - -

AusQuest Limited Directors’ report

Indemnification of officers and auditors

During or since the end of the financial year the Company has given an indemnity or entered into an agreement to indemnify, or paid or agreed to pay insurance premiums as follows:

except as may be prohibited by the Corporations Act 2001 a Director or Officer of the Company shall be indemnified out of the property of the Company against any liability incurred by him in his capacity as Director or officer of the Company or any related corporation in respect of any act or omission whatsoever and howsoever occurring or in defending any proceedings, whether civil or criminal.

Since the beginning of the financial year the Company has paid insurance premiums of $29,978 (2014:$28,924) in respect of Directors and Officers liability and corporate reimbursement, for Directors and Officers in the Company.

The insurance premiums relate to:

any loss for which the Directors and Officers may not be legally indemnified by the Company arising out of any claim, by reason of any wrongful act committed by them in their capacity as a Director or Officer of the Company or any related corporation, first made against them jointly or severally during the year of insurance; and
indemnifying the Company against any payment which it has made and was legally permitted to make arising out of any claim, by reason of any wrongful act, committed by any Director or Officer in their capacity as a Director or Officer of the Company or any related corporation, first made against the Director or Officer during the period of insurance.

Proceedings on behalf of the Company

No persons have applied for leave pursuant to s.237 of the Corporation Act 2001 to bring, or intervene in, proceedings on behalf of AusQuest Ltd.

Non-audit services

There were no non-audit services performed during the year by the auditors (or by another person or firm on the auditor’s behalf).

Auditor’s independence declaration

Section 307C of the Corporations Act 2001 requires our auditors, HLB Mann Judd, to provide the directors of the Company with an independence declaration in relation to the audit of the annual report. This independence declaration is included on page 31 of the financial report and forms part of this directors’ report for the year ended 30 June 2015.

Remuneration report (audited)

This report, which forms part of the directors’ report, outlines the remuneration arrangements in place for the key management personnel of AusQuest Ltd (the “Company”) for the financial year ended 30 June 2015.

The information provided in this remuneration report has been audited as required by Section 308(3C) of the Corporations Act 2001.

The remuneration report details the remuneration arrangements for key management personnel (“KMP”) who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Group, directly or indirectly, including any director (whether executive or otherwise) of the parent Company.

The prescribed details for each person covered by this report are detailed below under the following headings:

key management personnel details;
remuneration policy and relationship between the remuneration policy and Company performance;
remuneration of key management personnel;
key terms of employment contracts;
key management personnel equity holdings;
loans to key management personnel; and
other transactions with key management personnel of the Group.

AusQuest Limited Directors’ report

Key management personnel details

The key management personnel of AusQuest Ltd during the year or since the end of the year were:

Greg Hancock Non-Executive Chairman Graeme Drew Managing Director John Ashley Non-Executive Director Christopher Ellis Non-Executive Director

There were no group executives employed by AusQuest Ltd during the year.

Remuneration policy and relationship between the remuneration policy and Company performance

The Board policy for determining remuneration is based on the principle of remunerating Directors and senior executives on their ability to add value to the Company (taking into account the Company’s strategic plan and operations) whilst also considering market remuneration packages for similar positions within the industry and in consultation with external consultants.

The Board appreciates the interrelationship between this policy and Company performance. It acknowledges that it is in the best interests of shareholders to provide challenging but achievable incentives to reward senior executives for reaching the Company’s stated goals. The Board will discuss these issues internally and with candidates prior to engaging additional Directors or senior executives in the future.

- Key management personnel (excluding non executive Directors)

The Remuneration Committee is responsible for determining the remuneration policies for the Group, including those affecting executive Directors and other key management personnel. The Committee may seek appropriate external advice to assist in its decision making. Remuneration policies and practices are directed primarily at attracting, motivating and retaining key management personnel.

The remuneration policy for executive Directors and other key management personnel has the following key elements:

Primary benefits (being salary, fees, bonus and non monetary benefits)
Post-employment benefits (being superannuation)
Equity (being share options granted at the discretion of the Board)
Other benefits

Non-Executive Directors

The Company’s Non-Executive Directors receive only fees (including statutory superannuation) for their services and the reimbursement of reasonable expenses. The fees paid to the Company’s Non-Executive Directors reflect the demands on, and responsibilities of these Directors. They do not receive any retirement benefits (other than compulsory superannuation).

The Board decides annually the level of fees to be paid to Non-Executive Directors with reference to market standards.

Non-Executive Directors may also receive share options where this is considered appropriate by the Board as a whole and with regard to the stage of the Company’s development. Such options vest across the life of the option and are primarily designed to provide an incentive to Non-Executive Directors to remain with the Company.

A Non-Executive Directors’ fee pool limit of $300,000 per annum was approved by the shareholders at the Annual General Meeting on 18 November 2008 but is not currently being utilised as all Non-Executive Directors elected to forego their directors fees with effect from 1 January 2013 until further notice in order to assist in preserving the cash levels of the Group.

AusQuest Limited Directors’ report

Remuneration of key management personnel

	Short-termemployee benefits	Short-termemployee benefits	Short-termemployee benefits	Short-termemployee benefits	Post- employ- ment benefits	Other long- term	Share- based payment		% of compen- sation	Perform- ance Related
	Salary & fees	Bonus	Non- monetary
					Super-	employee			consisting
				Other(i)	annuation	benefits	Options	Total	of options
	$	$	$	$	$	$	$	$	%	%
2015 Directors Graeme Drew John Ashley Greg Hancock (ii) Chris Ellis 2014 Directors Graeme Drew John Ashley Greg Hancock (ii) Chris Ellis	136,986 - - 7,494 13,014 - - - - 7,494 - - - - - 11,660 - - - - - 7,494 - -						- 157,494 - - - 7,494 - - - 11,660 - - - 7,494 - -
	136,986 - - 34,142 13,014 -						- 184,142 - -
	183,066 - - 7,231 16,934 - - - - 7,231 - - - - - 7,231 - - - - - 7,231 - -						- 207,231 - - - 7,231 - - - 7,231 - - - 7,231 - -
	183,066 - - 28,924 16,934 -						- 228,924 - -

(i) Relates to Directors’ and Officers’ liability insurance paid on behalf of the Directors.

(ii) Mr Hancock received $4,166 for corporate advisory services rendered to the Company.

During the year no options were issued to key management personnel as part of their remuneration. No previously issued options granted as remuneration were exercised by key management personnel during the year. 500,000 unlisted options, exercisable at 30 cents each, and 500 unlisted options, exercisable at 40 cents each, previously issued to Mr Graeme Drew, lapsed unexercised on 30 November 2013.

There were no other options granted as remuneration to key management personnel which were granted, exercised or lapsed during the year.

Key terms of employment contracts

Remuneration and other terms of employment for the Managing Director, Graeme Drew are formalised in a service agreement. Major provisions of this agreement are set out below:

Term of agreement – two years commencing 25 November 2013.
Base salary reviewed annually, $200,000 (inclusive of superannuation entitlements) which Mr Drew agreed to reduce to $150,000 per annum (inclusive of superannuation entitlements) with effect from 1 July 2014.
Payment of termination benefit on early termination by the employer, other than for gross misconduct, equal to 3 months’ salary, other than if there is a change of control of the Company, which will result in 12 months’ salary.
Notice period of 90 days.

AusQuest Limited Directors’ report

Key management personnel equity holdings

Fully paid ordinary shares of AusQuest Ltd

	Balance at 1 July	Balance on appointment	Granted as compensation	Purchased during the year	Balance on resignation	Balance at 30 June
	No.	No.	No.	No.	No.	No.
2015 Directors Greg Hancock Graeme Drew John Ashley Chris Ellis	4,586,415 N/A - - N/A 4,586,415 8,612,466 N/A - 3,000,000 N/A 11,612,466 9,716,630 N/A - 2,631,579 N/A 12,348,209 28,366,218 N/A - 54,447,368 N/A 82,813,586
	51,281,729 N/A - 60,078,947 N/A 111,360,676

	Balance at 1 July Balance on appointment Granted as compensation Purchased during the year Balance on resignation Balance at 30 June
	No. No. No. No. No. No.
2014 Directors Greg Hancock Graeme Drew John Ashley Chris Ellis	2,086,415 N/A - 2,500,000 N/A 4,586,415 5,612,466 N/A - 3,000,000 N/A 8,612,466 7,071,630 N/A - 2,645,000 N/A 9,716,630 11,366,218 N/A - 17,000,000 N/A 28,366,218
	26,136,729 N/A - 25,145,000 N/A 51,281,729

Options (listed and unlisted) of AusQuest Ltd

	Balance at 1 July	Balance on appointment/ (resignation)	Granted as compen- sation	Exercised	Net other change			Vested and exercisable at 30 June
						Balance at	Vested during
						30 June	year
	No.	No.	No.	No.	No.	No.	No.	No.
2015 Directors Greg Hancock Graeme Drew John Ashley Chris Ellis	1,250,000 - - - - 1,250,000 1,250,000 1,250,000 1,500,000 - - - 1,500,000 (i) 3,000,000 3,000,000 3,000,000 1,322,500 - - - 1,315,790 (i) 2,638,290 2,638,290 2,638,290 8,500,000 - - - 8,473,684 (i) 16,973,684 16,973,684 16,973,684
	12,572,500 - - - 11,289,474 23,861,974 23,861,974 23,861,974

	Balance at 1 July Balance on appointment/ (resignation) Granted as compen- sation Exercised Net other change Balance at 30 June Vested during year Vested and exercisable at 30 June
	No. No. No. No. No. No. No. No.
2014 Directors Greg Hancock Graeme Drew John Ashley Chris Ellis	- - - - 1,250,000 (iii) 1,250,000 1,250,000 1,250,000 1,000,000 - - - 500,000 (ii) 1,500,000 1,500,000 1,500,000 - - - - 1,322,500 (iii) 1,322,500 1,322,500 1,322,500 - - - - 8,500,000 (iii) 8,500,000 8,500,000 8,500,000
	1,000,000 - - - 11,572,500 12,572,500 12,572,500 12,572,500

(i) Listed options purchased on 30 April 2015 as part of share acquisitions made by the relevant director.

(ii) The movement comprises the lapse of 1,000,000 unlisted options on 30 November 2013 and the purchase of 1,500,000 listed options on 2 December 2013.

(iii) Listed options purchased on 2 December 2013 as part of share acquisitions made by the relevant director.

AusQuest Limited Directors’ report

Loans to key management personnel

There were no loans to key management personnel during the current or previous financial years.

Other transactions with key management personnel of the Group

Office premises were rented by the Group for the financial year from Asuper Pty Ltd, an entity associated with Mr John Ashley, for a total amount of $56,177 excluding GST (2014: $53,289 excluding GST). The transactions were made on normal commercial terms.

The Company executed a convertible note agreement (“Agreement”) on 3 October 2014 with Mr Chris Ellis for a total loan facility of $750,000, available in up to three equal advances of $250,000. Key terms under the convertible note included:

・ Maturity date set as 3 October 2015.
・ Conversion date being the last to occur of the date on which the Company issues shares to raise funds for working capital purposes and the date shareholders ratify the issue of the convertible notes and approve the conversion of the convertible notes to ordinary shares in general meeting.
・ Conversion price being the higher of either 2 cents per conversion share or where the Company undertakes a share placement at greater than 2 cents per share, 2 cents per conversion share plus 50% of the difference between the issue price of such placement shares and 2 cents.
・ Interest accruing at 10% per annum with the first 6 months after drawdown being interest free. Interest is payable in cash.
・ Under the terms of the Agreement, the Company retains sole discretion to settle the loan in cash or shares.

The Company used the loan facility during December 2014 drawing down $750,000, which it settled in full on 20 April 2015 through the issue of 37,500,000 shares at 2 cents per share. No interest was paid on the loan.

The Company entered into a 12 month corporate advisory services agreement with Mr Hancock on 1 May 2015. Under the agreement Mr Hancock can receive fees of up to $25,000 + GST. Mr Hancock was paid $4,166 for services rendered during May 2015 and June 2015.

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

(End of remuneration report)

The Directors’ Report is signed in accordance with a resolution of Directors made pursuant to s.298(2) of the Corporations Act 2001.

On behalf of the Directors

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Graeme Drew Managing Director

8 September 2015 Perth, WA

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AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the audit of the consolidated financial report of AusQuest Limited for the year ended 30 June 2015, 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 8 September 2015

M R W Ohm Partner

HLB Mann Judd (WA Partnership) ABN 22 193 232 714 Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 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

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HLB Mann Judd (WA Partnership) is a member of

International, a worldwide organisation of accounting firms and business advisers.

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INDEPENDENT AUDITOR’S REPORT

To the members of AusQuest Limited

Report on the Financial Report

We have audited the accompanying financial report of AusQuest Limited (“the company”), which comprises the consolidated statement of financial position as at 30 June 2015, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration for the consolidated entity. The Group 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 2, 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.

Independence

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

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HLB Mann Judd (WA Partnership) is a member of

International, a worldwide organisation of accounting firms and business advisers.

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Auditor’s opinion

In our opinion:

(a) the financial report of AusQuest Limited is in accordance with the Corporations Act 2001 , including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2015 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001 ; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 2.

Report on the Remuneration Report

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

Auditor’s opinion

In our opinion the remuneration report of AusQuest Limited for the year ended 30 June 2015 complies with section 300A of the Corporations Act 2001 .

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HLB Mann Judd Chartered Accountants

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M R W Ohm Partner

Perth, Western Australia 8 September 2015

AusQuest Limited Directors' declaration 30 June 2015

In the directors' opinion:

the attached financial statements and notes thereto comply with the Corporations Act 2001, the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes thereto comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as described in note 2 to the financial statements;
the attached financial statements and notes thereto give a true and fair view of the Group's financial position as at 30 June 2015 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

The directors have been given the declarations required by section 295A of the Corporations Act 2001.

This declaration is signed in accordance with a resolution of the Board of Directors.

On behalf of the directors

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Graeme Drew Managing Director

8 September 2015 Perth, WA

AusQuest Limited Consolidated statement of profit or loss and other comprehensive income For the year ended 30 June 2015

Note Continuing operations Revenue 5 Expenses Consultants and employee benefits expense Occupancy expenses Administration expense Impairment of exploration expenditure 11 Total expenses Loss before income tax expense 6 Income tax expense 7 Loss for the year Other comprehensive income Items that may be reclassified subsequently to profit or loss Exchange gain/(loss) on translation of foreign operations Other comprehensive income/(loss) for the year, net of tax Total comprehensive income/(loss) for the year Basic loss per share 26	Consolidated 2015 2014 $ $ 31,781 44,719 (159,280) (224,405) (143,015) (126,005) (499,906) (664,176) (44,359) (1,932,547)	Consolidated 2015 2014 $ $ 31,781 44,719 (159,280) (224,405) (143,015) (126,005) (499,906) (664,176) (44,359) (1,932,547)
	(846,560)	(2,947,133)
	(814,779) -	(2,902,414) -
	(814,779) 2,183,821	(2,902,414) (332,023)
	2,183,821	(332,023)
	1,369,042	(3,234,437)
	Cents (0.24)	Cents (1.19)

The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes

AusQuest Limited Consolidated statement of financial position As at 30 June 2015

Note Assets Current assets Cash and cash equivalents 25 Trade and other receivables 8 Other assets 9 Total current assets Non-current assets Property, plant and equipment 10 Exploration and evaluation 11 Total non-current assets Total assets Liabilities Current liabilities Trade and other payables 12 Provisions 13 Total current liabilities Total liabilities Net assets Equity Issued capital 14 Reserves 15 Accumulated losses Total equity	Consolidated 2015 2014 $ $ 2,395,546 1,018,821 150,675 497,231 41,921 57,873	Consolidated 2015 2014 $ $ 2,395,546 1,018,821 150,675 497,231 41,921 57,873
	2,588,142	1,573,925
	32,400 15,649,086	50,957 11,791,786
	15,681,486	11,842,743
	18,269,628	13,416,668
	286,489 58,449	359,927 67,975
	344,938	427,902
	344,938	427,902
	17,924,690	12,988,766
	56,702,391 3,091,395 (41,869,096)	53,135,509 907,574 (41,054,317)
	17,924,690	12,988,766

The above statement of financial position should be read in conjunction with the accompanying notes

AusQuest Limited Consolidated statement of changes in equity For the year ended 30 June 2015

Issued capital $ 50,617,017 - -	Share based payment reserve $ 596,707 - -	Foreign currency translation reserves $ 1,009,237 - (332,023)	Accumulated losses $ (38,675,798) (2,902,414) -	Total $ 13,547,163 (2,902,414) (332,023)
- - - 2,750,000 (231,508)	- (523,895) 157,548 - -	(332,023) - - - -	(2,902,414) 523,895 - - -	(3,234,437) - 157,548 2,750,000 (231,508)
53,135,509	230,360	677,214	(41,054,317)	12,988,766
Issued capital $ 53,135,509 - -	Share based payment reserve $ 230,360 - -	Foreign currency translation reserves $ 677,214 - 2,183,821	Accumulated losses $ (41,054,317) (814,779) -	Total $ 12,988,766 (814,779) 2,183,821
- 3,802,983 (236,101)	- - -	2,183,821 - -	(814,779) - -	1,369,042 3,802,983 (236,101)
56,702,391	230,360	2,861,035	(41,869,096)	17,924,690

The above statement of changes in equity should be read in conjunction with the accompanying notes

AusQuest Limited Consolidated statement of cash flows For the year ended 30 June 2015

AusQuest Limited Consolidated statement of cash flows For the year ended 30 June 2015
Note Cash flows from operating activities Payments to suppliers and employees Interest received Net cash used in operating activities 25 Cash flows from investing activities Payments for property, plant and equipment Exploration and evaluation expenditure Payment received on grant of farm-in and joint venture interests Proceeds from disposal property, plant and equipment Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares 14 Share issue transaction costs Proceeds from convertible note Net cash from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Exchange rate adjustment Cash and cash equivalents at the end of the financial year 25	Consolidated 2015 2014 $ $ (570,908) (850,179) 16,328 30,394
	(554,580)	(819,785)
	(5,723) (1,852,510) 89,385 5,000	(1,749) (2,863,240) 635,640 -
	(1,763,848)	(2,229,349)
	2,999,983 (236,101) 750,000	2,750,000 (231,507) -
	3,513,882	2,518,493
	1,195,454 1,018,821 181,271	(530,642) 1,545,401 4,062
	2,395,546	1,018,821

The above statement of cash flows should be read in conjunction with the accompanying notes

AusQuest Limited Notes to the financial statements 30 June 2015

Note 1. General information

AusQuest Limited (the Company) is a public Company listed on the Australian Securities Exchange (trading under the symbol (“AQD”), incorporated in Australia and operating in Australia, Africa and Peru.

The Company’s registered office and its principal place of business are as follows:

Registered Office Principal place of business C/- Nexia Perth Pty Ltd 8 Kearns Crescent Level 3, 88 William Street ARDROSS WA 6153 Perth WA 6000

The Group’s principal activities are the exploration for and evaluation of mineral resources in Australia, Africa and Peru.

Note 2. Significant accounting policies

The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

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

Accounting Standards include Australian equivalents to International Financial Reporting Standards (‘A-IFRS’). Compliance with A-IFRS ensures that the financial statements and notes of the Company and the Group comply with International Financial Reporting Standards (‘IFRS’).

The financial statements were authorised for issue by the directors on 8 September 2015.

Basis of preparation

The financial statements comprise the consolidated financial statements for the Group.

For the purpose of preparing the consolidated financial statements, the Company is a for-profit entity.

The financial report has been prepared on the basis of historical cost. Cost is based on the fair values of the consideration given in exchange for assets.

All amounts are presented in Australian dollars, unless otherwise noted.

Going concern

The 30 June 2015 financial report has been prepared on the going concern basis that contemplates the continuity of normal business activities and the realisation of assets and extinguishment of liabilities in the ordinary course of business. For the year ended 30 June 2015 the Group recorded a net loss of $814,779 (2014 net loss: $2,902,414) and at 30 June 2015 had a net working capital surplus of $2,243,204 (30 June 2014: surplus of $1,146,023).

Based on the Group’s cash flow forecast, which is dependent on results from planned exploration activity, it is likely that the Group will need to access additional working capital in the next 12 months to advance its exploration projects.

The Directors are confident that the Group will be successful in raising additional funds through the issue of new equity, should the need arise. The Directors are also aware that the Group has the option, if necessary, to defer expenditure or relinquish certain projects and reduce administration costs in which case a capital raising will not be required. In this case, the Group will have sufficient existing cash resources to meet its obligations for a period of twelve months from the date of approval of these financial statements.

Based on these facts, the Directors consider the going concern basis of preparation to be appropriate for this financial report.

AusQuest Limited Notes to the financial statements 30 June 2015

Note 2. Significant accounting policies (continued)

Critical accounting estimates

In the application of the Group’s accounting policies, management is required to make 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 experiences and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis.

Revisions to the accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects the current and future periods.

Refer to Note 3 for a discussion of critical judgements in applying the Group’s accounting policies and key sources of estimation uncertainty.

Adoption of new and revised accounting standards

Standards and Interpretations applicable to 30 June 2015

In the year ended 30 June 2015, the directors have reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to the Company and effective for the current annual reporting period.

As a result of this review, the directors have determined that there is no material impact of the new and revised Standards and Interpretations on the Company and, therefore, no material change is necessary to Group accounting policies.

Standards and Interpretations in issue not yet adopted

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 2015. As a result of this review the directors have determined that there is no material impact, of the new and revised Standards and Interpretations on the Group and, therefore, no change is necessary to Group accounting policies.

The following significant accounting policies have been adopted in the preparation and presentation of the financial report:

Parent entity information

In accordance with the Corporations Act 2001, these financial statements present the results of the Group only. Supplementary information about the parent entity is disclosed in note 22.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) referred to as ‘the Group’ in these financial statements.

The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies.

In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and losses resulting from intra-group transactions have been eliminated in full.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group.

Control exists where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing when the Group controls another entity.

Business combinations have been accounted for using the acquisition method of accounting.

The consideration transferred for the acquisition of a subsidiary comprises the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group.

AusQuest Limited Notes to the financial statements 30 June 2015

Note 2. Significant accounting policies (continued)

The consideration transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary. Acquisition-related costs are expenses as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date.

On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets.

Unrealised gains or transactions between the Group and its associates are eliminated to the extent of the Group’s interests in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group.

Non-controlling interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group and are presented separately in the statement of profit or loss and other comprehensive income and within equity in the consolidated statement of financial position. Losses are attributed to the non-controlling interests even if that results in a deficit balance.

The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised within equity attributable to owners of AusQuest Limited.

Operating segments

An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity), whose operating results are regularly reviewed by the entity's chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available. This includes start up operations which are yet to earn revenues.

Management also considers other factors in determining operating segments such as the existence of a line manager and the level of segment information presented to the board of directors.

Operating segments have been identified based on the information provided to the chief operating decision maker – being the board of directors. The Group aggregates two or more operating segments when they have similar economic characteristics, and the segments are similar in the nature of the minerals targeted.

Operating segments that meet the quantitative criteria as prescribed by AASB 8 Operating Segments are reported separately. However, an operating segment that does not meet the quantitative criteria is still reported separately where information about the segment would be useful to users of the financial statements.

Information about other business activities and operating segments that are below the quantitative criteria are combined and disclosed in a separate category for “all other segments”.

Cash and cash equivalents

Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank overdrafts are shown within borrowings in current liabilities in the statement of financial position.

For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

Trade and other receivables

Trade receivables are measured on initial recognition at fair value and are subsequently measured at amortised cost using the effective interest rate method, less any allowance for impairment. Trade receivables are generally due for settlement within periods ranging from 15 days to 30 days.

AusQuest Limited Notes to the financial statements 30 June 2015

Note 2. Significant accounting policies (continued)

Impairment of trade receivables is continually reviewed and those that are considered to be uncollectible are written off by reducing the carrying amount directly. An allowance account is used when there is objective evidence that the Group will not be able to collect all amounts due according to the original contractual terms. Factors considered by the Group in making this determination include known significant financial difficulties of the debtor, review of financial information and significant delinquency in making contractual payments to the Group. The impairment allowance is set equal to the difference between the carrying amount of the receivable and the present value of estimated future cash flows, discounted at the original effective interest rate. Where receivables are short-term discounting is not applied in determining the allowance.

The amount of the impairment loss is recognised in the statement of comprehensive income within other expenses. When a trade receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against other expenses in the statement of comprehensive income.

Foreign currency translation

Both the functional and presentation currency of AusQuest Limited and its Australian subsidiaries is Australian dollars. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance date.

All exchange differences in the consolidated financial report are taken to profit or loss with the exception of differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity. These are taken directly to equity until the disposal of the net investment, at which time they are recognised in profit or loss.

Tax charges and credits attributable to exchange differences on those borrowings are also recognised in equity. Nonmonetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction.

Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

The functional currency of the foreign operations, E&A Resources Pty Ltd , Filigree SARL, Comoe Exploration SARL and Questdor SAC is United States dollars (US$). As at the balance date the assets and liabilities of these subsidiaries are translated into the presentation currency of AusQuest Limited at the rate of exchange ruling at the balance date and their statements of comprehensive income are translated at the weighted average exchange rate for the year.

The exchange differences arising on the translation are taken directly to the foreign currency translation reserve in equity. On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised in profit or loss.

Revenue recognition

Revenue is recognised when it is probable that the economic benefit will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable.

Interest

Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

Other revenue

Other revenue is recognised when it is received or when the right to receive payment is established.

AusQuest Limited Notes to the financial statements 30 June 2015

Note 2. Significant accounting policies (continued)

Income tax

Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit or tax loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by reporting date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).

Deferred tax is provided on all temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax base of those items.

In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be available against which deductible temporary differences or unused tax losses and tax offsets can be utilised.

However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which affects neither taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences arising from goodwill.

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

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the entity expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the entity intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax is recognised as an expense or income in the statement of comprehensive income, except when it relates to items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it arises from the initial accounting for a business combination, in which case it is taken into account in the determination of goodwill or excess.

The Company and its wholly-owned Australian resident entity are part of a tax-consolidated group under Australian taxation law. AusQuest Ltd is the head entity in the tax-consolidated group. Tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary differences of the members of the tax-consolidated group are recognised in the separate financial statements of the members of the tax-consolidated group using the ‘separate taxpayer within group’ approach. Current tax liabilities and assets and deferred tax assets arising from unused tax losses and tax credits of the members of the tax-consolidated group are recognised by the Company (as head entity in the tax-consolidated group).

Amounts are recognised as payable to or receivable by the Company and each member of the Group in relation to the tax contribution amounts paid or payable between the parent entity and the other members of the tax-consolidated Group as and when they arise.

Current and non-current classification

Assets and liabilities are presented in the statement of financial position based on current and non-current classification.

An asset is current when: it is expected to be realised or intended to be sold or consumed in normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.

AusQuest Limited Notes to the financial statements 30 June 2015

Note 2. Significant accounting policies (continued)

A liability is current when: it is expected to be settled in normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.

Deferred tax assets and liabilities are always classified as non-current.

Impairment of assets

At each reporting date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cashgenerating unit to which the asset belongs.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually and whenever there is an indication that the asset may be impaired.

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

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

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

Property, plant and equipment

Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Depreciation is provided on plant and equipment. Depreciation is calculated on a diminishing value basis so as to write off the net cost or other revalued amount of each asset over its expected useful life to its estimated residual value. The estimated useful lives, residual values and depreciation method is reviewed at the end of each annual reporting period.

The following estimated useful lives are used in the calculation of depreciation:

Class of fixed asset Depreciation rate (%) Fixtures, fittings and office equipment 10 - 40% Computer equipment 20 - 50% Field equipment 20 - 40%

The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.

Leasehold improvements and plant and equipment under lease are depreciated over the unexpired period of the lease or the estimated useful life of the assets, whichever is shorter.

An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the Group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss. Any revaluation surplus reserve relating to the item disposed of is transferred directly to retained profits.

AusQuest Limited Notes to the financial statements 30 June 2015

Note 2. Significant accounting policies (continued)

Financial instruments issued by the Company

Debt and equity instruments

Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the contractual arrangement.

Transaction costs on the issue of equity instruments

Transaction costs arising on the issue of equity instruments are recognised directly in equity as a reduction of the proceeds of the equity instruments to which the costs relate. Transaction costs are the costs that are incurred directly in connection with the issue of those equity instruments and which would not have been incurred had those instruments not been issued.

Exploration and evaluation assets

Exploration, evaluation and development expenditure incurred may be accumulated in respect of each identifiable area of interest.

These costs are carried forward only if they relate to an area of interest for which rights of tenure are current and in respect of which:

(i) such costs are expected to be recouped through successful development and exploitation or from sale of the area; or
(ii) exploration and evaluation activities in the area have not, at balance date, reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active operations in, or relating to, the area are continuing.

Notwithstanding the fact that a decision not to abandon an area of interest has been made, based on the above, the exploration and evaluation expenditure in relation to an area may still be written off if considered appropriate to do so.

Joint ventures

Joint operations

Interests in joint operations are reported in the financial statements by including the entity’s share of assets employed in the joint operation, the share of liabilities incurred in relation to the joint operation and the share of any expenses incurred in relation to the joint operation in their respective classification categories.

Jointly ventures

Interests in joint ventures are accounted for under the equity method in the consolidated financial statements and the cost method in the Company’s financial statements.

Impairment of non-financial assets

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

Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to form a cash-generating unit.

Trade and other payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.

AusQuest Limited Notes to the financial statements 30 June 2015

Note 2. Significant accounting policies (continued)

Share-based payments

The Group provides benefits to employees (including senior executives) of the Group in the form of share-based payments. The cost of these share-based payments is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value at grant date is measured by use of the Black and Scholes option pricing model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of nontransferability, exercise restrictions, and behavioural considerations.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the entity’s estimate of shares that will eventually vest.

For cash-settled share-based payments, a liability equal to the portion of the goods or services received is recognised at the current fair value determined at each reporting date.

Provisions

Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is probable the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that recovery will be received and the amount of the receivable can be measured reliably.

Employee benefits

Short-term employee benefits

Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled within 12 months of the reporting date are recognised in current liabilities in respect of employees' services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled.

Other long-term employee benefits

The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are recognised in non-current liabilities, provided there is an unconditional right to defer settlement of the liability. The liability is measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method.

Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the expired portion of the vesting period.
from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the reporting date.

Fair value measurement

When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence of a principal market, in the most advantageous market.

Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interest. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

AusQuest Limited Notes to the financial statements 30 June 2015

Note 2. Significant accounting policies (continued)

Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

The fair value of the liability portion of a convertible note is determined using a market interest rate for an equivalent nonconvertible note. This amount is recorded as a liability on an amortised cost basis until extinguished on conversion or maturity of the note. The remainder of the proceeds is allocated to the conversion option. This is recognised and included in shareholders’ equity, net of income tax effects.

Borrowings are removed from the statement of financial position when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

Issued capital

Ordinary shares are classified as equity.

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

Earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing the net profit/loss attributable to the owners of AusQuest Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

Goods and Services Tax ('GST') and other similar taxes

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

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

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

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.

AusQuest Limited Notes to the financial statements 30 June 2015

Note 3. Critical accounting judgements, estimates and assumptions

Judgements made by management in the application of A-IFRS that have significant effects on the financial statements and estimates with a significant risk of material adjustments in the next year are disclosed, where applicable, in the relevant note to the financial statements.

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the balance date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year:

Impairment

The Group assesses impairment at each reporting date by evaluating conditions specific to the Group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Other than exploration expenditure written off totalling $44,359 (2014: $1,932,547) during the year, no impairment loss was recorded in the current financial year (2014: nil).

Share-based payments

The Group measures the cost of equity settled transactions with consultants and employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using a Black & Scholes model using various assumptions, detailed in Note 27.

Exploration and evaluation costs carried forward

The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration and evaluation asset through sale.

Factors which could impact the future recoverability include the level of proved, probable and inferred mineral resources, future technological changes which could impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices.

To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future, this will reduce profits and net assets in the period in which this determination is made.

In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves. To the extent that it is determined in the future that this capitalised expenditure should be written off, this will reduce profits and net assets in the period in which this determination is made.

Loans to controlled entities

The Directors believe that the recoupment of the inter-company receivables from AusQuest Ltd to E&A Resources Pty Ltd, Filigree SARL and Questdor SAC is dependent on the successful development and commercial exploitation or, alternatively, the sale of the exploration assets held by the controlled entities.

Note 4. Operating segments

AASB 8 requires a ‘management approach’ under which segment information is presented on the same basis as that used for internal reporting purposes.

Operating segments are now 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 directors of AusQuest Limited.

The following table presents the revenue, results and certain asset and liability information regarding the segment information provided to the Board of Directors for the year ended 30 June 2015.

AusQuest Limited Notes to the financial statements 30 June 2015

Note 4. Operating segments (continued)

Operating segment information

Consolidated - 2015 Revenue Interest revenue Other revenue Total revenue Expenses Depreciation Impairment of exploration expenditure Other expenditure Profit/(loss) before income tax expense Income tax expense Loss after income tax expense Assets Segment assets Total assets Liabilities Segment liabilities Total liabilities Consolidated - 2014 Revenue Interest revenue Other revenue Total revenue Expenses Depreciation Impairment of exploration expenditure Other expenditure Profit/(loss) before income tax expense Income tax expense Loss after income tax expense Assets Segment assets Total assets Liabilities Segment liabilities Total liabilities	Australia Africa South America Intersegment eliminations / unallocated $ $ $ $ 16,328 - - - 10,365 - 5,088 -	Total $ 16,328 15,453
	26,693 - 5,088 -	31,781
	(13,509) - (293) - (44,359) - - - (660,357) (20,594) (107,448) -	(13,802) (44,359) (788,399)
	(691,532) (20,594) (102,653) -
	18,269,628 272,971 5,767,866 3,232,199 (8,928,098) 344,938
	Australia Africa South America Intersegment eliminations/ unallocated $ $ $ $ 28,325 - 11 - 16,383 - - -	344,938
		Total $ 28,336 16,383
	44,708 - 11 -	44,719
	(20,527) - (287) - (1,495,155) - (437,392) - (872,640) 3,392 (124,524) -	(20,814) (1,932,547) (993,772)
	(2,343,614) 3,392 (562,192) -	(2,902,414) -
	15,445,843 7,900,198 1,327,104 (11,256,477)
		(2,902,414)
		13,416,668
	328,993 4,918,179 2,508,924 (7,328,194)	13,416,668
		427,902
		427,902

AusQuest Limited Notes to the financial statements 30 June 2015

Note 5. Revenue

Interest Income Other Income	Consolidated 2015 2014 $ $ 16,328 28,336 15,453 16,383	Consolidated 2015 2014 $ $ 16,328 28,336 15,453 16,383
	31,781	44,719

Note 6. Loss for the year

Loss for the year includes the following expenses:

Depreciation Operating lease rental expenses Minimum lease payments Share-based payments Consulting services Employee benefits expenses Note 7. Income tax expense Tax expense/(income) comprises: Current tax expense/(income) Deferred tax expense/(income) relating to the origination and reversal of temporary differences Total tax expense/(income) Numerical reconciliation of income tax expense and tax at the statutory rate Loss before income tax expense Tax at the statutory tax rate of 30% Effect of expenses that are not deductible in determining taxable profit Effect of changes in unrecognised temporary differences Effect of unused tax losses and tax offsets not recognised as deferred tax assets Income tax expense	Consolidated 2015 2014 $ $ 13,802 20,814 143,015 126,604 53,000 - - 157,548	Consolidated 2015 2014 $ $ 13,802 20,814 143,015 126,604 53,000 - - 157,548
	209,817	304,966
	Consolidated 2015 2014 $ $ - - - -
	-	-
	(814,779)	(2,902,414)
	(244,434) (195,016) 2,941 437,508	(870,724) 95,376 25,065 750,283
	-	-

Note 7. Income tax expense

The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate entities on taxable profits under Australian tax law. There has been no change in the corporate tax rate when compared with the previous reporting period.

AusQuest Limited Notes to the financial statements 30 June 2015

Note 7. Income tax expense (continued)

Unrecognised deferred tax assets and liabilities The following deferred tax assets and (liabilities) have not been brought to account: Tax losses – revenue Temporary differences Deferred tax assets not recognised in equity – share issue costs	Consolidated 2015 2014 $ $ 11,036,362 8,638,440 (5,380,590) (4,052,333)	Consolidated 2015 2014 $ $ 11,036,362 8,638,440 (5,380,590) (4,052,333)
	5,655,772	4,586,107
	107,939	69,373

The above potential tax benefit for tax losses has not been recognised in the statement of financial position. These tax losses can only be utilised in the future if the continuity of ownership test is passed, or failing that, the same business test is passed.

Relevance of tax consolidation to the Group

The Company and its wholly-owned Australian resident entities have formed a tax-consolidated group and are therefore taxed as a single entity. The head entity within the tax-consolidated group is AusQuest Ltd. The members of the taxconsolidated group (incorporated in Australia) are identified at note 23.

Note 8. Current assets - trade and other receivables

Security deposits Other debtors - unsecured Goods and services tax recoverable	Consolidated 2015 2014 $ $ 50,000 125,006 58,490 326,790 42,185 45,435	Consolidated 2015 2014 $ $ 50,000 125,006 58,490 326,790 42,185 45,435
	150,675	497,231

Note 9. Current assets - Other assets

Prepayments

Consolidated	Consolidated
2015	2014
$	$
41,921	57,873

AusQuest Limited Notes to the financial statements 30 June 2015

Note 10. Non-current assets - property, plant and equipment

Fixtures, fittings and office equipment - at cost Less: Accumulated depreciation Computer equipment - at cost Less: Accumulated depreciation Field Equipment - at cost Less: Accumulated depreciation Low value pool - at cost Less: Accumulated depreciation	Consolidated 2015 2014 $ $ 18,020 18,020 (14,889) (14,403)	Consolidated 2015 2014 $ $ 18,020 18,020 (14,889) (14,403)
	3,131	3,617
	21,499 (11,231)	48,880 (33,599)
	10,268	15,281
	189,792 (174,822)	202,577 (176,019)
	14,970	26,558
	58,454 (54,423)	64,970 (59,469)
	4,031	5,501
	32,400	50,957

Reconciliations

Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:

Consolidated Balance at 1 July 2013 Additions Write off of assets Depreciation expense Balance at 30 June 2014 Additions Write off of assets Disposals Depreciation expense Balance at 30 June 2015 Note 11. Non-current assets - exploration and evaluation Exploration and evaluation phase - at cost	Total $ 71,563 1,749 (1,541) (20,814) 50,957 5,723 (6,865) (3,613) (13,802) 32,400 Consolidated 2015 2014 $ $ 15,649,086 11,791,786	Total $ 71,563 1,749 (1,541) (20,814)
		50,957 5,723 (6,865) (3,613) (13,802)
		32,400

Note 11. Non-current assets - exploration and evaluation

AusQuest Limited Notes to the financial statements 30 June 2015

Note 11. Non-current assets - exploration and evaluation (continued)

Consolidated Balance at 1 July 2013 Capitalised during the year Impaired during the year(i) Grant of farm-in and joint venture interests in previously capitalised projects(ii) Exchange movements Balance at 30 June 2014 Capitalised during the year Impaired during the year(i) Grant of farm-in and joint venture interests in previously capitalised projects(ii) Exchange movements Balance at 30 June 2015 (i) Significant impairments to the following projects occurred during the year: South West Peru Stanley Project Bald Hill		Total $ 11,933,989 2,869,936 (1,932,547) (635,640) (443,952)
		11,791,786 1,888,984 (44,359) (89,385) 2,102,060
		15,649,086

	2015 $	2014 $
	- 8,166 13,621	443,138 1,168,708 157,801

(ii) Grant of farm-in and joint venture interests in previously capitalised projects

Africa (2014)

The Group entered into a farm-in and joint venture agreement with Ressources Burkinor SARL (‘Burkinor’), a wholly owned subsidiary of TSX listed Semafo Inc. Under the terms of the agreement Burkinor can earn up to an 80% interest in the Banfora gold project by spending a total of US$7.5million over a three-year period and making an upfront cash payment to AusQuest of US$600,000 (A$635,640). The Company received these funds in early May 2014.

Peru (2015)

In February 2015 the Group entered into three separate farm-in and joint venture agreements with Compania Minera Zahena SAC (“Zahena”) and Southern Peru Copper Corporation Sucursal del Peru (“Southern”). Under the terms of the agreements these entities can earn up to an 70% interest in four copper-gold projects through a structured series of cash option payments and sole-funding exploration expenditures. The Group received the first option payment of US$70,000 (A$89,385) on 28 April 2015. A summary of these terms were announced on the ASX platform on 24 February 2015. Subsequent to year end the Group entered into a fourth agreement with Zahena to cover a fifth copper-gold project. Terms of this agreement were announced on the ASX platform on 8 July 2015 (refer note 24).

(iii) Capitalised exploration and evaluation expenditure

The ultimate recoupment of costs carried forward in respect of areas of interest still in the exploration and/or evaluation phases is dependent on successful development and commercial exploitation or, alternatively, sale of the respective areas of interest.

AusQuest Limited Notes to the financial statements 30 June 2015

Note 12. Current liabilities - trade and other payables

Trade and other payables Refer to note 16 for further information on financial instruments.	Consolidated 2015 2014 $ $ 286,489 359,927	Consolidated 2015 2014 $ $ 286,489 359,927

The average credit period on purchases and services is 30 days. No interest is charged on the trade payables for the first 30 to 60 days from the date of the invoice. Thereafter, interest may be charged at various penalty rates on the outstanding balance. The Group has financial risk management policies in place to ensure that all payables are paid within the credit timeframe.

Note 13. Current liabilities - provisions

Employee benefits	Consolidated 2015 2014 $ $ 58,449 67,975

The current provision for employee benefits relates to annual leave and long service leave entitlements.

Note 14. Equity - issued capital

	Consolidated	Consolidated	Consolidated	Consolidated
	2015	2014	2015	2014
	Shares No.	Shares No.	$	$
Ordinary shares - fully paid	495,897,392	297,503,444	56,702,391	53,135,509
Movements in ordinary share capital

Ordinary shares - fully paid Movements in ordinary share capital	Consolidated 2015 2014 $ $ 56,702,391 53,135,509	Consolidated 2015 2014 $ $ 56,702,391 53,135,509

Details Balance at 1 July 2013 Issue of shares (net of issue costs)(i) Balance at 30 June 2014 Issue of shares (net of issue costs)(ii) Issue of shares (consulting services)(iii) Issue of shares (conversion of convertible notes)(iv) Balance at 30 June 2015	Shares No. 160,003,444 137,500,000 297,503,444 157,893,948 3,000,000 37,500,000 495,897,392	$ 50,617,017 2,518,492
		53,135,509 2,763,882 53,000 750,000
		56,702,391

AusQuest Limited Notes to the financial statements 30 June 2015

Note 14. Equity - issued capital (continued)

(i) Issue of shares (net of issue costs) 2014

The Company issued 137,500,000 ordinary shares during the year under a Placement to sophisticated investors and a Share Purchase Plan. 26,500,000 shares were issued on 17 October 2013, 37,000,000 shares on 22 November 2013 and 74,000,000 shares on 02 December 2013. All shares were issued at 2 cents per share with one free attaching listed option for every two shares subscribed for. These options are exercisable at 4 cents per share on or before 30 November 2016. The Company raised funds totalling $2,750,000 before issue costs.

(ii) Issue of shares (net of issue costs) 2015

The Company issued 157,893,948 ordinary shares during the year under a Placement to sophisticated investors and a Share Purchase Plan. 72,375,000 shares were issued on 19 March 2015, 45,698,223 shares on 29 April 2015, 32,887,369 shares on 30 April 2015 and 6,933,356 shares on 4 May 2015. All shares were issued at 1.9 cents per share with one free attaching listed option for every two shares subscribed for. These options are exercisable at 3.5 cents per share on or before 30 April 2018. The Company raised funds totalling $2,999,984 before issue costs ($2,763,883 after issue costs).

(iii) Issue of shares (consulting services) 2015

The Company issued 3,000,000 ordinary shares during the year in lieu of cash payments for consulting services rendered to the Group. 1,000,000 shares were issued on 5 February 2015, 1,000,000 shares on 27 February 2015 and 1,000,000 shares on 5 May 2015. All shares were issued at the prevailing market rate on these dates, being 1.4 cents, 2.1 cents and 1.8 cents respectively for a combined value of $53,000. Consulting expenses to the same value were recognised in the statement of profit or loss and other comprehensive income.

(iv) Issue of shares (conversion of convertible notes) 2015

The Company executed a Convertible Note Agreement (“Agreement”) on 3 October 2014 with Mr Chris Ellis, a director and substantial shareholder of the Group for a total loan facility of $750,000, available in up to three equal advances of $250,000. Key terms under the convertible note included:

・ Maturity date set as 3 October 2015.
・ Conversion date being the last to occur of the date on which the Company issues shares to raise funds for working capital purposes and the date shareholders ratify the issue of the convertible notes and approve the conversion of the convertible notes to ordinary shares in general meeting.
・ Conversion price being the higher of either 2 cents per conversion share or where the Company undertakes a share placement at greater than 2 cents per share, 2 cents per conversion share plus 50% of the difference between the issue price of such placement shares and 2 cents.
・ Interest accruing at 10% per annum with the first 6 months after drawdown being interest free. Interest is payable in cash.
・ Under the terms of the Agreement, the Company retains sole discretion to settle the loan in cash or shares.

Following the issue of shares as noted under item (ii) above, the Company settled the loan on 20 April 2015 through the issue of 37,500,000 shares at 2 cents per share.

Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company does not have a limited amount of authorised capital. On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.

AusQuest Limited Notes to the financial statements 30 June 2015

Note 14. Equity - issued capital (continued)

Movements in listed options over ordinary shares on issue

Details Balance at 1 July 2013 Issued during the period Balance at 30 June 2014 Issued during the period Balance at 30 June 2015	Listed options (AQDO) No. Listed options (AQDOA) No. Listed options Total No. - - - 68,750,000 - 68,750,000
	68,750,000 - 68,750,000 - 78,946,976 78,946,976
	68,750,000 78,946,976 147,696,986

Listed options

During the 2014 financial year, a total of 68,750,000 free attaching listed options were issued (on a 1:2 basis) and allotted as part of the Company's Placement and Share Purchase Plan. These options are exercisable at 4 cents each on or before 30 November 2016 and have been granted quotation on ASX under the code AQDO.

During the 2015 financial year, a total of 78,976,976 free attaching listed options were issued (on a 1:2 basis) and allotted as part of the Company's Placement and Share Purchase Plan. These options are exercisable at 3.5 cents each on or before 30 April 2018 and have granted quotation on ASX under the code AQDOA.

Unlisted options on issue

Share options issued by the Company carry no rights to dividends and no voting rights.

As at 30 June 2015, the Company has 9,900,000 unlisted share options on issue (2014: 9,900,000) exercisable on a 1:1 basis for 9,900,000 shares (2014: 9,990,000) at an exercise price of 7 cents each. The options will expire 30 November 2015. Further details of options granted to employees during the prior financial year are contained in note 27 to the financial statements.

Note 15. Equity - reserves

Foreign currency reserve Share-based payments reserve	Consolidated 2015 2014 $ $ 2,861,035 677,214 230,360 230,360	Consolidated 2015 2014 $ $ 2,861,035 677,214 230,360 230,360
	3,091,395	907,574

Movements in reserves during these periods are disclosed in the consolidated statement of changes in equity.

Foreign currency reserve

The reserve is used to recognise exchange differences arising from translation of the financial statements of foreign operations to Australian dollars and foreign currency gains and losses on net investments in foreign operations.

Share-based payments reserve

The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their remuneration, and other parties as part of their compensation for services.

AusQuest Limited Notes to the financial statements 30 June 2015

Note 16. Financial instruments

Financial risk management objectives

The Company has exposure to the following risks from its use of financial instruments:

Credit risk
Liquidity risk
• Interest rate risk • Capital management

This note presents information about the Group’s exposure to each of the above risks, their objectives, policies and processes for measuring and managing risk, and the management of capital. Further quantitative disclosures are included throughout this note and the financial report.

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. Risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

Market risk

Foreign currency risk

The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk through foreign exchange rate fluctuations.

Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities denominated in a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis and cash flow forecasting.

The carrying amount of the Group's foreign currency denominated financial assets and financial liabilities at the reporting date, expressed in Australian dollars, was as follows:

	Assets	Assets	Liabilities	Liabilities
	2015	2014	2015	2014
Consolidated	$	$	$	$
US dollars	199,282	1,086,568	59,815	28,244

Foreign currency sensitivity analysis

The sensitivity analyses of the Group’s exposure to foreign currency risk at the reporting date has been determined based on a change of 10% in the value of the Australian dollar against the relevant foreign currencies. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates.

At reporting dated, if the Australian dollar was 10% stronger and all other variables were constant, the Group’s net loss after tax would have decreased by $13,947 (2014: $105,832) with a corresponding increase in equity. Where the Australian dollar weakened, there would be an equal and opposite impact on the loss after tax and equity.

Price risk

The Group is not exposed to any significant price risk.

Interest rate risk

The Group is exposed to interest rate risk as it places funds at both fixed and floating interest rates. The Group manages this risk by maintaining an appropriate mix between fixed and floating rated products, which also facilitate access to money.

Although some of the Group’s assets are subject to interest rate risk, it is not dependent on this income. Interest income is only incidental to the Group’s operations and operating cash flows. The Group is not exposed to interest rate risk associated with borrowed funds.

AusQuest Limited Notes to the financial statements 30 June 2015

Note 16. Financial instruments (continued)

Interest rate sensitivity analysis

The sensitivity analyses of the Group’s exposure to interest rate risk at the reporting date has been determined based on a change of 50 basis points in interest rates.

At reporting dated, if interest rates had been 50 basis points higher and all other variables were constant, the Group’s net loss after tax would have decreased by $11,968 (2014: $5,093) with a corresponding increase in equity. Where interest rates decreased, there would be an equal and opposite impact on the loss after tax and equity.

Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

Liquidity risk

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

Liquidity risk management is the responsibility of the board of Directors, who have built an appropriate liquidity risk management framework for the management of the Company’s short, medium and long-term funding and liquidity management requirements.

The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities, identifying when further capital raising initiatives are required.

Liquidity and interest risk tables

The following tables detail the Group’s remaining contractual maturity for its non-derivative financial assets and liabilities and have been prepared on the following basis:

Financial assets - based on the undiscounted contractual maturities including interest that will be earned on those assets except where the Company/Group anticipates that the cash flow will occur in a different period; and
Financial liabilities - based on undiscounted cash flows on the earliest date on which the Group can be required to pay, including both interest and principal cash flows.

2015	CONSOLIDATED	CONSOLIDATED	CONSOLIDATED	CONSOLIDATED	CONSOLIDATED	CONSOLIDATED
	Less than 1 month	1-3 months	3 months to 1 year	1 - 5 years	5+ years	Total
	$	$	$	$	$	$
Financial assets Non-interest bearing Variable interest rate Fixed interest rate Financial liabilities Non-interest bearing	98,462 - - - - 98,462 2,393,663 - - - - 2,393,663 - - 50,000 - - 50,000
	2,492,125 - 50,000 - - 2,542,125
	286,488 - - - - 286,488
	286,488 - - - - 286,488

AusQuest Limited Notes to the financial statements 30 June 2015

Note 16. Financial instruments (continued)

2014	CONSOLIDATED	CONSOLIDATED	CONSOLIDATED	CONSOLIDATED	CONSOLIDATED	CONSOLIDATED
	Less than 1 month $		3 months			Total $
		1-3 months $	to 1 year $	1 - 5 years	5+ years
				$	$
Financial assets Non-interest bearing Variable interest rate Fixed interest rate Financial liabilities Non-interest bearing	372,919 - - - - 372,919 1,018,649 1,018,649 - 69,777 55,229 - - 125,006
	1,391,568 69,777 55,229 - - 1,516,574
	321,477 38,450 - - - 359,927
	321,477 38,450 - - - 359,927

Fair value of financial assets and liabilities

The carrying amount of financial assets and financial liabilities recorded in the financial statements represents their respective net fair values, determined in accordance with the accounting policies disclosed in Note 2. The Directors consider that the carrying amount of financial assets and other financial liabilities recorded in the financial statements approximate their net fair values (2014: net fair values).

Capital management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The capital structure of the Group consists of equity only, comprising issued capital and reserves, net of accumulated losses. The Group’s policy is to use capital market issues to meet the funding requirements of the Group.

There were no changes in the Group’s approach to capital management during the year. Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.

Note 17. Key management personnel disclosures

Details of key management personnel compensation are disclosed in the Remuneration Report which forms part of the Directors’ Report and has been audited. The aggregate compensation of the key management personnel is summarised below:

Short term employee benefits Post employment benefits Other benefits	Consolidated 2015 2014 $ $ 136,986 183,066 13,014 16,934 34,142 28,924	Consolidated 2015 2014 $ $ 136,986 183,066 13,014 16,934 34,142 28,924
	184,142	228,924

Note 18. Remuneration of auditors

During the financial year the following fees were paid or payable for services provided by the auditor of the company:

Audit services Audit or review of the financial statements The auditor of AusQuest Limited is HLB Mann Judd.	Consolidated 2015 2014 $ $ 32,900 31,000	Consolidated 2015 2014 $ $ 32,900 31,000

AusQuest Limited Notes to the financial statements 30 June 2015

Note 19. Contingencies

In the opinion of the Directors, there were no material contingent liabilities as at 30 June 2015 and no contingent liabilities have arisen in the interval between the period end and the date of this financial report.

At reporting date the Company had contingent share issues to consultants of up to 12,000,000 fully paid ordinary shares. The issue of these shares are staged over a period of up to four years and is dependent on certain agreed project and/or Joint Venture milestones being reached.

Note 20. Commitments

Capital commitments Committed at reporting date but not recognised as liabilities, payable: Within one year After one year but not more than five years	Consolidated 2015 2014 $ $ 1,001,800 520,900 5,493,200 1,450,000	Consolidated 2015 2014 $ $ 1,001,800 520,900 5,493,200 1,450,000
	6,495,000	1,970,900

Capital commitments includes minimum expenditures and rent payable under granted tenements. Certain of these commitments will be paid for by the Company’s joint-venture partners. The Company also has the discretion to surrender one or more of these tenements and thereby avoid payment of these commitments.

Lease commitments - operating Committed at reporting date but not recognised as liabilities, payable: Within one year	56,666	53,289

The Company entered into an operating lease for its office premises at 8 Kearns Crescent, Ardross. The current lease expires on 28 February 2016.

Note 21. Related party transactions

Parent entity

AusQuest Limited is the parent entity.

Subsidiaries

Interests in subsidiaries are set out in note 23.

Key management personnel

Disclosures relating to key management personnel are set out in note 17 and the remuneration report in the directors' report.

AusQuest Limited Notes to the financial statements 30 June 2015

Note 21. Related party transactions (continued)

Transactions with related parties

The following transactions occurred with related parties:

Payment for corporate advisory services: Rent of premises	Consolidated 2015 2014 $ $ 4,166 - 56,177 53,289

Premises were rented by the Group for the financial year from Asuper Pty Ltd, an entity associated with Mr John Ashley. Asuper Pty Ltd owns 50% of the leased premises. The transaction was made on commercial terms.

The Company executed a Convertible Note Agreement (“Agreement”) on 3 October 2014 with Mr Chris Ellis for a total loan facility of $750,000, available in up to three equal advances of $250,000. Key terms under the convertible note included:

・ Maturity date set as 3 October 2015.
・ Conversion date being the last to occur of the date on which the Company issues shares to raise funds for working capital purposes and the date shareholders ratify the issue of the convertible notes and approve the conversion of the convertible notes to ordinary shares in general meeting.
・ Conversion price being the higher of either 2 cents per conversion share or where the Company undertakes a share placement at greater than 2 cents per share, 2 cents per conversion share plus 50% of the difference between the issue price of such placement shares and 2 cents.
・ Interest accruing at 10% per annum with the first 6 months after drawdown being interest free. Interest is payable in cash.
・ Under the terms of the Agreement, the Company retains sole discretion to settle the loan in cash or shares.

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

Receivable from and payable to related parties

The following balances are outstanding at the reporting date in relation to transactions with related parties:

Current payables: Trade payables to other related party	Consolidated 2015 2014 $ $ 7,734 4,249

Loans to/from related parties

Other than the convertible note, there were no loans to or from related parties at the current and previous reporting date.

Terms and conditions

All transactions were made on normal commercial terms and conditions and at market rates.

AusQuest Limited Notes to the financial statements 30 June 2015

Note 22. Parent entity information

Set out below is the supplementary information about the parent entity.

Statement of profit or loss and other comprehensive income

Loss after income tax Total comprehensive income Statement of financial position Total current assets Total assets Total current liabilities Total liabilities Equity Issued capital Reserves Accumulated losses Total equity	Parent 2015 2014 $ $ (691,530) (2,343,612)	Parent 2015 2014 $ $ (691,530) (2,343,612)
	(691,530)	(2,343,612)
	Parent 2015 2014 $ $ 2,473,988 1,185,882
	16,023,486	13,204,156
	272,971	328,993
	272,971	328,993
	56,702,391 230,360 (41,182,236)	53,135,509 230,360 (40,490,706)
	15,750,515	12,875,163

Guarantees entered into by the parent entity in relation to the debts of its subsidiaries

The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2015 and 30 June 2014.

Contingent liabilities

The parent entity had no contingent liabilities as at 30 June 2015 and 30 June 2014.

Included in non-current assets are investments in and loans to subsidiaries of $6,687,948, the recoverability of which is dependent on the successful exploitation of the subsidiaries exploration assets.

Capital commitments - Property, plant and equipment

The parent entity had no capital commitments for property, plant and equipment at 30 June 2015 and 30 June 2014.

AusQuest Limited Notes to the financial statements 30 June 2015

Note 23. Interests in subsidiaries

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note 2:

		Ownership	interest
	Principal place of business /	2015	2014
Name	Country of incorporation	%	%
Parent Entity
AusQuest Limited (i)	Australia	-	-
Subsidiaries
Fortescue Resources Limited	Australia	100%	100%
E&A Resources Pty Ltd	British Virgin Islands	100%	100%
Questdor SAC	Peru	100%	100%
Filigree SARL	Burkina Faso	100%	100%
Sub-subsidiary
Comoe Exploration SARL	Burkina Faso	100%	100%

(i) AusQuest Limited is the head entity within the tax consolidated group. All the Australian-incorporated companies are members of the tax consolidated group.

Note 24. Events after the reporting period

Under the Agreement, Zahena can earn a 70% interest in the increased title area for an upfront cash payment of US$120,000, a structured series of cash option payments over a four year period totalling US$2,995,000 and a total drilling budget of 30,000 meters.

Note 25. Cash and cash equivalents

	Consolidated	Consolidated
	2015	2014
	$	$
Cash at bank and on hand	2,395,546	1,018,821

Cash at bank earns interest at floating rates based on daily bank deposit rates.

Reconciliation to the Statement of Cash Flows:

For the purposes of the statement of cash flows, cash and cash equivalents comprise cash on bank and cash on hand.

AusQuest Limited Notes to the financial statements 30 June 2015

Note 25. Cash and cash equivalents (continued)

Reconciliation of loss after income tax to net cash used in operating activities

Loss after income tax expense for the year Adjustments for: Depreciation and amortisation Write off of property, plant and equipment Net (gain)/loss on disposal of property, plant and equipment Share-based payments Exploration expenditure written off and impaired Change in operating assets and liabilities: Decrease/(increase) in trade and other receivables Decrease/(increase) in prepayments Decrease in trade and other payables Increase/(decrease) in other provisions Net cash used in operating activities	Consolidated 2015 2014 $ $ (814,779) (2,902,414) 13,802 20,814 6,865 - (3,720) 1,541 53,000 157,548 44,359 1,932,547 230,304 17,269 15,952 (16,337) (90,837) (7,534) (9,526) (23,219)	Consolidated 2015 2014 $ $ (814,779) (2,902,414) 13,802 20,814 6,865 - (3,720) 1,541 53,000 157,548 44,359 1,932,547 230,304 17,269 15,952 (16,337) (90,837) (7,534) (9,526) (23,219)
	(554,580)	(819,785)

Note 26. Loss per share

Basic loss per share Loss after income tax attributable to the owners of AusQuest Limited Weighted average number of ordinary shares used in calculating basic loss per share	Consolidated 2015 2014 Cents Cents (0.24) (1.19) 2015 2014 $ $ (814,779) (2,902,414) Number Number 340,994,237 243,466,457	Consolidated 2015 2014 Cents Cents (0.24) (1.19) 2015 2014 $ $ (814,779) (2,902,414) Number Number 340,994,237 243,466,457
		2014 $ (2,902,414)
		Number 243,466,457

Diluted loss per share has not been calculated as the result does not increase loss per share.

Note 27. Share-based payments

Equity-settled payments

During the year the Company settled payment for certain consulting services received through the issue of ordinary shares. In total, the Company issued 3,000,000 ordinary shares - 1,000,000 shares on 5 February 2015, 1,000,000 shares on 27 February 2015 and 1,000,000 shares on 5 May 2015. All shares were issued at the prevailing market rate on these dates, being 1.4 cents, 2.1 cents and 1.8 cents respectively for a combined total of $53,000. The Company recognised an increase in its share capital account (refer note 16) and a corresponding increase in consulting expenditure in the statement of profit or loss and other comprehensive income.

AusQuest Limited Notes to the financial statements 30 June 2015

Note 27. Share-based payments (continued)

Employee share options

The Company has an ownership-based compensation arrangement for consultants and employees of the Company.

Each option issued under the arrangement converts into one ordinary share of AusQuest Limited on exercise. No amounts are paid or payable by the recipient on receipt of the option. Options neither carry rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry. The number of options granted is at the sole discretion of the Directors.

Incentive options issued to Directors (executive and non-executive) are subject to approval by shareholders and attach vesting conditions as appropriate.

Share based payment arrangements in existence during period

The following share-based payment arrangements were in existence during the current and comparative reporting periods

				Exercise price	Fair value at
Option series	Number	Grant date	Expiry date	$	grant date $
01 Dec 2013(i)	1,350,000	13 Feb 2009	01 Dec 2013	0.20	0.106
01 Dec 2013(i)	1,150,000	13 Feb 2009	01 Dec 2013	0.40	0.101
30 Nov 2013(i)	500,000	26 Nov 2010	30 Nov 2013	0.30	0.116
30 Nov 2013(i)	500,000	26 Nov 2010	30 Nov 2013	0.40	0.107
30 Nov 2013(i)	1,750,000	03 Dec 2010	30 Nov 2013	0.40	0.088
30 Nov 2015	2,900,000	30 Nov 2012	30 Nov 2015	0.07	0.025
30 Nov 2015	7,000,000	02 Dec 2013	30 Nov 2015	0.07	0.023

(i) These options expired during the 2014 financial year.

The expense recognised in the statement of profit or loss and other comprehensive income in relation to share-based payments granted in 2014 and 2015 are disclosed in note 6.

On 2 December 2013 the Company issued 7,000,000 new options to employees and contractors, exercisable at 7 cents on or before 30 November 2015 under the Company’s Employment Option Scheme (‘ESOP’). These options vested on the date of issue.

The exercise price of the options under the ESOP was determined by the Directors. The employees eligible to participate in the plan are at the discretion of the Directors. The options hold no voting rights and are not transferable. At balance date no options have been exercised and the employees have not ceased employment.

The fair value of the ESOP options issued is determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at valuation date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option. The Black-Scholes valuation is expensed over the vesting period of the particular options.

The table below summarises the model inputs for ESOP options granted during the year and valued using the BlackScholes option pricing model, as well as the inputs for the 30 November 2015 option series granted on 30 November 2012:

	Option series:	Option series:
	30 Nov 2015 (‘ESOP’)	30 Nov 2015
Inputs into the model	(Dec 2013 issue)	(Nov 2012 issue)
Grant date share price (cents)	2.8 cents	4.0 cents
Exercise price (cents)	7.0 cents	7.0 cents
Expected volatility	216%	123%
Option life	2 years	3 years
Dividend yield	-	-
Risk-free interest rate	2.79%	2.62%

AusQuest Limited Notes to the financial statements 30 June 2015

Note 27. Share-based payments (continued)

The following table shows a reconciliation of the outstanding share options granted as share-based payments at the beginning and end of the financial year:

Balance at beginning of the financial year Granted during the financial year Lapsed during the financial year Balance at end of the financial year (i) Exercisable at end of the financial year	2015 Number of Options Weighted average exercise price $ 9,900,000 0.07 - - - - 9,900,000 0.07 9,900,000 0.07	2014
		Number of Options Weighted average exercise price $
		8,150,000 0.24 7,000,000 0.07 (5,250,000) 0.34
		9,900,000 0.07
		9,900,000 0.07

(i) Balance at end of the financial year

The share options outstanding at the end of the financial year had a weighted average remaining contractual life of 0.42 years (2014: 1.42 years).

AusQuest Limited Additional securities exchange information

Additional information required by the Australian Securities Exchange and not shown elsewhere in this report is as follows. This information is current as at 31 August 2015.

1. Registered office and principal administrative office

The address of the registered office in Australia is C/- Nexia Perth, Level 3, 88 William Street, Perth, WA, 6000. Telephone + 61 8 9463 2463

The principal administrative office is 8 Kearns Crescent, Ardross, WA, 6153. Telephone + 61 8 9364 3866

2. Register of securities are held at the following address:

Advanced Share Registry Services 110 Stirling Highway Nedlands WA 6009 Telephone + 61 8 9389 8033

3. Shareholdings

a. Distribution of shareholders

Category (size of holding)	Ordinary shares	Number of holders
1 – 1,000 24,372 216 1,001 – 5,000 730,644 242 5,001 – 10,000 1,337,065 167 10,001 – 100,000 32,137,096 740 100,000 and over 461,668,215 474 Total shareholding 495,897,392 1,839

b. Less than marketable parcels of shares

The number of shareholdings held in less than marketable parcels is 925 given a share value of 1.8 cents per share.

c. Distribution of listed optionholders (“AQDO”)

Category (size of holding)	Listed options	Number of holders
1 – 1,000 57 4 1,001 – 5,000 - - 5,001 – 10,000 - - 10,001 – 100,000 5,393,330 137 100,000 and over 63,356,613 92 Total shareholding 68,750,000 233

d. Distribution of listed optionholders (“AQDOA”)

Category (size of holding)	Listed options	Number of holders
1 – 1,000 - - 1,001 – 5,000 - - 5,001 – 10,000 - - 10,001 – 100,000 3,126,628 76 100,000 and over 75,820,348 113 Total shareholding 78,946,976 189

AusQuest Limited Additional securities exchange information

e. Voting rights

The voting rights attached to each class of equity security are as follows:

Ordinary shares

Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy has vote on a show of hands.

Options

Options over ordinary shares do not carry voting rights.

f. 20 Largest shareholders – ordinary shares

NAME	Number of Ordinary Fully Paid Shares Held	% Held of Issued Ordinary Capital
1 Chrysalis Investments Pty Ltd 2 Merrill Lynch (Aust) Nominees P/L 3 JP Morgan Nominees Australia Limited 4 ASuper Pty Ltd / Mrs Nova V Ashley 5 HSBC Custody Nominees 6 Mr Graeme Drew & Mrs Barbara J Drew 7 Hamersley Holdings Limited 8 Mr Anthony Poli and Mrs Milvia Poli (A Poli Super Fund) 9 Mr James Thornett 10 Exploration Capital Partners 11 Mr Richard W Chadwick & Mrs Gwenda Ann Chadwick 12 Jayleaf Holdings Pty Ltd 13 BT Portfolio Services Ltd (Warrell Holdings S/F A/C) 14 Mr Gregory G Hancock 15 Intaglio Pty Ltd (Adrienne Meakins Family A/C) 16 National Nominees Limited 17 Iris Sydney Holdings Pty Ltd 18 Mr Terence Mervyn Risby & Mrs Dawn Lillian Risby (Risby Family S/F A/C) 19 HFTT Pty Ltd (Haggard Family A/C) 20 Mr John A Innes & Mrs Ljuba Innes (Innes Super Fund) TOTAL	82,813,586 16.70% 41,624,970 8.39% 13,678,608 2.76% 12,348,209 2.49% 12,078,508 2.44% 11,612,466 2.34% 10,500,000 2.12% 8,000,000 1.61% 7,332,109 1.48% 6,933,356 1.40% 6,230,000 1.26% 5,636,550 1.14% 5,000,000 1.01% 4,586,415 0.92% 4,584,164 0.92% 3,881,884 0.78% 3,846,974 0.78% 3,789,474 0.76% 3,471,038 0.70% 3,350,171 0.68%
	251,298,482 50.68%

AusQuest Limited Additional securities exchange information

g. 20 Largest shareholders – listed options (AQDO)

NAME	Number of Listed Options Held	% Held of Listed Options
1 Chrysalis Investments Pty Ltd 8,500,000 12.36% 2 Mr Ross Jeremy Taylor (Jamanaro A/C) 7,322,000 10.65% 3 Iris Sydney Holdings Pty Ltd 4,174,368 6.07% 4 Value Adding Resources Pty Ltd 3,000,000 4.36% 5 Jemaya Pty Ltd (JH Featherby Super Fund A/C) 2,500,000 3.64% 6 Mr James Thornett 2,000,000 2.91% 7 Lawrence Crowe Consulting Pty Ltd (LCC Super Fund A/C) 2,000,000 2.91% 8 Mr Graeme Drew & Mrs Barbara J Drew 1,500,000 2.18% 9 ASuper Pty Ltd / Mrs Nova V Ashley 1,322,500 1.92% 10 Mr Neil Harris 1,313,750 1.91% 11 HFTT Pty Ltd (Haggard Family A/C) 1,250,000 1.82% 12 Tarney Holdings Pty Ltd (DP & FL Waddell Family A/C) 1,250,000 1.82% 13 Mr Gregory G Hancock 1,250,000 1.82% 14 Mrs Carolyn Merle Seed 1,250,000 1.82% 15 Carpenders Park Pty Ltd (Staff Super Fund A/C) 1,250,000 1.82% 16 Jones Org Pty Ltd (Jones Org A/C) 1,250,000 1.82% 17 Southern Terrain Pty Ltd (Southern Terrain A/C) 1,125,000 1.64% 18 MacBeth Genealogical Services Pty Ltd (MacBeth Super Fund A/C) 1,113,750 1.62% 19 Stadjoy Pty Ltd (Bradam Trading A/C) 1,000,000 1.45% 20 Rivermore Pty Limited 1,000,000 1.45% 45,371,368 65.99%

h. 20 Largest shareholders – listed options (AQDOA)

NAME	Number of Listed Options Held	% Held of Listed Options
1 Chrysalis Investments Pty Ltd 2 JP Morgan Nominees Australia Ltd 3 HSBC Custody Nominees (NT Comntwlth Super Corp) 4 Jetosea Pty Ltd 5 Exploration Capital Partners 2014 Ltd Partnership 6 Berenes Nominees Pty Ltd (Berenes Super Fund) 7 BT Portfolio Services Ltd (Warrell Holdings S/F A/C) 8 National Nominees Limited 9 Mr Graeme Drew & Mrs Barbara J Drew 10 ASuper Pty Ltd / Mrs Nova V Ashley 11 Iris Sydney Holdings Pty Ltd 12 Statjoy Pty Ltd 13 CS Fourth Nominees Pty Ltd (Credit Suisse Eqts Aust Ltd) 14 Jayleaf Holdings Pty Ltd 15 Dixtru Pty Ltd 16 Howard Trading Pty Ltd 17 Kirzy Pty Ltd 18 Petrea Kristine McGhee 19 W U Investments Pty Ltd 20 Philip Strachan Attwood (Equity Underwriters P/L)	8,473,684 10.73% 6,657,358 8.43% 4,647,550 5.89% 4,495,264 5.69% 3,466,678 4.39% 2,523,422 3.20% 2,500,000 3.17% 1,852,987 2.35% 1,500,000 1.90% 1,315,790 1.67% 1,284,737 1.63% 1,244,737 1.58% 1,000,000 1.27% 1,000,000 1.27% 950,000 1.20% 883,334 1.12% 883,334 1.12% 883,333 1.12% 750,000 0.95% 750,000 0.95%
	47,062,208 59.61%

AusQuest Limited Additional securities exchange information

i. Substantial shareholders

Substantial shareholders listed in the company’s holding register as at 31 August 2015:

NAME	Number of fully paid ordinary shares held	Number of listed options held
1 Chrysalis Investments Pty Ltd (a company associated with Mr C Ellis)	82,813,586 16,973,684
	82,813,586 16,973,684

4. Company secretary

The name of the company secretary is Henko Vos.

5. Securities exchange listing

Quotation has been granted for all the ordinary shares and listed options of the Company on the Australian Securities Exchange (‘AQD’).

6. Unquoted securities

	Unlisted Options	Unlisted Options
Terms	Number	Number of holders
1 Unlisted options exercisable at 7 cents each on or before 30 November 2015 9,900,000 8 9,900,000 8

7. Unquoted equity security holdings greater than 20%

At 31 August 2015 there are no unquoted equity security holdings greater than 20% that arise other than as a result of the issue of options under an employee incentive scheme.

8. Restricted securities

There are no restricted securities or securities under voluntary escrow at the date of this report.

9. On-market buy back

At the date of this report, the Company is not involved in an on-market buy back.

AusQuest Limited Tenements

Project Tenements as at 31 August 2015

AUSTRALIA
State Tenement	Name	Status	Sub- Blocks	Area (km 2)	Grant Date	Expiry Date	Current Commitment
							($)
DUNDAS
WA E63/1003	Dundas 4	granted	21	58	9/02/2009	8/02/2016	51,667
WA E63/1004	Dundas 5	granted	11	30	9/02/2009	8/02/2016	51,667
GIBSON SOAK
WA E63/1672	GibsonSoak	granted	122	349	3/09/2014	2/09/2019	122,000
WA E63/1732	Gibson West	granted	54	151	8/05/2015	4/05/2020	54,000
WA E63/1733	Gibson East	granted	167	466	8/05/2015	4/05/2020	167,000
BALLADONIA
WA E69/3246	Balladonia- 1	granted	200	578	20/01/2015	19/01/2020	200,000
WA E69/3317	Balladonia - 2	granted	200	578	16/07/2015	15/07/2020	200,000
WA E69/3361	Balladonia East	Application	150	420
	Balladonia South
WA E69/3394	East	Application	96	279
WEST AFRICA
Country	Permit Name	Status		Area		Expiry
				(km²)		Date
BurkinaFaso	Komoe	granted		122		19/10/2016
BurkinaFaso	Finkere	granted		140		19/10/2016
Burkina Faso	Kangounadeni	granted		89		19/10/2016
BurkinaFaso	Kaouradeni	granted		79		19/10/2016
Burkina Faso	Tiefora	granted		102		19/10/2016
Burkina Faso	Tondoura	granted		142		19/10/2016
BurkinaFaso	Logoniegue	granted		175		19/12/2017
BurkinaFaso	Kapagouan	granted		158		27/07/2017
BurkinaFaso	Noumoussou	granted		72		27/07/2017

SOUTH AMERICA	SOUTH AMERICA
Country	Project Name	Applications	No.	Area
			Granted	(km²)
PERU	Cerro De Fierro		3	22
PERU	Lana		4	40
PERU	Pinguino	1	4	39
PERU	Ceniceros Rojos		7	70
PERU	El Jaguay		2	20
PERU	Sugar Azucar		2	20
PERU	Azucar West		3	28
PERU	Pampa Del Pulgas	1	24	208
PERU	Chololo		2	15
PERU	Los Otros	6		49
PERU	Lana South	4		40
PERU	Pampa Camarones	8		70

AI assistant

AUSQUEST LIMITED — Annual Report 2015

64406_rns_2015-09-07_b94523ed-2dae-408d-9725-ef053b2e47de.pdf

AusQuest Limited

Contents

Corporate directory

Board of Directors

Registered Office

Principal Office

Auditors

Share Registry

Securities Exchange

Dear Shareholder,

Highlights – Year in Review

Peru: Copper-Gold

Fraser Range WA: Nickel-Copper

Burkina Faso, West Africa – Gold

Corporate

OVERVIEW

PROJECT REVIEWS

PERU: COPPER-GOLD

FRASER RANGE (WA): NICKEL-COPPER

Balladonia Nickel-Copper Project (100% AQD)

Gibson Soak Nickel-Copper Project (100% AQD)

Dundas Nickel-Copper Project (100% AQD)

WEST AFRICA: GOLD

Banfora Joint Venture Project (AQD 100%, Burkinor earning to 80%)

CORPORATE

INTRODUCTION

PRINCIPLE 1: LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT

Recommendation 1.1 – A listed entity should disclose:

(a) the respective roles and responsibilities of its board and management; and (b) those matters expressly reserved to the board and those delegated to management.

Recommendation 1.2 – A listed entity should:

Recommendation 1.3 – A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment.

Recommendation 1.4 – The Company Secretary of a listed entity should be accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board.

Recommendation 1.5 – A listed entity should:

Recommendation 1.6 – A listed entity should:

Recommendation 1.7 – A listed entity should:

a) have and disclose a process for periodically evaluating the performance of its senior executives; and

b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.

PRINCIPLE 2: STRUCTURE THE BOARD TO ADD VALUE

Recommendation 2.1 – The board of a listed entity should:

and disclose:

Recommendation 2.2 – A listed entity should have and disclose a board skills matrix setting out the mix of skills and diversity that the board currently has or is looking to achieve in its membership.

Recommendation 2.3 – A listed entity should disclose:

Recommendation 2.4 –The majority of the board of a listed entity should be independent directors.

Recommendation 2.5 – The chair of the board of a listed entity should be an independent director and, in particular, should not be the same person as the CEO of the entity.

Recommendation 2.6 – A listed entity should have a program for inducting new directors and provide appropriate professional development opportunities for directors to develop and maintain the skills and knowledge needed to perform their role as directors effectively.

PRINCIPLE 3: ACT ETHICALLY AND RESPONSIBLY

Recommendation 3.1 – A listed entity should:

a) have a code of conduct for its directors, senior executives and employees; and b) disclose that code or a summary of it.

PRINCIPLE 4: SAFEGUARD INTEGRITY IN CORPORATE REPORTING

Recommendation 4.1 – The board of a listed entity should:

and disclose:

Recommendation 4.3 – A listed entity that has an AGM should ensure that its external auditor attends its AGM and is available to answer questions from security holders relevant to the audit.

PRINCIPLE 5: MAKE TIMELY AND BALANCED DISCLOSURE

Recommendation 5.1 – A listed entity should have a written policy for complying with its continuous disclosure obligations under the Listing Rules and disclose that policy or a summary of it.

PRINCIPLE 6: RESPECT THE RIGHTS OF SECURITY HOLDERS

Recommendation 6.1 – A listed entity should provide information about itself and its governance to investors via its website.

Recommendation 6.2 - A listed entity should design and implement an investor relations program to facilitate effective two-way communication with investors.

Recommendation 6.3 – A listed entity should disclose the policies and processes it has in place to facilitate and encourage participation at meetings of security holders.

Recommendation 6.4 – A listed entity should give shareholders the option to receive communications from, and send communications to, the entity and its security registry electronically.

PRINCIPLE 7: RECOGNISE AND MANAGE RISK

Recommendation 7.1 - The board of a listed entity should:

and disclose:

b) if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the processes it employs for overseeing the entity’s risk management framework.

Recommendation 7.2 - The Board or a committee of the board should review the entity’s risk management framework at least annually to satisfy itself that it continues to be sound and disclose, in relation to each reporting period, whether such a review has taken place.

Recommendation 7.4 - A listed entity should disclose whether it has any material exposure to economic, environmental and social sustainability risks and, if it does, how it manages or intends to manage those risks.

PRINCIPLE 8: REMUNERATE FAIRLY AND RESPONSIBLY

Recommendation 8.1 - The board of a listed entity should:

and disclose:

b) if it does not have a remuneration committee, disclose that fact and the processes it employs for setting the level and composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not excessive.

Recommendation 8.2 - A listed entity should separately disclose its policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives.

Information about Directors and senior management

Greg Hancock BA Econs., BEd Hons.,F.Fin

Non-Executive Director and Chairman

Graeme Drew B.Sc.Hons., FAIMM, MASEG

Managing Director

John Ashley B.Sc.Hons.,M.Sc., FAIMM, MSEG, MASEG, MAIG Non-Executive Director

Christopher Ellis B.Sc.Hons. Non-Executive Director

AUSQUEST LIMITED Annual Report 2015