Brockman Mining Limited - Interim / Quarterly Report 2015

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INTERIM REPORT 2014/15

FINANCIAL INFORMATION

For the six months ended 31 December 2014

Results for announcement to the market

The interim financial information does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2014 and any public announcements made by Brockman Mining Limited (“Brockman”) during the interim reporting period in accordance with the continuous disclosure requirements of The Stock Exchange of Hong Kong Limited (the “SEHK”) and Australian Securities Exchange Limited (the “ASX”).

Corporate Profile ...............................................................................................................................	2
Condensed Consolidated Statement of Comprehensive Income ...............................................	4
Condensed Consolidated Balance Sheet .......................................................................................	6
Condensed Consolidated Statement of Changes In Equity ..........................................................	8
Condensed Consolidated Statement of Cash Flows ......................................................................	10
Notes to the Condensed Consolidated Financial Information ......................................................	12
Report on Review of Interim Financial Information .........................................................................	35
Management Discussion and Analysis .............................................................................................	36
Directors’ Report ................................................................................................................................	45
Directors’ Declaration .......................................................................................................................	53
Glossary ..............................................................................................................................................	54

CORPORATE PROFILE

BOARD OF DIRECTORS

Non-Executive Directors

Kwai Sze Hoi (Chairman) Liu Zhengui (Vice Chairman) Ross Stewart Norgard

Executive Directors

Chan Kam Kwan, Jason Kwai Kwun, Lawrence Warren Talbot Beckwith

Independent Non-executive Directors

Yap Fat Suan, Henry Uwe Henke Von Parpart Yip Kwok Cheung, Danny Choi Yue Chun, Eugene

AUDITOR

PricewaterhouseCoopers Certified Public Accountants

REGISTERED OFFICE (BERMUDA)

Clarendon House 2 Church Street Hamilton HM11 Bermuda Tel: 1 441 295 1422 Fax: 1 441 292 4720

PRINCIPAL PLACE OF BUSINESS IN HONG KONG

Suites 3812–13, 38/F Two International Finance Centre 8 Finance Street Central, Hong Kong TEL (852) 3978 2800 FAX (852) 3978 2818

COMPANY SECRETARY

Chan Kam Kwan, Jason

PRINCIPAL PLACE OF BUSINESS IN AUSTRALIA

Level 1 117 Stirling Highway Nedlands WA 6009 Australia TEL (61) 8 9389 3000 FAX (61) 8 9389 3033

INTERIM REPORT 2014/15

PRINCIPAL SHARE REGISTRARS AND TRANSFER OFFICE

MUFG Fund Services (Bermuda) Limited The Belvedere Building 69 Pitts Bay Road Pembroke HM08 Bermuda

BRANCH SHARE REGISTRARS AND TRANSFER OFFICE IN HONG KONG

Tricor Secretaries Limited Level 22 Hopewell Centre 183 Queen’s Road East Wanchai, Hong Kong

BRANCH SHARE REGISTRARS AND TRANSFER OFFICE IN AUSTRALIA

PRINCIPAL BANKERS

Australia and New Zealand Banking Group Limited Hang Seng Bank Limited Standard Chartered Bank (Hong Kong) Limited Bank of Communications Westpac Banking Corporation

WEBSITE

www.brockmanmining.com www.irasia.com/listco/hk/brockmanmining/ index.htm

STOCK CODE

Main Board of The Stock Exchange of Hong Kong Limited: 159 Australian Securities Exchange: BCK

Computershare Investor Services Pty Ltd Level 2, Reserve Bank Building 45 St Georges Terrace Perth WA 6000

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

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Six months ended
31 December
2014 2013
HK$’000 HK$’000
Note (Unaudited) (Unaudited)
Continuing operations
Revenue 5 31,336 29,077
Cost of sales 8 (36,355) (29,621)
Gross loss (5,019) (544)
Other income 9 729 3,420
Other losses 10 (6,879) (87)
Selling and administrative expenses 8 (43,594) (55,888)
Exploration and evaluation expenses 8 (53,571) (50,081)
Impairment of mining properties 14 (125,000) –
Share of loss of joint ventures (4,476) (3,900)
Finance costs 11 – (427)
Loss before income tax (237,810) (107,507)
Income tax credit 12 2,050 –
Loss for the period from continuing
operations (235,760) (107,507)
Discontinued operation
Profit for the period from discontinued
operation 7 – 578
Loss for the period (235,760) (106,929)
Other comprehensive loss:
Item that may be reclassified to profit or loss
Exchange differences arising from
translation of foreign operations (269,955) (51,898)
Other comprehensive loss for the period (269,955) (51,898)
Total comprehensive loss for the period (505,715) (158,827)
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INTERIM REPORT 2014/15

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Six months ended
31 December
2014 2013
HK$’000 HK$’000
Note (Unaudited) (Unaudited)
Loss for the period attributable to:
Equity holders of the Company (235,760) (105,268)
Non-controlling interests – (1,661)
(235,760) (106,929)
(Loss)/income for the period attributable to
equity holders of the Company
arising from:
Continuing operations (235,760) (105,846)
Discontinued operation – 578
(235,760) (105,268)
Total comprehensive loss attributable to:
Equity holders of the Company (505,715) (157,681)
Non-controlling interests – (1,146)
(505,715) (158,827)
Total comprehensive (loss)/income
attributable to equity holders of
the Company arising from:
Continuing operations (505,715) (157,738)
Discontinued operation – 57
(505,715) (157,681)
(Loss)/earnings per share from continuing
and discontinued operations
attributable to the equity holders of
the Company during the period HK cents HK cents
Basic (loss)/earnings per share
Continuing operations 13 (2.81) (1.34)
Discontinued operation 13 – 0.01
(2.81) (1.33)
Diluted (loss)/earnings per share
Continuing operations 13 (2.81) (1.34)
Discontinued operation 13 – 0.01
(2.81) (1.33)
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The notes on pages 12 to 34 form an integral part of this condensed consolidated financial information.

CONDENSED CONSOLIDATED BALANCE SHEET

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As at
31 December 30 June
2014 2014
HK$’000 HK$’000
Note (Unaudited) (Audited)
Non-current assets
Mining properties 14 2,986,334 3,536,267
Property, plant and equipment 15 30,062 33,242
Interest in joint ventures 643 1,264
Other non-current assets 14,398 14,488
3,031,437 3,585,261
Current assets
Inventories 6,374 11,857
Trade receivables 16 440 –
Other receivables, deposits and
prepayments 6,788 8,117
Amounts due from related parties 22 3,682 2,993
Cash and cash equivalents 140,254 223,698
157,538 246,665
Total assets 3,188,975 3,831,926
Equity
Share capital 18 838,198 838,198
Reserves 1,429,903 1,941,198
Total equity attributable to the
equity holders of the Company 2,268,101 2,779,396
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INTERIM REPORT 2014/15

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As at
31 December 30 June
2014 2014
HK$’000 HK$’000
Note (Unaudited) (Audited)
Non-current liabilities
Other payables – 26,865
Deferred income tax liabilities 20 795,867 920,561
Provisions 1,413 1,660
797,280 949,086
Current liabilities
Trade payables 17 11,374 9,540
Other payables and accrued charges 110,210 91,070
Amounts due to related parties 22 2,010 2,834
123,594 103,444
Total liabilities 920,874 1,052,530
Total equity and liabilities 3,188,975 3,831,926
Net current assets 33,944 143,221
Total assets less current liabilities 3,065,381 3,728,482
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The notes on pages 12 to 34 form an integral part of this condensed consolidated financial information.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

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Attributable to equity holders of the Company
Statutory Share-based Non-
Share Share reserve compensation Translation Accumulated Other controlling
capital premium (Note) reserve reserve losses reserve Total interests Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
Balance at 1 July 2013
(Audited) 789,448 4,313,856 5,418 66,639 (291,041) (2,633,310) 462,461 2,713,471 43,075 2,756,546
Comprehensive loss
Loss for the period – – – – – (105,268) – (105,268) (1,661) (106,929)
Other comprehensive income
Exchange differences arising
on translation of foreign
operations – – – – (52,413) – – (52,413) 515 (51,898)
Total other comprehensive
(loss)/income for the period – – – – (52,413) – – (52,413) 515 (51,898)
Total comprehensive loss
for the period – – – – (52,413) (105,268) – (157,681) (1,146) (158,827)
Transactions with equity
holders
Appropriations to statutory
reserve – – 1,493 – – (1,344) – 149 (149) –
Share-based compensation – – – 14,082 – – – 14,082 – 14,082
Total transactions with
equity holders – – 1,493 14,082 – (1,344) – 14,231 (149) 14,082
Balance at 31 December
2013 (Unaudited) 789,448 4,313,856 6,911 80,721 (343,454) (2,739,922) 462,461 2,570,021 41,780 2,611,801

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INTERIM REPORT 2014/15

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Attributable to equity holders of the Company
Statutory Share-based
Share Share reserve compensation Translation Accumulated Other
capital premium (Note) reserve reserve losses reserve Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
Balance at 1 July 2014
(Audited) 838,198 4,460,106 7,670 88,080 (230,384) (2,842,499) 458,225 2,779,396
Comprehensive loss
Loss for the period – – – – – (235,760) – (235,760)
Other comprehensive
income
Exchange differences
arising on translation of
foreign operations – – – – (269,955) – – (269,955)
Total other comprehensive
loss for the period – – – – (269,955) – – (269,955)
Total comprehensive loss
for the period – – – – (269,955) (235,760) – (505,715)
Transactions with equity
holders
Appropriations to statutory
reserve – – 1,766 – – (1,766) – –
Share-based
compensation – – – (5,580) – – – (5,580)
Total transactions with
equity holders – – 1,766 (5,580) – (1,766) – (5,580)
Balance at 31 December
2014 (Unaudited) 838,198 4,460,106 9,436 82,500 (500,339) (3,080,025) 458,225 2,268,101
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Note: The statutory reserves represent general reserve funds appropriated from the profit after tax of a subsidiary established in the People’s Republic of China (the “PRC”) in accordance with the PRC laws and regulations.

The notes on pages 12 to 34 form an integral part of this condensed consolidated financial information.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

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Six months ended
31 December
2014 2013
HK$’000 HK$’000
(Unaudited) (Unaudited)
Cash flows from operating activities
Continuing operations (74,905) (69,675)
Discontinued operation – 7,067
Net cash used in operating activities (74,905) (62,608)
Cash flows from investing activities
Continuing operations
— Interest received 648 3,139
— Proceeds from disposal of property, plant
and equipment 46 225
— Purchases of property, plant and equipment (789) (1,710)
–
— Additions of mining properties (141)
— Investment in joint ventures (3,988) (4,405)
Discontinued operation – (1,804)
Net cash used in investing activities (4,083) (4,696)
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INTERIM REPORT 2014/15

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Six months ended
31 December
2014 2013
HK$’000 HK$’000
(Unaudited) (Unaudited)
Cash flows from financing activities
Continuing operations
— Proceeds from issuance of fixed rate bonds – 31,200
Discontinued operation – (6,158)
Net cash generated from financing activities – 25,042
Net decrease in cash and cash equivalents (78,988) (42,262)
Cash and cash equivalents at beginning of the period 223,698 252,994
Effects of foreign exchange rate changes (4,456) 4,157
Cash and cash equivalents at end of the period 140,254 214,889
Cash and cash equivalents represented by
Bank balances and cash 140,254 214,889
Less: Cash and cash equivalents included in assets of
disposal group classified as held for sale – (11,106)
140,254 203,783
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The notes on pages 12 to 34 form an integral part of this condensed consolidated financial information.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION

1 GENERAL INFORMATION

Brockman Mining Limited (the “Company”) and its subsidiaries (collectively, the “Group”) principally engage in the acquisition, exploration and towards future development of iron ore projects in Australia; and in the exploitation, processing and sales of mineral resources, including copper ore concentrates and other mineral ore products in the People’s Republic of China (the “PRC”).

The Company is a public limited company incorporated in Bermuda as an exempted company with limited liability and its shares are listed on The Stock Exchange of Hong Kong Limited (the “SEHK”) and Australian Securities Exchange Limited (the “ASX”). The address of its registered office is Clarendon House, 2 Church Street, Hamilton HM11, Bermuda.

This condensed consolidated financial information is presented in Hong Kong dollars (“HK$”), unless otherwise stated. This condensed consolidated financial information has been approved for issue by the Board of Directors on 24 February 2015. This condensed consolidated financial information has not been audited.

Key events

The Group reassessed the fair value of its mining properties during the period in view of the recent fluctuation of metal prices. Further details are given in Note 14.

2 BASIS OF PREPARATION

This condensed consolidated financial information for the six months ended 31 December 2014 has been prepared in accordance with International Accounting Standard (“IAS”) 34 “Interim Financial Reporting” and with the applicable disclosure requirements of Appendix 16 of the Rules Governing the Listing of Securities on the SEHK.

The condensed consolidated financial information should be read in conjunction with the annual financial statements for the year ended 30 June 2014, which have been prepared in accordance with International Financial Reporting Standards (“IFRSs”).

During the six months ended 31 December 2014, the Group had cash outflows used in operating activities of HK$74,905,000. Based on the directors’ review of the cash flow projections, taken into account the Group’s expected cash flows from operations and available financial resources, the Group is expected to have sufficient financial resources to satisfy its future working capital requirements, and to meet its financial obligations as and when required for the next twelve months from the balance sheet date. Accordingly, the directors consider that it is appropriate to prepare the Group’s condensed consolidated financial information on a going concern basis.

INTERIM REPORT 2014/15

3 PRINCIPAL ACCOUNTING POLICIES

Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 30 June 2014, as described in those annual financial statements.

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual profit or loss.

The preparation of condensed consolidated financial information requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

In preparing this condensed consolidated financial information, the significant judgments made by management in applying the Group’s accounting policies and key sources of estimation uncertainty were the same as those that applied to the annual financial statements for the year ended 30 June 2014, with the exception of changes in estimates that are required in determining the provision for income taxes.

(a) Amended standards and interpretation adopted by the Group

The following amendments to standards and interpretation are mandatory for accounting periods beginning on or after 1 July 2014. The adoption of these amendments to standards and interpretation does not have any significant impact to the results and financial position of the Group.

IAS 32 (Amendment)

IAS 36 (Amendment) IAS 39 (Amendment)

IFRIC-Int 21 IFRS 10, IFRS 12 and IAS 27 (Revised 2011) (Amendment) Annual Improvements Project 2012 Annual Improvements Project 2013 IAS 19 (Amendment)

Financial Instruments: Presentation — Offsetting Financial Assets and Financial Liabilities Impairments of Assets Financial Instruments: Recognition and Measurement Levies Investment Entities Annual Improvements 2010–2012 Cycle Annual Improvements 2011–2013 Cycle Employee Benefits

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION

3 PRINCIPAL ACCOUNTING POLICIES (Continued)

(b) New standards and amendments to standards that are not yet effective and have not been early adopted by the Group

		Effective for
		annual periods
		beginning on
		or after
IAS 16 and IAS 38 (Amendment)	Classification of Acceptable Methods of	1 January 2016
	Depreciation and Amortisation
IAS 16 and IAS 41 (Amendment)	Agriculture: Bearer Plants	1 January 2016
IAS 27 (Amendment)	Equity Method in Separate Financial	1 January 2016
	Statements
IFRS 9	Financial Instruments	1 January 2018
IFRS 10 and IAS 28 (Amendment)	Sale or Contribution of Assets between	1 January 2016
	an Investor and its Associate or
	Joint Venture
IFRS 11 (Amendment)	Accounting for Acquisitions of Interests	1 January 2016
	in Joint Operations
IFRS 14	Regulatory Deferral Accounts	1 January 2016
IFRS 15	Revenue from Contracts with Customers	1 January 2017
Annual Improvements Project 2014	Annual Improvements 2012–2014 Cycle	1 January 2016

The Group is in the process of making an assessment of the impact of the above new/revised standards and amendments to standards and is not yet in a position to state the impact on the Group’s results of operations and financial position.

4 FINANCIAL RISK MANAGEMENT

(a) Financial risk factors

The Group’s activities expose itself to a variety of financial risks: market risk (including foreign exchange risk, commodities price risk, cash flow and fair value interest rate risk), credit risk and liquidity risk.

The interim condensed consolidated financial information do not include all financial risk management information and disclosures required in the annual financial statements, and should be read in conjunction with the Group’s annual financial statements as at 30 June 2014.

There have been no changes in the risk management or in any risk management policies since 30 June 2014.

INTERIM REPORT 2014/15

4 FINANCIAL RISK MANAGEMENT (Continued)

(b) Liquidity risk

The Group monitors and maintains a level of cash and cash equivalents deemed adequate by management to finance the Group’s operations and mitigate the effects of fluctuations in cash flows.

The Group generally finances its short term funding requirement with cash generated from operations and equity funding. The Group invests surplus cash in time deposits with appropriate maturities to provide sufficient head-room to finance the Group’s operations. The Group’s ability to deliver its Marillana iron ore project is reliant on access to appropriate and timely export infrastructure and funding.

The current ratio, being the proportion of total current assets against current liabilities, is measured at 1.27 times compared to 2.38 times as at 30 June 2014.

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

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Carrying
Within Total un- amount at
1 year of discounted year end
demand 1–2 years 2–5 years cash flows date
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
31 December 2014
(Unaudited)
Non-derivative financial
liabilities:
Trade payables 11,374 – – 11,374 11,374
Other payables 55,370 – – 55,370 53,952
Amounts due to related parties 2,010 – – 2,010 2,010
68,754 – – 68,754 67,336
30 June 2014 (Audited)
Non-derivative financial
liabilities:
Trade payables 9,540 – – 9,540 9,540
Other payables 34,817 28,952 – 63,769 61,682
Amounts due to related parties 2,834 – – 2,834 2,834
47,191 28,952 – 76,143 74,056
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION

4 FINANCIAL RISK MANAGEMENT (Continued)

(c) Fair value estimation

The Group’s financial instruments carried at fair value as at 31 December 2014 and 30 June 2014 are measured by level of the following fair value hierarchy.

Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2 Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices)

Level 3 Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs)

As at 31 December 2014, the Group does not have any financial instruments that are measured at fair value (30 June 2014: Nil).

The fair values of the Group’s financial assets, including trade and other receivables, deposits, amounts due from related parties, restricted cash and cash and cash equivalents; and the Group’s financial liabilities, including trade and other payables, bank borrowings, amounts due to related parties and non-controlling interests, approximate their carrying amounts due to their short-term maturities.

5 REVENUE

Revenue represents the amounts received and receivable for sales of mineral ore products. An analysis of the Group’s revenue for the period is as follows:

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Six months ended
31 December
2014 2013
HK$’000 HK$’000
(Unaudited) (Unaudited)
Continuing operations
Sales of copper ore concentrates 31,336 29,077
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INTERIM REPORT 2014/15

6 SEGMENT INFORMATION

Operating segments are reported in a manner consistent with internal reporting provided to executive directors of the Company who are responsible for allocating resources and assessing performance of the operating segments. The executive directors consider the performance of the Group from a business perspective.

The Group’s reportable operating segments are as follows:

Mineral tenements in Australia — tenements acquisition, exploration and towards future development of iron ore projects in Western Australia
—
Mining operations in the PRC exploitation, processing and sales of copper ore concentrates in the PRC
Discontinued operation — provision of limousine rental services in Hong Kong Transportation services and the PRC and provision of airport shuttle bus (Note 7) services in Hong Kong

The Group’s chief operating decision-maker assesses the performance of the operating segments based on adjusted operating profit/(loss). Finance costs are not included in the result for each operating segment that is reviewed by executive directors of the Company.

Segment assets reported to executive directors of the Company is measured in a manner consistent with that in the consolidated balance sheet.

Others primarily relate to the provision of corporate services for investment holding companies. These activities are excluded from the reportable operating segments and are presented to reconcile to the totals included in the Group’s condensed consolidated statement of comprehensive income and balance sheet.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION

6 SEGMENT INFORMATION (Continued)

The following is an analysis of the Group’s revenue and results by business segment:

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Discontinued
Continuing operations operation
Mining Mineral
operation tenements Transportation
in the PRC in Australia Others Sub-total services Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
For the six months ended 31 December 2014 (Unaudited):
Segment revenue from
external customers 31,336 – – 31,336 – 31,336
Segment results (139,923) (85,229) (8,182) (233,334) – (233,334)
–
Share of loss of joint ventures (4,476) (4,476)
Loss before income tax (237,810) – (237,810)
Other information:
Depreciation of property,
–
plant and equipment (2,728) (576) (379) (3,683) (3,683)
Impairment of mining properties
– – –
(Note 14) (125,000) (125,000) (125,000)
– – –
Amortisation of mining properties (9,234) (9,234) (9,234)
– – –
Relinquish of mining properties (6,833) (6,833) (6,833)
Exploration and evaluation
expenses (3,461) (50,110) – (53,571) – (53,571)
Income tax credit – 2,050 – 2,050 – 2,050
For the six months ended 31 December 2013 (Unaudited):
Segment revenue from
external customers 29,077 – – 29,077 58,935 88,012
Segment results (16,611) (53,362) (33,207) (103,180) 1,690 (101,490)
–
Share of loss of joint ventures (3,900) (3,900)
Finance costs (427) (456) (883)
(Loss)/profit before income tax (107,507) 1,234 (106,273)
Other information:
Depreciation of property,
plant and equipment (2,688) (400) (378) (3,466) (7,312) (10,778)
– – –
Amortisation of mining properties (8,326) (8,326) (8,326)
Exploration and evaluation
expenses (7,888) (42,193) – (50,081) – (50,081)
Finance costs – – (427) (427) (456) (883)
– – – –
Income tax expense (656) (656)
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Revenue from mining operation in the PRC amounted to HK$31,336,000 (six months ended 31 December 2013: HK$29,077,000) represents sales of copper concentrate to a single customer.

INTERIM REPORT 2014/15

6 SEGMENT INFORMATION (Continued)

The following is an analysis of the Group’s assets by business segment as at 31 December 2014:

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Mining Mineral
operation tenements
in the PRC in Australia Others Total
HK$’000 HK$’000 HK$’000 HK$’000
As at 31 December 2014 (Unaudited):
Segment assets 379,850 2,681,021 128,104 3,188,975
Total segment assets include:
Interests in joint ventures – 643 – 643
Additions to property, plant and
equipment 503 113 173 789
As at 30 June 2014 (Audited):
Segment assets 521,442 3,114,123 196,361 3,831,926
Total segment assets include:
Interests in joint ventures – 1,264 – 1,264
Additions to property, plant and
equipment 2,133 518 39 2,690
Additions to mining properties – 141 – 141
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7 DISCONTINUED OPERATION

On 24 October 2013, the Company and Mr. Leung Chi Yan, Danny (“Mr. Leung”), a director of Perryville Group Limited, entered into a sale and purchase agreement pursuant to which the Company agreed to sell the entire equity interest in Perryville Group to Mr. Leung at a consideration of HK$45,000,000 (“Disposal”). Perryville Group is principally engaged in the provision of limousine and airport shuttle transportation services which represents the reportable segment of transportation services.

As part of the Disposal, the payable by Perryville Group to the Company of HK$11,000,000 was assigned to Mr. Leung, the adjusted consideration amounted to HK$34,000,000 which represents the consideration for the Company’s equity interest in Perryville Group at the date of Disposal in the separate financial statement of the Company.

The Disposal was completed on 19 February 2014 and the Company ceased to have any control and equity interests in Perryville Group.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION

7 DISCONTINUED OPERATION (Continued)

The results of Perryville Group are presented in the condensed consolidated financial information as discontinued operation in accordance with IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations”. The condensed consolidated statement of comprehensive income and consolidated statement of cash flows distinguish discontinued operation from continuing operations.

Profit from discontinued operation

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Six months ended
31 December
2013
HK$’000
(Unaudited)
Revenue 58,935
Expenses (57,701)
Profit before income tax 1,234
Income tax expense (656)
Profit for the period and total comprehensive income
from discontinued operation 578
Profit for the period and total comprehensive income
from discontinued operations attributable to:
— Equity holders of the Company 578
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8 EXPENSES BY NATURE

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Six months ended
31 December
2014 2013
HK$’000 HK$’000
(Unaudited) (Unaudited)
Amortisation of mining properties (included in
cost of sales) 9,234 8,326
Cost of inventories 15,436 6,776
Depreciation of property, plant and equipment 3,683 3,466
Equity-settled share-based compensation for
consultants (1,105) 520
Operating lease rentals 5,469 5,694
Staff costs 33,158 58,146
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INTERIM REPORT 2014/15

8 EXPENSES BY NATURE (Continued)

Staff costs include:

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Six months ended
31 December
2014 2013
HK$’000 HK$’000
(Unaudited) (Unaudited)
Wages, salaries and welfares 32,559 36,008
Directors’ emoluments (including share-based
compensation) 2,287 11,626
Retirement benefit scheme contributions 1,578 1,719
Share-based compensation for employees (3,266) 8,793
33,158 58,146
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9 OTHER INCOME

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Six months ended
31 December
2014 2013
HK$’000 HK$’000
(Unaudited) (Unaudited)
Interest on bank deposits 648 3,139
Others 81 281
729 3,420
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10 OTHER LOSSES

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----- Start of picture text -----

Six months ended
31 December
2014 2013
HK$’000 HK$’000
(Unaudited) (Unaudited)
Loss on disposal of property, plant and equipment 46 87
Relinquish of mining properties (Note 14) 6,833 –
6,879 87
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION

11 FINANCE COSTS

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Six months ended
31 December
2014 2013
HK$’000 HK$’000
(Unaudited) (Unaudited)
Interests on fixed rate bond – 427
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12 INCOME TAX CREDIT

Income tax expense is recognised based on management’s estimate of the weighted average annual income tax rate expected for the full financial year.

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Six months ended
31 December
2014 2013
HK$’000 HK$’000
(Unaudited) (Unaudited)
Deferred income tax
— Release upon relinquish of mining properties
–
(Note 14) (2,050)
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During the period ended 31 December 2014, the Group have relinquished two tenements E45/1845 Mt Stuart and E47/1738 Mt Florence with an allocated fair value of HK$2,733,000 and HK$4,100,000 respectively to the Government of Western Australia. The disposal reduces the deferred income tax liability brought to the account following the business combination relating to the value attributed to the mining properties acquired. The reduction in the deferred income tax liability as a result of the disposal is HK$2,050,000.

INTERIM REPORT 2014/15

13 (LOSS)/EARNINGS PER SHARE

Basic loss/earnings per share is calculated by dividing the loss/earnings attributable to the equity holders of the Company by the weighted average number of ordinary shares in issue during the period.

Diluted loss/earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.

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Six months ended
31 December
2014 2013
(Unaudited) (Unaudited)
(Loss)/profit for the period attributable to the
equity holders of the Company (HK$’000)
— Continuing operations (235,760) (105,846)
— Discontinued operation – 578
(235,760) (105,268)
Weighted average number of ordinary shares
for the purpose of calculating the basic
earnings/(loss) per share (thousands) 8,381,982 7,894,482
(Loss)/earnings per share attributable to the
equity holders of the Company
Basic: (HK cents)
— Continuing operations (2.81) (1.34)
— Discontinued operation – 0.01
(2.81) (1.33)
Diluted: (HK cents)
— Continuing operations (2.81) (1.34)
— Discontinued operation – 0.01
(2.81) (1.33)
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Diluted loss/earnings per share is the same as basic loss/earnings per share for the six months ended 31 December 2014 and 2013 because the effect of the assumed conversion of the convertible bonds and share options of the Company during these periods was antidilutive.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION

14 MINING PROPERTIES

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Mining Mining
properties right
in Australia in the PRC Total
HK$’000 HK$’000 HK$’000
Balance as at 1 July 2013 2,984,261 510,171 3,494,432
Additions 141 – 141
–
Amortisation during the period (7,850) (7,850)
Exchange differences (85,490) 6,066 (79,424)
Balance as at 31 December 2013
(Unaudited) 2,898,912 508,387 3,407,299
Balance as at 1 July 2014 3,076,212 460,055 3,536,267
–
Amortisation during the period (8,957) (8,957)
–
Impairment loss (125,000) (125,000)
–
Relinquish (6,833) (6,833)
Exchange differences (409,838) 695 (409,143)
Balance as at 31 December 2014
(Unaudited) 2,659,541 326,793 2,986,334
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Mining properties in Australia

The mining properties in Australia represent the carrying value of mining and exploration projects in Australia (including the Marillana iron ore project) acquired by the Group.

During the period ended 31 December 2014, the Group has relinquished two tenements E45/1845 Mt Stuart and E47/1738 Mt Florence with an allocated fair value of HK$2,733,000 and HK$4,100,000 respectively to the Government of Western Australia. As a result, a loss of HK$6,833,000 has been recognised in the condensed consolidated income statement (Note 10).

As at 31 December 2014, the Group assessed and concluded that the recent sustained iron ore price weakness is considered to be an impairment indicator which triggered the need to perform an impairment assessment. As at 31 December 2014, the recoverable amount is determined by the value in-use calculation.

Our assessment has made reference to industry experts’ long term iron ore price and exchange rate forecasts. The assessment concluded that no impairment of the carrying value was required for the period ended 31 December 2014 (six months ended 31 December 2013: nil).

INTERIM REPORT 2014/15

14 MINING PROPERTIES (Continued)

Mining properties in Australia (Continued)

The ultimate recoupment of the carrying value of mining properties is dependent on the successful development and commercial exploitation of or sale of interest in, the mining properties.

Mining right in the PRC

Mining right in the PRC represents the right to conduct mining activities in Damajianshan, Honghe Zhou, Luchun County, Yunnan. The mine is located on land in the PRC to which the Group has no formal title. Yunnan State Land Resources Bureau issued the mining right certificate to Luchun in January 2005 and the mining right certificates has been renewed several times subsequently. In July 2014, the mining right certificate was renewed for a period of two years expiring in July 2016.

With reference to an independent legal opinion received by Luchun, there is no legal barrier for Luchun to renew its mining right certificate when it expires. The independent legal opinion also confirmed that there was no illegal activity undertaken by Luchun in operating the mine between the expiry of the mining right and the granting of the mining right certificate and there was no penalty exerted by the government regarding Luchun’s mining operation.

Accordingly, the directors of the Company are of the opinion that the Group will be able to continuously renew the mining right and the business licenses of respective mining subsidiaries at minimal charges.

The mining right in the PRC is amortised using the units of production method based on the proven and probable mineral reserves under the assumption that the Group can renew the mining right in the future until all proven and probable reserves have been mined.

As at 31 December 2014, the Group assessed and concluded that the downturn of global economy and recent sustained copper price weakness are considered to be impairment indicators which triggered the need to perform an impairment assessment. The directors have taken into consideration fair value less costs of disposal and value-in-use calculations to determine the recoverable amount of the mining right. As at 31 December 2014, the recoverable amount is determined by the fair value less costs of disposal calculation and measured by Level 3 of fair value hierarchy.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION

14 MINING PROPERTIES (Continued)

Mining right in the PRC (Continued)

Key assumptions adopted by management are summarised as follows:

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31 December 30 June
2014 2014
Copper price assumption 2015: US$5,500/t 2014: US$7,020/t
(with reference to LME spot price and 2016: US$6,279/t 2015: US$7,053/t
forecast by industry experts) 2017: US$6,380/t 2016: US$7,183/t
2018: US$6,167/t 2017: US$7,466/t
2019: US$6,121/t 2018: US$7,531/t
2020 onwards: 2019 onwards:
US$6,596/t US$7,419/t
Discount rate 17.8% 17.8%
Production capacity 800 tonnes to 800 tonnes to
1,300 tonnes 1,300 tonnes
per day per day
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Based on the above impairment assessment, an impairment of approximately HK$125,000,000 was recognised for the period (six months ended 31 December 2013: Nil) primarily due to revision of forecast copper price.

These calculations use cash flow projections based on financial projections approved by management. If the long-term copper price adopted in the valuation had been 5% lower, the recoverable amount would have reduced by approximately HK$12,608,000 and further impairment of HK$12,608,000 would be required.

15 PROPERTY, PLANT AND EQUIPMENT

During the six months ended 31 December 2014, the Group acquired assets for continuing operations with a cost of HK$789,000 (six months ended 31 December 2013: HK$1,710,000).

INTERIM REPORT 2014/15

16 TRADE RECEIVABLES

The Group’s credit terms granted to customers are made under contractual arrangement whereby provisional payment is received within 30 to 90 days from the delivery date. Before accepting any new customers, the Group will review the potential customer’s credit quality and approve its credit limits. Credit limits attributed to customers are reviewed regularly.

The ageing analysis of the trade receivables, based on the invoice date at the respective balance sheet dates are as follows:

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As at
31 December 30 June
2014 2014
HK$’000 HK$’000
(Unaudited) (Audited)
0–30 days 440 –
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17 TRADE PAYABLES

Trade payables of the Group principally represent amounts outstanding to suppliers. The normal credit period is between 30 days and 90 days. In certain circumstances, the credit period has been extended to over 90 days. The following is an ageing analysis of trade payables of the Group at the respective balance sheet dates:

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As at
31 December 30 June
2014 2014
HK$’000 HK$’000
(Unaudited) (Audited)
0–30 days 6,330 4,538
31–60 days – 157
61–90 days – 191
Over 90 days 5,044 4,654
11,374 9,540
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION

18 SHARE CAPITAL

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Number of Share
shares capital
’000 HK$’000
Ordinary shares of HK$0.10 each
Authorised
As at 30 June 2014 and 31 December 2014 10,000,000 1,000,000
Issued and fully paid
As at 30 June 2014 and 31 December 2014 8,381,982 838,198
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19 SHARE OPTION SCHEME

Share option scheme of the Company

The 2012 share option scheme (the “2012 Share Option Scheme”) of the Company was adopted by the Company pursuant to the approval by shareholders at the Annual General Meeting on 13 November 2012. The 2012 Share Option Scheme replaced the old share option scheme which expired in August 2012 for the primary purpose of providing incentives or rewards to selected participants for their contribution to the Group. The 2012 Share Option Scheme is valid and effective for a period of ten years from the date of its adoption to August 2022. Share options granted under the old share option scheme prior to its expiry shall continue to be valid and exercisable pursuant to its rule.

The fair value of the employee services and consultancy services received in exchange for the grant of the share options is recognised as an expense, with a corresponding adjustment to employee share-based compensation reserve, over the vesting period. At the end of each reporting period, the Company revises its estimates of the number of options that are expected to vest. It recognises the impact of the revision to original estimates, if any, in the statement of comprehensive income, with a corresponding adjustment to equity.

INTERIM REPORT 2014/15

19 SHARE OPTION SCHEME (Continued)

Share option scheme of the Company (Continued)

Details of specific categories of options are as follows:

			Number of
			share options		Exercise price
Option type	Date of grant	Vesting period	granted	Exercise period	(HK$)
2011B	14 December 2011	14 December 2011 —	1,000,000	14 December 2014 —	0.720
		13 December 2014		13 December 2015
	14 December 2011	14 December 2011 —	1,000,000	14 December 2013 —	0.720
		13 December 2013		13 December 2015
	14 December 2011	14 December 2011 —	3,000,000	14 December 2012 —	0.720
		13 December 2012		13 December 2015
	14 December 2011	Immediate	2,000,000	14 December 2011 —	0.720
				13 December 2015
2012A	28 March 2012	28 March 2012 —	5,000,000	28 March 2015 —	0.720
		27 March 2015		13 December 2015
	28 March 2012	28 March 2012 —	5,000,000	28 March 2014 —	0.720
		27 March 2014		13 December 2015
	28 March 2012	28 March 2012 —	39,000,000	28 March 2013 —	0.720
		27 March 2013		13 December 2015
	28 March 2012	Immediate	29,000,000	28 March 2012 —	0.720
				13 December 2015
2013A	14 January 2013	14 January 2013 —	88,100,000	14 January 2014 —	0.717
		14 January 2014		14 January 2016
	14 January 2013	14 January 2013 —	88,100,000	14 January 2015 —	0.967
		14 January 2015		14 January 2016
2013B	28 February 2013	28 February 2013 —	3,750,000	28 February 2014 —	0.717
		28 February 2014		28 February 2016
	28 February 2013	28 February 2013 —	3,750,000	28 February 2015 —	0.967
		28 February 2015		28 February 2016
2013C	20 May 2013	20 May 2013 —	77,350,000	20 May 2014 —	0.717
		20 May 2014		20 May 2016
	20 May 2013	20 May 2013 —	77,350,000	20 May 2015 —	0.967
		20 May 2015		20 May 2016

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION

19 SHARE OPTION SCHEME (Continued)

Share option scheme of the Company (Continued)

Movements in the number of share options outstanding during the period ended 31 December 2014 are as follows:

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Reclassified Lapsed Outstanding
Outstanding during during as at
Option as at the period the period 31 December
type 1 July 2014 (Note 1) (Note 2) 2014
Directors
Luk Kin Peter Joseph 2012A 50,000,000 (50,000,000) – –
Chan Kam Kwan, Jason 2012A 5,000,000 – – 5,000,000
2013C 7,200,000 – – 7,200,000
Lau Kwok Kuen, Eddie 2012A 1,000,000 – (1,000,000) –
2013C 1,500,000 – (1,500,000) –
Uwe Henke Von Parpart 2012A 1,000,000 – – 1,000,000
2013C 1,500,000 – – 1,500,000
Yip Kwok Cheung, Danny 2012A 1,000,000 – – 1,000,000
2013C 1,500,000 – – 1,500,000
Kwai Sze Hoi 2013C 70,000,000 – – 70,000,000
Liu Zhengui 2013C 30,000,000 – – 30,000,000
Warren Talbot Beckwith 2013C 20,000,000 – – 20,000,000
Ross Stewart Norgard 2013C 1,500,000 – – 1,500,000
Kwai Kwun, Lawrence 2013C 15,000,000 – – 15,000,000
Sub-total 206,200,000 (50,000,000) (2,500,000) 153,700,000
Employees 2011B 5,400,000 – (1,000,000) 4,400,000
2012A – 50,000,000 – 50,000,000
2013A 176,200,000 – (47,000,000) 129,200,000
2013B 7,200,000 – – 7,200,000
Sub-total 188,800,000 50,000,000 (48,000,000) 190,800,000
Consultants 2012A 20,000,000 – (20,000,000) –
2013C 5,000,000 – (5,000,000) –
Sub-total 25,000,000 – (25,000,000) –
Total 420,000,000 – (75,500,000) 344,500,000
Weighted average
exercise price 0.82 – 0.81 0.82
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Notes:

Mr. Luk Kin Peter Joseph has resigned as an Executive Director and Chief Executive Officer of the Company on 5 August 2014. After the resignation, Mr. Luk Kin Peter Joseph continues to be employed by the Company as an employee. The board offered continuous entitlement to Mr. Luk for the previously granted 50,000,000 share options which were reclassified to options for employees.
A total of 75,500,000 options previously granted to certain directors, employees and consultants were lapsed during the period following their resignation/termination.

INTERIM REPORT 2014/15

19 SHARE OPTION SCHEME (Continued)

Share option scheme of the Company (Continued)

Movements in the number of share options outstanding during the period ended 31 December 2013 are as follows:

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Outstanding
Outstanding Lapsed as at
Option as at during 31 December
type 1 July 2013 the period 2013
Directors
Luk Kin Peter Joseph 2010C [1] 39,000,000 (39,000,000) –
2012A 50,000,000 – 50,000,000
Chan Kam Kwan, Jason 2010A 1,500,000 – 1,500,000
2012A 5,000,000 – 5,000,000
2013C 7,200,000 – 7,200,000
Lau Kwok Kuen, Eddie 2010A 1,000,000 – 1,000,000
2012A 1,000,000 – 1,000,000
2013C 1,500,000 – 1,500,000
Uwe Henke Von Parpart 2010A 1,000,000 – 1,000,000
2012A 1,000,000 – 1,000,000
2013C 1,500,000 – 1,500,000
Yip Kwok Cheung, Danny 2010A 1,000,000 – 1,000,000
2012A 1,000,000 – 1,000,000
2013C 1,500,000 – 1,500,000
Kwai Sze Hoi 2013C 70,000,000 – 70,000,000
Liu Zhengui 2013C 30,000,000 – 30,000,000
Warren Talbot Beckwith 2013C 20,000,000 – 20,000,000
Ross Stewart Norgard 2013C 1,500,000 – 1,500,000
David Michael Spratt 2013C [2] 1,500,000 (1,500,000) –
Sub-total 236,200,000 (40,500,000) 195,700,000
Employees 2011B 5,400,000 – 5,400,000
2013A 176,200,000 – 176,200,000
2013B 7,500,000 – 7,500,000
2013C 15,000,000 – 15,000,000
Sub-total 204,100,000 – 204,100,000
Consultants 2012A 3,000,000 – 3,000,000
2010B [3] 27,000,000 – 27,000,000
2012A 20,000,000 – 20,000,000
2013C 5,000,000 – 5,000,000
55,000,000 – 55,000,000
Total 495,300,000 (40,500,000) 454,800,000
Weighted average exercise price 0.94 1.96 0.85
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION

19 SHARE OPTION SCHEME (Continued)

Share option scheme of the Company (Continued)

Notes:

A total of 39,000,000 options previously granted to Mr. Luk Kin Peter Joseph were lapsed as a result of the expiry of share option scheme.
David Michael Spratt has resigned as Executive Director of the Company and a total of 1,500,000 options previously granted to him were lapsed during the period.
Among the 27,000,000 options granted to consultants, a total of 13,500,000 options belong to Mr. Warren Talbot Beckwith. As at 31 December 2013, Mr. Beckwith was in aggregate entitled to 33,500,000 share options of the Company.

The fair values of all the share options were calculated using the Binomial model prepared by an independent valuer. The inputs into the model were as follows:

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----- Start of picture text -----

2011B 2012A 2013A 2013B 2013C
Exercise price HK$0.72 HK$0.72 HK$0.717 — HK$0.717 — HK$0.717 —
HK$0.967 HK$0.967 HK$0.967
Volatility 55% 49% 57% 56% 56%
Expected option life 4 years 4 years 3 years 3 years 3 years
Annual risk-free rate 0.649% 0.396% 0.170% 0.273% 0.247%
Expected dividend yield 0% 0% 0% 0% 0%
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The volatility measured at grant date is referenced to the historical volatility of shares of the Company.

During the six months ended 31 December 2014, the Company recognised HK$2,996,000 (six months ended 31 December 2013: HK$14,094,000) as expenses in relation to the share options granted by the Company.

In August 2014, a total of 75,500,000 share options (six months ended 31 December 2013: 1,500,000 options) were lapsed following the resignation/termination of certain directors, employees and consultants. Accordingly, there was a reversal of previously recognised share-based compensation expenses attributed to those resigned/terminated staff and a total of HK$8,576,000 (six months ended 31 December 2013: HK$12,000) was credited to the condensed consolidated income statement.

As at 31 December 2014, the weighted average remaining contractual life of outstanding share options was 1.17 years (30 June 2014: 1.65 years).

No share option had been exercised during the year (30 June 2014: nil).

INTERIM REPORT 2014/15

20 DEFERRED INCOME TAX

The following is the major deferred income tax liabilities recognised by the Group and movements thereon during the current and prior period.

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Accelerated Mining
tax properties
depreciation in Australia Total
HK$’000 HK$’000 HK$’000
At 1 July 2013 (2,975) (893,087) (896,062)
Classified as liabilities held for sale
(Note 7) 2,975 – 2,975
Exchange difference – 25,583 25,583
At 31 December 2013 (Unaudited) – (867,504) (867,504)
At 1 July 2014 – (920,561) (920,561)
Credited to consolidated statement of
comprehensive income (Note 12) – 2,050 2,050
Exchange difference – 122,644 122,644
–
At 31 December 2014 (Unaudited) (795,867) (795,867)
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21 JOINT ARRANGEMENTS

Details of the Group’s interest in the joint arrangements are as follows:

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----- Start of picture text -----

Interest held in
Name of joint ventures share of output Principal activities
North West Infrastructure (Note a) 37% Port and related infrastructure
Irwin-Coglia JV (Note b) 40% Nickel exploration
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Notes:

(a) North West Infrastructure Pty Ltd is a joint venture incorporated in Australia which is seeking to develop port and related infrastructure on behalf of the North West Iron Ore Alliance (“NWIOA”) members.
(b) Irwin-Coglia is an unincorporated joint arrangement operating in Australia for the purpose of exploration activities and holding of tenement interests.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION

22 RELATED PARTY DISCLOSURES

(a) Material related party transactions

Save as disclosed elsewhere in this condensed consolidated financial information, the Group has the following related party transactions during the period:

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Six months ended
31 December
2014 2013
HK$’000 HK$’000
(Unaudited) (Unaudited)
Administrative expenses paid to
a related company (Note) 40 192
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Note: Administrative expenses were paid to a company in which Mr. Luk Kin Peter Joseph, has beneficial interest. Mr. Luk Kin Peter Joseph, has resigned as an Executive Director and Chief Executive Officer of the Company on 5 August 2014.

In the opinion of the directors of the Company, the above related party transactions were carried out in the normal course of business and at fair market terms mutually agreed between the Group and the respective related party.

(b) Related party balances

The amounts due from/to related parties included as current assets or current liabilities represents balances with entities controlled by a key management personnel of the Group are unsecured, interest-free and repayable on demand.

(c) Compensation of key management personnel

The remuneration of directors and other members of key management during the period were as follows:

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Six months ended
31 December
2014 2013
HK$’000 HK$’000
(Unaudited) (Unaudited)
Wages, salaries and other short-term welfare 10,888 17,116
Post-employment benefits 667 599
Termination benefits 2,295 –
Share-based compensation expenses (Note 19) (1,738) 5,307
12,112 23,022
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23 INTERIM DIVIDEND

The Board of Directors does not recommend the payment of an interim dividend for the six months ended 31 December 2014 (six months ended 31 December 2013: Nil).

24 EVENTS OCCURRING AFTER THE BALANCE SHEET DATE

There is no significant event occurred subsequently after the balance sheet date.

INTERIM REPORT 2014/15

REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION

TO THE BOARD OF DIRECTORS OF BROCKMAN MINING LIMITED

(incorporated in Bermuda with limited liability)

INTRODUCTION

We have reviewed the interim financial information set out on pages 4 to 34, which comprises the condensed consolidated balance sheet of Brockman Mining Limited (the “Company”) and its subsidiaries (together, the “Group”) as at 31 December 2014 and the related condensed consolidated statements of comprehensive income, changes in equity and cash flows for the sixmonth period then ended, and a summary of significant accounting policies and other explanatory notes. The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited require the preparation of a report on interim financial information to be in compliance with the relevant provisions thereof and International Accounting Standard 34 “Interim Financial Reporting”. The directors of the Company are responsible for the preparation and presentation of this interim financial information in accordance with International Accounting Standard 34 “Interim Financial Reporting”. Our responsibility is to express a conclusion on this interim financial information based on our review and to report our conclusion solely to you, as a body, in accordance with our agreed terms of engagement and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.

SCOPE OF REVIEW

We conducted our review in accordance with International Standard on Review Engagements 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

CONCLUSION

Based on our review, nothing has come to our attention that causes us to believe that the interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34 “Interim Financial Reporting”.

PricewaterhouseCoopers

Certified Public Accountants

Hong Kong, 24 February 2015

MANAGEMENT DISCUSSION AND ANALYSIS

BUSINESS REVIEW AND FINANCIAL HIGHLIGHTS

The Group’s consolidated revenue from continuing operations for the six months ended 31 December 2014 increased by 7.6% to approximately HK$31.3 million (2013: HK$29.1 million). The increase in revenue reflects an increased sales volume by 14.4% despite the average copper price has dropped by 5.6%.

As at 31 December 2014, the Group’s net asset value amounted to HK$2,268.1 million (30 June 2014: HK$2,779.4 million) and cash and bank balances, totalled HK$140.3 million (30 June 2014: HK$223.7 million).

Loss attributable to equity holders of the Company amounted to HK$235.8 million for the six months ended 31 December 2014 (2013: HK$105.3 million). The change was mainly attributable to the impairment loss charged to the income statement. Operation related production costs and exploration expenses have increased steadily and were in-line with the increased sales volume.

Impairment of Mining Properties in Yunnan, PRC

The recent sustained copper price weakness as demonstrated by weakness after the reporting period with prices hitting US$5,500 per tonne on the LME on 31 January 2015, is considered to be an impairment indicator which triggered the need for an impairment assessment.

Taken into consideration of current copper prices and various valuation outcomes, an impairment loss of approximately of HK$125 million has been recognised in the condensed consolidated income statement.

Basic loss per share for the period was HK2.81 cents (2013: HK1.33 cents).

During the six months ended 31 December 2014, the Group had cash outflows used in operating activities of HK$74.9 million.

OUTLOOK

In year 2015, the Company will continue to actively pursue various infrastructure alternatives, through means of Access Proposal and negotiations with business counterparts, aiming to secure infrastructure solution for the Marillana Project.

MINERAL TENEMENTS

Iron Ore Operations — Western Australia

This segment of the business is comprised of the 100% owned Marillana Iron Ore Project (the “Marillana”or “the Project”), the O p h t h a l m i a I r o n O r e P r o j e c t ( t h e “Ophthalmia”) and other regional exploration.

The net operating loss before income tax expense for the period for this segment and attributable to the Group was HK$85.2 million (2013: HK$53.4 million). Total expenditure associated with mineral exploration for the period ended 31 December 2014 amounted to HK$50.1 million (2013: HK$42.2 million).

INTERIM REPORT 2014/15

Total expenditure associated with mineral exploration and evaluation by each of the projects in Western Australia for the financial periods were summarised as follows:

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Six months ended Year ended
31 December 30 June
2014 2013 2014 2013
Project HK$’000 HK$’000 HK$’000 HK$’000
Marillana 9,255 7,131 11,330 26,117
Ophthalmia 34,467 29,812 54,153 45,343
West Pilbara 6,388 5,250 9,611 14,857
50,110 42,193 75,094 86,317
----- End of picture text -----

The Group is yet to make a final investment decision toward commencing development of any of its iron ore projects in the Western Australia. Accordingly, no development expenditures have been recognised in the financial statements during the year ended 30 June 2014 and six months period ended 31 December 2014 (year ended 30 June 2013 and six months period ended 31 December 2013: Nil).

Total capital expenditures for each of the projects in Western Australia for the financial periods were summarised as follows:

==> picture [364 x 124] intentionally omitted <==

----- Start of picture text -----

Six months ended Year ended
31 December 30 June
2014 2013 2014 2013
HK$’000 HK$’000 HK$’000 HK$’000
Addition to Addition to Addition to Addition to
property, Addition to property, Addition to property, Addition to property, Addition to
plant and mining plant and mining plant and mining plant and mining
Project equipment properties equipment properties equipment properties equipment properties
Marillana 31 – 29 – 31 – 83 –
Ophthalmia 82 – 318 141 487 141 661 7,305
113 – 347 141 518 141 744 7,305
----- End of picture text -----

MANAGEMENT DISCUSSION AND ANALYSIS

Marillana Iron Ore Project

T h e 1 0 0 % o w n e d M a r i l l a n a P r o j e c t i s Brockman’s flagship project located in the Hamersley Iron Province within the Pilbara region of Western Australia, approximately 100 km north-west of the township of Newman. The Project is located within mining lease M47/1414. The Project area covers 82 km[2] bordering the Hamersley Range, where extensive areas of supergene iron ore mineralisation have developed within the dissected Brockman Iron Formation that caps the Range.

The ultimate delivery of Marillana’s first commercial production is dependent upon securing, funding, and developing suitable rail and port infrastructure.

The Company will provide guidance on the timing for delivery of the Project once the infrastructure solution is secured.

Rail and Port Infrastructure

The key to unlocking the value of the Group’s highly prospective iron ore mineral tenements relies on securing a rail and port infrastructure solution and funding.

The Company continues to actively pursue various infrastructure alternatives.

Rail Access

Brockman is seeking access rights to The Pilbara Infrastructure Pty Ltd’s (“TPI’s”) belowrail infrastructure under the Western Australian Railways (Access) Code 2000 (WA) (“Code”), to allow it to haul up to 20 Mtpa of hematite iron ore product from its Marillana Project, for a term of 20 years (“Access Proposal”). The access sought proposed to exit the TPI mainline at Port Hedland where North West Infrastructure (“NWI”) has a capacity allocation of 50 Mtpa at the proposed SP3 and the SP4 berths for iron ore export from South West Creek in the Inner Harbour.

As part of the Access Proposal process commenced in May 2013, Brockman will procure the necessary spur lines and associated infrastructure to connect Marillana with the TPI railway and to connect it to the proposed NWI facilities in Port Hedland, which will include unloading, stockpiling and ship loading facilities in South West Creek, Port Hedland.

In October 2013, following the September 2013 ERA determination of Floor and Ceiling Costs, TPI commenced proceedings in the WA Supreme Court challenging the validity of the Access Proposal (“Validity Writ”) and a judicial review proceeding challenging the Floor and

INTERIM REPORT 2014/15

Ceiling Costs determination and the section 10 approval (“Judicial Review”). The 26 September 2014 decision of the Hon. Justice Edelman confirmed that Brockman’s Access Proposal was valid for the purpose of s8 of the Code. TPI’s October 2014 appeal on both decisions will be opposed by Brockman and is expected to be heard in March or April of 2015. Brockman does not anticipate that the appeal process will impede the current progression of the Access Proposal under sections 14 and 15 of the Code.

As part of the decision of Justice Edelman on the Judicial Review matter regarding the ERA review of “contingencies” and “asset lives” relating to the calculation of GRV and the determination of the Floor and Ceiling Costs, the ERA published a remade determination of the Floor and Ceiling Costs on 9 January 2015. The final determination is anticipated to be materially similar,in numerical effect, to the pre-Judicial Review decision. Accordingly, the remade determination is not anticipated to materially affect the pricing in Brockman’s financial model.

D u r i n g t h e p e r i o d , B r o c k m a n f u r t h e r advanced the development of the sections 14 (financial and managerial capability) and

15 submissions (capacity) and it is now expected that these will be submitted in April 2015. Brockman is progressing its own legal p r o c e e d i n g s i n t h e S u p r e m e C o u r t , commenced in November 2014, to compel TPI to publish a correct statement regarding the available capacity of each route section the subject of the Access Proposal.

Port — North West Infrastructure

In August 2008, the Western Australia State Government, in conjunction with the Port Hedland Port Authority (“PHPA”) now the Pilbara Port Authority (“PPA”), conferred 50 Mtpa of B Class iron ore export capacity to North West Infrastructure (“NWI”), which is to be utilised at the proposed South West Creek berths SW3 and SW4 at Port Hedland. NWI, which is an incorporated joint venture between Brockman, Atlas Iron Limited (“Atlas”) and FerrAus Pty Ltd, a wholly owned subsidiary of Atlas, is progressing the development of these two new berths.

Brockman remains focused on protecting its f o u n d a t i o n s h a r e h o l d i n g p o s i t i o n , t o participate in NWI port development to utilise the capacity conferral of 50 Mtpa at berths SP3 and SP4 at South West Creek in the Port Hedland harbour.

MANAGEMENT DISCUSSION AND ANALYSIS

Ophthalmia Iron Ore Project

The Ophthalmia Project, located north of Newman in the East Pilbara region of Western Australia, is the most significant iron ore project for the company outside of its flagship Marillana Project. During the period the Company announced an upgraded Mineral Resource of 158 Mt grading 58.4% Fe for the Coondiner Deposits and an upgraded Mineral Resource of 59 Mt grading 59.4% Fe for the Kalgan Creek Deposit. This takes the total Indicated and Inferred Mineral Resource Estimate for Ophthalmia to 341 Mt, grading 59.3% Fe (Refer ASX announcement dated 1 December 2014 and Table 1) from three separate areas/deposits: Sirius, Coondiner and Kalgan Creek (Figure 1).

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Figure 1: General location map of Ophthalmia Iron Ore Project

INTERIM REPORT 2014/15

Table 1: Ophthalmia Mineral Resource (DSO) Summary

==> picture [364 x 24] intentionally omitted <==

----- Start of picture text -----

Deposit Class Tonnes Fe CaFe SiO2 Al2O3 S P LOI
(Mt) (%) (%) (%) (%) (%) (%) (%)
----- End of picture text -----*

Deposit	Class	Tonnes (Mt)	Fe (%)	CaFe (%)*	SiO2 (%)	Al2O3 (%)	S (%)	P (%)	LOI (%)

Coondiner (Pallas and Castor)	Indicated	140.5	58.5	62.0	5.18	4.46	0.007	0.176	5.71
	Inferred	17.1	58.1	61.5	6.06	4.45	0.008	0.155	5.47
	Sub Total	157.6	58.4	62.0	5.27	4.46	0.007	0.174	5.68
Kalgan Creek	Indicated	34.9	59.3	62.7	4.08	4.57	0.009	0.183	5.49
	Inferred	24.4	59.5	63.2	4.38	3.90	0.007	0.157	5.81
	Sub Total	59.3	59.4	62.9	4.21	4.29	0.009	0.173	5.63
Sirius	Indicated	105.0	60.4	63.7	3.54	3.97	0.007	0.178	5.22
	Inferred	19.0	60.2	63.4	4.09	3.83	0.009	0.168	5.14
	Sub Total	124.0	60.3	63.6	3.62	3.95	0.007	0.177	5.20
Ophthalmia Project	Indicated	280.4	59.3	62.7	4.43	4.29	0.007	0.178	5.50
	Inferred	60.5	59.3	62.8	4.76	4.03	0.008	0.160	5.50
	Total	340.9	59.3	62.7	4.49	4.24	0.007	0.175	5.50

CaFe represents calcined Fe and is calculated by Brockman using the formula CaFe = Fe%/((100LOI)/100) ** Tonnes may not add up due to rounding

The increase represents an overall increase of 36Mt over the previously announced Mineral Resources but significantly 82% of the total resources (280.4 Mt) are now classified as Indicated Resources, whereas the previous resource for Ophthalmia contained Indicated Resources of 200 Mt (or 66% of the total). The average grade of mineralisation has remained nearly identical at 59.3%.

The upgraded Mineral Resource estimates for the Coondiner and Kalgan Creek Deposits were estimated by Golder Associates Pty Ltd (“Golder”). It has incorporated the results of an additional 193 infill and extension RC drill holes (13,627 m) completed in 2013 and 2014 since the original Mineral Resource estimates were announced. The resource estimates

were classified in accordance with guidelines provided in the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code, 2012). The classification was based principally on geological confidence, drill hole spacing and grade continuity from available drilling data and the performance of the grade interpolation (see Figures 2 and 3). The mineralisation models and block reporting cutoff grades used in the in situ resource estimates are both 54% Fe. The methodology and procedures used for the Mineral Resource estimates, as well as the sampling techniques and data acquisition methods were provided in the statement by Golder Associates Pty Ltd as Appendix 1 of the ASX announcement dated 1 December 2014.

MANAGEMENT DISCUSSION AND ANALYSIS

During the Mineral Resource estimation process, Exploration Targets were identified for Coondiner and Kalgan Creek. The potential quantity and grade of the Exploration Targets are conceptual in nature and insufficient exploration has been completed to allow estimation of a Mineral Resource. Further, it is uncertain if additional exploration will result in the estimation of a Mineral Resource for the Exploration Targets.

The Exploration Targets (Table 2) were based on extrapolated estimates which have insufficient geological confidence and drill hole data to be classified as Mineral Resource. Refer to Figures 2 and 3 which show the location of the Exploration Targets with respect to the drilling and Mineral Resource. Brockman will conduct additional exploration and infill drilling to test these targets with the aim of further increasing the Mineral Resource inventory at Ophthalmia to meet the requirements of future mine development.

Table 2: Ophthalmia Exploration Targets

Deposit	Tonnes Min. (Mt)	Tonnes Max. (Mt)	Fe Min. (%)	Fe Max. (%)
Coondiner	22	35	55	60
Kalgan Creek	9	15	55	60
Ophthalmia	31	50	55	60

INTERIM REPORT 2014/15

==> picture [362 x 197] intentionally omitted <==

Figure 2: Coondiner Deposits Geology, Drill Hole and Resource Location

==> picture [363 x 198] intentionally omitted <==

Figure 3: Kalgan Creek Deposits Geology, Drill Hole and Resource Location

MANAGEMENT DISCUSSION AND ANALYSIS

MINING OPERATION

Copper Mine — Yunnan, PRC

The copper mining business of the Company is conducted through Luchun Xingtai Mining Co. Ltd (“Luchun”), a 100% owned subsidiary of the Company, the owner and operator of the Damajianshan Mine.

During the interim period, an aeromagnetic survey was conducted over a 131.02km[2] prospecting target area in Qimaba Town, Luchun County of Yunnan Province in the PRC.

Production and operation results for the financial periods were summarised as follows:

==> picture [363 x 86] intentionally omitted <==

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Six months ended
31 December
2014 2013
Copper ore processed 166,845 tonnes 112,585 tonnes
Production of copper ore concentrates 732 Metal (t) 618 Metal (t)
Sales of copper ore concentrates 737 Metal (t) 644 Metal (t)
Average selling price per Metal (t) (without VAT) RMB34,000 RMB36,000
----- End of picture text -----

During the six months ended 31 December 2014, Luchun has contributed revenue of approximately HK$31.3 million (2013: HK$29.1 million), up 7.6%, and the loss before a m o r t i s a t i o n a n d i m p a i r m e n t w a s approximately HK$5.7 million (2013: HK$8.3 million), representing an improvement of 31.3%.

The cost of sales of the mining segment mainly included mining, processing and refining, ore transportation and waste disposal costs.

Total expenditure associated with the mining operation during the six months ended 31 December 2014 amounted to approximately HK$46.3 million (2013: HK$45.7 million).

Expenditure associated with exploration activities amounted to approximately HK$3.5 million (2013: HK$7.9 million).

During the six months ended 31 December 2014, capital expenditures of HK$0.5 million has been capitalised as property, plant and equipment (31 December 2013: HK$1.4 million).

During the year ended 30 June 2014, capital expenditure associated with copper mine amounted to HK$2.1 million (30 June 2013: HK$3.0 million).

During the interim period, steady ore processing volume was recorded, following better utilisation of the Group’s existing production capacities.

Sales volume of copper ore concentrates grew slightly, however average price per tonne has decreased steadily over the period reflecting the decrease in global metal prices.

The downturn of global economy and the recent sustained copper price weakness are considered to be the impairment indicators which triggered the need to perform an impairment assessment. Based on the impairment assessment, an impairment loss of approximately HK$125,000,000 was recognised during the period (2013: Nil).

INTERIM REPORT 2014/15

DIRECTORS’ REPORT

The Directors present their report together with the condensed consolidated financial information for the six months ended 31 December 2014.

Name

DIRECTORS

The Directors of the Company during the six months ended 31 December 2014 and up to the date of this report were:

Period of Directorship

Non-Executive Directors:

Kwai Sze Hoi (Chairman) Liu Zhengui (Vice Chairman) Ross Stewart Norgard

Appointed on 15 June 2012 Appointed on 27 April 2012 Appointed on 22 August 2012

Executive Directors:

Luk Kin Peter Joseph (CEO)

Chan Kam Kwan, Jason (Company Secretary) Kwai Kwun, Lawrence Warren Talbot Beckwith

Appointed on 16 February 2009 Resigned on 5 August 2014 Appointed on 2 January 2008

Appointed on 13 March 2014 Appointed on 15 June 2012

Independent non-executive Directors:

Yap Fat Suan, Henry Uwe Henke Von Parpart Yip Kwok Cheung, Danny Choi Yue Chun, Eugene

INTERIM DIVIDEND

The Board of Directors does not recommend the payment of an interim dividend for the six months ended 31 December 2014 (2013: Nil).

LIQUIDITY AND FINANCIAL RESOURCES

The Group generally finances its short-term funding requirement with cash generated from operations and equity funding. The Group’s ability to advance its iron ore project developments is reliant among other things, on access to appropriate and timely funding.

Appointed on 8 January 2014 Appointed on 2 January 2008 Appointed on 5 August 2009 Appointed on 12 June 2014

The current ratio as at 31 December 2014 is measured at 1.27 (30 June 2014: 2.38). The gearing ratio as at 31 December 2014 (longterm debts over equity and long-term debts) is measured at zero as there is no long-term debts (30 June 2014: 0.01).

During the period, the Group did not engage in the use of any financial instruments for hedging purposes, and there was no hedging instrument outstanding as at 31 December 2014.

DIRECTORS’ REPORT

CAPITAL STRUCTURE

The Company has no changes in its issued share capital for the interim period.

As at the date of the announcement, the total number of issued shares outstanding for the Company amounted to 8,381,982,131 shares.

Shares Details

Shares on issue

As at 31 December 2014: 8,381,982,131 fully paid shares on issue

The following options were lapsed during the period:

22,000,000 share options, expiring 13 December 2015 Exercise price: HK$0.72
— 23,500,000 share options, expiring 14 January 2016 Exercise price: HK$0.717
23,500,000 share options, expiring 14 January 2016 Exercise price: HK$0.967
3,250,000 share options, expiring 20 May 2016 Exercise price: HK$0.717
3,250,000 share options, expiring 20 May 2016 Exercise price: HK$0.967

Unquoted securities

As at 31 December 2014:

t h e t o t a l n u m b e r o f u n l i s t e d o p t i o n s outstanding is 344,500,000, including:

61,400,000 share options, expiring 13 December 2015 Exercise price: HK$0.72
64,600,000 share options, expiring 14 January 2016 Exercise price: HK$0.717
64,600,000 share options, expiring 14 January 2016 Exercise price: HK$0.967
3,600,000 share options, expiring 28 February 2016 Exercise price: HK$0.717
3,600,000 share options, expiring 28 February 2016 Exercise price: HK$0.967
73,350,000 share options, expiring 20 May 2016 Exercise price: HK$0.717
73,350,000 share options, expiring 20 May 2016 Exercise price: HK$0.967

In addition to the above, 15,000,000 options quoted on the ASX were lapsed on 30 September 2014.

Supplemental information — Share Subscription

In order to redeem the bond previously issued by the Company and to strengthen the Group’s financial position and provide general working capital required for the development of the Marillana Project, the Company conducted a share subscription exercise with two subscribers in January 2014.

(a) On 2 January 2014, the Company entered into a shares subscription a g r e e m e n t w i t h C h i n a G u o y i n I n v e s t m e n t ( H K ) L t d ( t h e “ C G Subscription”) in which the Company agreed to issue and China Guoyin agreed to subscribe for 195,000,000 Shares (with an aggregate nominal value of HK$19,500,000) of the Company at HK$0.4 per share, raising net proceeds of approximately HK$78 million. The net issue price per Share is approximately HK$0.4.

INTERIM REPORT 2014/15

The CG Subscription price per CG Subscription share represents a discount of approximately 13.98% to the closing price of HK$0.465 per share as quoted on the Stock Exchange on 2 January 2014.

The proceeds from the issue of the CG Subscription shares is used for the development of the Group’s iron ore mining projects in Western Australia and for general working capital of the Group.

(b) On the same date, the Company entered into a shares subscription agreement with Ocean Line Holdings Limited (the “OL Subscription”) in which the Company agreed to issue and Ocean Line agreed to subscribe for 292,500,000 Shares (with an aggregate nominal value of HK$29,250,000) of the Company at the same price of HK$0.40 per share, representing an aggregate subscription price of HK$117 million. The net issue price per Share is approximately HK$0.40. Among the 292,500,000 shares, 78,000,000 ordinary shares were issued by the Company to redeem a fixed rate bond in full. The remaining net proceeds of HK$85.8 million from the issue of the OL Subscription shares is used for the development of the Group’s iron ore mining projects in Western Australia and for general working capital of the Group.

SHARE OPTION SCHEME

Under the share options scheme renewed, adopted and approved by the shareholders at a special general meeting of the Company held on 13 November 2012 (the “Share Options Schemes”), the Board may, in their sole discretion, grant options to eligible participants to subscribe for fully paid ordinary shares of the Company subject to stipulated terms and conditions.

During the period under review, no options were granted or exercised under the Share Options Schemes.

PROVISION OF INFORMATION IN RESPECT OF AND BY DIRECTORS

Updated information with regard to the change in other directorships of the Directors of the Company are as set out below:

Mr. Chan Kam Kwan Jason has been appointed as an independent none x e c u t i v e d i r e c t o r o f C a n v e s t E n v i r o n m e n t a l P r o t e c t i o n G r o u p Company Limited (Stock Code: 1381) on 29 December 2014.

PLEDGE OF ASSETS AND CONTINGENT LIABILITIES

As at 31 December 2014, no asset was pledged to secure any banking facilities (30 June 2014: Nil).

Financial guarantees

As at 31 December 2014, the Company did not provide any financial guarantees (30 June 2014: Nil).

Contingent liabilities

There is no material contingent liability of the Group as at 31 December 2014.

DIRECTORS’ REPORT

MARKET RISK

The Group is exposed to various types of market risks, including fluctuations in iron ore and copper ore concentrate prices and exchange rates.

(a) Commodities Price risk Copper ore concentrate price:

The Group’s revenue and results of the mining business during the period, and the fair value of the Group’s mining right was affected by fluctuations in the copper ore concentrate price. All of our mining products were sold at market price.

Iron ore price:

The fair value of the Group’s intangible assets arising from acquisition of mineral tenements operations in Australia was affected by fluctuations in the iron ore price. However, the carrying value of the mining right remains unchanged.

We have not used any commodity derivative instruments or futures for speculation or hedging purpose. The management will review the market condition from time to time and determine the best strategy to deal with the fluctuations of iron ore and copper concentrate prices.

(b) Exchange rate risk

The Group is exposed to exchange rate risk primarily because our mineral t e n e m e n t s a r e d e n o m i n a t e d i n Australian dollars. Depreciation in Australian dollars may adversely affect our net asset value and earnings when the value of such assets converted to Hong Kong dollars. During the period, no financial instrument was used for hedging purpose.

STAFF AND REMUNERATION

As at 31 December 2014, the continuing operations of the Group employed 420 full t i m e e m p l o y e e s ( 3 0 J u n e 2 0 1 4 : 4 0 9 employees), of which approximately 384 employees were in the PRC (30 June 2014: 365 employees) and 16 employees were in Australia (30 June 2014: 26 employees). The remuneration of employees includes salary and discretionary bonus. The Group also adopted a share option scheme to provide incentives to the employees.

The remuneration policy and packages, including share options of the Group’s employees, senior management and directors are maintained at market level and are reviewed periodically by the management and the remuneration committee.

DIRECTORS’ AND CHIEF EXECUTIVES’ INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES OR DEBENTURES

As at 31 December 2014, the interests and short positions of the directors and chief executives and their respective associates in the shares, underlying shares and debentures o f t h e C o m p a n y a n d i t s a s s o c i a t e d corporations (within the meaning of Part XV of the Securities and Futures Ordinance (the “SFO”) as recorded in the register maintained by the Company pursuant to Sections 336 and 352 of the SFO, or which were otherwise required to be notified to the Company and the Stock Exchange, pursuant to the Model Code for Securities Transactions by Directors of the Listed Companies were as follows:

INTERIM REPORT 2014/15

Long positions of ordinary shares of HK$0.10 each of the Company

					Percentage
		Number			of the issued
		of issued	Number of	Number of	share capital
		ordinary	underlying	share options	of the
Name of Director	Capacity	shares held	shares held	held	Company
Mr. Kwai Sze Hoi	Jointly_(Note 1)_	60,720,000	–	–	0.72%
	Interests of controlled corporation_(Note 1)_	1,776,960,137	–	–	21.20%
	Beneficial owner_(Note 1)_	–	–	70,000,000	0.84%
Mr. Liu Zhengui	Beneficial owner	–	–	30,000,000	0.36%
Mr. Ross Stewart Norgard	Beneficial owner	64,569,834	–	1,500,000	0.79%
	Interests of controlled corporation	178,484,166	–	–	2.13%
Mr. Kwai Kwun, Lawrence	Beneficial owner	22,258,412	–	15,000,000	0.44%
	Interests of controlled corporation	59,000,000	–	–	0.70%
Mr. Warren Talbot Beckwith	Beneficial owner	–	–	20,000,000	0.24%
Mr. Chan Kam Kwan Jason	Beneficial owner	–	–	12,200,000	0.15%
Mr. Yap Fat Suan, Henry	Beneficial owner	400,000	–	–	0.00%
Mr. Uwe Henke Von Parpart	Beneficial owner	–	–	2,500,000	0.03%
Mr. Yip Kwok Cheung Danny	Beneficial owner	–	–	2,500,000	0.03%
Mr. Choi Yue Chun, Eugene	Beneficial owner	–	–	–	–

Notes:

Ocean Line is owned as to 60% by Mr. Kwai Sze Hoi and as to 40% by Ms. Cheung Wai Fung (Mr. Kwai’s spouse). In addition, Mr. Kwai and Ms. Cheung have a joint direct interest in 60,720,000 shares of the Company.

Apart from the above, as at 31 December 2014, there was no interest of the Directors or chief executives of the Company in the shares and the underlying shares of the Company and any shares and underlying shares of its associated corporations (within the meaning of Part XV of the SFO), which were required to

be notified to the Company and the SEHK pursuant to Divisions 7 and 8 of Part XV of the SFO (including the interests and short positions which they were taken or deemed to have under such provisions of the SFO), or which were required pursuant to Section 352 of the SFO to be entered in the register maintained by the Company referred to therein, or which were required to be notified to the Company and the SEHK pursuant to the Model Code for Securities Transactions by Directors of listed issuers.

DIRECTORS’ REPORT

ARRANGEMENTS TO PURCHASE SHARES OR DEBENTURES

Other than as disclosed in section “Directors’ and Chief Executives’ Interests and Short Positions in Shares, Underlying Shares or Debentures”, at no time during the period was the Company, its holding company, or any of its subsidiaries or fellow subsidiaries, was a party to any arrangements to enable the Directors of the Company and their associates t o a c q u i r e b e n e f i t s b y m e a n s o f t h e acquisition of shares in, or debentures of, the Company or any other body corporate.

SUBSTANTIAL SHAREHOLDERS

As at 31 December 2014, so far as is known to the Directors, the persons (not being a Director or chief executive of the Company) who had an interest or short position in the shares and underlying shares which would fall to be d i s c l o s e d t o t h e C o m p a n y u n d e r t h e provisions of Divisions 2 and 3 of the Part XV of the SFO were as follows:

Long positions in ordinary shares of HK$0.10 each of the Company

			Percentage of the
		Number of shares or	issued share capital
Name of shareholder	Nature of interest	underlying shares	of the Company
Ocean Line Holdings Ltd	Beneficial owner	1,776,960,137	21.20%
(“Ocean Line”)(Note 1)
Kwai Sze Hoi_(Note 1)_	Interest held by controlled corporations	1,776,960,137	21.20%
	Interest held jointly with another person	60,720,000	0.72%
	Beneficial owner	70,000,000	0.84%
Cheung Wai Fung_(Note 1)_	Interest held by controlled corporations	1,776,960,137	21.20%
	Interest held jointly with another person	60,720,000	0.72%
	Beneficial owner	70,000,000	0.84%
Cheung Sze Wai_(Note 2)_	Interest in controlled corporation	515,574,276	6.15%
	Interest held by spouse	50,000,000	0.60%
Luk Kin Peter Joseph_(Note 2)_	Interest held by controlled corporations	515,574,276	6.15%
	Beneficial owner	50,000,000	0.60%
China Guoyin Investments (HK)	Beneficial owner	764,904,972	9.13%
Ltd_(Note 3)_
Zhu Yi Cai_(Note 3)_	Interest in controlled corporations	774,804,972	9.24%

INTERIM REPORT 2014/15

Notes:

Ocean Line is owned as to 60% by Mr. Kwai Sze Hoi and as to 40% by Ms. Cheung Wai Fung (Mr. Kwai’s spouse). In addition, Mr. Kwai and Ms. Cheung have a joint direct interest in 60,720,000 shares. In addition, Mr. Kwai also held 70,000,000 share options of the Company.
The 515,574,276 shares were held by Equity Valley Investments Limited. Equity Valley Investments Limited is wholly-owned by The XSS Group Limited, of which 50%, 20% and 30% of its issued share capital were held by Mr. Luk Kin Peter Joseph, Ms. Cheung Sze Wai, Catherine (Mr. Luk’s spouse) and Ms. Chong Yee Kwan (Mr. Luk’s mother) respectively. In addition, Mr. Luk also held 50,000,000 share options of the Company.
Subsequent to 31 December 2014, China Guoyin Investments (HK) Ltd and Mr. Zhu Yi Cai disposed 400,000,000 shares and ceased to become a substantial shareholder of the Company.

PURCHASE, REDEMPTION OR SALE OF LISTED SECURITIES

During the six months ended 31 December 2014, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the listed securities of the Company.

COMPLIANCE OF THE CODE ON CORPORATE GOVERNANCE PRACTICES

The Company is listed on both the Australian Securities Exchange Limited (“ASX”) and on t h e S E H K . T h e C o m p a n y ’ s c o r p o r a t e governance policies have been formulated to ensure that it is a responsible corporate citizen. The Company complies with all aspects of the Corporate Governance Code as set out in Appendix 14 of the Rules Governing the Listing of Securities on the SEHK, except for the deviation from Code Provision A.2.1, which requires the roles of chairman and chief executive should be separate and should not be performed by the same individual. The position for the chief executive officer at the Group level has been vacant during the period. Nonetheless, Mr. Colin Paterson, who serves as the chief executive officer at Brockman Mining Australia Pty Ltd (a whollyowned subsidiary of the Company), is responsible for the oversight of the core iron ore business operation.

The Company will continue to seek for the appropriate candidate to fill the vacant position when appropriate.

DIRECTORS’ REPORT

PUBLICATION OF THE INTERIM RESULTS AND INTERIM REPORT

The interim results announcement is published on the website of SEHK (www.hkexnews.hk), ASX (www.asx.com.au), as well as the website of the Company (www.brockmanmining.com)/ (www.irasia.com/listco/hk/brockmanmining). The interim report will be dispatched to shareholders and will be published on the aforementioned websites in due course.

MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS

The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”) as set out in Appendix 10 of the Listing Rules as its own code of conduct regarding securities transactions by directors of the Company. Having made specific enquiry to all directors of the Company, all directors confirmed that they have complied with the required s t a n d a r d s e t o u t i n t h e M o d e l C o d e t h r o u g h o u t t h e s i x m o n t h s e n d e d 3 1 December 2014.

AUDIT COMMITTEE

As at 31 December 2014, the audit committee comprises of three independent nonexecutive directors namely Messrs. Yap Fat Suan, Henry, Uwe Henke Von Parpart and Yip Kwok Cheung, Danny (the “Audit Committee”). Mr. Yap Fat Suan, Henry was the Chairman of the Audit Committee. The Audit Committee has adopted terms of reference which are in line with the CG Code. The Audit Committee has reviewed the Group’s interim results for the six months ended 31 December 2014.

By Order of the Board

Kwai Sze Hoi

Chairman

Hong Kong, 24 February 2015

INTERIM REPORT 2014/15

DIRECTORS’ DECLARATION

The Company is incorporated in Bermuda under the Companies Act 1981 of Bermuda.

This declaration is made in accordance with a resolution of the Directors of the Company dated 24 February 2015. In the Directors’ opinion:

(a) The condensed consolidated financial information and notes set out on pages 4 to 34 are:
(i) complying with International Accounting Standards 34 Interim Financial Reporting and the disclosure requirements of Hong Kong Companies Ordinance;
(ii) giving a true and fair view of the Groups’ financial position as at 31 December 2014 and of its performance for the six months ended on that date;
(b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

==> picture [74 x 59] intentionally omitted <==

Kwai Sze Hoi

Chairman

Hong Kong, 24 February 2015

GLOSSARY

“Board”	the Board of Directors
“Brockman” or “Company”	Brockman Mining Limited ARBN 143 211 867, a company
	incorporated in Bermuda
“CG Code”	Corporate Governance Code as set out in Appendix 14 of the
	Rules Governing the Listing of Securities on the SEHK
“China Guoyin”	China Guoyin Investments (HK) Ltd
“Damajianshan mine”	The 100% owned copper mine held by the Company in the
	Yunnan Province, PRC
“Directors”	the directors of the Company
“DSO”	Direct Shipping Ore
“km”	kilometres
“LME”	London Metal Exchange
“LOI”	Loss on ignition
“Luchun”	Luchun Xingtai Mining Co., Ltd, a subsidiary of the Company,
	which is the operator of the Damajianshan Mine
“Marillana Project”	The 100% owned Marillana iron ore project is Brockman’s
	flagship project located in the Hamersley Iron Province
“m”	metre
“Mt”	million tonnes
“Ocean Line”	Ocean Line Holdings Ltd
“PRC”	People’s Republic of China
“RC”	Reverse circulation
“SEHK”	Hong Kong Exchanges and Clearing Company Limited or the
	financial products market or the Hong Kong Stock Exchange,
	as the situation requires
“Share(s)”	ordinary share of the Company of par value HK$0.1 each
“WA”	Western Australia

AI assistant

Brockman Mining Limited — Interim / Quarterly Report 2015

48994_rns_2015-03-08_aec25a4e-53e9-4544-b499-4a6a198104de.pdf

FINANCIAL INFORMATION

Results for announcement to the market

CONTENTS

CORPORATE PROFILE

BOARD OF DIRECTORS

Non-Executive Directors

Executive Directors

Independent Non-executive Directors

AUDITOR

REGISTERED OFFICE (BERMUDA)

PRINCIPAL PLACE OF BUSINESS IN HONG KONG

COMPANY SECRETARY

PRINCIPAL PLACE OF BUSINESS IN AUSTRALIA

PRINCIPAL SHARE REGISTRARS AND TRANSFER OFFICE

BRANCH SHARE REGISTRARS AND TRANSFER OFFICE IN HONG KONG

BRANCH SHARE REGISTRARS AND TRANSFER OFFICE IN AUSTRALIA

PRINCIPAL BANKERS

WEBSITE

STOCK CODE

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED BALANCE SHEET

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION

1 GENERAL INFORMATION

Key events

2 BASIS OF PREPARATION

3 PRINCIPAL ACCOUNTING POLICIES

(a) Amended standards and interpretation adopted by the Group

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION

3 PRINCIPAL ACCOUNTING POLICIES (Continued)

4 FINANCIAL RISK MANAGEMENT

(a) Financial risk factors

4 FINANCIAL RISK MANAGEMENT (Continued)

(b) Liquidity risk

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION

4 FINANCIAL RISK MANAGEMENT (Continued)

(c) Fair value estimation

5 REVENUE

6 SEGMENT INFORMATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION

6 SEGMENT INFORMATION (Continued)

6 SEGMENT INFORMATION (Continued)

7 DISCONTINUED OPERATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION

7 DISCONTINUED OPERATION (Continued)

Profit from discontinued operation

8 EXPENSES BY NATURE

8 EXPENSES BY NATURE (Continued)

9 OTHER INCOME

10 OTHER LOSSES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION

11 FINANCE COSTS

12 INCOME TAX CREDIT

13 (LOSS)/EARNINGS PER SHARE

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION

14 MINING PROPERTIES

Mining properties in Australia

14 MINING PROPERTIES (Continued)

Mining properties in Australia (Continued)

Mining right in the PRC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION

14 MINING PROPERTIES (Continued)

Mining right in the PRC (Continued)

15 PROPERTY, PLANT AND EQUIPMENT

16 TRADE RECEIVABLES

17 TRADE PAYABLES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION

18 SHARE CAPITAL

19 SHARE OPTION SCHEME

Share option scheme of the Company

19 SHARE OPTION SCHEME (Continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION

19 SHARE OPTION SCHEME (Continued)

19 SHARE OPTION SCHEME (Continued)

Share option scheme of the Company (Continued)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION

Brockman Mining Limited Interim / Quarterly Report 2015