CANYON RESOURCES LIMITED

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Canyon Resources Limited ABN 13 140 087 261

Interim Financial Report 31 December 2016

CORPORATE INFORMATION

ABN 13 140 087 261

Share Register

Computershare Limited

Directors

David Netherway Phillip Gallagher Emmanuel Correia

Company Secretary

Robert Marusco

Registered office

Level 3, Suite 5 9 Bowman Street South Perth, Western Australia 6151 T: +61 8 9217 2400

Level 11, 172 St Georges Terrace Perth WA 6000 Tel: +61 8 9323 2000 Fax: +61 8 9323 2033 Web: computershare.com.au

Solicitors

Steinepreis Paganin Level 4, 16 Milligan Street Perth WA 6000

Auditors

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

Principal place of business

853 Wellington Street West Perth WA 6005 PO Box 270 West Perth WA 6872

Securities Exchange Listing

ASX Limited ASX Code: CAY

Tel: +61 8 6143 4256 Fax: +61 8 9324 1502 Web: www.canyonresources.com.au

CONTENTS	PAGE
Directors’ Report	1
Auditor’s Independence Declaration	6
Condensed Consolidated Statement of Comprehensive Income	7
Condensed Consolidated Statement of Financial Position	8
Condensed Consolidated Statement of Changes in Equity	9
Condensed Consolidated Statement of Cash Flows	10
Notes to the Condensed Consolidated Financial Statements	11
Directors’ Declaration	19
Independent Auditor’s Review Report	20

Canyon Resources Limited

DIRECTORS’ REPORT

Your Directors submit the financial report of the consolidated entity comprising Canyon Resources Limited (“the Company” or “Canyon”) and the entities it controlled for the half-year ended 31 December 2016 (together the “Group”). In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows:

Directors

The names of directors who held office during or since the end of the interim period and until the date of this report are noted below. Directors were in office for the entire period unless otherwise stated.

David Netherway	Chairman
Phillip Gallagher	Managing Director
Emmanuel Correia	Non-executive Director (appointed 20 July 2016)
Rhoderick Grivas	Chairman (resigned 20 July 2016)

Review of Operations

The Directors of Canyon Resources Ltd (“Canyon or “The Company”) have continued the focus of developing a large scale DSO (Direct Shipping Ore) bauxite mining and export operation in Cameroon.

Canyon has been actively engaging with key stakeholders in this process, including the Government of Cameroon and infrastructure operators in the country.

The Company’s Burkina Faso gold projects, in particular the Pinarello Project, which is in a joint venture with London listed Acacia Minerals, has shown some promising results from ongoing exploration.

Birsok Bauxite Project Cameroon

Canyon has maintained its focus on developing a high grade bauxite mining and DSO (Direct Shipping Ore) operation in Cameroon.

The Company continued high level discussions with the Government of Cameroon throughout the period in relation to the broad opportunity of developing a DSO bauxite operation in the Adamawa Province of Cameroon, including the possibility of securing additional permits in close proximity to the Company’s existing Birsok joint venture project. The Company also engaged senior French legal counsel with significant African mining experience to assist Canyon in its discussions.

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Figure 1: Location of Canyon’s Birsok Bauxite Project, Cameroon, West Africa

Canyon Resources Limited

DIRECTORS’ REPORT (CONTINUED)

As a bauxite mining and export project contains a significant infrastructure component to its successful development, Canyon has been working with all the relevant stakeholders, including existing rail and port infrastructure operators in the country to present its development proposals for potential infrastructure solutions for a bauxite mining project in the Adamawa Province of Cameroon.

Previously completed exploration on the Birsok Project by Canyon has identified occurrences of high grade bauxite that is consistent with historical exploration in the region. This high grade low contaminant bauxite will be suitable for DSO export from Cameroon and bauxite of this overall grade is generally highly sought after by low temperature refiners throughout the world.

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Figure 2: Ship berthing area at the Kribi Deep Water Port suitable for Panamax size vessels, with breakwater in the distance.

Canyon’s preparations to recommence exploration on the Birsok Project are currently underway. The objective of the exploration program will be to complete additional exploration on the high grade, low contaminant bauxite identified from previous drilling programs and to test additional and new bauxite plateaux. The planned exploration program will also investigate other locations in the region that have the potential to host high grade bauxite.

Canyon Resources Limited

DIRECTORS’ REPORT (CONTINUED)

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Figure 3: The Camrail rail line near to the Birsok Bauxite Project.

Burkina Faso – Joint Venture with Acacia Mining plc

Canyon Resources entered into a joint venture with Acacia Mining plc (Acacia) in March 2015 on the Pinarello and Konkolikan Projects located on the Hounde greenstone belt in south western Burkina Faso. Acacia can earn up to 75% of the projects by the expenditure of $1,500,000 on exploration over two years from March 2015. Acacia currently have 51% equity of the Projects.

Acacia completed an early stage exploration program on the permits which had positive and encouraging results including, 96 of 278 aircore (AC) holes drilled on the Pinarello Project producing anomalous gold results, and the identification of numerous extensive gold in soil anomalies ranging from 2km to 25km in length.

Acacia plan approximately 35,000m of AC and Reverse Circulation (RC) drilling on the Pinarello Project in 2017.

For further details on the exploration conducted by Acacia on the Pinarello Project, refer to : http://www.acaciamining.com/~/media/Files/A/Acacia/presentations/2016/Exploration%20Roundtablev2%20%20Nov%202016.pdf)

~~Canyon Resources Limited~~

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DIRECTORS’ REPORT (CONTINUED)

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Figure 4: Map showing Acacia Mining holding on the Hounde belt in south west Burkina Faso. Canyon Resource JV permits are in blue.

Corporate

Mr David Netherway, previously a Non-Executive Director of the Company, became the Non-Executive Chairman of the Company on the 20 July 2016 following the resignation of Mr Rhod Grivas. Mr Netherway has been a Non-Executive Director of the Company since March 2014. Mr Emmanuel Correia was appointed to the board on 20 July 2016 as NonExecutive Director. Mr Correia is a Chartered Accountant and founding director of Peloton Capital and Peloton Advisory and has over 25 years public company and corporate finance experience in Australia, North America and the United Kingdom. He has held various senior positions with Deloitte and other accounting firms and boutique corporate finance houses.

On the 19th January 2017, the Company announced that it had entered into underwriting agreements with each of Barclay Wells Limited and BW Equities Pty Ltd (“Underwriters”) to fully underwrite the Company’s listed option series (ASX: CAYOA), up to a value of A$3.405 million. Canyon had 56,753,252 listed CAYOA options on issue, exercisable at $0.06 cents on or before 31 January 2017. The Company paid a fee to each of the Underwriters a fee equal to 6% of the amount underwritten by each Underwriter and issued a total of 10,000,000 options exercisable at $0.12 on or before 16 February 2019 to the Underwriters.

On the 22nd February 2017, a series of unlisted incentive options previously issued to Company Directors expired. There were a total of 7,100,000 options priced at 6.8c. A total of 3,438,308 were exercised by the holders and the balance of 3,661,692 options were placed with sophisticated investors, raising the Company a total of $482,800.

Canyon Resources Limited

DIRECTORS’ REPORT (CONTINUED)

Operating Result for the Period

The Group’s operating loss for the half-year ended 31 December 2016 was $1,155,316 (half-year ended 31 December 2015: $1,025,349).

Review of Financial Condition

At 31 December 2016, the Group held $471,153 in cash and cash equivalents (30 June 2016: $446,405).

Significant Events Subsequent to Balance Date

Subsequent to the balance date, it was announced that the Company had entered into an underwriting agreement with Barclay Wells Limited and BW Equities Pty Ltd to fully underwrite the Company’s listed option series (ASX: CAYOA) up to a value of $3.405 million which were exercisable at $0.06 cents on or before 5:00pm (AWST) 31 January 2017. Of the approximate 57 million CAYO options on issue at the time of the announcement of the underwriting, almost 47 million or 82% of the options were converted by option holders by the expiration date. The exercise of the options excluding the approximate 10 million CAYO options which will taken up by the underwriters raised a total of approximately $2.805 million before costs. The underwritten options raised approximately $600,000 in additional funds to bring the total capital raised to $3.405 million before costs.

The following options were converted to shares subsequent to balance date:

57,588,593 listed options expiring 31 January 2017 at a price of 6 cents per share
7,400,000 unlisted options expiring 22 February 2017 at a price of 6.8 cents per share

Other than these matters, there have been no matters or circumstances that have arisen since 31 December 2016 that significantly affected or may significantly affect:

The Group’s operations in future years; or
The results of those operations in future years; or
The Groups state of affiars in future years.

Auditor’s Independence Declaration

Section 307C of the Corporations Act 2001 requires our auditors, HLB Mann Judd, to provide the directors of the Company with an Independence Declaration in relation to the review of the interim financial report. This Independence Declaration is set out on page 5 and forms part of this Directors’ Report for the half-year ended 31 December 2016.

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

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……………………………………………..

Phillip Gallagher

Managing Director Perth, 14 March 2017

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AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the review of the consolidated financial report of Canyon Resources Limited for the half-year ended 31 December 2016, I declare that to the best of my knowledge and belief, there have been no contraventions of:

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

Perth, Western Australia 14 March 2017

D I Buckley Partner

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HLB Mann Judd (WA Partnership) ABN 22 193 232 714 Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: [email protected]. Website: http://www.hlb.com.au Liability limited by a scheme approved under Professional Standards Legislation

HLB Mann Judd (WA Partnership) is a member of

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

Canyon Resources Limited

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2016

Note Interest received Foreign exchange gain/(loss) Employee expenses Consultants and contractors Director fees Legal and professional fees Occupancy Depreciation Compliance and regulatory Administration Share-based payments Interest expense Impairment of financial assets 2 Project evaluation Exploration expensed as incurred Loss before income tax Income tax expense Net loss after tax Other comprehensive income Items that may be reclassified to profit or loss Change in fair value of available-for-sale financial assets Movement in foreign exchange on translation Total other comprehensive (loss)/income Total comprehensive loss for the period Basic/diluted loss per share (cents per share)	31 December 2016 $ 31 December 2015 $
	2,673 3,730 (7,283) 9,534
	(4,610) 13,264 (102,605) (27,375) (151,927) (144,137) (148,693) (142,693) (46,155) (156,483) (11,429) (8,105) (11,488) (21,058) (60,376) (29,520) (31,637) (121,503) (68,432) (208,572) (9,252) (4,347) (4,000) (8,000) (365,153) - (139,559) (166,820)
	(1,155,316) (1,025,349) - -
	(1,155,316) (1,025,349)
	- (11,200) (10,864) 5,656
	(10,864) (5,544)

	(1,166,180) (1,030,893)
	(0.62) (0.70)

The accompanying notes form part of these financial statements.

Canyon Resources Limited

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2016

Notes Assets Current Assets Cash and cash equivalents Trade and other receivables Other current assets Total Current Assets Non-Current Assets Other financial assets 2 Property, plant and equipment Deferred exploration expenditure 3 Total Non-Current Assets Total Assets Liabilities Current Liabilities Trade and other payables Provisions Convertible notes 10 Total Current Liabilities Total Liabilities Net Assets Equity Issued capital 4 Reserves Accumulated losses Total Equity	31 December 2016 $ 30 June 2016 $
	471,153 446,405 33,571 31,147 54,571 44,410
	559,295 521,962
	8,000 12,000 102,735 116,376 1,017,222 1,027,394
	1,127,957 1,155,770
	1,687,252 1,677,732
	224,482 277,234 48,259 41,981 - 240,748
	272,741 559,963
	272,741 559,963
	1,414,511 1,117,769
	23,058,413 21,628,155 1,016,068 994,268 (22,659,970) (21,504,654)
	1,414,511 1,117,769

The accompanying notes form part of these financial statements.

Canyon Resources Limited

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

Balance at 1 July 2015 Loss for the period Movement in foreign exchange on translation Change in fair value of available-for- sale financial assets Total comprehensive loss for the period Shares issued for cash Share issue costs Convertible notes issued Share-based payments Balance at 31 December 2015 Balance at 1 July 2016 Loss for the period Movement in foreign exchange on translation Total comprehensive loss for the period Shares issued on conversion of convertible notes Shares issued for cash Share issue costs Issue of performance shares Balance at 31 December 2016	Issued capital Accumulated losses Convertible note reserve Available- for-sale reserve Foreign currency reserve Option and performance shares reserve Total Equity
	$ $ $ $ $ $ $
	19,949,474 (17,114,945) - 11,200 257,002 503,984 3,606,715 - (1,025,349) - - - - (1,025,349) - - - - 5,656 - 5,656 - - - (11,200) - - (11,200)
	- (1,025,349) - (11,200) 5,656 - (1,030,893)
	760,000 - - - - - 760,000 (84,854) - - - - - (84,854) - - 45,455 - - - 45,455 - - - - - 208,572 208,572
	20,624,620 (18,140,294) 45,455 - 262,658 712,556 3,504,995
	21,628,155 (21,504,654) 35,768 - 235,944 722,556 1,117,769 - (1,155,316) - - - - (1,155,316) - - - - (10,864) - (10,864)
	- (1,155,316) - - (10,864) - (1,166,180)
	285,768 - (35,768) - - - 250,000 1,160,123 - - - - - 1,160,123 (15,633) - - - - - (15,633) - - - - - 68,432 68,432
	23,058,413 (22,659,970) - - 225,080 790,988 1,414,511

The accompanying notes form part of these financial statements

Canyon Resources Limited

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

31 December 2016 31 December 2015

Cash flows from operating activities Payments to suppliers and employees Interest received Net cash outflow from operating activities Cash flows from investing activities Payments for exploration and evaluation Net cash outflow from investing activities Cash flows from financing activities Shares issued for cash Share issue costs Convertible notes issued for cash Net cash inflow from financing activities Net increase/(decrease) in cash held Cash and cash equivalents at the beginning of the period Effect of foreign exchange on cash balances held Cash and cash equivalents at the end of the period	$ $
	(977,033) (666,522) 2,673 3,730
	(974,360) (662,792)
	(139,559) (204,187)
	(139,559) (204,187)
	1,160,123 760,000 (15,633) (84,854) - 500,000
	1,144,490 1,175,146
	30,571 308,167 446,405 650,271 (5,823) 9,082
	471,153 967,520

The accompanying notes form part of these financial statements

Canyon Resources Limited

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2016

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

Statement of compliance

These interim consolidated financial statements are general purpose financial statements prepared in accordance with the requirements of the Corporations Act 2001, applicable accounting standards including AASB 134 ‘Interim Financial Reporting’, Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board (‘AASB’). Compliance with AASB 134 ensures compliance with IAS 34 ‘Interim Financial Reporting’.

The condensed consolidated financial statements are for the consolidated entity consisting of Canyon Resources Limited and its subsidiaries.

This condensed consolidated interim financial report does not include full disclosures of the type normally included in an annual financial report. Therefore, it cannot be expected to provide as full an understanding of the financial performance, financial position and cash flows of the Group as in the full financial report.

It is recommended that the interim financial report be read in conjunction with the annual financial report for the year ended 30 June 2016 and any public announcements made by Canyon Resources Limited during the half-year in accordance with continuous disclosure requirements arising under the Corporations Act 2001 and the ASX Listing Rules.

Basis of preparation

The interim report has been prepared on a historical cost basis, except for the revaluation of certain financial instruments to fair value. Cost is based on the fair value of the consideration given in exchange for assets. The company is domiciled in Australia and all amounts are presented in Australian dollars, unless otherwise noted.

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

Adoption of new and revised Accounting Standards and Interpretations

In the half-year ended 31 December 2016, the Directors have reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to the Group’s operations and effective for annual reporting periods beginning on or after 1 July 2016. The Directors have also reviewed all new Standards and Interpretations that have been issued but are not yet effective for the half-year ended 31 December 2016. As a result of this review the Directors have determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on the Group’s business and, therefore, no change necessary to Group accounting policies.

Significant accounting judgments and key estimates

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

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

Accounting policies and methods of computation

The accounting policies and methods of computation adopted are consistent with those of the previous financial year and corresponding interim period. These accounting policies are consistent with Australian Accounting Standards and with International Reporting Standards.

Canyon Resources Limited

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2016

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued

Going Concern

The financial statements are prepared on a going concern basis.

At the balance date, the Group had an excess of current assets over current liabilities of $286,554 (30 June 2016: excess of current liabilities over current assets of $38,001). On the 31 January 2017 the company raised $3.408 million before costs from the exercise of 56,753,252 listed options and on the 22 February 2017 the company raised a further $482,800 before costs in relation to 7,100,00 unlisted options of which 3,438,308 options where exercised by option holders and the balance of 3,661,692 where placed with sophisticated investors giving a total capital raised of $3.890 million before costs. This provides the Company with a positive working capital position, and as such the Group has forecasted that it will not need to seek additional funding in the coming year in order to meet its planned exploration expenditure for the next twelve months from the date of signing this financial report.

NOTE 2: OTHER FINANCIAL ASSETS

Available-for-sale financial assets carried at fair value: Listed shares Shares in Rumble Resources Ltd at fair value Impairment Reversal of available-for-sale reserve	6 months to 31 December 2016 Year to 30 June 2016 $ $
	12,000 23,200 (4,000) - - (11,200)
	8,000 12,000

The remaining 400,000 shares were revalued at 31 December 2016 in line with the Group’s accounting policy to their fair value. Due to the significant and prolonged diminuition in value an impairment charge of $4,000 has been recognised during the period.

Canyon Resources Limited

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2016

NOTE 3: DEFERRED EXPLORATION EXPENDITURE

		6	months to	months to		Year to
		31 December 2016			30	June 2016
			$			$
Exploration and evaluation phase
Acquisition of tenements – at cost
Balance at beginning of the period				1,027,394		3,186,349
Impairment of exploration assets				-		(2,135,217)
Effect of movement in exchange rates on carrying value				(10,172)		(23,738)
Total				1,017,222		1,027,394
The recoupment of costs carried forward in relation	to areas of interest in the		exploration and evaluation phase is
dependent on the successful development and commercial exploitation or sale of the respective areas.
NOTE 4: ISSUED CAPITAL
			31 December			30 June
				2016		2016
				$		$
Ordinary shares
Issued and fully paid				23,058,413		21,628,155

6	months to 31	Year to		6 months to	31	Year to
	December	30 June		December		30 June
	2016	2016		2016		2016
	No.	No.		$		$
Movements in ordinary shares on issue
At beginning of period	174,898,796	137,544,214		21,628,155		19,949,474
- Shares issued for cash	6,200,000	31,275,714		682,000		1,497,000
- Options converted to shares	7,455,384	1,078,868		478,123		64,732
- Convertible notes converted	5,000,000	5,000,000		285,768		250,000
- Cost of share issues	-		-	(15,633)		(133,051)
At end of period	193,554,180	174,898,796		23,058,413		21,628,155

Canyon Resources Limited

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2016

NOTE 5: SEGMENT REPORTING

The following table presents the profit & loss and assets & liabilities information by segment provided to the Board of Directors for the half-year periods ended 31 December 2016 and 31 December 2015.

		Project Generation (Africa) Unallocated (Corporate) Total $ $ $
31 December 2015 Segment revenue and other income Segment result Included within segment results: Depreciation Interest revenue Impairment of financial assets Segment assets Segment liabilities 31 December 2016 Segment revenue and other income Segment result Included within segment results: Depreciation Interest revenue Impairment of financial assets Segment assets Segment liabilities		- 13,264 13,264
		(184,005) (841,344) (1,025,349)
		(15,979) (5,079) (21,058) - 3,730 3,730 - (8,000) (8,000) 3,186,929 1,228,513 4,415,442 (143,816) (766,631) (910,447) - 2,673 2,673
		(523,248) (632,068) (1,155,316)
		(9,170) (2,318) (11,488) - 2,673 2,673 - (4,000) (4,000) 555,709 1,131,543 1,687,252 (131) (272,610) (272,741)

Canyon Resources Limited

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2016

NOTE 6: FINANCIAL INSTRUMENTS

This note provides information about how the Group determines fair values of various financial assets and liabilities.

Fair value of the Group’s financial assets and liabilities that are measured at fair value on a recurring basis

Some of the Group’s financial assets and liabilities are measured at fair value at the end of the reporting period. The following table gives information about how the fair values of these financial assets and liabilities are determined (in particular, the valuation technique(s) and key input(s) used).

	Fair value	as at
Financial	31 December	30 June	Fair value	Valuation	Significant	Relationship of
assets/liabilities	2016	2016	hierarchy	technique(s)	unobservable	unobservable
				and key	input(s)	input(s) to fair
				input(s)		value
	$	$
Available-for-sale
financial instruments	8,000	12,000	Level 1	Shareprice	None	None

There were no transfers between Level 1 and Level 2 in the period.

Fair value of financial assets and financial liabilities that are not measured at fair value on a recurring basis

The Directors consider that the carrying value of the financial assets and financial liabilities are recognised in the consolidated financial statements approximate their fair values.

All gains and losses included in other comprehensive income relate to available-for-sale assets held at the balance date are reported as changes of available-for-sale reserve unless the asset is impaired.

NOTE 7: COMMITMENTS

Commitments remain as those disclosed in the 30 June 2016 annual financial report.

NOTE 8: CONTINGENCIES

There has been no change in contingent liabilities since the 30 June 2016 annual financial report.

Canyon Resources Limited

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2016

NOTE 9: SHARE-BASED PAYMENTS

During the half year, the following performance shares were issued:

8,000,000 Director Performance Shares

Details of these issues are:

Performance Shares

8,000,000 Director Performance Shares were approved 25 November 2016 to Messrs David Netherway, Phillip Gallagher and Emmanuel Correia on the terms and conditions set out below:

Name	Performance Shares
David Netherway	2,500,000
Phillip Gallagher	2,500,000
Emmanuel Correia	3,000,000
Total	8,000,000

These performance shares were independently valued, using a valuation methodology based on the guidelines set out in AASB 2 Share Based Payments . Details of the assumptions used in the valuation of these performance shares issued are as follows:

Item	Performance Shares
Number of shares	8,000,000
Market price of shares as at 25 November 2016	$0.10
Fair value per Performance share	$0.10530

The value of $68,432 has been expensed as share-based payments in the statement of comprehensive income for the period.

The Performance Shares will be issued for nil cash consideration as fully paid ordinary shares in the capital of the Company issued on the terms and conditions under the Canyon Long Term Incentive Plan and subject to the following vesting conditions:

one third vest on delineating a resource of at least 150 MT on one of the Company’s existing projects or a project to be acquired by the Company;
one third vest on the raising of at least $10million in support of a Company project; and
oen third vest on the Related party remaining with the Company for a minimum of 12 months.

Canyon Resources Limited

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2016

NOTE 10: CONVERTIBLE NOTES

At beginning of period Proceeds of issue Equity component taken to reserves Interest expense for the period(1) Conversion to shares At end of period	6 months to 31 December 2016 $ Year to 30 June 2016 $
	240,748 - - 500,000 - (45,455) 9,252 26,515 (250,000) (240,312)
	- 240,748

On 16 October 2015, the Company announced that to fund the Birsok Bauxite Project in Cameroon funds had been raised through the placement of 10 million convertible notes at an issue price of 5 cents issue to raise $500,000 from sophisticated and professional investors. The key terms of the convertible notes were:

Principal	$0.05
Interest Rate	Nil
MaturityDate	1 November 2016
Conversion Price	$0.05, or, subject to not being prohibited by the ASX Listing Rules, if, after 1 May 2016 the Share price as traded on ASX on the Conversion Date is below $0.05, a 15% discount to the 30 day volume weighted average price of Shares as traded on ASX immediately prior to the Conversion Date.
Security	Unsecured and the Noteholder will rank equally with all other unsecured creditors of the Company.
Quotation	The Companywill not applyforquotation on ASX of the Convertible Notes.
Voting rights	The Convertible Notes shall not provide for any voting rights at shareholder meetings of the Company (unless otherwise required by the ASX Listing Rules or the Corporations Act).
Transferability	The Noteholder shall be permitted to transfer all or any of the Convertible Notes on the condition that the Noteholder procures that the assignee of the Convertible Notes agrees to be bound by the terms and conditions of this Deed and the assignee falls within one or more of the categories specified in sections 708(8), 708(10) or 708(11) of the Corporations Act.

(1) The interest for the period was calculated by apply an effective interest rate of 10% to the liability component for the period since the notes were issued.

Canyon Resources Limited

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

NOTE 11: EVENTS SUBSEQUENT TO BALANCE DATE

The following options were converted to shares subsequent to balance date:

57,588,593 listed options expiring 31 January 2017 at a price of 6 cents per share
7,400,000 unlisted options expiring 22 February 2017 at a price of 6.8 cents per share

Other than these matters, there have been no matters or circumstances that have arisen since 31 December 2016 that significantly affected or may significantly affect:

The Group’s operations in future years; or
The results of those operations in future years; or
The Groups state of affiars in future years.

NOTE 12: RELATED PARTIES

For details of share-based payments to Directors refer to note 9. Other arrangements continue to be in place.

For details of these arrangements, refer to the 30 June 2016 annual report.

Canyon Resources Limited

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DIRECTORS’ DECLARATION

In the opinion of the directors:

1 the financial statements and notes set out on pages 7 to 18 are in accordance with the Corporations Act 2001 including:
(a) complying with Accounting Standards, AASB 134 “Interim Financial Reporting ” the Corporations Regulations 2001 and other mandatory professional reporting requirements: and
(b) giving a true and fair view of the Group’s financial position as at 31 December 2016 and of its performance for the half-year ended on that date; and
2 there are reasonable grounds to believe that Canyon Resources Limited will be able to pay its debts as and when they become due and payable.

This declaration is signed in accordance with a resolution of the Board of Directors made pursuant to s.303(5) of the Corporations Act 2001.

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Phillip Gallagher Managing Director

Perth, 14 March 2017

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INDEPENDENT AUDITOR’S REVIEW REPORT

To the members of Canyon Resources Limited

Report on the Condensed Half-Year Financial Report

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

Directors’ responsibility for the half-year financial report

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

Auditor’s responsibility

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

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

Independence

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

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HLB Mann Judd (WA Partnership) is a member of

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

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Conclusion

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

(a) giving a true and fair view of the Group’s financial position as at 31 December 2016 and of its performance for the half-year ended on that date; and
(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

HLB Mann Judd Chartered Accountants

D I Buckley Partner

Perth, Western Australia 14 March 2017

AI assistant

CANYON RESOURCES LIMITED — Interim / Quarterly Report 2017

64608_rns_2017-03-14_9fa5c474-b4a0-491c-af45-20c2ac3caddb.pdf

CORPORATE INFORMATION