CARNABY RESOURCES LIMITED — Interim / Quarterly Report 2017

Mar 13, 2017

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Financial Statements

Berkut Minerals Limited For the half-year ended 31 December 2016

Berkut Minerals Limited financial statements For the period ended 31 December 2016

Contents

Contents
	Page
Directors’ Report	1
Auditor’s Independence Declaration	6
Statement of Profit or Loss and Other Comprehensive Income	7
Statement of Cash Flows	10
Notes to the Financial Statements	11
Directors’ Declaration	15
Independent Auditor’s Report	16

Berkut Minerals Limited financial statements For the period ended 31 December 2016

1

Directors’ Report

The Directors of Berkut Minerals Limited (Berkut or Company) present their Report together with the financial statements of the consolidated entity, being Berkut (‘the Company’) and its Controlled Entities (‘the Company’) for the period ended 31 December 2016.

Director details

The following persons were Directors of Berkut during or since the end of the financial year.

Mr Michael Bohm

B.AppSc, MAusIMM, MAICD

Non-Executive Chairman (appointed 1 July 2016)

Mr Bohm is a qualified mining professional with extensive Corporate, Project Development and Mine Operations experience. A graduate of the WA School of Mines, he has worked as a mining engineer, mine manager, study manager, project manager and project director.

Other current Directorships: Perseus Mining Limited Ramelius Resources Limited Mincor Resources Limited Cygnus Gold Limited

Previous Directorships in the last 3 years: Tawana Resources NL Herencia Resources plc

Interests in shares: 100,000 shares

Interest in options: 1,000,000 comprising 500,000 Class A Options and 500,000 Class B Options

Paul Payne

B.AppSc, Grad Dip Min Ec, Grad Cert (Geostats), FAusIMM

Non-Executive Director (Appointed 1 July 2016)

Mr Payne is principal of PayneGeo and has over thirty years’ experience within the mining industry including over ten years of independent consulting across a range of commodities and jurisdictions. Mr Payne has extensive technical experience in the evaluation of mineral deposits from early stage exploration to definitive feasibility studies.

Other current Directorships: None

Previous Directorships in the last 3 years: Dacian Gold Limited Brighton Resources Limited

Interests in shares: 75,000 shares

Interest in options: 500,000 comprising Class A Options

Berkut Minerals Limited financial statements For the period ended 31 December 2016

2

Mr Justin Tremain BCom

Non-Executive Director (Appointed 19 February 2016)

Mr Justin Tremain graduated from the University of Western Australia with a Bachelor of Commerce degree. Mr Tremain cofounded ASX listed Renaissance Minerals Limited in June 2010 and served as Managing Director until its takeover by ASX Emerald Resources NL in November 2016. He is currently an Executive Director of Emerald Resources NL. Prior to founding Renaissance Minerals Limited, he had over 10 years’ investment banking experience in the natural resources sector. He has held positions with Investec, NM Rothschild & Sons and Macquarie Bank and has extensive experience in the funding of natural resource projects in the junior to midtier resource sector. He has undertaken numerous advisory assignments for resource companies, including acquisition and disposal assignments and project advisory roles.

Other current Directorships: Emerald Resources NL

Previous Directorships: Renaissance Minerals Limited

Interests in shares: 2,100,000 shares

Interest in options: 500,000 Comprising Class A Options

Mr Michael Naylor

Appointed 19 February 2016, Resigned 1 July 2016

Mr Michael Wilson

Appointed 19 February 2016, Resigned 1 July 2016

Berkut Minerals Limited financial statements For the period ended 31 December 2016

3

Company Secretary

Ms Melanie Li

Ms Melanie Li is a Chartered Accountant and the Company Secretary. Melanie Li has over six years’ experience in the mining industry. She commenced her career at ASX-listed Tanami Gold NL where she qualified as a Chartered Accountant. She is currently the Financial Controller and Company Secretary of Tawana Resources NL.

Principal activities

During the period, the principal activity of the Company was the exploration on the area of land the subject of the Cairn Hill Gold Project. Both the Mt Clement Gold Project and Capricorn Lithium Project are in a tenement application stage and therefore the Company has not yet commenced its own exploration activities on these two projects.

There have been no significant changes in the nature of these activities during the period.

Review of operations and financial results

Since incorporation, (19 February 2016) the Company has established itself as a minerals exploration company, focussing on gold, base metals, lithium and cobalt.

The Company was successfully admitted to the Official List of ASX Limited on 26 August 2016 with official quotation commencing on 30 August 2016.

The Company entered into an agreement to acquire an interest of up to a 70% in a gold project located in the Ashburton region, WA (Cairn Hill Gold Project).

A diamond drilling program at the Cairn Hill Gold Project (“the Project”) in the Ashburton Region of Western Australia was completed in the December 2016 quarter. A four hole, 480m diamond drilling program was designed to confirm the presence and style of high grade gold at the Project. Significant intersections from the recent Berkut drilling program are summarised in Table 1.

Table 1- Significant intersections Cairn Hill December 2016 (0.1g/t Au cut off with maximum internal dilution of 2.0m in a single zone of waste)*

Hole	Depth from	Depth to	Interval	Au (g/t)
CHD003	31m	34.1m	3.1m	9.7
within	30m	42.9m	12.9m	2.9
CHD004	30.5m	41m	10.5m	8.1

• Refer to ASX Announcement on 19 December 2016 for full details.

Hole CHD003 was designed to confirm the location of a high grade historic intersection. Hole CHD004 tested continuity on a small step out on this shallow high grade mineralised intersection. Both holes yielded high-grade gold, surrounded by a broader mineralised envelope. The high-grade gold in CHD003 was coincident with strong quartz veining. CHD004 was dominated by limonitic, highly weathered sediments with stringer quartz veins present.

Berkut Minerals Limited financial statements For the period ended 31 December 2016

4

The results confirm the style of mineralisation targeted and illustrate the potential for a shallow, highgrade gold deposit at Cairn Hill. A follow-up RC drilling program commenced in February 2017.

In addition, the Company has identified and secured an additional 218km[2 ] of ground as a gold target also located in the Ashburton region, Western Australia (Mt Clement Gold Project) and secured 188km[2 ] of ground covering an area prospective for lithium in the Savory Basin in the Little Sandy Desert of Western Australia (Capricorn Lithium Project).

The operating result of the Company is $180,712 loss. Earnings per share are a loss of 1.30 cents per share.

Events arising since the end of the reporting period

Cairn Hill Gold Project

In January 2017, in accordance with the earn-in and joint venture agreement with the vendors of the Cairn Hill Gold Project, the Company made a payment of $100,000 to the vendors.

Cobalt Projects

On 9 February 2017, the Company entered into a binding term sheet granting it an exclusive 60-day due diligence option period to acquire Kobald Mineral Holdings Pty Ltd (‘Kobald’) which holds the 100% rights to four highly prospective cobalt projects (‘Projects’) located in Czech Republic (‘Jachymov Project’), Norway (‘Skutterud Project’) and Sweden (‘Gladhammar and Tunaberg Projects’). The Projects are well located with excellent infrastructure and proximity to an operating cobalt refinery and are well placed to benefit from growing demand for ethically sourced cobalt.

Subject to shareholder approval, the consideration for the acquisition of Kobald will be:

• 5.0 million Berkut shares at completion of the acquisition. These shares will be subject to a voluntary escrow period to 30 August 2018; and

• 7.5 million Berkut shares on completion of a scoping study for the development of any of the Projects based on JORC compliant Measured, Indicated or Inferred Resources identified at any of the Projects; and

• 7.5 million Berkut shares on the completion of a definitive feasible study for the development of any of the Projects based on JORC compliant Measured and Indicated Resources identified at any of the Projects.

Also, subject to shareholder approval and completion of the acquisition, Berkut will issue 2.0 million shares as an introduction and facilitation fee to Max Capital Pty Ltd or nominees (none of these parties are related to Berkut).

Berkut has received firm commitments to raise $2.0 million through an equity placement of 10.0 million shares to be issued at a price of 20 cents per share.

The placement are in two tranches:

• Tranche 1 - 4.9 million shares at 20 cents to raise $0.98 million, which was completed on 17 February 2017,

• Tranche 2 - 5.1 million shares at 20 cents to raise a further $1.02 million, to be issued subject to shareholder approval at a meeting of shareholders to be held following completion of the Due Diligence Option Period.

Berkut Minerals Limited financial statements For the period ended 31 December 2016

5

Subject to completion of Tranche 2 of the placement, Berkut will issue 5.0 million broker options exercisable at 25 cents each and expiring 30 June 2018.

In January 2017, in accordance with the earn-in and joint venture agreement with the vendors of the Cairn Hill Gold Project, the Company made a payment of $100,000 to the vendors.

There are no other matters or circumstances that have arisen since the end of the year that have significantly affected or may significantly affect either:

• the entity’s operations in future financial years

• the results of those operations in future financial years; or

• the entity’s state of affairs in future financial years

Auditor’s independence declaration

The lead auditor’s independence declaration for the period ended 31 December 2016 has been received and is attached to this Directors’ Report.

Signed in accordance with a resolution of the Board of Directors.

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Mr Justin Tremain

Non-Executive Director

Dated at Perth this 14[th] day of March 2017

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Level 1 10 Kings Park Road West Perth WA 6005

Correspondence to: PO Box 570 West Perth WA 6872 T +61 8 9480 2000 F +61 8 9322 7787 E info.wa@au.gt.com W www.grantthornton.com.au

Auditor’s Independence Declaration To The Directors of Berkut Minerals Limited

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the review of Berkut Minerals Limited for the half-year ended 31 December 2016, I declare that, to the best of my knowledge and belief, there have been:

• a No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

• b No contraventions of any applicable code of professional conduct in relation to the review.

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GRANT THORNTON AUDIT PTY LTD Chartered Accountants

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M A Petricevic Partner - Audit & Assurance

Perth, 14 March 2017

Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation.

Berkut Minerals Limited financial statements For the period ended 31 December 2016

7

Statement of Profit or Loss and Other Comprehensive Income

For the half year ended 31 December 2016

	Notes	Dec 2016	Dec 2015
		$	$
Revenues		17,939	-
Audit and accountancy		(16,865)	-
Compliance costs		(61,342)	-
Consultancy costs		(42,550)	-
Directors’ fees		(35,000)	-
Depreciation		(519)	-
Employment costs		(8,999)	-
Explorationexpenses		(24,129)	-
Insurance		(13,214)	-
ITcosts		(580)	-
Premises costs		(3,937)	-
Share based payments expense		-	-
Travelcosts		(10,741)	-
Othergeneraland administrationexpenses		(4,903)	-
Loss before income tax		(204,840)	-
Income taxexpense		-	-
Loss for theperiod		(204,840)	-
Other comprehensive loss for the period, net of tax		-	-
Total comprehensive loss for the period		(204,840)	-
	Notes	Dec 2016	Dec 2015
		$	$
Lossper share
Loss per share (cents per share)	10	(1.47)	-
Diluted loss per share (cents per share)	10	(1.47)	-

Note: This statement should be read in conjunction with the notes to the financial statements.

Berkut Minerals Limited financial statements For the period ended 31 December 2016

8

Statement of Financial Position

As at 31 December 2016

	Notes	Dec 2016	Jun 2016
		$	$
Assets
Current
Cashand cashequivalents	5	3,060,473	344,840
Other financialassets		15,000	20,129
Trade and other receivables	6	24,234	3,241
Current assets		3,099,707	368,210
Non-current
Property, plant and equipment		12,196	-
Explorationand evaluation	7	314,951	-
Non-current assets		327,147	-
Total assets		3,426,854	368,210
Liabilities
Current
Trade and otherpayables	8	36,384	60,830
Short termprovisions		4,548	-
Currentliabilities		40,932	60,830
Non-current
Long termprovisions		1,089	-
Non-currentliabilities		1,089	-
Total liabilities		42,021	60,830
Net assets		3,384,833	307,380
Equity
Share Capital	9	3,601,439	319,146
Share Option Reserve		105,816	105,816
Accumulatedlosses		(322,422)	(117,582)
Total equity		3,384,833	307,380

Note: This statement should be read in conjunction with the notes to the financial statements.

Berkut Minerals Limited financial statements For the period ended 31 December 2016

9

Statement of Changes in Equity

For the period ended 31 December 2016

	Notes	Share **capital **	Share option reserve	Retained Losses	Total equity
		$’000	$’000	$’000	$’000
Balance at1July2016		319,146	105,816	(117,582)	307,380
Lossforthe period		-	-	(204,840)	(204,840)
Othercomprehensiveloss		-	-	-	-
Totalcomprehensiveloss		-	-	(204,840)	(204,840)
Transactionswithowners and options
Share-based payment options		-	-	-	-
Issue ofshare capital	9	3,500,000	-	-	3,500,000
Shareissuance costs	9	(217,707)			(217,707)
Balance at 31 December 2016		3,601,439	105,816	(322,422)	3,384,833

	Notes	Share capital	Share option reserve	Retained Losses	Total equity
		$’000	$’000	$’000	$’000
Balance at19February2016		-	-	-	-
Lossforthe period		-	-	(117,582)	(117,582)
Othercomprehensiveloss		-	-	-	-
Totalcomprehensiveloss		-	-	(117,582)	(117,582)
Transactionswithowners and options
Share-based payment options		-	105,816	-	105,816
Issue ofshare capital	9	360,503	-	-	360,503
Shareissuance costs	9	(41,357)			(41,357)
Balance at 30 June 2016		319,146	105,816	(117,582)	307,380

Note: This statement should be read in conjunction with the notes to the financial statements.

Berkut Minerals Limited financial statements For the period ended 31 December 2016

10

Statement of Cash Flows

For the period ended 31 December 2016

	Notes	Dec 2016	Dec 2015
		$	$
Operating activities
Payments to suppliersforadministration		(209,873)	-
Interestreceived		15,412	-
Net cash used in operating activities		(194,461)	-
Investing activities
Deposits paidforexplorationtenements		(314,265)	-
Purchase ofproperty, plant and equipment		(12,715)	-
Paymentsfordeposits		(15,000)	-
Net cash used in investing activities		(341,980)	-
Financing activities
Proceedsfromshareissuances	9	3,252,074	-
Net cash provided by financing activities		3,252,074	-
Net changeincashand cashequivalents		2,715,633	-
Cashand cashequivalents, beginning ofperiod		344,840	-
Cash and cash equivalents, end ofperiod	5	3,060,473	-

Note: This statement should be read in conjunction with the notes to the financial statements.

Berkut Minerals Limited financial statements For the period ended 31 December 2016

11

Notes to the Financial Statements

1 Nature of operations

Berkut Minerals Limited (‘the Company’) principal activities include the exploration for gold, lithium and cobalt.

The Company’s planned activities include:

• (a) satisfying its expenditure commitments under the Cairn Hill Joint Venture Agreement;

• (b) systematically exploring the Company’s key Western Australian projects being the Cairn Hill Gold Project, Mt Clement Gold Project and the Capricorn Lithium Project;

• (c) systematically exploring the Company’s prospective cobalt projects located in Czech Republic (Jachymov Project), Norway (Skutterud Project) and Sweden (Gladhammar and Tunaberg Projects); and

• implementing a growth strategy to seek out further exploration, acquisition and joint venture opportunities in Australia and internationally.

2 General information and statement of compliance

The condensed interim financial statements (‘the interim financial statements’) of the Company are for the six (6) months ended 31 December 2016 and are presented in Australian Dollar ($AUD) which is the functional currency the Company. These general purpose interim financial statements have been prepared in accordance with the requirements of the Corporations Act 2001 and AASB 134 Interim Financial Reporting. They do not include all of the information required in annual financial statements in accordance with Australian Accounting Standards, and should be read in conjunction with the financial statements of the Company for the year ended 30 June 2016 and any public announcements made by the Company during the half-year in accordance with continuous disclosure requirements arising under the Australian Securities Exchange Listing Rules and the Corporations Act 2001.

Berkut Minerals Limited is a Company incorporated and domiciled in Australia on 19[th] of February 2016. The address of its registered office and its principal place of business is 78 Churchill Avenue, Subiaco, Western Australia.

The financial statements for the period ended 31 December 2016 were approved and authorised for issue by the Board of Directors on 13 March 2017.

3 Adoption of new and revised Accounting Standards

(a) Adoption of new and revised Accounting Standards

In the half-year ended 31 December 2016, the Company has reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for annual reporting periods beginning on or after 1 July 2016.

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

Berkut Minerals Limited financial statements For the period ended 31 December 2016

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The Company has 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 its business and therefore no change is necessary to Company accounting policies.

4 Estimates

When preparing the interim financial statements, management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results.

The judgements, estimates and assumptions applied in the interim financial statements, including the key sources of estimation uncertainty were the same as those applied in the Company’s last annual financial statements for the year ended 30 June 2016. The only exception is the estimate of the provision for income taxes which is determined in the interim financial statements using the estimated average annual effective income tax rate applied to the pre-tax income of the interim period.

5 Cash and cash equivalents

Cash and cash equivalents include the following components:

	Dec 2016	Jun 2016
	$	$
Cashat bankandin hand:	1,560,473	344,840
Cashat call	1,500,000	-
Cash and cash equivalents	3,060,473	344,840

The amount of cash and cash equivalents accessible to the Company as at 31 Dec 2016 amounts to $3,060,473 (30 Jun 2016: $344,840).

6 Trade and other receivables

Trade and other receivables consist of the following:

Trade and other receivables	Dec 2016	Jun 2016
	$	$
GST recoverable	21,706	3,241
Other receivables	2,527	-
Total trade and other receivables	24,234	3,241

All amounts are short term. The net carrying value of trade receivables is considered a reasonable approximation of fair value.

7 Exploration and evaluation

**Exploration and evaluation **	Dec 2016	Jun 2016
	$	$
Opening balance	-	-
Expenditureincurred during the period	314,951	-
Closing balance	314,951	-

Berkut Minerals Limited financial statements For the period ended 31 December 2016

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8 Trade and other payables

Trade and other payables consist of the following:

Trade and otherpayables	Dec 2016	Jun 2016
	$	$
Trade and otherpayables	36,384	60,830
Total trade and otherpayables	36,384	60,830

All amounts are short-term. The carrying values of trade and other payables are considered to be a reasonable approximation of fair value.

9 Equity

9.1 Share capital

The share capital of Berkut consists only of fully paid ordinary shares; the shares do not have a par value. All shares are equally eligible to receive dividends and the repayment of capital and represent one vote at the shareholders’ meeting of Berkut.

	Dec 2016	Dec 2016	Jun 2016	Jun 2016
	Shares	$	Shares	$
Balance at beginning ofperiod	15,166,666	319,146	-	-
Sharesissued andfully paid	17,500,000	3,500,000	15,166,666	360,503
Shareissuance costs		(217,707)		(41,357)
Balance at end ofperiod	32,666,666	3,601,439	15,166,666	319,146

Each share has the same right to receive dividend and the repayment of capital and represents one vote at the shareholders’ meeting of Berkut.

10 Earnings per share

10.1 Earnings per share

Both the basic and diluted earnings per share have been calculated using the profit attributable to shareholders of the Parent Company (Berkut) as the numerator (ie no adjustments to profit were necessary in 2016).

The reconciliation of the weighted average number of shares for the purposes of diluted earnings per share to the weighted average number of ordinary shares used in the calculation of basic earnings per share is as follows:

	Dec 2016
Amountsinthousand shares:
•weighted averagenumberofshares usedinbasic earnings pershare	13,920,091
•shares deemed to be issued for no consideration in respect of share based payments	1,504,110
Weighted average number of shares used in diluted earnings per share	15,424,201

11 Contingent commitments

On 14 June 2016, the Company entered into an earn-in and joint venture agreement that will grant the Company the conditional right to earn up to a 70% interest in a joint exploration operation.

The Company may earn a 51% joint venture interest in the operation by spending $2,000,000 by 31 December 2019, $1,000,000 of which must be committed by December 2018. The Company has the option to increase its joint venture interest to 70% by sole funding the project until completion of a pre-feasibility study.

Berkut Minerals Limited financial statements For the period ended 31 December 2016

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12 Operating segments

The Company has identified its operating segments based on the internal reports that are reviewed and used by the Directors (chief operating decision makers) in assessing performance and determining the allocation of resources.

The company operates in one segment being Exploration and Evaluation of Minerals in Australia.

13 Post-reporting date events

Cairn Hill Gold Project

In January 2017, in accordance with the earn-in and joint venture agreement with the vendors of the Cairn Hill Gold Project, the Company made a payment of $100,000 to the vendors.

Cobalt Projects

On 9 February 2017, the Company entered into a binding term sheet granting it an exclusive 60 day due diligence option period to acquire Kobald Mineral Holdings Pty Ltd (‘Kobald’) which holds the 100% rights to four highly prospective cobalt projects (‘Projects’) located in Czech Republic (‘Jachymov Project’), Norway (‘Skutterud Project’) and Sweden (‘Gladhammar and Tunaberg Projects’). The Projects are well located with excellent infrastructure and proximity to an operating cobalt refinery and are well placed to benefit from growing demand for ethically sourced cobalt.

Subject to shareholder approval, the consideration for the acquisition of Kobald will be:

• 5.0 million Berkut shares at completion of the acquisition. These shares will be subject to a voluntary escrow period to 30 August 2018; and

• 7.5 million Berkut shares on completion of a scoping study for the development of any of the Projects based on JORC compliant Measured, Indicated or Inferred Resources identified at any of the Projects; and

• 7.5 million Berkut shares on the completion of a definitive feasible study for the development of any of the Projects based on JORC compliant Measured and Indicated Resources identified at any of the Projects.

Also, subject to shareholder approval and completion of the acquisition, Berkut will issue 2.0 million shares as an introduction and facilitation fee to Max Capital Pty Ltd or nominees (none of these parties are related to Berkut).

Berkut has received firm commitments to raise $2.0 million through an equity placement of 10.0 million shares to be issued at a price of 20 cents per share.

The placement are in two tranches as below:

• Tranche 1 - Comprising 4.9 million shares at 20 cents to raise $0.98 million, which was completed on 17 February 2017,

• Tranche 2 - Comprising 5.1 million shares at 20 cents to raise a further $1.02 million, to be issued subject to shareholder approval at a meeting of shareholders to be held following completion of the Due Diligence Option Period.

Subject to completion of Tranche 2 of the Placement, Berkut will issue 5.0 million broker options exercisable at 25 cents each and expiring 30 June 2018.

Other than the paragraphs above, there have been no adjusting or significant non-adjusting events have occurred between the reporting date and the date of authorisation.

Berkut Minerals Limited financial statements For the period ended 31 December 2016

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Directors’ Declaration

• 1 In the opinion of the Directors of Berkut Minerals Limited:

• a The consolidated financial statements and notes of Berkut Minerals Limited are in accordance with the Corporations Act 2001 , including:

  • i Giving a true and fair view of its financial position as at 31 December 2016 and of its performance for the half-year ended on that date; and

  • ii Complying with Accounting Standard AASB 134 Interim Financial Reporting ; and

• 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.

Signed in accordance with a resolution of the Directors:

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Director Justin Tremain

Dated the 14[th] day of March 2017

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Level 1 10 Kings Park Road West Perth WA 6005

Correspondence to: PO Box 570 West Perth WA 6872

INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS OF BERKUT MINERALS LIMITED

T +61 8 9480 2000 F +61 8 9322 7787 E info.wa@au.gt.com W www.grantthornton.com.au

We have reviewed the accompanying half-year financial report of Berkut Minerals Limited (the Company), which comprises the statement of financial position as at 31 December 2016, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, notes comprising a statement or description of accounting policies, other explanatory information and the directors’ declaration.

Directors’ Responsibility for the Half-year Financial Report

The Directors of Berkut Minerals Limited are responsible for the preparation of the halfyear financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such controls as the Directors determine is necessary to enable the preparation of the half-year financial report that 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 the 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 Berkut Minerals Limited’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 Berkut Minerals Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation.

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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 complied with the independence requirements of the Corporations Act 2001 .

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 Berkut Minerals Limited is not in accordance with the Corporations Act 2001 , including:

• a giving a true and fair view of the Company’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 Corporations Regulations 2001 .

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GRANT THORNTON AUDIT PTY LTD Chartered Accountants

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M A Petricevic Partner - Audit & Assurance

Perth, 14 March 2017