COPPERMOLY LIMITED — Annual Report 2017

Sep 25, 2017

2017 ANNUAL REPORT

C O N T E N T S

	Page
Directors' Report	2-21
Operating & Financial Review2
Corporate Governance 21
Auditor's Independence Declaration22
Financial Report 23
Consolidated Statement of Profit or Loss and Other Comprehensive Income 24
Consolidated Statement of Financial Position25
Consolidated Statement of Changes in Equity26
Consolidated Statement of Cash Flows 27
Notes to the Consolidated Financial Statements	28-48
Directors' Declaration 49
Independent Audit Report to the Members	50-53
Shareholder Information 54
Corporate Directory 55
Schedule of Tenements55

Your Directors present their report on the consolidated entity consisting of Coppermoly Ltd and the entities it controlled at the end of, or during, the year ended 30 June 2017.

DIRECTORS

The following individuals were Directors of Coppermoly Ltd during the whole of the financial year ended 30 June 2017, and up to the date of this report:

Mr Kevin Grice

Mr Jincheng Yao Dr Wanfu Huang

Mr Zule Lin

Please see page 15 of the Directors' Report for further details on each director.

PRINCIPAL ACTIVITIES

The principal activities during the financial year of entities within the consolidated entity were exploration and evaluation of porphyry copper-molybdenum-gold projects in Papua New Guinea.

There were no significant changes in the principal activities during the year.

RESULTS AND DIVIDENDS

The consolidated entity loss from operating activities after income tax for the period was \$1,395,240 (2016: \$740,740). No dividend has been paid or recommended during the year ended 30 June 2017.

OPERATING & FINANCIAL REVIEW

Coppermoly Limited is an ASX-listed exploration company targeting porphyry style large scale-low grade projects prospective for copper, gold and molybdenum. The Company's projects are located on New Britain Island in Papua New Guinea (PNG).

Operational Review

Two of the exploration licences currently held by the Company, EL 1043 Mt Nakru and EL 2379 Simuku, are together known as the West New Britain Projects (WNB Projects). During the year the Company completed a successful drilling program at its primary exploration licence, the Mt Nakru (EL 1043) copper-gold project. The results from the program led to an updated JORC Inferred Mineral Resource. Independent mining consultants Mining Associates Pty Ltd estimated the Inferred Mineral Resources in two deposits (at the Nakru 1 and Nakru 2 prospects) totalling approximately 29 million tonnes @ 0.92% Cu and 0.22 g/t Au using a cutoff grade of 0.3% Cu.

The WNB Projects were previously subject to a farm-in agreement with Barrick (PD) Australia Ltd (Barrick), a subsidiary of Barrick Gold Corporation. The Company has a binding agreement to reacquire Barrick's remaining nominal 28% interest in the WNB Projects, completion of which will be effected on the payment of a further \$4.5M to Barrick within 6 months after the commencement of commercial production at the WNB Projects. Barrick do not have to contribute any further costs to exploration or development of the projects nor are they entitled to any profits from the projects. See note 12 in the Notes to the Consolidated Financial Statements for more details.

Coppermoly's other tenement interest is an exploration licence on New Britain Island containing most of the ground previously covered by the old EL 2014 Makmak exploration licence as well as some new additional ground that adjoins the licence area to EL 1043 Mt Nakru. The exploration licence application was granted in September 2017 by the MRA as EL 2514, after a successful Warden's Hearing was held in August 2017.

The Company's core objective is to endeavour to deploy its resources efficiently and effectively to evaluate and realise the full value of its assets over time.

The consolidated entity's current mineral tenements are:

	Date first
Project	acquired	Location
EL 1043 Mt Nakru (48km²)	Jan 2008	West New Britain
EL 2379 Simuku (123km²)	Jan 2008	West New Britain
EL 2514 Makmak (269km²)	Sep 2017	West New Britain

Figure 1: Coppermoly's Exploration Licences on New Britain at 30 June 2017

Project review

EL 1043 Mt Nakru

Drilling at Mt Nakru Copper-Gold project

In June 2017 the Company announced an updated JORC Mineral Resource Estimate for its Mt Nakru Copper-Gold Project (EL 1043). The updated Mineral Resource follows the successful drilling program completed in March 2017. Independent mining consultancy Mining Associates Pty Ltd (Mining Associates) has estimated Inferred Mineral Resources in two deposits (Nakru 1 and Nakru 2) totalling approximately 29 million tonnes @ 0.92% Cu and 0.22 g/t Au using a cut-off grade of 0.3% Cu (Table 1).

Cut Off %Cu	Deposit	Tonnes	Cu (%)	Au (g/t)	Ag (g/t)	Cu (kt)	Au (koz)	Ag (oz)
> 0.2	Nakru 1	40,100,000	0.63	0.21	1.55	253	275	2001
	Nakru 2	9,800,000	0.67	0.04	2.49	66	11	784
	Total	49,900,000	0.64	0.18	1.74	319	286	2785
> 0.3	Nakru 1	21,700,000	0.96	0.28	2.05	208	198	1432
	Nakru 2	7,400,000	0.80	0.04	2.82	59	10	672
	Total	29,100,000	0.92	0.22	2.25	267	208	2104
> 0.5	Nakru 1	15,100,000	1.23	0.35	2.34	186	169	1138
	Nakru 2	3,100,000	1.39	0.06	4.43	43	6	441
	Total	18,200,000	1.26	0.30	2.70	229	175	1579

The Mt Nakru Cu-Au project comprises two known deposits, Nakru 1 and Nakru 2, which are 1.5 km apart (Figure 2).

Figure 1 Plan of Nakru Project Showing Block Model Grades and Drillhole Locations (Location of long sections A-A' and B-B' also shown)

Modelling by Mining Associates confirmed the presence of higher grade (>0.5% Cu) mineralisation lenses at shallow levels (refer to long sections of Nakru 1 and Nakru 2, Figure 2), which should have a significant impact on the project's economics.

Inferred Mineral Resources are reported from blocks less than 200 m depth from surface topography, approximating the likely depth limit of an open pit.

The Nakru 1 Inferred Mineral Resource is open to the south west down plunge. The Nakru 2 Inferred Mineral Resource is the smaller deposit to date, and is open in all directions.

Since in both deposits the higher grades are concentrated in the upper levels, and the shallow depth (over all <200m), an open-pit mine with conventional copper flotation processing is a foreseeable opportunity.

The next phase of exploration activities will focus on seeking to upgrade the resource category while defining the size of Nakru 1, and Nakru 2 in particular.

Results from the successful drilling program at EL 1043 Mt Nakru were announced during March and April 2017. As previously stated, the project area hosts two known mineralisation zones: Nakru 1 and adjacent Nakru 2 prospects where all previous drilling, including the most recent drill holes, has intersected high grade near-surface copper mineralisation.

Highlights from the results from the most recent drilling campaign at Mt Nakru include:

Nakru 1:

• NAK11606 intersected 56.00m @ 1.95% Cu from 60.00m
• NAK11607 intersected 49.66m @ 1.84% Cu and 2.66/t Au from 74.00m
• NAK11604 intersected 50.40m @ 1.45% Cu from 114.00m excluding 3.6m mafic intrusives
• NAK11611 intersected 19.10m @ 3.64% Cu and 0.2 g/t Au from 30.00m
• NAK11602 intersected 55.20m @ 1.11% Cu from 54.00m including 4.00m @ 1.99g/t Au excluding 14.8m mafic intrusives

Nakru 2:

• NAK21603 intersected 32.00m @ 2.58% Cu from 82.00m
• NAK21605 intersected 10.37m @ 3.75% Cu from 15.63m
• NAK21602 intersected 38.00m @ 0.87% Cu from 92.00m including 8.00m @ 1.58% Cu

A total of nine diamond core holes were drilled at Nakru 1 and five diamond core holes at Nakru 2 during the campaign for a total of 2,900.2 metres over the 14 drill holes. The drilling campaign was part of an infill drilling program aimed at upgrading the resource at Nakru 1 and testing the extension of mineralisation at Nakru 2.

The Nakru 1 drilling has identified high grade copper and gold mineralisation extending over significant intersections only being interrupted by later stage mafic dykes and sills. These intrusives are easily identified and will not dilute the mineralised material during extraction.

The geometry of the mineralisation, and relatively flat geological contacts intersected in the drilling, indicate that this deposit may be associated with a volcanogenic hosted massive sulphide style. The breadth and depth of this mineralised envelope is yet to be defined and will be tested with further drilling.

The Nakru 1 deposit also contains a supergene enrichment blanket adjacent to the base of oxidation where secondary enrichment of the sulphides, particularly copper in the form of chalcocite has taken place. This varies in thickness from a metre to over 10 metres in some parts. This zone is relatively close to the surface, is higher in grade and is relatively soft.

In addition to this, later stage quartz sulphide veins have possibly cut through the previously mineralised zones adding more grade, and gold credits to the prospect.

The Nakru 1 prospect remains open, and further exploration is required to uncover the potential tonnage and grade of this deposit.

The recent Nakru 2 drilling has identified mineralised downhole intervals of over 30 metres at greater than 2.5% copper. The style and shape of this mineralisation tends to indicate that this is related to a volcanogenic massive sulphide style deposit, and is backed up by the level of sulphur in the assays received. As previously observed, the mineralisation in the primary zone at the Nakru 2 prospect is dominated by disseminated pyrite and chalcopyrite hosted in a silicified pumice and breccia unit.

This deposit also contains a subtle supergene enrichment blanket similar to Nakru 1 where secondary enrichment of the sulphides, particularly copper in the form of chalcocite occurs. Previous drilling also identified this layer.

The drill holes also intersected bands of elevated zinc and silver within the massive sulphide unit. This adds credence to the possibility that Nakru 2 is a style related to volcanogenic massive sulphide mineralisation.

The prospect remains open, and further exploration is required to uncover the potential tonnage and grade of this deposit.

Figure 3 is a plan of Nakru 1 indicating the location of all the drill holes completed on that prospect to date. Sections through the completed holes can be seen on Figures 4, 5 and 6. These highlight elevated concentrations of copper and gold including the supergene enriched blanket intersected in the drilling.

Figure 7 is a plan of Nakru 2 indicating the location of all the drill holes completed there to date. Sections through the completed holes can be seen on Figures 8, 9 and 10. These highlight elevated concentrations of copper intersected in the drilling.

Figure 2- Drill plan Nakru 1 showing location of all drill holes completed to date.

Figure 3 - Section through NAK11602, NAK11604, NAK11606, NAK11607, NAK11609 and NAK11611

Figure 4 - Section through NAK11602, NAK11603 and BWNBDD0009

Figure 5 - Section through NAK11605 and NAK11610(A)

Figure 6- Drill plan Nakru 2 showing location of all drill holes completed to date.

Figure 7 - Section through NAK21601 and NAK2004

Figure 8 - Section through NAK21602, NAK21603 NAK21605 and BWNBDD0003

Figure 9 - Section through NAK21604

Refer to the ASX Announcement released on 22 June 2017 for details of the Inferred Mineral Resource Estimate update as well as ASX Announcements released 16 March, 19 April, 27 April 2017 and for full details of the recent drilling, including all relevant assay results. The Company is not aware of any new information or data that materially affects the information included in these announcements and all the material assumptions and technical parameters underpinning the Inferred Mineral Resource Estimate in the ASX Announcement released on 22 June 2017 continue to apply and have not materially changed.

EL 2379 Simuku

The Simuku Copper-Gold project prospect comprises the Simuku porphyry, Kula alteration zone and Mt Misusu quartz stockwork. The style of mineralisation at Simuku is typically large and lower grade. As the Simuku prospect extends over both the previously held Simuku and Talelumas exploration licences, Coppermoly decided to consolidate the two licences into EL 2379. The new exploration licence covers exactly the same land, and has the same landowners, as the antecedent tenements but reduces the administration and compliance requirements for the licence.

The Company has signed an agreement with Perth based contractor UTS Geophysics (UTS) to carry out a helicopter-borne geophysical survey at Simuku. The Simuku project area hosts both a large tonnage low grade porphyry style Copper mineralisation and near surface higher grade secondary Copper mineralisation. Both mineralisation zones have untested extensions. A number of geochemical anomalies within the licence area have not yet been tested.

The agreement provides for a helicopter-borne geophysical survey using UTS's Versatile Time-Domain Electromagnetic (VTEM™) geophysical system. The VTEM™ Plus system is excellent for locating discrete conductive anomalies as well as mapping lateral and vertical variations in resistivity.

The VTEM™ survey will investigate the mineral potential over the Simuku exploration licence (EL 2379) area. The proposed survey will be approximately 928 line-kilometres (line spacing at 150m) over all of the existing EL 2379 licence area. The program is scheduled for November 2017.

EL 2514 Makmak

Coppermoly's other tenement interest is an exploration licence on New Britain Island, granted in September 2017, which contains most of the ground covered by the previously held EL 2014 exploration licence as well as some new additional ground that adjoins the application area to EL 1043 Mt Nakru. The licence was granted by the MRA as EL 2514.

The main area of focus previously on the Makmak tenement was the Pulding prospect. Past sampling and prominent aeromagnetic anomalies show a prospective SSE-NNW trending lineament which will be targeted for further evaluation.

Other tenements

In November 2016 the Company was notified by the PNG Mineral Resources Authority (MRA) that renewal applications for exploration licences EL 2014 and EL 2272 had been refused.

An internal decision was made to not seek renewal of EL 1782 Powell when it expires in September 2017. The decision was made to allow the Company to concentrate on its leading prospects Nakru & Simuku along with the new EL 2514 Makmak.

Financial Review

Profit or Loss

Costs, before foreign exchange differences, for the year ended 30 June 2017 were up by approximately \$667,000, or 89% more than last year's total costs. The increased costs were attributable to the non-cash write-off of \$705,399 (2016: \$nil), being historical exploration costs for exploration licences that were not renewed during the year. Employee benefits expense also increased this year compared to 2016, increasing by \$38,750, or 11%, due to 2016 only reflecting Director's fees for less than 3 months for the new non-executive director appointed in April 2016 as well as an increase in the provisions for staff annual and long service leave in 2017. The only other cost to materially increase year on year was Office rental, communication and consumables, up \$4,917, or 13%, due to increased IT costs and a CPI rise in office rent in 2017.

These cost increases were offset by a 46% decrease of \$5,663 in Deprecation charges; lower negotiated Insurance costs which were down \$10,677, or 21%, on last year; a decrease in Finance costs of \$16,347, an decrease of 10% on last year. The lower Finance costs were due to lower amortisation charges recorded on outstanding Convertible notes. The only other significant cost decrease was \$53,465 less in Other expenses due almost entirely to Losses on the impairment and write off of old equipment included last year.

Statement of Financial Position

Total assets decreased over the year by \$907,716 due largely to the net decrease in Cash of \$1,562,041 which was offset by a rise in total capitalised values of Mineral exploration and evaluation assets of \$676,843 that was made up of an increase in Capitalised exploration expenditure of \$1,797,369, offset by non-cash write-off of historical exploration costs of \$705,399, and a decrease of \$415,127 from Foreign currency exchange differences on prior year Mineral exploration and evaluation asset carrying values. A decline in Trade and other receivables of \$18,520 and an overall increase in the value of Property plant and equipment of \$5,747 also offset the reduction in Cash.

Total liabilities increased by a total of \$243,713 largely due to an increase in accrued Directors' fees of \$145,300. As announced in May 2017, subject to shareholders' approval, accrued Directors' fees up to March 2017 will be exchanged for ordinary shares in the Company. Other reasons for the increase in total liabilities include an increase of \$84,000 in accrued interest and other charges on the outstanding Convertible notes and a net increase in Employee leave provisions of \$12,502. These increases in total liabilities were offset by a net decrease in other Trade and payables of \$7,911, excluding the accrued Directors' fees.

Total equity decreased by \$1,151,429 during the year due to the loss for the year of \$1,395,200 and a decrease of \$467,699 in the Foreign currency translation reserve offset by the net proceeds of \$659,562 for the issue of new securities during the year on the exercise of unlisted options and an increase in the Share option reserve of \$51,948 relating to charges on the outstanding Convertible notes.

Cash Flows

Cash used in operations during the year was down again, this year by \$93,230 compared to 2016, an improvement of more than 20% and largely due to lower Employee benefits cash expenses because of a cash payment made to a former director in 2016 for accrued Director's fees of \$64,500. Other material savings included \$10,600 less in Insurance premiums paid in 2017. The Company also received \$13,781 more interest from a higher average cash balance during 2017.

Cash used for investment activities was higher in 2017 compared to last year by \$1,523,270 due to higher Payments for exploration and evaluation activities for the drilling program at Mt Nakru.

Net cash inflows from financing activities were lower during the current year by \$1,769,322. The decrease was due to net cash of \$2,447,032 raised from the issue of securities in 2016 compared to gross cash of \$666,667 raised from the issue of securities in 2017, the costs associated with the 2017 security issues being paid after the end of the financial year.

As at 30 June 2017 Coppermoly had \$554,633 in Cash and cash equivalents compared to \$2,116,674 at 30 June 2016.

Corporate

Capital Raising and Debt Financing

In October 2016 the Company announced that it had obtained agreement from Jade Triumph International Limited to extend the maturity date for the Convertible Notes held by them for twelve months, extending their term so that the new maturity date is now 19 December 2017.

Each Convertible Note is convertible, at the option of the holder, into one new fully paid ordinary share on or before the maturity date, unless repaid earlier, subject to such conversion not resulting in the holder breaching the Corporations Act 2001. There were no other changes to the Convertible Notes terms.

In March 2017 Ever Leap Services Limited (Ever Leap) elected to exercise all the outstanding unlisted options that they held at the time.

A total of 333,333,333 new fully paid ordinary shares in Coppermoly (Shares), raising \$666,667 before costs, were issued pursuant to the exercise of the following unlisted options held by Ever Leap:

• 1. 250,000,000 Shares issued pursuant to the exercise of COYOR options issued in April 2016 at \$0.004 per option with no exercise price; and
• 1. 83,333,333 Shares issued pursuant to the exercise of COYOS options also issued in April 2016 at no issue price based on a ratio of one COYOS option for every three COYOR options issued, and with a \$0.008 (0.8 cents) exercise price.

Both the COYOR and COYOS options (Unlisted Options) were exercisable at any time between 1 February 2017 and 31 January 2020. The funds raised by the exercise of these options will be used to fund further exploration on Coppermoly's tenements and other working capital requirements.

The issue of the Unlisted Options was approved by Coppermoly shareholders on 30 March 2016 and were issued in April 2016 as part of a Placement Agreement with Ever Leap, which raised a total of \$2.5M, before costs. Following the issue of the Unlisted Options Ever Leap hold a relevant interest in the Company of 64.8%.

In March 2017 Coppermoly further announced that the Directors of the Company had resolved to satisfy their accrued Directors' fees owing as at 31 March 2017 by way of the issue of new fully paid Shares at an issue price of \$0.025 (2.5 cents) per Share (Director Shares). The issue of the Director Shares is subject to obtaining the necessary approvals under the ASX Listing Rules and the Corporations Act.

The Directors have all previously resolved to deploy Company funds into on the ground exploration, including drilling at the Mt Nakru Copper-Gold project and to defer payment of their accrued Directors' fees until such time as the Company could make other reasonable arrangements. By accepting Shares in lieu of receiving cash the Directors allow the Company to concentrate its efforts and funds on the further exploration and value adding to its exploration properties.

The deemed issue price of the Director Shares was the closing ASX market price of the Shares on 31 March 2017. The issue price is at a premium to market closing prices around the time of the announcement and is significantly higher than the average market price of Shares over the period the Directors' fees were earned and the debts for unpaid fees were accumulated.

The outstanding accrued Directors' fees at 31 March 2017 totalled \$291,619. This equates to a potential total number of Shares of 11,664,749 to be issued at an issue price of 2.5 cents.

Shareholder approval for the issue of the Director Shares will be sought at the Company's next AGM.

Business strategies and prospects for future financial years

As is typical for a junior exploration company, the ability to raise funds in the future is a critical factor. The results from the Company's exploration activities will be a key determinant, along with the on-going support of its shareholders, in the success of raising funds. The general state and sentiment of the equity and commodities markets and the demand for exploration and development investments are also vital considerations. While the Company has no control over macro-economic factors they nevertheless define the broad setting in which the Company makes strategic decisions.

The Company's primary strategy is to actively explore and evaluate its exploration assets. The main focus of this exploration and evaluation is to efficiently and effectively assess the potential for advancing the Company's tenements. The current intention is for the Company's activities to remain geographically focused on the West New Britain region in PNG.

The Company's core objective is to increase shareholder wealth through sustained, active, value-adding exploration. Once the value of the Company's assets has been proven, the options for realising that value will be fully and carefully assessed.

Material business risks

The Company recognises that the management of risk is a critical component for Coppermoly achieving its purpose of delivering growth in shareholder value. The Company has a framework to identify, understand, and manage risks. The material business risks that could have an adverse impact on Coppermoly's business include exposure to economic, political, environmental and social sustainability risks. The nature of the material risks and, where appropriate, how such risks are managed is set out below. This list is neither exhaustive nor in order of importance.

Funding risk

There is no certainty that Coppermoly can raise additional capital, or that it will be able to do so on favourable terms. If Coppermoly is able to raise additional capital, it may be required to do so at a significant discount to the prevailing share price. If this occurs, this may significantly dilute existing Shareholders. If Coppermoly cannot raise additional capital through the issue of additional Securities, it may be forced to dispose of some or all of its interest in one of more of its assets. If Coppermoly is required to dispose of assets in those circumstances to a third party, such disposal could possibly be on unfavourable terms, including price. If Coppermoly is not able to raise additional funding in a timely manner through either the issue of additional Securities or the disposal of assets, it could also have a significant and detrimental effect on the financial position and viability of the Company. To reduce these risks as much as possible the Company is striving to find the balance between cost savings and maintaining resources to allow for future operations when needed.

Exploration Licence extension risk

Copper Quest PNG Limited, the Company's wholly owned subsidiary, is the legal holder of three Exploration Licences, with the following expiry dates:

Exploration Licences:

• 1. EL 1043 (Nakru) has been granted for a two year term ending on 7 December 2018;
• 1. EL 2379 (Simuku) has been granted for a two year term ending on 10 September 2017. The Company has lodged an application to extend the term of this Exploration licence until 10 September 2019. A Warden's Hearing is scheduled for 10 October 2017;
• 1. EL 2514 (Makmak) has been granted for a two year term ending on 11 September 2019;

In November 2016 the Company was notified by the PNG Mineral Resources Authority (MRA) that renewal applications for exploration licences EL 2014 and EL 2272 had been refused.

The Company was surprised by the refusals to renew the licences as it had no prior indications from the MRA that the exploration licences wouldn't be renewed, particularly after holding very successful Warden's Hearings for both licences with full support of each group of landowners from Makmak & Wowonga to renew the respective licenses for another two years. While the Company was disappointed with that decision those tenements have not been a focus for exploration efforts of the Company.

Coppermoly reapplied for most of the ground covered by EL 2014 and some new additional ground that adjoins EL 1043. The licence was granted in September 2017 by the MRA as EL 2514 after a successful Warden's Hearing was held in August 2017.

As at the date of this report, the current term of the Simuku Exploration Licence has expired. However, Coppermoly has applied to extend the term of this Exploration Licence, and it continues in force until a determination is made regarding the application to extend its term. Accordingly, while Coppermoly has applied to renew the Simuku Exploration Licence, there is no certainty that the term of the Exploration Licence will be extended.

The departmental procedure for Exploration Licence extensions requires the approval at a Warden's Hearing, followed by consideration and recommendation by the Mining Advisory Council and the final approval by the Papua New Guinean Minister of Mining. Shareholders should be aware that, pending extension, granted Exploration Licences remain in force until a determination is made.

There is a risk that the exploration licence will not be extended, or that the terms of the extension are not favourable to Coppermoly. This could have a significant adverse impact on the performance of Coppermoly.

Key sensitivities of Coppermoly's licences

The future success of Coppermoly is largely dependent on the success of the WNB Projects. The WNB Projects are subject to the following key sensitivities:

• 1. the delineation of sufficient copper/gold resources so as to result in the viable extraction and processing of copper/gold from the WNB Projects;
• 1. copper, gold and other relevant material commodity prices;
• 1. mining and processing costs of copper, gold and other ores;
• 1. the capital cost to construct any required processing plant and associated facilities or the cost of transporting any extracted materials to a third party's processing facility;
• 1. national/provincial/local governments' stakes that may be included in any subsequent development agreement; and
• 1. consent from the customary landowners or other parties for access to exploration licences.

There is also no guarantee that Coppermoly will be able to obtain all of the necessary approvals, permits, licences and consents required to develop the West New Britain Project.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

In the opinion of the Directors there were no significant changes in the state of affairs of the consolidated entity that occurred during the financial year not otherwise disclosed in this report or the consolidated financial report.

MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR

There have been no subsequent events after 30 June 2017.

ENVIRONMENTAL REGULATION

The consolidated entity is subject to significant environmental regulation in respect of its mineral exploration and mining activities.

The entity has exploration tenements in Papua New Guinea. The entity is not aware of any breach of environmental regulations during or since the end of the financial year.

INFORMATION ON DIRECTORS Particulars of Directors'

interest in shares and options of Coppermoly Ltd

Director and Experience	Special	Ordinary	Listed
Kevin Grice	Responsibilities	Shares	Options
Non-Executive Director since 15 July 2014.	Member of	Nil	Nil
Age 68. Mr Grice, BComm CPA MAICD, is a successful finance executive with significant experience with listed and unlisted exploration companies and general management experience, including as acting Chief Executive and Chief Financial Officer of Renison Consolidated Mines NL (now Laneway Resources Ltd), Chief Financial Officer of ASX Listed Highlands Pacific Limited and various other roles with Ensham Resources, Century Gold Resources Pty Ltd and others.	Audit Committee.
Mr Grice has not served as a Director of any other public listed companies during the last three years.
Jincheng Yao
Non-Executive Director since 5 March 2015.		30,000,000	Nil
Age 44. Mr Yao, MBA and Bachelor of Commerce, is a finance professional based in mainland China. He has held various senior executive roles in the Meijin Group and is currently Vice President and Director of Meijin Energy Group Limited.
Mr Yao has not served as a Director of any other public listed companies during the last three years.
Wanfu Huang
Non-Executive Director since 11 March 2015.	Member of	56,501,133	Nil
Age 55. Dr Huang is a member of the Australian Institute of Geoscientists and holds a PhD, a MSc and a BSc. Dr Huang has more than 20 years' experience in the exploration industry. He has held numerous positions in the industry, covering base metals, gold, iron ore, coal and bauxite in Australia and overseas.	Audit Committee.
Dr Huang has not served as a Director on any other public listed companies during the last three years.
Zule Lin
Non-Executive Director since 11 April 2016.		Nil	Nil
Age 37. Mr Lin holds a master's degree in finance, and is currently the Chief Financial Officer of Coppermoly investor Ever Leap Services Ltd parent company Shanxi Xierun Investment Limited. Mr Lin has more than 15 years of experience in financial management.
Mr Lin has not served as a Director on any other public listed companies during the last three years.

COMPANY SECRETARY – QUALIFICATIONS & EXPERIENCE

Paul Schultz

CPA AGIA B.Bus GDipACG. Mr Schultz has over twenty years' experience in business administration and statutory reporting. He has a professional background in commercial accounting and public practice. He is also a graduate and associate member of the Governance Institute of Australia.

Mr Schultz has been the Chief Financial Officer of Coppermoly Ltd since 8 July 2013 and was appointed as Company Secretary on 3 February 2014. He is also a member of the Audit Committee.

DIRECTORS' MEETINGS

The number of meetings of the Company's Board of Directors and of each Board committee held during the year ended 30 June 2017, and the numbers of meetings attended by each Director were:

		Directors' Meetings	Audit Committee Meetings
	A	B	A	B
Mr K Grice	2	2	2	2
Mr J Yao	2	0	*	*
Dr W Huang	2	2	2	2
Mr Z Lin	2	0	*	*

A = Number of meetings attended

B = Number of meetings held during the time the Director held office or was a member of the committee during the year

* = Not a member of the relevant committee

REMUNERATION REPORT (Audited)

(a) Principles used to determine the nature and amount of remuneration

The following people were the Directors, Executives and Key Management Personnel (KMP) of the Group during the period covered by this report:

Name	Position	Period Position Held
K. Grice	Non-Executive Director	15 July 2014 – Current
J. Yao	Non-Executive Director	5 March 2015 – Current
W. Huang	Non-Executive Director	11 March 2015 – Current
Z. Lin	Non-Executive Director	11 April 2016 – Current

Apart from the above there were no other executives of the Company and the Group during the current year.

The objective of the Group's executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. The Board ensures that Director and executive rewards satisfy the following key criteria for good reward governance practices:

• competitiveness and reasonableness
• acceptability to shareholders
• transparency
• capital management.

The Group has structured an executive remuneration framework that is market competitive and complementary to the reward strategy of the organisation. Remuneration consultants have not been engaged by the company.

Relationship between remuneration and Company performance

During the past year, the Group has generated losses because it is still involved in exploration and not production.

Overview of the Company's ordinary share price and other key metrics at year end for the last five years ended 30 June 2017:

	2013	2014	2015	2016	2017
Share price at year end	\$0.034	\$0.016	\$0.005	\$0.008	\$0.020
Change in share price 1	\$0.007	(\$0.018)	(\$0.011)	\$0.003	\$0.012
TSR – year on year 2	25.9%	(52.9%)	(68.8%)	60.0%	150.0%
Loss for the year	\$1,000,406	\$787,337	\$798,960	\$740,740	\$1,395,240
KMP remuneration	\$356,050	\$384,640	\$262,567	\$132,658	\$163,800
Market Capitalisation at year end	\$6.2M	\$4.7M	\$1.9M	\$6.1M	\$21.9M

1. The change in share price as measured by the share price at the end of the year from opening share price.

2. Total shareholder return (TSR) – measured as the percentage change in the share price over the year.

There were no dividends paid during the year ended 30 June 2017.

The link between remuneration, company performance and shareholder wealth generation is tenuous, particularly in the exploration and development stage of a minerals company.

REMUNERATION REPORT (Audited) (continued)

Options issued to KMP have performance "premiums" factored into their exercise prices. The cash component of remuneration is kept relatively low. However there are no current options on issue to KMP.

Share prices are subject to the influence of international economic factors and market sentiment toward the sector and increases or decreases may occur quite independent of executive performance or remuneration.

Non-Executive Directors

Fees and payments to Non-Executive Directors reflect the responsibilities and the demands made on the Directors. Non-Executive Directors' fees and payments are reviewed periodically by the Board. The Board seeks to ensure Non-Executive Directors' fees and payments are appropriate and in line with the market.

Directors' fees

The current base remuneration was last reviewed in March 2014. Directors' fees are inclusive of committee fees.

Retirement allowances for Directors

The Company provides no retirement allowances for Non-Executive Directors under service contracts.

Executive pay

The executive pay and reward framework can have three components:

• base pay and benefits
• long-term incentives through options, and
• other remuneration such as superannuation.

Base pay

This is structured as a total employment cost package which may be delivered as a mix of cash and prescribed nonfinancial benefits at the executive's discretion and subject to mutual agreement between the executive and the Company.

Executives are offered a competitive base pay that comprises the fixed component of pay and rewards. Base pay for senior executives is reviewed annually to ensure the executive's pay is competitive with the market. An executive's pay is also reviewed on promotion.

There are no guaranteed base pay increases fixed in any senior executive's contracts. Refer to section (b) for further details.

Benefits

Executives receive no benefits outside of the base pay, non-monetary benefits, options and superannuation disclosed in this report.

Retirement benefits

Other than the statutory superannuation contribution and superannuation paid by way of salary sacrifice, no retirement benefits are provided for executives.

Coppermoly Ltd Employee Incentive Option Plan

There are no Employee Options on issue as at the date of this report.

Coppermoly Ltd Directors' & Officers Option Plan

There are no Directors' & Officers Options on issue as at the date of this report.

The Company does not currently employ any executive Directors.

(b) Service Agreements

Remuneration and other terms of employment for the Executive Directors are formalised in service agreements. None of the Directors are eligible to participate in the Coppermoly Ltd Employee Incentive Option Plan. Other major provisions of the agreements relating to remuneration are set out below.

Non-Executive Directors are not eligible to receive any termination payments.

K. Grice, Non-Executive Director

Base Salary, inclusive of superannuation, as at 30 June 2017 of \$43,800 to be reviewed annually.

J. Yao, Non-Executive Director

Base Salary as at 30 June 2017 of \$40,000 to be reviewed annually.

W. Huang, Non-Executive Director

Base Salary as at 30 June 2017 of \$40,000 to be reviewed annually.

Z. Lin, Non-Executive Director

Base Salary as at 30 June 2017 of \$40,000 to be reviewed annually.

REMUNERATION REPORT (Audited) (continued)

All Directors are required by the Company's Constitution to retire at the end of the third Annual General Meeting after their appointment and may offer themselves for reappointment.

Directors may give notice of resignation, effective at the time of receipt (which depends upon the means of delivery or transmission). Directors can be suspended from office by a majority of directors at a meeting of the Board called for that purpose.

(c) Details of remuneration

Details of the nature and amount of each element of the remuneration of each key management personnel of the Company and the consolidated entity for the years ended 30 June 2017 and 30 June 2016 are set out in the following tables:

2017	Short-term employee benefits		Post Employment Benefits	Long-term Benefits		Share-based payments		Proportion of remuneration that is
Name	Cash salary & fees	Cash Bonus	Super annuation	Long Service Leave	Termination Benefits	Options	Total	performance based %
	\$	\$	\$	\$	\$	\$	\$
Directors
K. Grice 1	40,000	-	3,800	-	-	-	43,800	-
J. Yao 2	40,000	-	-	-	-	-	40,000	-
W. Huang 3	40,000	-	-	-	-	-	40,000	-
Z. Lin 4	40,000	-	-	-	-	-	40,000	-
Total	160,000	-	3,800	-	-	-	163,800

2016	Short-term employee benefits		Post Employment Benefits	Long-term Benefits		Share based payments		Proportion of remuneration that is
Name	Cash salary and fees	Cash Bonus	Super annuation	Long Service Leave	Termination Benefits	Options	Total	performance based %
	\$	\$	\$	\$	\$	\$	\$
Directors
K. Grice 1	40,000	-	3,800	-	-	-	43,800	-
J. Yao 2	40,000	-	-	-	-	-	40,000	-
W. Huang 3	40,000	-	-	-	-	-	40,000	-
Z. Lin 4	8,858	-	-	-	-	-	8,858	-
Total	128,858	-	3,800	-	-	-	132,658

1 Includes accrued & unpaid Directors fees of \$40,000 for y/e 30 June 2017, \$40,000 for y/e 30 June 2016. \$17,500 for y/e 30 June 2015 also accrued but not included above.

2 Includes accrued & unpaid Directors fees of \$40,000 for y/e 30 June 2017, \$40,000 for y/e 30 June 2016. \$12,959 for y/e 30 June 2015 also accrued but not included above.

3 Includes accrued & unpaid Directors fees of \$40,000 for y/e 30 June 2017, \$40,000 for y/e 30 June 2016. \$12,302 for y/e 30 June 2015 also accrued but not included above.

4 Includes accrued & unpaid Directors fees of \$40,000 for y/e 30 June 2017 and \$8,858 for y/e 30 June 2016 from 11 April 2016 to 30 June 2016.

REMUNERATION REPORT (Audited) (continued)

(d) Options and rights granted as remuneration

There were no options granted during the year ended 30 June 2017.

(e) Equity instruments issued on exercise of remuneration options

No equity instruments were issued during the period to KMP as a result of options exercised that had previously been granted as compensation.

(f) Additional disclosures relating to key management personnel

(i) Share holdings

The numbers of shares in the Company held during the financial year by key management personnel of the consolidated entity, including their personally related entities, is set out below.

2017	Balance at the start	Changes during	Balance at the end
Name	of the year	the year	of the year
	Number	Number	Number
K. Grice	-	-	-
J. Yao 1	30,000,000	-	30,000,000
W. Huang 2	56,501,133	-	56,501,133
Z. Lin	-	-	-

1 includes 30,000,000 shares held by related parties

2 includes 56,054,613 shares held by related parties

(ii) Option holdings

The numbers of options over ordinary shares in the Company held during the financial year by key management personnel of the consolidated entity, including their personally-related entities, is set out below.

2017 Name	Balance at the start of the year	Exercised during the year	Expired during the year	Other changes during the year	Balance at the end of the year	Vested and exercisable at the end of the year
	Number	Number	Number	Number	Number	Number
K. Grice	-	-	-	-	-	-
J. Yao 1	19,999,999	-	19,999,999	-	-	-
W. Huang	-	-	-	-	-	-
Z. Lin	-	-	-	-	-	-

¹Options were unlisted options issued in conjunction with the convertible notes issued to a related party – Jade Triumph International Limited

(iii) Convertible notes

The numbers of convertible notes held during the financial year by key management personnel of the consolidated entity, including their personally related entities, is set out below.

2017	Balance at the start	Changes during	Balance at the end
Name	of the year	the year	of the year
	Number	Number	Number
K. Grice	-	-	-
J. Yao 1	60,000,000	-	60,000,000
W. Huang	-	-	-
Z. Lin	-	-	-

¹Convertible notes issued to a related party - Jade Triumph International Limited

(iv) Other transactions with Directors and executives

There were no other transactions with Directors and executives.

END OF REMUNERATION REPORT (Audited)

SHARES UNDER OPTION

Unissued ordinary shares of Coppermoly Limited under option at the date of this report are as follows:

Options	No. of Options 2017
Unlisted Options exercisable at 3 cents, expiry 3 December 2018	585,008
	585,008

No option holder has any right under the options to participate in any other share issue of the company or any other entity.

SHARES ISSUED ON THE EXERCISE OF OPTIONS

333,333,333 ordinary shares of Coppermoly Ltd were issued during the year ended 30 June 2017 on the exercise of options. No shares have been issued from the exercise of options since that date.

INDEMNIFICATION OF OFFICERS AND AUDITORS

During the financial year the consolidated entity paid insurance premiums in respect of Directors' and Officers' legal expenses and liability insurance. The policies prohibit disclosure of details of the policies or the premiums paid. The consolidated entity has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an Officer of the Company or any of its controlled entities against a liability incurred as such an Officer.

Other than the standard indemnities, the Company has not indemnified or insured the auditor.

NON-AUDIT SERVICES

The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor's expertise and experience with the Company and/or the Consolidated Entity are important.

Details of the amounts paid or payable to the auditors (BDO Audit Pty Ltd and Sinton Spence Chartered Accountants) for audit and non-audit services provided during the year are set out below.

The Board of Directors has considered the position and, in accordance with the advice received from the Audit Committee, is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

• All non-audit services have been reviewed by the Audit Committee to ensure they do not impact the impartiality and objectivity of the auditors;
• None of the services undermine the general principles relating to the auditor independence as set out in APES 110 Code of Ethics for Professional Accountants.

	NON-AUDIT SERVICES (continued)
		2017 \$	2016 \$
	During the year the following fees were paid or payable for services provided by the auditors, their related practices and non-related audit firms.
	Assurance Services
1.	Audit Services – audit or review of financial statements
	BDO Audit Pty Ltd Australian firm:	27,163	34,856
	Sinton Spence Chartered Accountants PNG firm:	6,267	6,829
	Total remuneration for audit services	33,430	41,685
2.	Other Assurance Services
	BDO Audit Pty Ltd Australian firm:	-	-
	Sinton Spence Chartered Accountants PNG firm:	1,558	5,236
	Total remuneration for other assurance services	1,558	5,236
	Total remuneration for assurance services	34,988	46,921
	Taxation Compliance Services
	BDO (QLD) Pty Ltd Australian firm:	6,500	6,500
	Sinton Spence Chartered Accountants PNG firm:	414	664
	Total remuneration for taxation services	6,914	7,164

AUDITOR'S INDEPENDENCE DECLARATION

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 22.

PROCEEDINGS ON BEHALF OF COMPANY

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.

No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the Corporations Act 2001.

This report is made in accordance with a resolution of the Directors.

Kevin Grice Non-executive Director

Bundall, Queensland 26 September 2017

CORPORATE GOVERNANCE

The Company's Corporate Governance Statement, prepared in accordance with the 3rd Edition of Corporate Governance Principles and Recommendations of the ASX Corporate Governance Council, can be found on the Coppermoly website at http://www.coppermoly.com.au/corporate/corporate.htm.

Level 10, 12 Creek St Brisbane QLD 4000 GPO Box 457 Brisbane QLD 4001 Australia

DECLARATION OF INDEPENDENCE BY T R MANN TO THE DIRECTORS OF COPPERMOLY LIMITED

As lead auditor of Coppermoly Limited for the year ended 30 June 2017, I declare that, to the best of my knowledge and belief, there have been:

• 1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
• 1. No contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Coppermoly Limited and the entities it controlled during the period.

T R Mann Director

BDO Audit Pty Ltd

Brisbane, 26 September 2017

CONTENTS

Page No.

Consolidated Statement of Profit or Loss and Other Comprehensive Income24
Consolidated Statement of Financial Position25
Consolidated Statement of Changes in Equity26
Consolidated Statement of Cash Flows 27
Notes to the Consolidated Financial Statements28-48
Directors' Declaration 49
Independent Audit Report to the Members of Coppermoly Ltd50-53

This financial report covers the consolidated entity consisting of Coppermoly Ltd and subsidiaries. The financial report is presented in the Australian currency.

Coppermoly Ltd is a company limited by shares, incorporated and domiciled in Australia whose shares are publicly traded on the Australian Securities Exchange and Port Moresby Stock Exchange. Its registered office and principal place of business is:

Coppermoly Ltd Level 1 91 Upton Street Bundall Qld 4217

A description of the nature of the consolidated entity's operations and its principal activities is included in the Directors' Report on pages 2 to 21, both of which are not part of the financial report.

The financial report was authorised for issue by the Directors on 26 September 2017. The Directors have the power to amend and reissue the financial report.

Through the use of the internet, we have ensured that our corporate reporting is timely, complete, and available globally at minimum cost to the Company. All press releases, financial reports and other information are available on our website: www.coppermoly.com.au.

For queries in relation to our reporting please call +61 7 5510 3994 or e-mail info@coppermoly.com.au.

COPPERMOLY LTD & ITS CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2017

	Notes	2017 \$	2016 \$
Revenue	5	23,361	10,866
		23,361	10,866
Depreciation		(6,626)	(12,289)
Employee benefits expense		(362,455)	(323,705)
Exploration expenditure written-off	12	(705,399)	-
Insurances		(40,056)	(50,733)
Corporate compliance and shareholder relations		(105,972)	(107,711)
Office rental, communication and consumables		(43,125)	(38,208)
Finance costs		(151,075)	(167,422)
Other expenses		(3,893)	(51,538)
Loss before income tax		(1,395,240)	(740,740)
Income tax (expense) / benefit	7	-	-
Net Loss for the year		(1,395,240)	(740,740)
Other comprehensive income
Items that may be reclassified to the profit or loss
Exchange differences on translation of foreign operations		(467,699)	(995,852)
Income tax on items of other comprehensive income		-	-
Other comprehensive income for the year		(467,699)	(995,852)
Total comprehensive income for the year		(1,862,939)	(1,736,592)
		Cents	Cents
Basic and diluted loss per share	23	(0.17)	(0.15)

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

COPPERMOLY LTD & ITS CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2017

	Notes	2017 \$	2016 \$
ASSETS
Current Assets
Cash and cash equivalents	8	554,633	2,116,674
Trade and other receivables	9	29,250	47,770
Total Current Assets		583,883	2,164,444
Non-Current Assets
Receivables	10	15,234	24,979
Property, plant and equipment	11	24,148	18,401
Mineral exploration and evaluation assets	12	11,652,157	10,975,314
Total Non-Current Assets		11,691,539	11,018,694
Total Assets		12,275,422	13,183,138
LIABILITIES
Current Liabilities
Trade and other payables	13	394,874	261,060
Provisions	14	39,477	15,566
Borrowings	15	1,386,024	1,288,627
Total Current Liabilities		1,820,375	1,565,253
Non-Current Liabilities
Provisions	14	2,302	13,711
Total Non-Current Liabilities		2,302	13,711
Total Liabilities		1,822,677	1,578,964
Net Assets		10,452,745	11,604,174
EQUITY
Contributed equity	16	19,065,353	18,405,791
Reserves	17	1,927,032	2,342,783
Accumulated losses		(10,539,640)	(9,144,400)
Total Equity		10,452,745	11,604,174

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

COPPERMOLY LTD & ITS CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2017

	Contributed	Accumulated	Reserves	Total
	Equity \$	Losses \$	\$	\$
Balance at 30 June 2016	18,405,791	(9,144,400)	2,342,783	11,604,174
Comprehensive income for the year
Loss for the year	-	(1,395,240)	-	(1,395,240)
Foreign currency translation difference	-	-	(467,699)	(467,699)
Total Comprehensive Income	-	(1,395,240)	(467,699)	(1,862,939)
Transactions with owners in their capacity as owners
Contributions of equity	666,667	-	-	666,667
Costs of share issue	(7,105)	-	-	(7,105)
Value of conversion rights on convertible notes	-	-	51,948	51,948
Total transactions with owners In their capacity as owners	659,562	-	51,948	711,510
Balance at 30 June 2017	19,065,353	(10,539,640)	1,927,032	10,452,745
Balance at 30 June 2015	15,922,838	(8,403,660)	3,338,635	10,857,813
Comprehensive income for the year
Loss for the year	-	(740,740)	-	(740,740)
Foreign currency translation difference	-	-	(995,852)	(995,852)
Total Comprehensive Income	-	(740,740)	(995,852)	(1,736,592)
Transactions with owners in their capacity as owners
Contributions of equity	2,535,100	-	-	2,535,100
Costs of share issue	(52,147)	-	-	(52,147)
Total transactions with owners In their capacity as owners	2,482,953	-	-	2,482,953
Balance at 30 June 2016	18,405,791	(9,144,400)	2,342,783	11,604,174

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

COPPERMOLY LTD & ITS CONTROLLED ENTITIES CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2017

	Notes	2017 \$	2016 \$
Cash Flows from Operating Activities
Cash receipts in the course of operations (incl. GST)		39,529	25,960
Interest received		20,549	6,768
Interest paid		(1,764)	(2,894)
Payments to suppliers and employees (incl. GST)		(424,502)	(489,252)
Net cash inflow (outflow) from operating activities	25	(366,188)	(459,418)
Cash Flows From Investing Activities
Payments for exploration and evaluation activities		(1,856,239)	(332,042)
Security deposits recovered / (paid)		9,235	(4,926)
Payments for property, plant and equipment		(13,234)	-
Net cash inflow (outflow) from investing activities		(1,860,238)	(336,968)
Cash Flows From Financing Activities
Proceeds from issues of shares and options		666,667	2,500,000
Cost of share and option issues		-	(52,968)
Proceeds from borrowings		23,156	57,446
Repayment of borrowings		(23,122)	(68,455)
Net cash inflow (outflow) from financing activities		666,701	2,436,023
Net increase/(decrease) in cash and cash equivalents		(1,599,725)	1,639,637
Cash and cash equivalents at the beginning of the financial
year		2,116,674	488,351
Exchange difference on cash		(2,317)	(11,314)
Cash and cash equivalents at the end of the financial year	8	554,633	2,116,674

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

	INDEX
		Page Nos.
NOTE 1	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 28
NOTE 2	FINANCIAL RISK MANAGEMENT 34
NOTE 3	CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS 38
NOTE 4	PARENT ENTITY INFORMATION 38
NOTE 5	REVENUE 38
NOTE 6 NOTE 7	EXPENSES 39 INCOME TAX 39
NOTE 8	CURRENT ASSETS: CASH & CASH EQUIVALENTS 39
NOTE 9	CURRENT ASSETS: TRADE AND OTHER RECEIVABLES 39
NOTE 10	NON-CURRENT ASSETS: RECEIVABLES 39
NOTE 11	NON-CURRENT ASSETS: PROPERTY, PLANT AND EQUIPMENT 40
NOTE 12	MINERAL EXPLORATION AND EVALUATION ASSETS 40
NOTE 13	CURRENT LIABILITIES: TRADE AND OTHER PAYABLES 41
NOTE 14	CURRENT AND NON-CURRENT LIABILITIES: PROVISIONS 41
NOTE 15	CURRENT LIABILITIES: BORROWINGS 42
NOTE 16	CONTRIBUTED EQUITY 43
NOTE 17	RESERVES 44
NOTE 18 NOTE 19	COMMITMENTS 45 SUBSEQUENT EVENTS 45
NOTE 20	KEY MANAGEMENT PERSONNEL DISCLOSURES 45
NOTE 21	SEGMENT INFORMATION 46
NOTE 22	AUDITORS' REMUNERATION 46
NOTE 23	EARNINGS PER SHARE ("EPS") 46
NOTE 24	CONTINGENCIES 47
NOTE 25	RECONCILIATION OF LOSS AFTER INCOME TAX TO NET CASH FLOW FROM OPERATING
NOTE 26	ACTIVITIES 47 SUBSIDIARIES 47
NOTE 27	NON-CASH FINANCING AND INVESTING ACTIVITIES 48

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been consistently applied throughout the period, unless otherwise stated.

The ultimate parent entity Coppermoly Ltd, is a public, listed company, incorporated and domiciled in Australia and having its registered address and principal place of business at Level 1, 91 Upton St, Bundall, Queensland.

(a) Basis of preparation

This general purpose financial report has been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, and the Corporations Act 2001. The consolidated entity is a for-profit entity for the purposes of preparing these financial statements.

Compliance with IFRS

Australian Accounting Standards include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the consolidated financial statements and notes of Coppermoly Ltd comply with International Financial Reporting Standards (IFRS).

This financial report comprises the consolidated financial statements and notes of Coppermoly Ltd and controlled entities.

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Going concern

The Group incurred a net loss of \$1,395,240 for the year ended 30 June 2017. As at 30 June 2017 the Group had cash reserves of \$554,633, a working capital deficit of \$1,236,492 and net assets of \$10,452,745. The company has not generated revenues from operations. The Group has committed to re-acquire Barrick (PD) Australia Ltd's (Barrick) nominal 28% interest in tenements EL 1043 and EL 2379 for a final payment of \$4,500,000 to be paid no later than six months after the commencement of commercial production at the West New Britain Project, in addition to its exploration commitments under its other licenses. The Group has met all its exploration expenditure commitments for the next 12 months (Refer Note 18). Also refer to note 12 for further details on the required payments to reacquire the tenements from Barrick.

The ability of the Group to continue as a going concern is principally dependent upon one or more of the following:

• the ability of the company to raise additional capital in the future;
• the ability of the company to repay or renegotiate the expiry date of the outstanding convertible notes that are currently due to expire in December 2017;
• the successful exploration and subsequent exploitation or sale of the company's tenements.

These conditions give rise to material uncertainty which may cast significant doubt over the Group's ability to continue as a going concern.

The directors believe that the going concern basis of preparation is appropriate due to the following reasons:

• To date the Group has funded its activities through issuance of equity securities and it is expected that the Group will be able to fund its future activities through further issuances of equity securities;
• The company has commenced negotiations with the convertible note holders to extend the expiry date; and
• The directors believe there is sufficient cash available for the Group to continue operating until it can raise sufficient further capital to fund its ongoing activities.

Should the Group be unable to continue as a going concern, it may be required to realise its assets and extinguish its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial statements.

This financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts or classification of liabilities and appropriate disclosures that may be necessary should the Group be unable to continue as a going concern.

Critical accounting estimates

The preparation of financial statements in conformity with AIFRS requires the use of certain critical accounting estimates. It also requires Management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 3.

Historical cost convention

The financial report has been prepared on an accruals basis under the historical cost convention.

(b) Principles of consolidation

Subsidiaries

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Coppermoly Ltd (''company'' or ''parent entity'') as at 30 June 2017 and the results of all subsidiaries for the period then ended. Coppermoly Ltd and its subsidiaries together are referred to in this financial report as the Group or the Group.

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The acquisition method of accounting is used to account for business combinations by the Group.

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of comprehensive income, statement of changes in equity and balance sheet respectively.

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(c) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as the Board which makes strategic decisions.

(d) Foreign currency translation

(i) Functional and presentation currency

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial statements are presented in Australian dollars, which is Coppermoly Ltd's functional and presentation currency.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit or loss.

(iii) Group companies

The results and financial position of Copper Quest PNG Ltd which has a functional currency of PNG Kina are translated into the presentation currency as follows:

• assets and liabilities for each statement of financial position presented are translated at the closing rate at the end of the reporting period;
• income and expenses for each statement of profit and loss and other comprehensive income presented are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and
• all resulting exchange differences are recognised in other comprehensive income.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other financial instruments designated as hedges of such investments, are recognised in other comprehensive income. When a foreign operation is sold or borrowings repaid a proportionate share of such exchange differences are reclassified to profit or loss as part of the gain or loss on sale, where applicable.

(e) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances and duties and taxes paid.

Interest income

Interest income is recognised on a time proportion basis using the effective interest method.

(f) Income tax

Current income tax expense is based on the profit before income tax adjusted for any non-tax deductible or non-assessable items between accounting profit and taxable income. Deferred tax assets and liabilities are recognised using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets or liabilities and their carrying amounts in the financial statements and unused tax losses.

Deferred tax assets and liabilities are recognised for all temporary differences, with certain limited exceptions, between carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases at the rate of income tax applicable to the period in which the benefit will be received or the liability will become payable. These differences are presently assessed at 30%.

Deferred tax assets are only brought to account if it is probable that future taxable amounts will be available to utilise those temporary differences and unused tax losses.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(g) Impairment of non-financial assets

Non-financial Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cashgenerating units). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

(h) Cash and cash equivalents

For statement of cash flows presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the statement of financial position.

(i) Trade and other receivables

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for doubtful debts.

Collectability of receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written-off. A provision for doubtful receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The amount of the provision is recognised in the profit or loss as part of other expenses.

(j) Financial assets

The Group classifies its financial assets in the following categories: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification at initial recognition and re-evaluates this designation at each reporting date.

Financial assets are initially stated at fair value plus any directly attributable transaction costs (except for assets at fair value through the profit or loss for which transaction costs are expensed). Purchases and sales are recognised on trade date which is the date on which the Group commits to purchase or sell the asset. Accounting policies for each relevant category of financial assets subsequent to initial recognition are set out below.

(i) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the end of the reporting period which are classified as non-current assets.

Loans and receivables are measured at amortised cost using effective interest method less any impairment losses.

(ii) Impairment

The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired.

(k) Fair value

The nominal value less estimated credit adjustments of receivables and payables are assumed to approximate their fair values. Where applicable, the fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments.

The carrying values of financial assets and liabilities are assumed to approximate their fair values due to their short-term nature.

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(l) Property, plant and equipment

All property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

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

Items of property, plant and equipment are depreciated over their estimated useful lives. The diminishing balance method is used. Assets are depreciated from the date of acquisition or, in respect of internally constructed assets, from the time an asset is completed and held ready for use. Estimates of useful lives are made at the time of acquisition and varied as required. Expected useful lives are: Plant and Equipment between 4 years and 7 years.

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount (note 1(g)).

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss.

(m) Trade and other payables

These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial year and which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

(n) Borrowings

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

The fair value of the liability portion of convertible bonds, that do not include a derivative at fair value, is determined using a market interest rate for an equivalent non-convertible bond. This amount is recorded as a liability on an amortised cost basis until extinguished on conversion or maturity of the bonds. The remainder of the proceeds is allocated to the conversion option. This is recognised and included in shareholders' equity, net of income tax effects.

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

Where the terms of a financial liability are renegotiated and the entity issues equity instruments to a creditor to extinguish all or part of the liability (debt for equity swap), a gain or loss is recognised in profit or loss, which is measured as the difference between the carrying amount of the financial liability and the fair value of the equity instruments issued.

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

(o) Provisions

Provisions are recognised when: the Group has a present legal or constructive obligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses.

(p) Employee benefits

(i) Wages and salaries, annual leave and sick leave

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

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(ii) Long service leave

The liability for employee benefits relating to long service leave represents the present value of the estimated future cash outflows to be made by the employer resulting from employees' services provided up to the balance date.

(iii) Share-based payments

Share-based compensation benefits can be provided to directors and employees.

The fair value at grant date is determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option.

The fair value of the options granted excludes the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. At the end of each reporting period, the entity revises its estimate of the number of options that are expected to vest. The employee benefit expense recognised each period takes into account the most recent estimate.

Upon the exercise of options, the balance of the share-based payments reserve relating to those options is transferred to share capital and the proceeds received, net of any directly attributable transaction costs, are credited to share capital.

(q) Contributed equity

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

(r) Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the period.

(ii) Diluted earnings per share

Potential ordinary shares as a result of options outstanding at the end of the period are not dilutive and therefore have not been included in the calculation of diluted earnings per share.

(s) Mineral exploration and evaluation assets

Exploration and evaluation expenditure in relation to separate areas of interest for which rights of tenure are current is carried forward as an asset in the statement of financial position where it is expected that the expenditure will be recovered through the successful development and exploitation of an area of interest, or by its sale; or exploration activities are continuing in an area and activities have not reached a stage which permits a reasonable estimate of the existence or otherwise of economically recoverable reserves. Where a project or an area of interest has been abandoned, the expenditure incurred thereon is written off in the year in which the decision is made.

(t) Goods and Services Tax (GST)

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

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

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

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(u) Accounting standards issued but not yet effective

Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2017 reporting periods. The Group has decided against early adoption of these standards. The Group's assessment of the impact of these new standards and interpretations is set out below:

AASB 9 Financial Instruments

This standard and its consequential amendments are currently applicable to annual reporting periods beginning on or after 1 January 2018. This standard introduces new classification and measurement models for financial assets, using a single approach to determine whether a financial asset is measured at amortised cost or fair value. To be classified and measured at amortised cost, assets must satisfy the business model test for managing the financial assets and have certain contractual cash flow characteristics. All other financial instrument assets are to be classified and measured at fair value. This standard allows an irrevocable election on initial recognition to present gains and losses on equity instruments (that are not held-for-trading) in other comprehensive income, with dividends as a return on these investments being recognised in profit or loss. In addition, those equity instruments measured at fair value through other comprehensive income would no longer have to apply any impairment requirements nor would there be any 'recycling' of gains or losses through profit or loss on disposal. The accounting for financial liabilities continues to be classified and measured in accordance with AASB 139, with one exception, being that the portion of a change of fair value relating to the entity's own credit risk is to be presented in other comprehensive income unless it would create an accounting mismatch. The Group has not yet evaluated the impact adoption of this standard will have.

There are no other standards that are not yet effective and that would be expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

(v) New Accounting Standards and Interpretations

The Group adopted all new Accounting Standards and Interpretations effective for the year ended 30 June 2017. There were no material impacts on the financial statements of the Group as a result of adopting these standards.

NOTE 2 FINANCIAL RISK MANAGEMENT

Risk management has focused on limiting debt to a level which could be extinguished by sale of assets or issue of securities if necessary.

The Group's activities expose it to a variety of financial risks; market risk (including interest rate risk and foreign exchange risk), credit risk and liquidity risk. The Group's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group.

(a) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the entity's income or the value of its holdings of financial instruments.

The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimising the return.

The entity does not have any material exposure to market risk.

(i) Foreign exchange risk

Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the entity's functional currency.

The Group operates internationally and is exposed to foreign exchange risk arising from currency exposure in the PNG Kina.

The Group currently has no material foreign exchange risk, however such risk may arise in future when mine production begins and product may be sold internationally. The policy of the Group for managing foreign exchange risk is to continuously monitor exchange risk. It is the Group's policy not to use hedging. As at reporting date the Group has not started production activity and accordingly has minimal exposure to this risk.

(ii) Interest rate risk

Refer to (d) below.

NOTE 2 FINANCIAL RISK MANAGEMENT (continued)

(b) Credit risk

Credit risk is the risk of financial loss to the entity if a customer or counterparty to a financial instrument fails to meet its contractual obligations to the entity.

The objective of the entity is to minimise risk of loss from credit risk exposure.

Credit risk arises principally from cash and cash equivalents.

The entity's maximum exposure to credit risk, without taking into account the value of any collateral or other security, in the event other parties fail to perform their obligations under financial instruments in relation to each class of recognised financial asset at reporting date is the carrying amount of those assets as indicated in the statement of financial position.

The Group has no significant concentrations of credit risk other than cash at bank and short-term deposits. No amounts owing to the Group are past due and none are impaired. The Group has all cash deposits with reputable banks such as Westpac and Bankwest.

(c) Liquidity risk

Liquidity risk is the risk that the entity will not be able to meet its financial obligations as they fall due.

The objective of managing liquidity risk is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when they fall due, under both normal and stressed conditions.

The entity has established a number of policies and processes for managing liquidity risk. These include:

• Continuously monitoring:
• actual and daily cashflows and longer-term forecasted cashflows
• the maturity profiles of financial assets and liabilities in order to match inflows and outflows
• Maintaining adequate reserves
• Monitoring liquidity ratios (working capital)

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities. Due to the lack of material revenue, the Group aims to maintain adequate reserves of liquidity. The Group's objective is to obtain maximum investment returns whilst maintaining maximum security.

The Group's practice is to maintain funds, other than those required for working capital, on term deposits with major financial institutions.

Other cash is held in an interest bearing bank account and funds are transferred to operating cheque accounts on the basis of forecast operating requirements.

Liquidity risk is measured using liquidity ratios such as working capital.

Summary quantitative data

	2017	2016
	\$	\$
Current assets	583,883	2,164,444
Current liabilities	1,820,375	1,565,253
Surplus / (deficit)	(1,236,492)	599,191

NOTE 2 FINANCIAL RISK MANAGEMENT (continued)

(c) Liquidity risk (continued)

Maturity analysis

Financial liabilities have differing maturity profiles depending on the contractual term. The table shows the period in which recognised financial liabilities balance will be paid based on the remaining period to repayment date assuming contractual repayments are maintained. Contractual cashflows are at undiscounted values (including future interest expected to be paid). Accordingly these values may not agree to carrying amount.

	Carrying amount \$	Contractual cashflow \$	Within 1 year \$	1-2 years \$
2017
Trade and other payables	394,874	394,874	394,874	-
Borrowings	1,386,024	1,444,094	1,444,094	-
2016
Trade and other payables	261,060	261,060	261,060	-
Borrowings	1,288,627	1,360,094	1,360,094	-

(d) Interest rate risk

At the end of the reporting period the Group had the following financial assets and liabilities exposed to interest rate risk:

	2017	2016
	\$	\$
Financial Assets
Cash and cash equivalents	554,633	2,116,674
Trade and other receivables	-	-
	554,633	2,116,674
Financial Liabilities
Trade and other payables	-	-
Borrowings	-	-
	-	-
Net exposure	554,633	2,116,674

Sensitivity Analysis		Interest Rate Risk		Interest Rate Risk
June 2017		- 1%		+ 1%
	Carrying amount	Profit	Equity	Profit	Equity
	\$	\$	\$	\$	\$
Financial Assets
Cash and cash equivalents	554,633	(5,546)	(5,546)	5,546	5,546
Total increase / decrease	-	(5,546)	(5,546)	5,546	5,546

Cash and cash equivalents include deposits at call at floating and short-term interest rates.

Sensitivity Analysis June 2016			Interest Rate Risk - 1%		Interest Rate Risk + 1%
	Carrying amount	Profit	Equity	Profit	Equity
	\$	\$	\$	\$	\$
Financial Assets
Cash and cash equivalents	2,116,674	(21,167)	(21,167)	21,167	21,167
Total increase / decrease	-	(21,167)	(21,167)	21,167	21,167

NOTE 2 FINANCIAL RISK MANAGEMENT (continued)

(d) Interest rate risk (continued)

Cash and cash equivalents include deposits at call at floating and short-term interest rates.

Interest rate risk arises principally for cash and cash equivalents.

From time to time the Group has significant interest bearing assets, but they are as a result of the timing of equity raising and capital expenditure rather than a reliance on interest income. The Group's income and operating cash flows are not expected to be materially exposed to changes in market interest rates in the future. The policy of the Group is to continuously monitor interest rate risk exposures during the period balances are held and to alter the balance of fixed and floating rate deposits as considered appropriate.

(e) Foreign exchange risk

At the end of the reporting period the Group had the following exposure to foreign currencies:

	2017 Kina	2016 Kina
Financial Assets
Cash and cash equivalents	40,351	325,517
Trade and other receivables	76,499	112,266
	116,850	437,783
Financial Liabilities
Trade and other payables	53,747	95,217
	53,747	95,217
Net exposure	63,103	342,566

Sensitivity Analysis	Foreign Exchange Risk
June 2017		- 10%		+ 10%
	Carrying amount	Profit	Equity	Profit	Equity
	\$	\$	\$	\$	\$
Financial Assets and Liabilities
Net exposure – AUD	25,800	(2,580)	(2,580)	2,580	2,580

Sensitivity Analysis	Foreign Exchange Risk
June 2016		- 10% + 10%
	Carrying amount	Profit	Equity	Profit	Equity
	\$	\$	\$	\$	\$
Financial Assets and Liabilities
Net exposure - AUD	145,773	(14,577)	(14,577)	14,577	14,577

(f) Commodity price risk

As the Group is not currently engaged in mining and sale of commodities there is no exposure to this risk.

NOTE 3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The Group makes estimates and assumptions concerning the future when preparing the financial statements. The resulting accounting estimates will, by definition, seldom equal the related actual results. Information about key estimates, assumptions and judgements are described in the following notes:

Note 1(a) - going concern assessment

Note 12 - the assessment of the existence of facts and circumstances that may indicate an impairment of exploration and evaluation assets

Estimates and assumptions are reviewed on an ongoing basis.

NOTE 4 PARENT ENTITY INFORMATION

	2017 \$	2016 \$
ASSETS
Current Assets	545,511	1,997,302
Non-Current Assets	11,815,431	11,144,978
Total Assets	12,360,942	13,142,280
LIABILITIES
Current Liabilities	1,798,162	1,524,503
Non-Current Liabilities	2,072	13,603
Total Liabilities	1,800,234	1,538,106
Net Assets	10,560,708	11,604,174
EQUITY
Contributed equity	19,065,353	18,405,791
Reserves
- Unlisted options	40,000	40,000
- Share option reserve	2,961,879	2,909,931
Accumulated losses	(11,506,524)	(9,751,548)
Total Equity	10,560,708	11,604,174
Net Profit (Loss) for the year	(1,754,976)	(2,252,215)
Total comprehensive income for the year	(1,754,976)	(2,252,215)

The Company has committed to provide continued financial support to its subsidiary, Copper Quest PNG Ltd, and will not call loans owed by its subsidiary within the next 12 months. The Company has no other guarantees, contractual commitments for the acquisition of property, plant or equipment or contingencies as at 30 June 2017 and 2016.

NOTE 5 REVENUE

Interest income – unrelated parties	19,214	8,379
Other	4,147	2,487
	23,361	10,866

NOTE 6 EXPENSES

		2017 \$	2016 \$
	Loss before income tax includes the following specific expenses:
Depreciation		6,626	12,289
	Exploration expenditure written-off	705,399	-
	Net loss on disposal of property, plant and equipment	231	46,174
	Rental expenses on operating leases – minimum lease payments Defined contribution superannuation expense	25,774 20,357	24,819 21,066
NOTE 7	INCOME TAX
(a)	The prima facie tax on loss before income tax is reconciled to the income tax as follows:
Loss before income tax expense		(1,395,240)	(740,740)
	Tax at the Australian (and PNG) tax rate of 30%	(418,572)	(222,222)
Non-deductible expenses		44,793	49,358
	Deferred tax assets not recognised	373,779	172,864
Income tax expense / (benefit)		-	-
(b)	Recognised deferred tax assets
Unused tax losses		287,135	315,278
	Deductible temporary differences	156,658	126,385
		443,793	441,663
(c)	Recognised deferred tax liabilities
	Assessable temporary differences	443,793	441,663
		443,793	441,663
(d)	Unrecognised deferred tax assets
	Deferred tax assets have not been recognised in the Statement of Financial Position for the following items:
	Unused tax losses for which no deferred tax asset has been recognised	9,702,542	10,431,394
	Potential benefit at 30% (2016: 30%)	2,910,763	3,129,418
	There is no expiry date on the future deductibility of unused tax losses. The Company has no franking credits.
NOTE 8	CURRENT ASSETS: CASH & CASH EQUIVALENTS
Cash at bank and on hand		154,633	1,116,674
Cash on short-term deposit		400,000	1,000,000
		554,633	2,116,674
NOTE 9	CURRENT ASSETS: TRADE AND OTHER RECEIVABLES
Other receivables		17,197	30,235
Prepayments		12,053	17,535
		29,250	47,770
NOTE 10	NON-CURRENT ASSETS: RECEIVABLES
	Deposits – tenements and premises	15,234	24,979

15,234 24,979

NOTE 11 NON-CURRENT ASSETS: PROPERTY, PLANT AND EQUIPMENT

	2017	2016
	\$	\$
Plant and Equipment
Plant and equipment at cost	133,571	125,946
Less accumulated depreciation	(109,423)	(107,545)
	24,148	18,401
Reconciliation
Reconciliation of the carrying amount of property, plant and equipment at the beginning and end of the financial year is set out below:
Carrying amount at the beginning of the financial year	18,401	81,362
Additions	12,890	-
Disposals	(226)	(42,660)
Depreciation expense	(6,626)	(12,289)
Foreign currency exchange differences	(291)	(8,012)
Carrying amount at the end of the financial year	24,148	18,401

NOTE 12 MINERAL EXPLORATION AND EVALUATION ASSETS

Papua New Guinea
Balance at the beginning of the financial year	10,975,314	11,621,139
Expenditure capitalised during the year	1,797,369	317,685
Current year expenditure written-off during the year	(62,606)	-
Capitalised expenditure written-off during the year	(642,793)	-
Foreign currency exchange differences	(415,127)	(963,510)
Balance at the end of the financial year	11,652,157	10,975,314

The ultimate recoupment of costs carried forward for exploration and evaluation is dependent upon the successful development and commercial exploitation or sale of the respective areas of interest.

Coppermoly's wholly owned subsidiary, Copper Quest PNG Limited, is the legal holder of three Exploration Licences.

Exploration Licences:

• EL 2379 Simuku has a two year term ending on 10 September 2017;
• EL 1043 Mt Nakru has a two year term ending on 7 December 2018;
• EL 2514 Makmak has a two year term ending on 11 September 2019.

As at the date of this report, the current term of the Simuku Exploration Licence EL 2379 has expired. However, Coppermoly has applied to extend the term of this Exploration Licence, and therefore continues in force until a determination is made regarding the renewal application. A Warden's Hearing has been scheduled for 10 October 2017.

The departmental procedure for Exploration Licence extensions requires the approval at a Warden's Hearing, followed by consideration and recommendation by the Mining Advisory Council and the final approval by the Papua New Guinean Minister of Mining. Shareholders should be aware that, pending extension, granted Exploration Licences remain in good standing until a decision is made.

Accordingly, while Coppermoly has applied to renew the Simuku Exploration Licence, there is no certainty that the term of the Exploration Licence will be extended. There is a risk that the exploration licence will not be extended, or that the terms of the extension are not favourable to Coppermoly. This could have a significant adverse impact on the performance of Coppermoly.

In November 2016 the Company was advised by the MRA that renewal applications for exploration licences EL 2014 and EL 2272 had been refused due to limited exploration activity having been conducted during the terms after the Company focused its limited resources on the Mt Nakru licence. All capitalised costs associated with these two tenements have been written off in the current period.

Coppermoly reapplied for most of the ground covered by EL 2014 and some new additional ground that adjoins EL 1043. The licence was granted in September 2017 by the MRA as EL 2514 after a successful Warden's Hearing was held in August 2017.

NOTE 12 MINERAL EXPLORATION AND EVALUATION ASSETS (continued

West New Britain Project Exploration Licences

In October 2009 the Group signed a Letter Agreement with Barrick to sole fund \$20 million to earn up to 72% interest in Coppermoly Limited's tenements (Mt Nakru and Simuku) (WNB Projects) on the island of New Britain in Papua New Guinea. Barrick earned 72% equity in January 2012. In May 2012 Barrick advised Coppermoly of its intention to divest its interest in the WNB Projects. In July 2013 Coppermoly entered into an agreement with Barrick to re-acquire Barrick's interest in the WNB Projects on a staged basis to reacquire 100% ownership of these licences. Barrick still holds a nominal 28% interest in the WNB Projects.

Reacquisition Deed

The key remaining term of the Reacquisition Deed with Barrick is:

The Group may acquire the remaining nominal 28% interest in the WNB Projects, which the Company has a binding agreement to acquire, by making a payment of AUD \$4,500,000, payable no later than the date that is 6 months after the commencement of commercial production at the WNB Projects. Barrick do not have to contribute any further costs to exploration or development of the projects nor are they entitled to any profits from the projects.

NOTE 13 CURRENT LIABILITIES: TRADE AND OTHER PAYABLES

	2017	2016
	\$	\$
Trade and other payables
Unsecured:
Trade creditors	24,594	32,505
Other creditors	370,280	228,555
	394,874	261,060
NOTE 14 PROVISIONS
Current liabilities
Annual Leave and Long Service Leave	39,477	15,566
	39,477	15,566
Non-current liabilities
Long Service Leave	2,302	13,711

2,302 13,711

NOTE 15 BORROWINGS

	2017 \$	2016 \$
Borrowings
Unsecured:
Convertible notes (a)	1,175,520	1,162,157
Accrued interest	204,740	120,740
Other borrowings	5,764	5,730
	1,386,024	1,288,627
(a) Convertible notes

The terms of the convertible notes are as follows:

Re-issue Date: Maturity Date: Number of Notes Note Face Value: Conversion Price:	19 December 2016 19 December 2017 60,000,000 \$1,200,000 Convertible into ordinary shares \$0.02 at the note holder's option being 60,000,000 shares.
Repayment upon maturity:	The outstanding principle amounts of the convertible notes (being the outstanding issue price of the convertible notes to the extent that they have not been converted) will be repaid by the Company.
	The terms of the notes were varied on 19 October 2016 so that they now have a Maturity Date of 19 December 2017.
	The notes may be repaid by Coppermoly any time prior to the Maturity Date subject to Coppermoly paying the note holder a break fee equal to 5% of the repayment amount.
Unlisted Options:	In conjunction with the convertible notes the noteholder was issued with 12,916,666 unlisted options on 19 December 2014 and 7,083,333 unlisted options on 26 March 2015 (a total of 19,999,999 unlisted options) to acquire shares at an exercise price of \$0.03 per option. The options expired unexercised on 19 December 2016.
	The options were exercisable at any time prior to the original Maturity Date subject to the holder only being entitled to exercise 1 option for every 3 convertible notes it elected to convert to shares.
Interest:	The convertible notes bear interest at 7%. The effective interest rate is 15%.

	2017 \$	2016 \$
The convertible notes are presented in the statement of financial position as follows:
Face value of notes issued	1,200,000	1,200,000
Other equity securities – value of options issued	(194,214)	(142,266)
Cost of convertible notes issue	(13,739)	(13,739)
	992,047	1,043,995
Unwinding of equity portion - interest expense	183,473	118,162
Repayment of convertible notes	-	-
Convertible notes liability	1,175,520	1,162,157

NOTE 16 CONTRIBUTED EQUITY

	2017	2016	2017	2016
	Shares	Shares	\$	\$
(a) Paid Up Capital
Ordinary shares – fully paid – no par value	1,093,817,806	760,484,473	19,065,353	18,405,791

Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares held.

On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and in a poll each share is entitled to one vote.

The Company does not have any authorised capital limit.

(b) Movements in ordinary share capital:

Date	Details	Number of Shares	Issue Price \$	\$
30 Jun 2015	Balance	383,729,449		15,922,838
7 Dec 2015	Shares issued in lieu of directors fees1	1,755,024	0.020	35,100
28 Jan 2016	Private Placement	57,750,000	0.004	231,000
11 Apr 2016	Private Placement2	317,250,000	0.004	2,269,000
	Less costs of raising capital	-		(52,147)
30 Jun 2016	Balance	760,484,473		18,405,791
30 Mar 2017	Private Placement3	250,000,000	0.000	-
30 Mar 2017	Private Placement4	83,333,333	0.008	666,667
	Less costs of raising capital	-		(7,105)
30 Jun 2016	Balance	1,093,817,806		19,065,353

1 Issued with 585,008 Unlisted Options exercisable at 3 cents and expiring 3 December 2018.

2 Issued with 250,000,000 Deferred Options and 83,333,333 Attached Options, at an issue price of \$0.004 per Deferred Option.

³ 250,000,000 Shares issued upon the exercise of Deferred Options, with no exercise price.

⁴ 83,333,333 Shares issued upon the exercise of Attached Options, at an exercise price of \$0.008 per Attached Option.

(c) Capital risk management

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern. The capital structure of the Group consists of equity attributable to equity holders of the Parent comprising issued capital, reserves and retained earnings as disclosed in the statement of financial position.

The Group reviews the capital structure on an on-going basis with consideration to the cost of capital and the risks associated with each class of capital. The Group is not exposed to externally imposed capital requirements.

(d) Options	No. of Options 2017	No. of Options 2016
The number of unissued ordinary shares relating to options not exercised at year end:
Unlisted Options over shares in the Parent Entity:
Exercisable at 3 cents, expiry 19 December 2016	-	19,999,999
Exercisable at 3 cents, expiry 24 March 2017	-	21,963,933
Exercisable at 3 cents, expiry 3 December 2018	585,008	585,008
Exercisable at 0 cents between 1 February 2017 and 31 January 2020	-	250,000,000
Exercisable at 0.8 cents between 1 February 2017 and 31 January 2020	-	83,333,333
	585,008	375,882,273

NOTE 16 CONTRIBUTED EQUITY (continued)

(e) Option Issues

Date	Details	Number of Options	Exercise Price	Expiry Date
2017	No Options issued	-	-	-
2016	Unlisted Options	585,008	\$0.030	3 Dec 2018
	Unlisted Options	250,000,000	\$0.000	31 Jan 2020
	Unlisted Options	83,333,333	\$0.008	31 Jan 2020

(f) Option Exercise

333,333,333 options were exercised during the financial year (2016: Nil).

Date	Details	Number of Options
30 Mar 2017	Unlisted Options exercisable at 0.000 cents	250,000,000
30 Mar 2017	Unlisted Options exercisable at 0.008 cents	83,333,333

(g) Option Expiry

41,963,932 options expired during the financial year (2016: 9,681,337).

Date	Details	Number of Options
19 Dec 2016	Unlisted Options exercisable at 3 cents	19,999,999
24 Mar 2017	Unlisted Options exercisable at 3 cents	21,963,933

NOTE 17 RESERVES	2017 \$	2016 \$
Share option reserve	3,001,879	2,949,931
Foreign currency translation reserve	(1,074,847)	(607,148)
	1,927,032	2,342,783
Movements:
Share option reserve
Balance at the beginning of the financial year	2,949,931	2,949,931
Convertible notes – value of conversion feature and options issued	51,948	-
Balance at the end of the financial year	3,001,879	2,949,931
Foreign Currency Translation Reserve
Balance at the beginning of the financial year	(607,148)	388,704
Currency translation difference arising during the year	(467,699)	(995,852)
Balance at the end of the financial year	(1,074,847)	(607,148)

Nature and purpose of reserves

(i) Share Option Reserve

The share option reserve represents accumulation of option premium paid on issuing listed options, the value of expired options and the difference between the proceeds received from a convertible bond that does not have a derivative at fair value and the fair value of the liability on initial recognition.

(ii) Foreign Currency Translation Reserve

Exchange differences arising on translation of the foreign controlled entity are taken to the foreign currency translation reserve. The reserve is recognised in profit and loss when the net investment is disposed.

NOTE 18 COMMITMENTS

(a) Exploration Expenditure Commitments	2017 \$	2016 \$
In order to maintain rights of tenure to exploration tenements the Group is required to perform exploration work to meet the minimum expenditure requirements as specified by various governments.
Commitments are not provided for in the accounts and are payable:
Not later than 1 year	-	612,300
Later than 1 year but not later than 5 years	-	57,200
	-	669,500
All exploration expenditure spending commitments had been met as at 30 June 2017.
(b) Other Operating Lease Commitments Future property rental agreements are not provided for in the financial statements and are payable:
Not later than 1 year	36,555	37,092
Later than 1 year but not later than 5 years	22,488	23,404
	59,043	60,496
(c) Capital Commitments
Payments required under the Barrick Reacquisition Deed 1 :
Not later than 1 year	-	-
Later than 1 year but not later than 5 years	-	-
	-	-
1. Refer to note 12 and note 24 for details of Capital Commitments due to Barrick.
NOTE 19 SUBSEQUENT EVENTS

There have been no subsequent events after 30 June 2017.

NOTE 20	KEY MANAGEMENT PERSONNEL DISCLOSURES AND RELATED PARTY TRANSACTIONS	2017 \$	2016 \$
	Key management personnel compensation:
	Short-term employee benefits:
	Cash and accrued directors fees	160,000	128,858
Post-employment benefits		3,800	3,800
		163,800	132,658

The total outstanding accrued Directors' fees at 30 June 2017 was \$331,619. In March 2017 Coppermoly announced that the Directors of the Company had resolved to satisfy their accrued Directors' fees owing as at 31 March 2017 by way of the issue of new fully paid Shares at an issue price of \$0.025 (2.5 cents) per Share (Director Shares). The issue of the Director Shares is subject to obtaining the necessary approvals under the ASX Listing Rules and the Corporations Act.

The deemed issue price of the Director Shares was the closing ASX market price of the Shares on 31 March 2017. The issue price is at a premium to market closing prices around the time of the announcement and is significantly higher than the average market price of Shares over the period the Directors' fees were earned and the debts for unpaid fees were accumulated.

The outstanding accrued Directors' fees at 31 March 2017 totalled \$291,619. This equates to a potential total number of Shares of 11,664,749 to be issued at an issue price of 2.5 cents.

Shareholder approval for the issue of the Director Shares will be sought at the next General Meeting of the Company.

Transactions with other related parties

During the year ended 30 June 2015 the Group issued convertible notes to Jade Triumph International Limited (Jade Triumph) an entity related to Jincheng Yao. The terms and conditions of the notes are included in Note 15 including details of the amounts provided, interest accrued and repayments made. As at 30 June 2017 the balance owed to Jade Triumph was \$1,404,740 (30 June 2016 \$1,320,740).

NOTE 21 SEGMENT INFORMATION

(a) Description of segments

The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (chief operating decision makers) in assessing performance and determining the allocation of resources. Operating segments are determined on the basis of financial information reported to the Board which is at the consolidated entity level. Accordingly, the consolidated entity is treated as one operating segment.

Therefore, management identifies the Group as having only one reportable segment. The financial results from this reportable segment are equivalent to the financial statements of the consolidated entity as a whole. There have been no changes in the operating segments during the year.

(b) Entity-wide disclosures

The Group's geographical information is as follows:

		Australia	Papua New Guinea
		\$	\$
Non-current assets	2017	12,193	11,679,346
	2016	14,430	11,004,264

The Group operates primarily in mineral exploration locations in Papua New Guinea. The Group's headquarter office is in Australia.

The Group does not have any products/services it derives material revenue from except interest which is mainly from Australia.

NOTE 22	AUDITORS' REMUNERATION	2017 \$	2016 \$
	During the year the following fees were paid or payable for services provided by the auditor of the parent entity and the auditor of the subsidiary entity, their related practices and non-related audit firms.
Assurance Services
1.	Audit Services – audit or review of financial statements
	BDO Audit Pty Ltd Australian firm:	27,163	34,856
	Sinton Spence Chartered Accountants PNG firm:	6,267	6,829
	Total remuneration for audit services	33,430	41,685
2.	Other Assurance Services
	BDO Audit Pty Ltd Australian firm:	-	-
	Sinton Spence Chartered Accountants PNG firm:	1,558	5,236
	Total remuneration for other assurance services	1,558	5,236
	Total remuneration for assurance services	34,988	46,921
Taxation Services
	BDO (QLD) Pty Ltd Australian firm:	6,500	6,500
	Sinton Spence Chartered Accountant PNG firm:	414	664
	Total remuneration for taxation services	6,914	7,164
NOTE 23	EARNINGS PER SHARE ("EPS")
		2017	2016
	Basic and diluted earnings (losses) per share (cents per share)	(0.17)	(0.15)
for the year.	Loss used in calculating basic and diluted earnings per share is the net loss	\$1,395,240	\$740,740
		No.	No.
diluted EPS	Weighted average number of shares used in the calculation of the basic and	845,415,980	479,390,077
	The number of potential ordinary shares relating to options not exercised at year end. These potential ordinary shares are not dilutive and, accordingly, were not used in calculating diluted EPS.	60,585,008	435,882,273

NOTE 24 CONTINGENCIES

(i) The Macmin Royalty

By an agreement dated 12 June 2002 between Macmin NL, Macmin (PNG) Limited and New Guinea Gold Corporation (NGG Canada), NGG Canada indirectly acquired all rights, title and interests held by Macmin NL in respect of EL 1043 (Mt Nakru) and EL 1077 (Simuku) through the purchase of all of the issued capital of Macmin (PNG) Limited (being a wholly owned subsidiary of Macmin NL). Note, on 11 September 2015 EL 2379 was granted by the PNG Mineral Resources Authority as a consolidated exploration licence combining EL 1077 Simuku and EL 1445 Talelumas.

Under the terms of the agreement NGG Canada granted a 1% net smelter return royalty (NSRR) in favour of Macmin NL payable in respect of all mineral products produced from the tenements upon being brought into production. The royalty may remain attached to the tenements and may become payable by the Group upon the tenements being brought into production. This would be subject to legal opinions and negotiations should such circumstances come to bear.

In November 2008, Macmin Silver Ltd (formerly Macmin NL) had been placed into administration. In October 2009, Macmin Silver Ltd emerged from voluntary administration; however the rights to the 1% net smelter royalty are now attributable to the Creditors' Trust of Macmin Silver Ltd.

Due to the number of variables involved it is not practicable to disclose an estimate of the financial effect related to this contingent liability.

(ii) The Reacquisition Deed with Barrick

The Group may acquire Barrick's remaining nominal 28% interest in the West New Britain Projects by making a payment of AUD \$4,500,000, payable no later than the date that is 6 months after the commencement of commercial production at the West New Britain Projects.

NOTE 25	RECONCILIATION OF LOSS AFTER INCOME TAX TO NET CASH FLOW FROM OPERATING ACTIVITIES
		2017 \$	2016 \$
operating activities	Reconciliation of loss after income tax to net cash inflow from
	Profit / (loss) after income tax	(1,395,240)	(740,740)
	- Impairment of exploration expenditure	705,399	-
	- Loss/(gain) on disposal of fixed assets	231	46,174
	- Depreciation expense	6,626	12,289
	- Non-cash interest expense	149,311	164,528
	- Net exchange differences	(105)	660
	Change in operating assets and liabilities:
	- Payables and provisions	156,783	61,758
	- Trade and other receivables	5,456	(4,576)
- Prepayments		5,351	489
	Net cash inflow / (outflow) from operating activities	(366,188)	(459,418)

NOTE 26 SUBSIDIARIES

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiary in accordance with the accounting policy described in note 1(b):

Name of Entity	Country of Incorporation	Class of Shares	Equity Holding 2017 %	Equity Holding 2016 %
Copper Quest PNG Ltd	PNG	Ordinary	100	100

NOTE 27 NON-CASH FINANCING AND INVESTING ACTIVITIES

There were no such activities during the 2017 financial year.

Activities during the 2016 financial year:

Shares were issued in satisfaction of accrued directors fees:

		Number of
Date	Issued to	Shares	Issue Price \$	\$
7 Dec 2015	Michael Howard	1,755,024	0.02	35,100

Unlisted options were issued in satisfaction of accrued directors fees:

Date	Issued to	Number of Options	Exercise Price	Expiry Date
7 Dec 2015	Michael Howard	585,008	\$0.03	3 Dec 2018

The following unlisted options were issued in conjunction with the shares and deferred options issued on the same date:

Date	Issued to	Number of Options	Exercise Price	Expiry Date
11 Apr 2016	Ever Leap Services Limited	83,333,333	\$0.008	31 Jan 2020

In the Directors' opinion:

• (a) the financial statements and notes set out on pages 23 to 48 are in accordance with the Corporations Act 2001, including:
• (i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
• (ii) giving a true and fair view of the consolidated entity's financial position as at 30 June 2017 and of its performance, as represented by the results of its operations, changes in equity and its cash flows, for the financial year ended on that date; and
• (iii) complying with International Financial Reporting Standards as disclosed in note 1; 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; and
• (c) the audited Remuneration Report set out on pages 16 to 19 of the Directors' Report complies with section 300A of the Corporations Act 2001.

The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by section 295A of the Corporations Act 2001.

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

Kevin Grice Non-executive Director

Bundall, Queensland 26 September 2017

Level 10, 12 Creek St Brisbane QLD 4000 GPO Box 457 Brisbane QLD 4001 Australia

INDEPENDENT AUDITOR'S REPORT

To the members of Coppermoly Limited

Report on the Audit of the Financial Report

Opinion

We have audited the financial report of Coppermoly Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2017, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial report, including a summary of significant accounting policies and the directors' declaration.

In our opinion the accompanying financial report of the Group, is in accordance with the Corporations Act 2001, including:

• (i) Giving a true and fair view of the Group's financial position as at 30 June 2017 and of its financial performance for the year ended on that date; and
• (ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis for opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's report.

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

BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.

Material uncertainty related to going concern

We draw attention to Note 1 in the financial report which describes the events and/or conditions which give rise to the existence of a material uncertainty that may cast significant doubt about the group's ability to continue as a going concern and therefore the group may be unable to realise its assets and discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this matter.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit matter

How the matter was addressed in our audit

Refer to note 1 (s) and 12 in the financial report The Group carries mineral exploration and evaluation assets totalling \$11,652,157 as at 30 June 2017 in relation to the application of the Group's accounting policy for exploration and evaluation assets. The recoverability of mineral exploration and evaluation asset is a key audit matter due to:  The significance of the total balance (95% of total assets); and  The level of procedures undertaken to evaluate management's application of the requirements of AASB 6 Exploration for and Evaluation of Mineral Resources ('AASB 6') in light of any indicators of impairment that may be present.

Our procedures included, but were not limited to the following:  Obtaining evidence that the Group has valid rights to explore in the areas represented by the capitalised exploration and evaluation expenditure by obtaining supporting documentation such as license agreements and also considering whether the Group maintains the tenements in good standing  Where licenses over areas of interest have expired or are due to expire in the next 12 months we further assessed the basis for continuing to carry the costs, including the status of renewals that had been lodged and obtaining evidence that the licenses remained in force until the renewal process is completed. Where license renewal applications had been refused we confirmed that costs related to those areas of interest had been expensed  Making enquiries of management with respect to the status of ongoing exploration programs in the respective areas of interest

Carrying value of mineral exploration and evaluation assets

BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.

and assessing the Group's cashflow budget for the level of budgeted spend on exploration projects and held discussions with directors of the Group as to their intentions and strategy

Enquiring of management, reviewing ASX announcements and reviewing directors' minutes to ensure that the Group had not decided to discontinue activities in any applicable areas of interest and to assess whether there are any other facts or circumstances that existed to indicate impairment testing was required.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group's annual report for the year ended 30 June 2017, but does not include the financial report and the auditor's report thereon.

Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the directors for the Financial Report

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

In preparing the financial report, the directors are responsible for assessing the ability of the group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Auditor's responsibilities for the audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at:

http://www.auasb.gov.au/auditors\_responsibilities/ar1.pdf

This description forms part of our auditor's report.

Report on the Remuneration Report

Opinion on the Remuneration Report

We have audited the Remuneration Report included in pages 16 to 19 of the directors' report for the year ended 30 June 2017.

In our opinion, the Remuneration Report of Coppermoly Limited, for the year ended 30 June 2017, complies with section 300A of the Corporations Act 2001.

Responsibilities

The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

BDO Audit Pty Ltd

T R Mann Director

Brisbane, 26 September 2017

SHAREHOLDER INFORMATION

Information required by Australian Securities Exchange Limited and not shown elsewhere in this report is as follows:

STATEMENT OF QUOTED SECURITIES AS AT 31 AUGUST 2017

a) Distribution of Shareholders

	Size of Holding	Number of Shareholders
	1 – 1,000	35
	1,001 – 5,000	44
	5,001 – 10,000	139
	10,001 – 100,000	402
	100,001 and over	163
		783
b)	Number of holders of less than marketable parcels	455
c)	Percentage holding of 20 largest holders	93.35%

d) There were three substantial shareholders listed in the Company's register as at 31 August 2017.

e) Twenty largest shareholders (as at 31 August 2017):

COY Shareholders
		% of
Name	Quantity	Total Holding
EVER LEAP SERVICES LIMITED	708,333,333	64.76
BARRICK (PD) AUSTRALIA LIMITED	73,201,447	6.69
JELSH HOLDINGS PTY LTD [GROUP]	56,501,133	5.17
MR MA PIWU	52,737,609	4.82
JADE TRIUMPH INTERNATIONAL LTD	30,000,000	2.74
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED	23,494,181	2.15
MR JOSEPH TULLIO [GROUP]	15,855,000	1.45
MR HAO MA	10,835,790	0.99
MR PETER JOHANNES POORT	10,000,000	0.91
MR CHRIS & MS FIONA WALLIN	5,500,000	0.50
MR BEN MICHAEL FAULKNER [GROUP]	5,322,156	0.49
HOLICARL PTY LTD	4,384,454	0.40
MR DAVID THOMAS WHITE	4,289,632	0.39
NMC MINING CORPORATION	3,827,646	0.35
MR DAVID LAWSON	3,606,936	0.33
NATIONAL NOMINEES LIMITED	3,116,713	0.29
MR GOPAL & MRS SHARMILA BOSE	3,000,000	0.27
MR JOHN DOUGLAS BENSEMAN	3,000,000	0.27
CITICORP NOMINEES PTY LTD	2,161,105	0.20
MISS ANN STERLING MACANSH	2,000,000	0.18
TOTAL	1,021,167,135	93.35

STATEMENT OF UNQUOTED SECURITIES AS AT 31 AUGUST 2017

The following unquoted securities are on issue:	Quantity
Convertible notes maturing on 19 December 2017	60,000,000
Options exercisable at 3 cents per share on or before 3 December 2018	585,008

DIRECTORS

Mr Kevin Grice Mr Jincheng Yao Dr Wanfu Huang Mr Zule Lin

COMPANY SECRETARY

Mr Paul Schultz

HEAD OFFICE & REGISTERED OFFICE

Level 1, 91 Upton Street Bundall Qld 4217, Australia Telephone: +61 7 5510 3994 Facsimile: +61 7 5510 3997

POSTAL ADDRESS

PO Box 6965 Gold Coast Mail Centre Qld 9726

INTERNET

Email: info@coppermoly.com.au Website: www.coppermoly.com.au

SHARE REGISTRY

Boardroom Pty Limited Level 12 225 George Street Sydney NSW 2000

AUDITORS

BDO Audit Pty Ltd Level 10 12 Creek Street Brisbane Qld 4000

BANKERS

Westpac Bank

STOCK EXCHANGE

Coppermoly Ltd is listed on the Australian Securities Exchange (the home branch is Brisbane) and the Port Moresby Stock Exchange, Papua New Guinea.

SCHEDULE OF TENEMENTS AS AT 26 SEPTEMBER 2017

PROJECT	EFFECTIVE OWNERSHIP	LOCATION
EL 1043 Mt Nakru (47.7km²)	100% Copper Quest PNG Ltd1	New Britain Island PNG
EL 2379 Simuku (122.7km²)	100% Copper Quest PNG Ltd1	New Britain Island PNG
EL 2514 Makmak (269.4km²)	100% Copper Quest PNG Ltd	New Britain Island PNG
 Copper Quest PNG Ltd is a 100% owned subsidiary of Coppermoly Ltd

1. Barrick still holds a nominal 28% interest in the WNB Projects, which the Company has a binding agreement to acquire, completion of which will be effected on the payment of a further \$4.5M to Barrick within 6 months after the commencement of commercial production at the WNB Projects. Barrick do not have to contribute any further costs to exploration or development of the projects nor are they entitled to any profits from the projects.