DREADNOUGHT RESOURCES LTD — Interim / Quarterly Report 2018

Mar 13, 2018

Tychean Resources Limited

Interim Financial Report

For The Half Year Ended 31 December 2017

To be read in conjunction with the 30 June 2017 Annual Report

Tychean Resources Limited

Contents

DIRECTORS' REPORT ......................................................................................................................................................3 AUDITOR'S INDEPENDENCE DECLARATION ....................................................................................................................5 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME .....................................................................6 STATEMENT OF FINANCIAL POSITION ............................................................................................................................7 STATEMENT OF CHANGES IN EQUITY .............................................................................................................................8 STATEMENT OF CASH FLOWS ........................................................................................................................................9 NOTES TO THE FINANCIAL STATEMENTS ...................................................................................................................... 10 DIRECTORS' DECLARATION .......................................................................................................................................... 13 INDEPENDENT AUDITOR’S REVIEW REPORT ................................................................................................................ 14

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Tychean Resources Limited

Directors' Report For the Half Year Ended 31 December 2017

Your directors present their report on the consolidated entity consisting of Tychean Resources Limited and the entities it controlled at the end of, or during, the half-year ended 31 December 2017.

Directors

The following persons were directors of Tychean Resources Limited at any time during the half year and up to the date of this report:

Robert Michael Kennedy (Non-Executive Chairman, resigned on 21 December 2017) Ewan Vickery (Non-Executive Director, resigned on 21 December 2017) Kevin John Anson Wills (Non-Executive Director, resigned on 21 December 2017)

Duncan Lachlan Gordon (Non-Executive Chairman, appointed on 21 December 2017) Ian James Gordon (Non-Executive Director, appointed on 21 December 2017) Paul Charles Payne (Non-Executive Director, appointed on 21 December 2017)

The directors have been in office to the date of this report unless otherwise stated.

Review of operations and financial results

Tanami Joint Venture

Tychean maintain their 15% interest in the Tanami-JV, with venture partner Ramelius Resources (ASX: RMS ) where a maiden Aircore drilling programme has been completed at the Highland Rocks ELs totalling 5,780m. Goldrush, Goldrush South and Mount Solitaire EL’s were granted in the September quarter however no additional field work was completed to date.

Corporate

Last quarter, Tychean Resources completed a fully underwritten non-renounceable Entitlement Issue raising ~A$385,000. The Company would like to thank all those shareholders and underwriters who participated for their ongoing support.

Concurrent to this recapitalisation, Tychean underwent a Board restructure, as the Company continues to refocus its corporate strategy moving forward. Outgoing Board members Mr Robert Kennedy, Mr Ewan Vickery and Dr Kevin Wills resigned subsequent to the appointment of Mr Duncan Gordon as Non-executive Chairman and Mr Ian Gordon and Mr Paul Payne as Non-executive Directors. The Company wishes to sincerely thank the outgoing Board for their contribution to Tychean.

The incoming Board members all took part in the Company’s recent equity issue and hold the set of skills necessary to allow Tychean to capitalise on value-accretive investment opportunities as they arise without deviating from the Company’s’ core business in the mining and minerals space.

The funds raised through the recent Entitlement Issue have secured the Company’s financial position and enabled the new Board to pursue thorough due diligence on key acquisition targets, which is currently underway.

Tychean is actively progressing discussions with select parties across the minerals sector within Australia in relation to an anticipated acquisition of a new flagship project. The Company will continue to shareholders with updates as material progress is made in this area.

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Tychean Resources Limited

Directors' Report For the Half Year Ended 31 December 2017

Subsequent Events

Except for the below, no other matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Group, the results of those operations or the state of affairs of the Group in future financial years.

Auditor's independence declaration

The auditor's independence declaration in accordance with section 307C of the Corporations Act 2001 for the half year ended 31 December 2017 has been received and can be found on page 5 of the financial report.

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

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Duncan Lachlan Gordon Non-Executive Chairman

Dated this 6[th] day of March 2018

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Grant Thornton House Level 3 170 Frome Street Adelaide, SA 5000 Correspondence to: GPO Box 1270 Adelaide SA 5001

T 61 8 8372 6666 F 61 8 8372 6677 E info.sa@au.gt.com W www.grantthornton.com.au

Auditor’s Independence Declaration to the Directors of Tychean Resources Limited

In accordance with the requirements of section 307C of the Corporations Act 2001 , as lead auditor for the review of Tychean Resources Limited for the half-year ended 31 December 2017. I declare that, to the best of my knowledge and belief, there have been:

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

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

Grant Thornton Audit Pty Ltd Chartered Accountants

J L Humphrey Partner – Audit & Assurance

Adelaide, 6 March 2018

Grant Thornton Audit Pty Ltd ACN 130 913 594

a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

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

Liability limited by a scheme approved under Professional Standards Legislation.

Tychean Resources Limited

Statement of Profit or Loss and Other Comprehensive Income For The Half Year Ended 31 December 2017

Other income Administration expenses Impairment of exploration expenditure Loss before income tax Income tax expense Loss from continuing operations Loss for the half year Other comprehensive income, net of income tax: Items that will not be reclassified subsequently to profit or loss Items that will be reclassified to profit or loss Total comprehensive loss for the year Loss attributable to: Members of the parent entity Total comprehensive loss attributable to: Members of the parent entity Earnings per share From continuing operations: Basic earnings per share (cents) Diluted earnings per share (cents)	Consolidated Dec-17 Dec-16 $ $ 1,082 1,640 (160,462) (235,129) (410) (2,025)
	(159,790) (235,514) - (6,740)
	(159,790) (242,254)
	(159,790) (242,254)
	- - (12,500) 25,000 (172,290) (217,254)
	(172,290) (217,254)
	(172,290) (217,254)
	Cents Cents (0.05) (0.06) (0.05) (0.06)

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Tychean Resources Limited

Statement of Financial Position As At 31 December 2017

Note ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables Available for sale financial instruments 3 Other assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Property, plant and equipment Exploration, evaluation and development assets 6 TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 2 Reserves Accumulated Losses TOTAL EQUITY	Consolidated Dec-17 Jun-17 $ $ 457,901 165,339 9,768 2,497 37,500 50,000 14,975 4,657
	520,144 222,493
	248 307 252,521 252,521
	252,769 252,828
	772,913 475,321
	82,465 57,894
	82,465 57,894
	- -
	82,465 57,894
	690,448 417,427
	38,106,938 37,661,627 (12,500) - (37,403,990) (37,244,200)
	690,448 417,427

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Tychean Resources Limited

Statement of Changes in Equity For the Half Year Ended 31 December 2017

Dec-17		Issued Capital	Reserves	Accumulated Losses	Total
	Note	$	$	$	$
Balance at 1 July 2017		37,661,627	-	(37,244,200)	417,427
Comprehensive loss
Loss for period		-	-	(159,790)	(159,790)
Other comprehensive income		-	(12,500)	-	(12,500)
Total comprehensive loss for the period		-	(12,500)	(159,790)	(172,290)
Transactions with owners, in their capacity as
owners, and other transfers
Transaction costs		(39,461)	-	-	(39,461)
Shares issued during the year		484,772	-	-	484,772
Total transactions with owners and other transfers		445,311	-	-	445,311
Balance at 31 December 2017		38,106,938	(12,500)	(37,403,990)	690,448
Dec-16		Issued Capital	Reserves	Accumulated Losses	Total
	Note	$	$	$	$
Balance at 1 July 2016		37,324,853	-	(36,862,080)	462,773
Comprehensive loss
Loss for period		-	-	(242,254)	(242,254)
Other comprehensive income		-	25,000	-	25,000
Total comprehensive loss for the period		-	25,000	(242,254)	(217,254)
Transactions with owners, in their capacity as
owners, and other transfers
Transaction costs		(22,466)	-	-	(22,466)
Tax effect on transactions costs		6,740	-	-	6,740
Shares issued during the year		352,500	-	-	352,500
Total transactions with owners and other transfers		336,774	-	-	336,774
Balance at 31 December 2016		37,661,627	25,000	(37,104,334)	582,293

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Tychean Resources Limited

Statement of Cash Flows For the Half Year Ended 31 December 2017

CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers Payments to suppliers and employees Interest received Net cash used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Payments for exploration assets Net cash provided/(used in) by investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issue of shares Payments for capital raising costs Net cash provided by financing activities Net increase in cash and cash equivalents held Cash and cash equivalents at beginning of half year Cash and cash equivalents at end of the half year	Consolidated Dec-17 Dec-16 $ $ - - (153,421) (222,344) 1,082 1,640
	(152,339) (220,704)
	(410) (2,399)
	(410) (2,399)
	484,772 352,500 (39,461) (20,835)
	445,311 331,665
	292,562 108,562 165,339 288,331
	457,901 396,893

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Tychean Resources Limited

Notes to the Financial Statements For the Half Year Ended 31 December 2017

1 Basis of Preparation

This condensed consolidated interim financial report for the reporting period ending 31 December 2017 has been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standard AASB 134: Interim Financial Reporting .

The interim financial report is intended to provide users with an update on the latest annual financial statements of Tychean Resources Limited and controlled entities (the Group). As such it does not contain information that represents relatively insignificant changes occurring during the half year within the Group. This condensed consolidated financial report does not include all the notes normally included in an annual financial report. It is therefore recommended that this financial report be read in conjunction with the annual financial statements of the Group for the year ended 30 June 2017, together with any public announcements made during the half year.

The same accounting policies and methods of computation have been followed in this interim financial report as were applied in the most recent annual financial statements.

a) Key estimates

The preparation of the consolidated financial statements requires management to make estimates and judgments. These estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Group and that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

(i) Estimated impairment

The Group assesses impairment at each reporting date by evaluating conditions specific to the Group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates.

(ii) Exploration and evaluation

The Group policy for exploration and evaluation is discussed in note 1 (s) of the June 2017 Annual Report. The application of this policy requires management to make certain assumptions as to future events and circumstances. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised exploration and evaluation expenditure, management concludes that the capitalised expenditure is unlikely to be recovered by future sale or exploration, then the relevant capitalised amount will be written off through the statement of profit or loss. The related carrying amounts are disclosed in note 6.

2 Issued Capital

		Consolidated	Consolidated
		Dec-17	Jun-17
		$	$
	(a) Share capital
Dec	2017: 577,156,607 (June 2017: 334,770,921) fully paid ordinary shares	38,106,938	37,661,627

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Tychean Resources Limited

Notes to the Financial Statements For the Half Year Ended 31 December 2017

2 Issued Capital - continued

(b) Movements in ordinary share capital

Date Details 01/07/2017 Opening Balance 07/11/2017 Placement 18/12/2017 Non-renounceable rights issue Less: transaction costs arising on share issue 31/12/2017 Closing Balance	No. Issue Price ($) 334,770,921 50,000,000 0.002 192,385,686 0.002 577,156,607	$ 37,661,627 100,000 384,772 (39,461)
		38,106,938

3 Available for sale financial instruments

Investments – ASX Listed company Total	Consolidated Dec-17 Jun-17 $ $ 37,500 50,000
	37,500 50,000

The company holds 25,000,000 shares in Maximus Resources Limited (ASX: MXR). The market price as at 31 December 2017 was $0.0015 per share.

4 Operating Segments

Segment information

The Directors have considered the requirements of AASB 8 - Operating Segments and the internal reports that are reviewed by the chief operating decision maker (the Board) in allocating resources have concluded at this time there is one identifiable segment being the Tanami Joint Venture with Ramelius Resources Ltd (ASX: RMS).

5 Subsidiaries

The consolidated financial statements include the financial statements of Tychean Resources Ltd and the following subsidiaries:

	% ownership	% ownership
	interest	interest
Name of subsidiary	Dec-17	Jun-17
Tychean Tanami Pty Ltd (previously ERO Metals Pty Ltd)	100.0	100.0
Valley Floor Resources Pty Ltd	100.0	100.0

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Tychean Resources Limited

Notes to the Financial Statements For the Half Year Ended 31 December 2017

6 Exploration & Evaluation Expenditure

Exploration and evaluation expenditure Exploration assets at cost Reconciliation Balance at beginning of financial year Expenditure incurred Exploration expenditure impairment Total exploration and evaluation expenditure	Consolidated Dec-17 Jun-17 $ $ 252,521 252,521 252,521 252,521 410 3,015 (410) (3,015)
	252,521 252,521

7 Events Occurring After the Reporting Date

No other matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Group, the results of those operations or the state of affairs of the Group in future financial years.

8 Going Concern

The financial report has been prepared on the basis of going concern.

The cash flow projections of the Group indicate that it will require positive cash flows from additional capital for continued operations. The Group incurred a loss of $172,290 for the half year and a net cash outflow from operating and investing activities of $152,749.

The Group is currently meeting minimum cash commitments and the Group is actively seeking new opportunities.

The Group's ability to continue as a going concern is contingent on obtaining additional capital. If additional capital is not obtained, the going concern basis may not be appropriate, with the result that the consolidated entity may have to realise its assets and extinguish its liabilities, other than in the ordinary course of business and in amounts different from those stated in the financial report. No allowance for such circumstances has been made in the financial report.

9 Company Details

The registered office and principal place of business of the company is:

Tychean Resources Limited Level 3 100 Pirie Street Adelaide SA 5000

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Tychean Resources Limited

Directors' Declaration

The directors of the Company declare that:

1. The financial statements and notes, as set out on pages 6 to 12 are in accordance with the Corporations Act 2001 , including:

2. (a) complying with Accounting Standard AASB 134: Interim Financial Reporting; and

3. (b) give a true and fair view of the consolidated group's financial position as at 31 December 2017 and of its performance for the half-year ended on that date.

4. In the directors' opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

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

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Duncan Gordon Non-executive Chairman

Dated this 6[th] day of March 2018

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Grant Thornton House Level 3 170 Frome Street Adelaide, SA 5000 Correspondence to: GPO Box 1270 Adelaide SA 5001

T 61 8 8372 6666 F 61 8 8372 6677 E info.sa@au.gt.com W www.grantthornton.com.au

Independent Auditor’s Review Report To the Members of Tychean Resources Limited

Report on the Half Year Financial Report

Conclusion

We have reviewed the accompanying half year financial report of Tychean Resources Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 31 December 2017 and the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the half year ended on that date, a description of accounting policies, other selected explanatory notes, and the directors’ declaration.

Based on our review, which is not an audit, nothing has come to our attention that causes us to believe that the half year financial report of Tychean Resources Limited does not give a true and fair view of the financial position of the Group as at 31 December 2017, and of its financial performance and its cash flows for the half year ended on that date, in accordance with the Corporations Act 2001 , including complying with Accounting Standard AASB 134 Interim Financial reporting .

Material Uncertainty Related to Going Concern

We draw attention to Note 8 in the financial report, which indicates that the Group incurred a net loss of $172,290 during the half year ended 31 December. As stated in Note 8, these events or conditions, along with other matters as set forth in Note 8, indicate that a material uncertainty exists that may cast significant doubt on the Group's ability to continue as a going concern. Our conclusion is not modified in respect of this matter.

Directors’ Responsibility for the Half Year Financial Report

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

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

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

Liability limited by a scheme approved under Professional Standards Legislation.

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Auditor’s Responsibility

Our responsibility is to express a conclusion on the half year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half year financial report is not in accordance with the Corporations Act 2001 including giving a true and fair view of the Group’s financial position as at 31 December 2017 and its performance for the half year ended on that date, and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of Tychean Resources Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

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

Independence

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

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

J L Humphrey Partner – Audit & Assurance

Adelaide, 6 March 2018