EAGLE MOUNTAIN MINING LIMITED - Regulatory Filings 2018

SILVER MOUNTAIN MINING PTY LTD

ABN 16 163 828 466

FINANCIAL REPORT

FOR THE YEAR ENDED 30 JUNE 2015

CONTENTS PAGE

1 CORPORATE DIRECTORY
2 DIRECTORS' REPORT
4 AUDITOR'S INDEPENDENCE DECLARATION
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
5 COMPREHENSIVE INCOME
6 CONSOLIDATED STATEMENT OF FINANCIAL POSITION
7 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
8 CONSOLIDATED STATEMENT OF CASH FLOWS
9 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22 DIRECTORS' DECLARATION
23 INDEPENDENT AUDITOR'S REPORT,

CORPORATE DIRECTORY

Brett Anthony Rowe Director Appointed 17 May 2013

Charles Bennett Bass Director Appointed 19 September 2017

COMPANY SECRETARY

Brett Anthony Rowe

DIRECTORS REGISTERED OFFICE

Level 3 15 Labouchere Road South Perth WA6151

AUDITORS

Appointed 17 May 2013 William Buck Audit (WA) Pty Ltd Level 3 15 Labouchere Road South Perth WA5151

DIRECTORS' REPORT

The Directors present their report on Sliver Mountain Mining Pty Ltd ("SMM" or the "Company") and its controlled entity (the "Consolidated entity") for the year ended 30 June 2015.

DIRECTORS

The names and details of the Consolidated entity's directors in office during the year until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated.

Brett Anthony Rowe	Director (appointed 17 May 2013)
Sylvia Culham Bass	Director (appointed 17 May 2013, resigned 19 September 2017)
Matthew Harrison Bass	Director (appointed 17 May 2013, resigned 19 September 2017)
Samuel David Bass	Director (appointed 17 May 2013, resigned 19 September 2017)
Charles Bennett Bass	Director (appointed 19 September 2017)

COMPANY SECRETARY

Brett Anthony Rowe (appointed 17 May 2013)

REVIEW OF OPERATIONS

Silver Mountain Mining Pty Ltd was incorporated on 17 May 2013.

The operating loss after income tax of the Consolidated entity for the year ended 30 June 2015 was \$1,156,752 (2014: \$1,004,874).

No dividend has been paid during or is recommended for the financial year ended 30 June 2015.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

No significant changes in the consolidated group's state of affairs occurred during the financial year.

PRINCIPAL ACTIVITIES

The consolidated group's principal activity is mineral exploration for base and precious metal in Arizona, USA. The main project is the Silver Mountain Project (SMP) situated in Yavapai County, approximately lOOKm to the NW of Phoenix in the Bradshaw Mountains of central Arizona. The SMP Is comprised of 26 Patented Mining Claims, 342 Unpatented Mining Claims and 5 Arizona State Exploration Permits. The SMP is prospective for base metals (Cu) and precious metals (Au and Ag) across three key areas: Pacific Horizon, Scarlett and Red Mule.

No significant change in the nature of these activities occurred during the year.

EVENTS SUBSEQUENT TO THE END OF THE REPORTING PERIOD

On 23 November 2017, \$3,264,155 AUD in loaned funds to The Company from Silver Mountain Mining Nominee Pty Ltd as trustee for the Silver Mountain Mining Trust ("the Trust") was converted into equity. 3,264,155 ordinary shares In the Company at \$1 per share were issued to the Trust In satisfaction of the above amount owed by the Company.

The Trust holds 4,214,165 ordinary shares (previously 950,010 ordinary shares) in the Company after the share issue on 23 November 2017

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

Likely developments in the operations of the consolidated group and the expected results of those operations in future financial years have not been included in this report as the inclusion of such information is likely to result in unreasonable prejudice to the consolidated group.

ENVIRONMENTAL ISSUES

The Consolidated entity's operations are not regulated under any significant environmental regulation under ^a law of the Commonwealth of Australia a State or a Territory. The Consolidated entity's operations on Patented and Unpatented Claims in Arizona are regulated by several federal environmental laws.

The Board believes that the Consolidated entity has adequate systems in place for the management of its environmental requirements. The Consolidated entity aims to ensure the appropriate standard of environmental care is achieved, and in doing so, that it is aware of and is in compliance with all environmental legislation. The Directors of the Consolidated entity are not aware of any breach of environmental legislation for the financial year under review.

SHARE OPTIONS

No options over issued shares or interests in the Consolidated entity were granted during or since the end of the financial year and there were no options outstanding at the date of this report.

No shares were issued during or since the end of the year as a result of the exercise of an option over unissued shares or interests.

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

The parent entity held and paid premiums for directors and officers insurance for the financial year.

PROCEEDINGS ON BEHALF OF THE CONSOLIDATED ENTITY

No person has applied for leave of court to bring proceedings on behalf of the Consolidated entity or intervene in any proceedings to which the Consolidated entity is a party for the purpose of taking responsibility on behalf of the Consolidated entity for all or any part of those proceedings.

The company was not a party to any such proceedings during the year.

AUDITOR'S INDEPENDENCE DECLARATION

Section 307C of the Corporations Act 2001 requires our auditors, William Buck Audit (WA) Pty Ltd, to provide the directors of the Consolidated entity with an Independence Declaration in relation to the audit of the financial report. This Independence Declaration is set out on page 4 and forms part of this directors' report for the year ended 30 June 2015.

This reporUias been made in accordance with a resolution of the Board of Directors.

Charles Berjrtett Bass Director

Dated at Perth this 5th day of December 2017

AUDITOR'S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF SILVER MOUNTAIN MINING PTY LTD

I declare that, to the best of my knowledge and belief during the year ended 30 June 2015 there have been:

no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.

William Buck Audit (WA) Pty Ltd ABN 67 125 012 124

Confey Manifis Director

Dated this 5 ,^hday of December 2017

CHARTERED ACCOUNTANTS & ADVISORS

Level 3,15 Labouchere Road South Perth WA6151 PO Box 748 South Perth WA 6951 Telephone: +61 8 6436 2888 williambuck.com

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the Year Ended 30 June 2015

		2015	2014
	Notes	\$	\$

Continuing Operations
Other Revenue	4(a)	687	1,344
Administration costs		(110,549)	(72,983)
Consultancy expense		(37,565)	(27,343)
Depreciation expense		(5,780)	(2,390)
Exploration costs		(1,003,058)	(877,534)
Other expenses	4(b)	(487)	(25,968)
Loss before income tax		(1,156,752)	(1,004,874)
Income tax expense	5
Loss after Income tax from continuing operations		(1,156,752)	(1,004,874)
Other comprehensive income (loss), net of income tax
Galn/(loss) on foreign currency exchange	14	82,708	(2,025)
Total comprehensive Income (loss) for the period		(1,074,044)	(1,006,899)

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

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2015

		2015	2014
	Note	\$	s
Current Assets
Cash and cash equivalents	6	493,834	230,630
Trade and other receivables	7	2,539	2,118
Prepayments	8	5,864
Total Current Assets		502,237	232,748
Non Current Assets
Exploration and evaluation expenditure - Land	9	969,897	219,992
Property, plant and equipment	10	11,100	13,882
Total Non Current Assets		980,997	233,874
TOTAL ASSETS		1,483,234	466,622
Current Liabilities
Trade and other payables	11	39,719	48,826
Borrowings	12	2,579,655	479,892
Total Current Liabilities		2,619,374	528,718
TOTAL LIABILITIES		2,619,374	528,718

NET ASSETS		(1,136,140)	(62,096)
Equity
Issued capital	13	950,010	950,010
Reserves	14	80,683	(2,025)
Accumulated losses		(2,166,833)	(1,010,081)
TOTAL EQUITY		(1,136,140)	(62,096)

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

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the Year Ended 30 June 2015

	Issued capital	Foreign Currency Translation Reserve	Accumulated losses	Total
	S	\$	\$	s
Balance at 1 July 2013	10		(5,207)	(5,197)
Loss for the period			(1,004,874)	(1,004,874)
Other comprehensive income for the period, net of income tax		(2,025)		(2,025)
Total comprehensive loss for the period		(2,025)	(1,004,874)	(1,006,899)
Issue of 950,000 ordinary shares	950,000			950,000
Capital raising costs
Issue of options
Balance at 30 June 2014	950,010	(2,025)	(1,010,081)	(62,096)

	Issued capital	Foreign Currency Translation Reserve	Accumulated losses	Total
	\$	s	\$	\$
Balance at 1 July 2014	950,010	(2,025)	(1,010,081)	(62,096)
Loss for the period			(1,156,752)	(1,156,752)
Other comprehensive income for the period, net of income tax		82,708		82,708
Total comprehensive loss for the period		82,708	(1,156,752)	(1,074,044)
issue of shares
Capital raising costs
Issue of options
Balance at 30 June 2015	950,010	80,683	(2,166,833)	(1,136,140)

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

CONSOLIDATED STATEMENT OF CASH FLOWS

For the Year Ended 30 June 2015

		2015	2014
	Note	S	\$
Cash Flows from Operating Activities
Payments to suppiiers and empioyees		(163,084)	(51,500)
Payments for expioration and evaluation		(1,670,742)	(1,055,819)
Interest received		687	1,344
GST (paid) received		(422)	4,780
Tax withholding received			17
Net cash used in operating activities	15	(1,833,561)	(1,101,178)

Cash Flows from Investing Activities
Payments for plant and equipment		(2,998)	(16,272)
Net cash generated by financing activities		(2,998)	(16,272)

Cash Flows from Financing Activities
Loans from (to) related parties		2,099,763	(501,200)
Issue of shares			950,000
Net cash generated by financing activities		2,099,763	448,800

Net increase (decrease) in cash held		263,204	(668,650)
Cash and cash equivalents at the beginning of the period		230,630	899,280
Cash and cash equivalents at the end of the period	6	493,834	230,630

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended 30 June 2015

These consolidated financial statements and notes represent those of Silver Mountain Mining Pty Ltd and its controlled entity (the "Consolidated entity"). Silver Mountain Mining Pty Ltd is a private limited liability company, incorporated and domiciled in Australia.

The Consolidated entity is a for-profit entity for financial reporting purposes under Australian Accounting Standards. The financial statements for the year ended 30 June 2015 were approved and authorised for issue by the Board of Directors on 5 th December 2017.

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of the material accounting policies adopted by the Consolidated entity in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.

(a) Basis of Preparation

The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards including Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").

The financial report has been prepared on an accruals basis and is based on historical cost and does not take into account changing money values or, except where stated, current valuations of non-current assets. Cost is based on the fair values of the consideration given in exchange for assets.

(!) Going Concern

The financial report has been prepared on the going concern basis, which assumes continuity of normal business activities and realisation of assets and settlement of liabilities In the ordinary course of business.

As at 30 June 2015, the Consolidated entity had cash assets of \$493,834 and working capital deficit of \$2,117,137. Subsequent to the year end, borrowings of \$2,579,655 from Silver Mountain Mining Nominee Pty Ltd ATP Silver Mountain Mining Trust have been converted to equity.

The shareholder of the Consolidated entity. Silver Mountain Mining Nominee Pty Ltd ATP Silver Mountain Mining Trust, which has sufficient financial capability has provided a letter of support indicating that it will provide the required financial support to the Consolidated entity as and when required to ensure the Consolidated entity has sufficient funds to continue trading and to pay its debts as and when they fall due.

Based on these factors, the directors are satisfied that the going concern basis of preparation is appropriate. The financial report has therefore been prepared on a going concern basis, which assumes continuity of normal business activities and realisation of assets and settlement of liabilities in the ordinary course of business.

(il) New Accounting Standards for Application in Future Periods

Application of new and revised Accounting Standards

New, revised or amending Accounting Standards and Interpretations adopted

The Consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the Consolidated entity during the financial period.

Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

New Accounting Standards and Interpretations not yet mandatory or early adopted

Australian Accounting Standards and Interpretations that have recently been Issued or amended but are not yet mandatory, have not been early adopted by the Consolidated entity for the reporting year ended 30 June 2015. The Consolidated entity's assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the Consolidated entity, are set out below.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

AASB 9 Financial Instruments

This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard replaces all previous versions of AASB 9 and completes the project to replace IAS 39 'Financial Instruments: Recognition and Measurement'. AASB 9 introduces new classification and measurement models for financial assets. A financial asset shall be measured at amortised cost, if it is held within a business model whose objective is to hold assets in order to collect contractual cash flows, which arise on specified dates and solely principal and interest. All other financial instrument assets are to be classified and measured at fair value through profit or loss unless the entity makes an irrevocable election on initial recognition to present gains and losses on equity instruments (that are not held-for-trading) in other comprehensive income ('OCI'). For financial liabilities, the standard requires the portion of the change in fair value that relates to the entity's own credit risk to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge accounting requirements are intended to more closely align the accountingtreatment with the risk management activities of the entity. New impairment requirements will use an 'expected credit loss' ('ECL') model to recognise an allowance. Impairment will be measured under a 12-month ECL method unless the credit risk on a financial instrument has increased significantly since initial recognition in which case the lifetime ECL method is adopted. The standard introduces additional new disclosures. The Consolidated entity will adopt this standard from 1 July 2018 but the impact of its adoption is yet to be assessed by the Consolidated entity.

AASB 16 Leases

This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard replaces AASB 117 'Leases' and for lessees will eliminate the classifications of operating leases and finance leases. Subject to exceptions, a 'rightof-use' asset will be capitalised in the statement of financial position, measured as the present value of the unavoidable future lease payments to be made over the lease term. The exceptions relate to short-term leases of 12 months or less and leases of low-value assets (such as personal computers and small office furniture) where an accounting policy choice exists whereby either a 'right-of-use' asset is recognised or lease payments are expensed to profit or loss as incurred. A liability corresponding to the capitalised lease will also be recognised, adjusted for lease prepayments, lease incentives received, initial direct costs incurred and an estimate of any future restoration, removal or dismantling costs. Straight-line operating lease expense recognition will be replaced with a depreciation charge for the leased asset (included in operating costs) and an interest expense on the recognised lease liability (included in finance costs). In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when compared to lease expenses under AASB 117. However EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results will be improved as the operating expense is replaced by interest expense and depreciation in profit or loss under AASB 16. For classification within the statement of cash flows, the lease payments will be separated into both a principal (financing activities) and interest (either operating or financing activities) component. For lessor accounting, the standard does not substantially change how a lessor accounts for leases. The group will adopt this standard from 1 July 2019 but the impact of its adoption is yet to be assessed by the Consolidated entity.

(b) Exploration, Evaluation and Development Expenditure

Exploration and evaluation expenditure is generally written off in the year incurred, except for acquisition of exploration properties which is capitalised and carried forward.

When production commences, any accumulated costs for the relevant area of interest which have been capitalised and carried forward will be amortised over the life of the area according to the rate of

depletion of the economically recoverable resources. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to the area of interest. The carrying value of any capitalised expenditure is assessed by the Directors each year to determine if any provision should be made for the impairment of the carrying value. The appropriateness of the Group's ability to recover these capitalised costs has been assessed at year end and the Directors are satisfied that the value is recoverable.

exceed recoverable amount. An impairment exists when the carrying amount of the assets exceed the estimated recoverable amount. The assets are then written down to their recoverable amount. Any impairment losses are recognised in the income statement.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(c) Financial Instruments

Financial instruments in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale investments, as appropriate. When financial instruments are recognised initiallv, they are measured at fair value, plus, in the case of investments not atfair value through profit or loss, directly attributable transactions costs. The Consolidated entity determines the classification of its financial instruments after initial recognition and, when allowed and appropriate, re-evaluates this designation at each financial year-end.

All regular way purchases and sales of financial assets are recognised on the trade date i.e. the date that the consolidated entity commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets under contracts that require delivery of the assets within the period established generally by regulation or convention in the marketplace.

(i) Financial assets atfair value through profit or loss

Financial assets classified as held for trading are included in the category 'financial assets at fair value through profit or loss'. Financial assets are classified as held for trading if they are acquired for the purpose of selling in the near term. Derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on investments held for trading are recognised in profit or loss.

(ii) Held-to-maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Consolidated entity has the positive intention and ability to hold to maturity. Investments intended to be held for an undefined period are not included in this classification. Investments that are intended to be held-to-maturity, such as bonds, are subsequently measured at amortised cost. This cost is computed as the amount initially recognised minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initially recognised amount and the maturity amount. This calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums and discounts. For investments carried at amortised cost, gains and losses are recognised in profit or loss when the investments are derecognised or impaired, as well as through the amortisation process.

Loans and receivables OH)

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

(iv) Available-for-sale investments

Available-for-sale investments are those non-derivative financial assets that are designated as available-for-sale or are not classified as any of the three preceding categories. After initial recognition, available-for sale investments are measured at fair value with gains or losses being recognised as a separate component of equity until the investment is derecognised or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is recognised in profit or loss.

The fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market bid prices at the close of business on the reporting date. For investments with no active market, fair value is determined using valuation techniques. Such techniques include using recent arm's length market transactions; reference to the current market value of another instrument that is substantially the same; discounted cash flow analysis and option pricing models.

M Financial Liabilities

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost using the effective interest rate method.

Impairment

At each reporting date, the Consolidated entity assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether impairment has arisen. Impairment losses are recognised in the profit or loss.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended 30 June 2015 (continued)

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Derecognition

Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expired. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed. Is recognised in profit or loss.

(d) Borrowings

Borrowings are presented as current liabilities unless the Consolidated Entity has an unconditional right to defer settlement for at least 12 months after the reporting date. Borrowings are initially recognised at fair value (net of transaction costs) and subsequently carried at amortised cost.

(e) Cash and Cash Equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly liquid Investments with original maturities of three months or less, and bank overdrafts.

ffj Impairment of Assets

At each reporting date, the Consolidated entity reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset Is estimated In order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from the other assets, the Consolidated entity estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value In use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generated unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss Immediately, unless the relevant asset Is carried at fair value, in which case the impairment loss is treated as a revaluation decrease. Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of Its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years.

^Areversal of an impairment loss Is recognised In profit or loss immediately, unless the relevant asset Is carried at fair value. In which case the impairment loss is treated as a revaluation increase.

(g) Property, plant and equipment

IT equipment and other equipment

IT equipment and other equipment (comprising fittings and furniture) are initially recognised at acquisition cost or manufacturing cost, including any costs directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by the Consolidated entity's management. IT equipment and other equipment are subsequently measured using the cost model, cost less subsequent depreciation and impairment losses. Depreciation is recognised on ^adiminishing value basis to write down the cost less estimated residual value of IT equipment and other equipment.

The following useful lives are applied:

IT equipment: 2-5 years
Other equipment: 3-12 years

Material residual value estimates and estimates of useful life are updated as required, but at least annually.

Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the disposal proceeds and the carrying amount of the assets and are recognised in profit or loss within other income or other expenses.

(h) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office ("ATO"). In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST.

The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the statement of financial position.

Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.

0) Taxation

The Consolidated entity adopts the liability method of tax-effect accounting whereby the income tax expense is based on the profit/loss from ordinary activities adjusted for any non-assessable or disallowed items.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the statement of comprehensive income except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the Consolidated entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

(j) Trade and Other Payables

Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services provided to the Consolidated entity prior to the end of the financial year that are unpaid and arise when the Consolidated entity becomes obliged to make future payments in respect of the purchase of these goods and services.

(k) Issued Capital

Issued and paid up capital is recognised at the fair value of the consideration received by the Consolidated entity. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended 30 June 2015 (continued)

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(I) Critical Accounting Estimates and Judgments

The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externallv and within the Consolidated entity.

Key Estimates - Impairment

The Consolidated entity assesses impairment at the end of each reporting period by evaluating conditions and events specific to the Consolidated entity that may be indicative of impairment triggers. Recoverable amounts of relevant assets are reassessed using value-in-use calculations which incorporate various key assumptions.

Key Estimates - Taxation

Balances disclosed in the financial statements and the notes thereto related to taxation are based on the best estimates of the directors. These estimates take into account both the financial performance and position of the Consolidated entity as they pertain to current income taxation legislation, and the directors' understanding thereof. No adjustment has been made for pending or future taxation legislation. The current income tax position represents that directors' best estimate, pending an assessment by the Australian Taxation Office.

Key Judgment - Environmental Issues

Balances disclosed in the financial statements and notes thereto are not adjusted for any pending or enacted environmental legislation, and the directors' understanding thereof. At the current stage of the Consolidated entity's development and its current environmental impact the directors believe such treatment is reasonable and appropriate.

(m) Fair Value of Assets and Liabilities

The Consolidated entity measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis, depending on the requirements of the applicable Accounting Standard.

Fair value is the price the Consolidated entity would receive to sell an asset or would have to pay to transfer a liability in an orderly (ie unforced) transaction between independent, knowledgeable and willing market participants at the measurement date.

As fair value is a market-based measure, the closest equivalent observable market pricing information is used to determine fair value. Adjustments to market values may be made having regard to the characteristics of the specific asset or liability. The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market data.

To the extent possible, market information is extracted from either the principal market for the asset or liability (ie the market with the greatest volume and level of activity for the asset or liability) or, in the absence of such a market, the most advantageous market available to the entity at the end of the reporting period (ie the market that maximises the receipts from the sale of the asset or minimises the payments made to transfer the liability, after taking into account transaction costs and transport costs).

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

For non-financial assets, the fair value measurement also takes into account a market participant's ability to use the asset in its highest and best use or to sell it to another market participant that would use the asset in Its highest and best use.

The fair value of liabilities and the entity's own equity instruments (excluding those related to share-based payment arrangements) may be valued, where there is no observable market price in relation to the transfer of such financial instruments, by reference to observable market information where such instruments are held as assets. Where this information is not available, other valuation techniques are adopted and, where significant, are detailed in the respective note to the financial statements.

Valuation techniques

In the absence of an active market for an identical asset or liability, the Consolidated entity selects and uses one or more valuation techniques to measure the fair value of the asset or liability, The Consolidated entity selects a valuation technique that is appropriate in the circumstances and for which sufficient data is available to measure fair value. The availability of sufficient and relevant data primarily depends on the specific characteristics of the asset or liability being measured. The valuation techniques selected by the Consolidated entity are consistent with one or more of the following valuation approaches:

Market approach: valuation techniques that use prices and other relevant information generated by market transactions for identical or similar assets or liabilities.

Income approach: valuation techniques that convert estimated future cash flows or income and expenses into a single discounted present value.

Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current service capacity. Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when pricing the asset or liability, including assumptions about risks. When selecting a valuation technique, the Consolidated entity gives priority to those techniques that maximise the use of observable inputs and minimise the use of unobservable inputs. Inputs that are developed using market data (such as publicly available information on actual transactions) and reflect the assumptions that buyers and sellers would generally use when pricing the asset or liability are considered observable, whereas Inputs for which market data is not available and therefore are developed using the best information available about such assumptions are considered unobservable.

Fair value hierarchy

AASB 13 requires the disclosure of fair value Information by level of the fair value hierarchy, which categorises fair value measurements into one of three possible levels based on the lowest level that an input that Is significant to the measurement can be categorised into as follows:

Level 1

Measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Measurements based on inputs other than quoted prices Included in Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 2

Measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3

Measurements based on unobservable inputs for the asset or liability.

The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market data. If all significant inputs required to measure fair value are observable, the asset or liability is included in Level 2. If one or more significant inputs are not based on observable market data, the asset or liability Is included in Level 3.

The Consolidated entity would change the categorisation within the fair value hierarchy only in the following circumstances:

(i) if a market that was previously considered active (Level 1) became inactive (Level 2 or Level 3) or vice versa; or
if significant inputs that were previously unobservable (Level 3) became observable (Level 2) or vice versa. (ii)

When a change in the categorisation occurs, the Consolidated entity recognises transfers between levels of the fair value hierarchy (i.e. transfers into and out of each level of the fair value hierarchy) on the date the event or change in circumstances occurred.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended 30 June 2015 (continued)

RELATED PARTY TRANSACTtONS

Transactions between related parties are on commercial terms and conditions, no more favourable than those available to other parties unless otherwise stated.

	2015	2014
	\$	s
Other related party transactions
Administration Fees - Bass Group (AUS) Pty Ltd	80,000	48,000

The consolidated entity has borrowings from Silver Mountain Mining Nominee Pty Ltd ATF the Silver Mountain Mining Trust which is also a related party and shareholder of Silver Mountain Mining Pty Ltd, refer to note 12.

REMUNERATION OF AUDITORS

	2015	2014
	\$	\$
the financial statements Audit of	10,000
Total	10,000

The auditor of Silver Mountain Mining Pty Ltd is William Buck Audit (WA) Pty Ltd.

LOSS FROM ORDINARY ACTIVITIES

		2015	2014
(a)	Other revenue	s	\$
	Interest received	687	1,344
	Total other revenue from ordinary activities	687	1,344
(b)	Other expense
	Realised foreign exchange gains / (losses)	(487)	(25,968)
	Total other expense from ordinary activities	(487)	(25,968)

INCOME TAX EXPENSE

Current tax

	Deferred tax
		Consolidated		Parent
		2015 \$	2014 \$	2015 s	2014 s
(a)	The prima facie tax on loss from ordinary activities before income tax is reconciled to the income tax as follows:
	Loss before tax	(1,156,752)	(1,004,874)	(138,742)	(101,064)
	Net (income)/ loss attributable to U.S subsidiary not subject to income tax in Australia	1,018,010	903,810
	The prima facie tax on loss from ordinary activities attributable to parent entity before income tax:	(138,742)	(101,064)	(138,742)	(101,064)
	Prima facie tax (benefit) on loss from ordinary activities before income tax at 30%	(41,623)	(30,319)	(41,623)	(30,319)
	Add/(Less) tax effect of:
	Prepaid expenditure	(2,383)	1,103	(2,383)	1,103

Accrued expenditure	6,750		6,750
Tax depreciation expense
Deferred tax asset not brought to account	37,256	29,216	37,256	29,216
Income tax attributable to entity

No income tax is payable by the Consolidated entity. The Directors have considered it prudent not to bring to account the deferred tax asset of income tax losses and exploration deductions until it is probable of deriving assessable income of a nature and amount to enable such benefit to be realised.

6' CASH AND CASH EQUIVALENTS

	2015	2014
	\$	\$
Cash at bank	493,834	230,630
Total	493,834	230,630

TRADE AND OTHER RECEIVABLES

	2015 \$	2014 \$
GST Receivable	2,539	2,118
Total	2,539	2,118

PREPAYMENTS

	2015	2014
	\$	\$
Prepaid insurance	5,864
Total	5,864

EXPLORATION AND EVALUATION EXPENDITURE - LAND

(a) Capitalised exploration land carried forward	2015 \$	2014 \$
Movement during the year
Carrying value - beginning of year	219,992
Additions	749,905	219,992
Carrying value - end of the year	969,897	219,992

The Consolidated Entity exercised three option agreements during the 2015 year to acquire exploration land in Yavapai County, Arizona USA. Silver Mountain Project is comprised of 26 Patented Mining Claims, 342 Unpatented Mining Claims and 5 Arizona State Exploration Permits.

10. PROPERTY, PLANT AND EQUIPMENT

	2015	2014
	S	S
IT and Other Equipment at cost	19,270	16,272
Less: accumulated depreciation	(8,170)	(2,390)
Balance	11,100	13,882

	IT and other equipment s
Balance at 1 July 2014	13,882
Additions	2,998
Disposals
Depreciation	(5,780)
Balance at 30 June 2015	11,100

ii. TRADE AND OTHER PAYABLES

	S	\$
Current
Trade creditors and accrued expenses	39,719	48,826
Total	39,719	48,826

2015 2014

12. BORROWINGS

	2015 s	2014 \$
Current Silver Mountain Mining Nominee Pty Ltd ATF Silver Mountain Mining Trust	2,579,655	479,892
Total	2,579,655	479,892

Silver Mountain Mining Nominee Pty Ltd ATF Silver Mountain Mining Trust ("The Trust") is the sole shareholder of the parent entity. The Trust has loaned further funds to the parent entity during the year ended 30 June 2015. The loan is non-interest bearing and has no fixed repayment terms or repayment date.

Subsequent to the year end, borrowings of \$2,579,655 from Silver Mountain Mining Nominee Pty Ltd ATF Silver Mountain Mining Trust have been converted to equity.

13. ISSUED CAPITAL

	2015		2014

				10
				950,000

Balance 30 June	950,010	950,010	950,010	950,010

14. RESERVES

	2015 \$	2014 \$
Foreign currency translation reserve
Balance 1 July	(2,025)
Exchange gains (losses) for the year	82,708	(2,025)
Balance 30 June	80,683	(2,025)

Foreign currency translation reserve

The foreign currency translation reserve records unrealised exchange gains and losses on translation of controlled entities accounts during the year.

15. CASH FLOW INFORMATION

	2015 s	2014 \$
Reconciliation of cash flows from operating activities with loss after income tax
Loss after income tax	(1,156,752)	(1,004,874)
Non-cash items included in profit or loss
Depreciation expense	5,780	2,390

Changes in assets and liabilities:
(Increase)/decrease in receivables	(422)	4,797
(Increasej/decrease in prepayments	(5,864)
(lncrease)/decrease in capitalised exploration costs	(749,904)	(150,292)
(Decrease)/increase in accounts payable and accruals	(9,107)	48,826
(Decrease)/lncrease in reserves	82,708	(2,025)
Net cash outflows from Operating Activities	(1,833,561)	(1,101,178)

is. SEGMENT INFORMATION

The Group's operations are in one reportable business segment being the exploration of base and precious metals. The Group operates in one geographical segment being in Arizona, USA.

17. SUBSEQUENT EVENTS

On 23 November 2017, \$3,264,155 AUD in loaned funds to The Company from Silver Mountain Mining Nominee Pty Ltd as trustee for the Silver Mountain Mining Trust ("the Trust") was converted into equity. 3,264,155 ordinary shares in the Company at \$1 per share were issued to the Trust in satisfaction of the above amount owed by the Company.

The Trust holds 4,214,165 ordinary shares (previously 950,010 ordinary shares) in the Company after the share issue on 23 November 2017.

)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended 30 June 2015 (continued)

18. CONTINGENT ASSETS AND LIABILITIES

The Consolidated entity has an exploration service agreement with Dragon's Deep Exploration, Inc., an Arizona corporation ("Dragon").

Included in this agreement is a performance bonus payable to Dragon consisting of cash together with shares in Silver Mountain Mining Pty Ltd (shares at market price, escrowed as required by the appropriate exchange) within 10 days of the events detailed below:

Criteria	Cash Bonus	Shares of Value
by the holes completed Minimum of 24 Consolidated Entity with 70% success within 24 months of first drilling1	US \$50,000	US \$150,000
Calculation of a JORC-compliant Resource equal or greater than USS500 million value within 36 months of first drilling2	US \$100,000	US \$200,000

1. Success defined as a minimum 40 gram-metre zone (Au equivalent) within each drill hole for 70% of non-condemnation holes drilled.
1. Resource to be calculated by competent person not related to either party unless otherwise agreed.

Other than the above, the Consolidated entity has no contingent assets or liabilities outstanding at the end of the period.

19. COMMITMENTS

(a) Exploration Expenditure

In order to maintain the current tenure status of its exploration assets, the Consolidated entity has certain obligations with respect to tenements and minimum expenditure requirements in Arizona USA, as follows:

	2015	2014
	\$ USD	\$ USD
Within 1 year	88,881	81,910
1 to 5 years	331,732	420,613
Total	420,613	502,523

(b) Asset acquisition

The consolidated entity has no commitments for asset acquisitions at 30 June 2015.

20. FINANCIAL INSTRUMENTS

The Consolidated entity has minimal exposure to various risks from the use of financial instruments. The Consolidated entity's financial instruments consist mainly of cash at bank and loan from a related party. The carrying amount of financial assets and financial liabilities recorded in the financial statements is considered to approximate their fair values.

21. CONTROLLED ENTITY

Silver Mountain Mining Pty Ltd is the ultimate parent entity of the consolidated group.

The following was a controlled entity at the period end date and has been included in the consolidated financial statements.

Name	Country of Incorporation	Percentage Interest Held 2015
Silver Mountain Mining LLC	United States of America	100%

Page 20

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended 30 June 2015 (continued)

22. PARENT ENTITY INFORMATION

	Parent	Parent
	2015	2014
	\$	s
Assets
Current assets	44,909	25,407
Non-current assets	3,262,518	1,298,224
Total Assets	3,307,427	1,323,631

Liabilities
Current liabilities	2,602,430	479,892
Non-current liabilities
Total Liabilities	2,602,430	479,892
Equity
Issued capital	950,010	950,010
Reserves
Accumulated losses	(245,013)	(106,271)
Total Equity	704,997	843,739

Loss for the period	(138,742)	(101,064)
Other comprehensive income
Total comprehensive loss for the period	(138,742)	(101,064)

23. SHARE BASED PAYMENTS

The were no share-based payment arrangements in existence during the current and prior reporting periods.

DIRECTORS' DECLARATION

The directors of Silver Mountain Mining Pty Ltd declare that:

The financial statements and notes are in accordance with the Corporations Act 2001 including compliance with accounting standards and:
(a) comply with International Financial Reporting Standards as disclosed in notel(a); and
(b) give a true and fair view of the Consolidated entity's financial position as at 30 June 2015 and of its performance as represented by the results of its operations^ changes in equity and its cash flows for the Year Ended on that date; and
At the date of this statement there are reasonable grounds to believe that the consolidated entity 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 made pursuant to 5.295(5) of the Corporations Act 2001.

Charles Bennett Bass Director

Dated at Perth this 5 th day of December 2017

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SILVER MOUNTAIN MINING PTY LTD AND CONTROLLED ENTITIES

Report on the Financial Report

We have audited the accompanying financial report of Silver Mountain Mining Pty Ltd (the Company) and the entities it controlled at the year's end or from time to time during the financial year (the consolidated entity). The financial report comprises the consolidated statement of financial position as at 30 June 2015, consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration.

Directors' Responsibility 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 Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards.

Auditor's Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

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

CHARTERED ACCOUNTANTS & ADVISORS

Level 3,15 Labouchere Road South Perth WA 6151 PO Box 748 South Perth WA 6951 Telephone: +61 8 6436 2888

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SILVER MOUNTAIN MINING PTY LTD AND CONTROLLED ENTITIES (CONT)

Independence

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

Auditor's Opinion

In our opinion:

a) the financial report of the consolidated entity is in accordance with the Corporations Act 2001, including:
i. giving a true and fair view of the consolidated entity's financial position as at 30 June 2015 and of its performance for the year ended on that date; and
ii. complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and
b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1

William Buck Audit (WA) Pty Ltd ABN 67 125 012 124

Coryey Manifis Director Dated this 5 th day of December 2017

SILVER MOUNTAIN MINING PTY LTD

ABN 16 163 828 466

FINANCIAL REPORT

FOR THE YEAR ENDED 30 JUNE 2016

CONTENTS PAGE

1 CORPORATE DIRECTORY
2 DIRECTORS' REPORT
4 AUDITOR'S INDEPENDENCE DECLARATION
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
5 COMPREHENSIVE INCOME
6 CONSOLIDATED STATEMENT OF FINANCIAL POSITION
7 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
8 CONSOLIDATED STATEMENT OF CASH FLOWS
9 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22 DIRECTORS' DECLARATION
23 INDEPENDENT AUDITOR'S REPORT

CORPORATE DIRECTORY

Brett Anthony Rowe Director Appointed 17 May 2013

Charles Bennett Bass Director Appointed 19 September 2017

COMPANY SECRETARY

Brett Anthony Rowe

DIRECTORS REGISTERED OFFICE

Level 3 15 Labouchere Road South Perth WA 6151

AUDITORS

Appointed 17 May 2013 William Buck Audit (WA) Pty Ltd Level 3 15 Labouchere Road South Perth WA 6151

DIRECTORS' REPORT

The Directors present their report on Silver Mountain Mining Pty Ltd ("SMM" or the "Company") and its controlled entity (the "Consolidated entity") for the year ended 30 June 2016.

DIRECTORS

Brett Anthony Rowe	Director (appointed 17 May 2013)
Sylvia Culham Bass	Director (appointed 17 May 2013, resigned 19 September 2017)
Matthew Harrison Bass	Director (appointed 17 May 2013, resigned 19 September 2017)
Samuel David Bass	Director (appointed 17 May 2013, resigned 19 September 2017)
Charles Bennett Bass	Director (appointed 19 September 2017)

COMPANY SECRETARY

Brett Anthony Rowe (appointed 17 May 2013)

REVIEW OF OPERATIONS

Silver Mountain Mining Pty Ltd was incorporated on 17 May 2013.

The operating loss after income tax of the Consolidated entity for the year ended 30 June 2016 was \$688,605 (2015: \$1,156,752).

No dividend has been paid during or is recommended for the financial year ended 30 June 2016.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

No significant changes In the consolidated group's state of affairs occurred during the financial year.

PRINCIPAL ACTIVITIES

The consolidated group's principal activity Is mineral exploration for base and precious metal in Arizona, USA. The main project is the Silver Mountain Project (SMP) situated in Yavapai County, approximately lOOKm to the NW of Phoenix in the Bradshaw Mountains of central Arizona. The SMP is comprised of 26 Patented Mining Claims, 342 Unpatented Mining Claims and 5 Arizona State Exploration Permits. The SMP is prospective for base metals (Cu) and precious metals (Au and Ag) across three key areas: Pacific Horizon, Scarlett and Red Mule.

No significant change in the nature of these activities occurred during the year.

EVENTS SUBSEQUENT TO THE END OF THE REPORTING PERIOD

On 23 November 2017, \$3,264,155 AUD in loaned funds to The Company from Silver Mountain Mining Nominee Pty Ltd as trustee for the Silver Mountain Mining Trust ("the Trust") was converted into equity. 3,264,155 ordinary shares in the Company at \$1 per share were issued to the Trust in satisfaction of the above amount owed by the Company.

The Trust holds 4,214,165 ordinary shares (previously 950,010 ordinary shares) in the Company after the share issue on 23 November 2017.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

ENVIRONMENTAL ISSUES

SHARE OPTIONS

No options over issued shares or interests in the Consolidated entity were granted during or since the end of the financial year and there were no options outstanding at the date of this report.

No shares were issued during or since the end of the year as a result of the exercise of an option over unissued shares or interests.

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

The parent entity held and paid premiums for directors and officers insurance for the financial year.

PROCEEDINGS ON BEHALF OF THE CONSOLIDATED ENTITY

The company was not a party to any such proceedings during the year.

AUDITOR'S INDEPENDENCE DECLARATION

This report has been made in accordance with a resolution of the Board of Directors.

/ Charles Bennett Bass

Director

Dated at Perth this 5 th day of December 2017

AUDITOR'S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF SILVER MOUNTAIN MINING PTY LTD

I declare that, to the best of my knowledge and belief during the year ended 30 June 2016 there have been;

no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.

6u(i SVV

William Buck Audit (WA) Pty Ltd ABN 67 125 012 124

Conley Manifis Director iated this 5 th day of December 2017

CHARTERED ACCOUNTANTS & ADVISORS

Level 3,15 Labauchere Road South Perth WA 6151 PC Box 748 South Perth WA 6951 Telephone: +61 8 6436 2888 williambuck.com

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the Year Ended 30 June 2016

		2016	2015
	Notes	\$	\$
Continuing Operations Other Revenue	4(a)	445	687
Administration costs		(110,736)	(110,549)
Consultancy expense		(40,455)	(37,565)
Depreciation expense		(3,941)	(5,780)
Exploration costs		(532,975)	(1,003,058)
Other expenses	4(b)	(943)	(487)
Loss before income tax		(688,605)	(1,156,752)
Income tax expense	5
Loss after income tax from continuing operations		(688,605)	(1,156,752)
Other comprehensive income (loss), net of income tax
Gain/(loss) on foreign currency exchange	14	20,311	82,708
Total comprehensive income (loss) for the period		(668,294)	(1,074,044)

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

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2016

		2016	2015
	Note	\$	\$
Current Assets
Cash and cash equivalents	6	399,115	493,834
Trade and other receivables	7	2,321	2,539
Prepayments	8	7,076	5,864
Total Current Assets		408,512	502,237
Non Current Assets
Exploration and evaluation expenditure - Land	9	969,897	969,897
Property, plant and equipment	10	7,159	11,100
Total Non Current Assets		977,056	980,997
TOTAL ASSETS		1,385,568	1,483,234
Current Liabilities
Trade and other payables	11	65,709	39,719
Borrowings	12	3,124,293	2,579,655
Total Current Liabilities		3,190,002	2,619,374
TOTAL LIABILITIES		3,190,002	2,619,374

NET ASSETS		(1,804,434)	1,136,140
Equity
Issued capital	13	950,010	950,010
Reserves	14	100,994	80,683
Accumulated losses		(2,855,438)	(2,166,833)
TOTAL EQUITY		(1,804,434)	1,136,140

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

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the Year Ended 30 June 2016

Foreign Currency Accumulated Issued capital Total Translation losses Reserve \$ s \$ \$ Balance at 1 July 2014 (2,025) 950,010 (1,010,081) (62,096) Loss for the period (1,156,752) (1,156,752) Other comprehensive income for the period, net of 82,708 82,708 income tax





82,708 (1,156,752) (1,074,044)	Total comprehensive loss for the period

Capital raising costs
Issue of options
Balance at 30 June 2015 80,683 950,010 (2,166,833) (1,136,140)

	Issued capital	Foreign Currency Translation Reserve	Accumulated losses	Total
	\$	\$	\$	\$
Balance at 1 July 2015	950,010	80,683	(2,166,833)	(1,136,140)
Loss for the period			(688,605)	(688,605)
Other comprehensive income for the period, net of Income tax		20,311		20,311
Total comprehensive loss for the period		20,311	(688,605)	(668,294)
Capital raising costs
Issue of options
Balance at 30 June 2016	950,010	100,994	(2,855,438)	(1,804,434)

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

CONSOLIDATED STATEMENT OF CASH FLOWS

For the Year Ended 30 June 2016

		2015	2015
	Note	s	\$
Cash Flows from Operating Activities
Payments to suppliers and employees		(126,413)	(163,084)
Payments for exploration and evaluation		(513,607)	(1,670,742)
Interest received		445	687
6ST (paid) received		219	(422)
Net cash used in operating activities	15	(639,356)	(1,833,561)

Cash Flows from Investing Activities
Payments for plant and equipment			(2,998)
Net cash generated by financing activities			(2,998)

Cash Flows from Financing Activities
Loans from (to) related parties		544,637	2,099,763
Issue of shares
Net cash generated by financing activities		544,637	2,099,763

Net Increase (decrease) in cash held		(94,719)	263,204
Cash and cash equivalents at the beginning of the period		493,834	230,630
Cash and cash equivalents at the end of the period	6	399,115	493,834

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended 30 June 2016

The Consolidated entity is a for-profit entity for financial reporting purposes under Australian Accounting Standards, The financial statements for the year ended 30 June 2016 were approved and authorised for issue by the Board of Directors on ⁵ th December 2017.

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of the material accounting policies adopted by the Consolidated entity in the preparation of the financial report, The accounting policies have been consistently applied, unless otherwise stated.

(a) Basis of Preparation

(i) Going Concern

As at 30 June 2016, the Consolidated entity had cash assets of \$399,115 and working capital deficit of \$2,781,490. Subsequent to the year end, borrowings of \$3,124,293 from Silver Mountain Mining Nominee Pty Ltd ATP Silver Mountain Mining Trust have been converted to equity.

The shareholder of the Consolidated entity. Silver Mountain Mining Nominee Pty Ltd ATF Silver Mountain Mining Trust, which has sufficient financial capability has provided a letter of support indicating that it will provide the required financial support to the Consolidated entity as and when required to ensure the Consolidated entity has sufficient funds to continue trading and to pay its debts as and when they fall due.

(II) New Accounting Standards for Application in Future Periods

Application of new and revised Accounting Standards

New, revised or amending Accounting Standards and Interpretations adopted

Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

New Accounting Standards and Interpretations not yet mandatory or early adopted

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the Consolidated entity for the reporting year ended 30 June 2016. The Consolidated entity's assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the Consolidated entity, are set out below.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

AASB 9 Financial Instruments

This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard replaces all previous versions of AASB 9 and completes the project to replace IAS 39 'Financial Instruments: Recognition and Measurement', AASB 9 introduces new classification and measurement models for financial assets. A financial asset shall be measured at amortised cost, if it is held within a business model whose objective is to hold assets In order to collect contractual cash flows, which arise on specified dates and solely principal and interest. All other financial instrument assets are to be classified and measured at fair value through profit or loss unless the entity makes an irrevocable election on initial recognition to present gains and losses on equity instruments (that are not held-for-trading) in other comprehensive income ('OCI'). For financial liabilities, the standard requires the portion of the change in fair value that relates to the entity's own credit risk to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge accounting requirements are intended to more closely align the accounting treatment with the risk management activities of the entity. New impairment requirements will use an 'expected credit loss' ('ECL') model to recognise an allowance. Impairment will be measured under a 12-month ECL method unless the credit risk on a financial instrument has increased significantly since initial recognition in which case the lifetime ECL method is adopted. The standard introduces additional new disclosures. The Consolidated entity will adopt this standard from 1 July 2018 but the impact of its adoption is yet to be assessed by the Consolidated entity.

AASB 16 Leases

This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard replaces AASB ¹¹⁷ 'Leases' and for lessees will eliminate the classifications of operating leases and finance leases. Subject to exceptions, a 'rightof-use' asset will be capitalised in the statement of financial position, measured as the present value of the unavoidable future lease payments to be made over the lease term. The exceptions relate to short-term leases of 12 months or less and leases of low-value assets (such as personal computers and small office furniture) where an accounting policy choice exists whereby either a 'right-of-use' asset is recognised or lease payments are expensed to profit or loss as incurred. A liability corresponding to the capitalised lease will also be recognised, adjusted for lease prepayments, lease incentives received, initial direct costs incurred and an estimate of any future restoration, removal or dismantling costs. Straight-line operating lease expense recognition will be replaced with a depreciation charge for the leased asset (included in operating costs) and an interest expense on the recognised lease liability (included in finance costs). In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when compared to lease expenses under AASB 117. However EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results will be improved as the operating expense is replaced by interest expense and depreciation in profit or loss under AASB 16. For classification within the statement of cash flows, the lease payments will be separated into both a principal (financing activities) and interest (either operating or financing activities) component. For lessor accounting, the standard does not substantially change how a lessor accounts for leases. The group will adopt this standard from 1 July 2019 but the impact of its adoption is yet to be assessed by the Consolidated entity.

(b) Exploration, Evaluation and Development Expenditure

Exploration and evaluation expenditure is generally written off in the year incurred, except for acquisition of exploration properties which is capitalised and carried forward.

When production commences, any accumulated costs for the relevant area of interest which have been capitalised and carried forward will be amortised over the life of the area according to the rate of

The carrying value of capitalised exploration and evaluation expenditure is assessed for impairment at an overall level whenever facts and circumstances suggest that the carrying amount of the assets may exceed recoverable amount. An impairment exists when the carrying amount of the assets exceed the estimated recoverable amount. The assets are then written down to their recoverable amount. Any impairment losses are recognised in the income statement.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

{c) Financial Instruments

Financial instruments in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale investments, as appropriate. When financial instruments are recognised initiallv, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transactions costs. The Consolidated entity determines the classification of its financial instruments after initial recognition and, when allowed and appropriate, re-evaluates this designation at each financial year-end.

(i) Financial assets at fair value through profit or loss

(ii) Held-to-maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Consolidated entity has the positive intention and ability to hold to maturity. Investments intended to be held for an undefined period are not included in this classification. Investments that are intended to be held-to-maturity, such as bonds, are subsequently measured at amortised cost, This cost is computed as the amount initially recognised minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initially recognised amount and the maturity amount. This calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums and discounts. For investments carried at amortised cost, gains and losses are recognised in profit or loss when the investments are derecognised or impaired, as well as through the amortisation process.

Loans and receivables (Hi)

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

f'W Available-for-sale investments

Financial Liabilities M

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost using the effective interest rate method.

Impairment

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended 30 June 2016 (continued)

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Derecognition

(d) Borrowings

(e) Cash and Cash Equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts.

(f) Impairment of Assets

At each reporting date, the Consolidated entity reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from the other assets, the Consolidated entity estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generated unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease. Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years.

^Areversal of an impairment loss is recognised In profit or loss immediately, unless the relevant asset Is carried at fair value, In which case the impairment loss is treated as a revaluation increase.

(g) Property, plant and equipment

IT equipment and other equipment

IT equipment and other equipment (comprisingfittings and furniture) are initially recognised at acquisition cost or manufacturing cost, including any costs directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by the Consolidated entity's management. IT equipment and other equipment are subsequently measured using the cost model, cost less subsequent depreciation and impairment losses. Depreciation is recognised on ^adiminishing value basis to write down the cost less estimated residual value of IT equipment and other equipment.

The following useful lives are applied:

IT equipment: 2-5 years
Other equipment: 3-12 years

Material residual value estimates and estimates of useful life are updated as required, but at least annually.

(h) Goods and Services Tax (GST)

The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the statement of financial position.

0) Taxation

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised.

(J) Trade and Other Payables

(k) Issued Capital

(I) Critical Accounting Estimates and Judgments

Key Estimates - Impairment

Key Estimates - Taxation

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended 30 June 2016 (continued)

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Key Judgment - Environmental Issues

(m) Fair Value of Assets and Liabilities

The Consolidated entity measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis, depending on the requirements of the applicable Accounting Standard.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Valuation techniques

In the absence of an active market for an identical asset or liability, the Consolidated entity selects and uses one or more valuation techniques to measure the fair value of the asset or liability. The Consolidated entity selects a valuation technique that is appropriate in the circumstances and for which sufficient data is available to measure fair value. The availability of sufficient and relevant data primarily depends on the specific characteristics of the asset or liability being measured. The valuation techniques selected by the Consolidated entity are consistent with one or more of the following valuation approaches:

Market approach: valuation techniques that use prices and other relevant information generated by market transactions for identical or similar assets or liabilities.

Income approach: valuation techniques that convert estimated future cash flows or income and expenses into a single discounted present value.

Cost approach; valuation techniques that reflect the current replacement cost of an asset at its current service capacity.

Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when pricing the asset or liability, including assumptions about risks. When selecting a valuation technique, the Consolidated entity gives priority to those techniques that maximise the use of observable inputs and minimise the use of unobservable inputs. Inputs that are developed using market data {such as publicly available information on actual transactions) and reflect the assumptions that buyers and sellers would generally use when pricing the asset or liability are considered observable, whereas inputs for which market data is not available and therefore are developed using the best information available about such assumptions are considered unobservable.

Fair value hierarchy

AASB 13 requires the disclosure of fair value information by level of the fair value hierarchy, which categorises fair value measurements into one of three possible levels based on the lowest level that an input that is significant to the measurement can be categorised into as follows;

Level 1

Measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 2

Measurements based on Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3

Measurements based on unobservable Inputs for the asset or liability.

The Consolidated entity would change the categorisation within the fair value hierarchy only in the following circumstances;

(i) if a market that was previously considered active (Level 1) became inactive (Level 2 or Level 3) or vice versa; or
if significant inputs that were previously unobservable (Level 3) became observable (Level 2) or vice versa. (ii)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended 30 June 2016 (continued)

RELATED PARTY TRANSACTIONS

Transactions between related parties are on commercial terms and conditions, no more favourable than those available to other parties unless otherwise stated.

	2016	2015
	S	s
Other related party transactions Administration Fees - Bass Group (AUS) Pty Ltd	80,000	80,000

REMUNERATION OF AUDITORS

	2016	2015
	\$	\$
Audit of the financial statements	10,000	10,000
Total	10,000	10,000

The auditor of Silver Mountain Mining Pty Ltd is William Buck Audit (WA) Pty Ltd.

LOSS FROM ORDINARY ACTIVITIES

		2016 \$	2015 \$
(a)	Other revenue
	Interest received	445	687
	Total other revenue from ordinary activities	445	687
(b)	Other expense
	Realised foreign exchange gains / (losses)	(943)	(487)

Total other expense from ordinary activities	(943)	(487)

5. INCOME TAX EXPENSE

Current tax Deferred tax Consolidated Parent 2016 2015 2016 2015 \$ \$ \$ \$ (a) The prima facie tax on loss from ordinary activities before income tax is reconciled to the income tax as follows; (138,742) Loss before tax (688,605) (1,156,752) (140,434) Net (income)/ loss attributable to U.S subsidiary not subject to income tax in Australia The prima facie tax on loss from ordinary activities attributable to parent entity before income tax; Prima facie tax (benefit) on loss from ordinary activities before income tax at 30% 548,171 1,018,010 (138,742) (140,434) (138,742) (140,434) (41,623) (42,130) (41,623) (42,130) Add/(Less) tax effect of:

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended 30 June 2016 (continued)

Prepaid expenditure		(2,383)		(2,383)
Accrued expenditure	6,750	6,750	6,750	5,750
Deferred tax asset not brought to account	35,380	37,256	35,380	37,256
Income tax attributable to entity

No income taxis payable by the Consolidated entity. The Directors have considered it prudent not to bring to account the deferred taxassetof income tax losses and exploration deductions until it is probable of deriving assessable income of a nature and amount to enable such benefit to be realised.

CASH AND CASH EQUIVALENTS

	2016	2015
	s	s
Cash at bank	399,115	493,834
Total	399,115	493,834
TRADE AND OTHER RECEIVABLES
	2016	2015
	s	s
GST Receivable	2,321	2,539
Total	2,321	2,539
PREPAYMENTS
	2016	2015
	s	\$
Prepaid insurance	7,076	5,864
Total	7,076	5,864
EXPLORATION AND EVALUATION EXPENDITURE - LAND
	2016	2015
(a)	\$	\$
Capitalised exploration land carried forward
Movement during the year
Carrying value - beginning of year	969,897	219,992
Additions		749,905
Carrying value - end of the year	969,897	969,897

The Consolidated Entity exercised three option agreements during the 2015 year to acquire exploration land in Yavapai County, Arizona USA. The Silver Mountain Project is comprised of 26 Patented Mining Claims, 342 Unpatented Mining Claims and 5 Arizona State Exploration Permits.

10. PROPERTY, PLANT AND EQUIPMENT

	2016	2015
	\$	\$
IT and Other Equipment at cost Less: accumulated depreciation	19,270 (12,111)	19,270 (8,170)
Balance	7,159	11,100

	IT and other equipment \$
Balance at 1 July 2015	11,100
Additions
Disposals
Depreciation	(3,941)
Balance at 30 June 2016	7,159

11. TRADE AND OTHER PAYABLES

	S	S
Current
Trade creditors and accrued expenses	65,709	39,719
Total	65,709	39,719

2016 2015

12. BORROWtNGS

	2016 s	2015 \$
Current
Silver Mountain Mining Nominee Pty Ltd ATF Silver Mountain Mining Trust	3,124,293	2,579,655
Total	3,124,293	2,579,655

Silver Mountain Mining Nominee Pty Ltd ATF Silver Mountain Mining Trust ("The Trust") Is the sole shareholder of the parent entity. The Trust has loaned further funds to the parent entity during the year ended 30 June 2016. The loan is non-interest bearing and has no fixed repayment terms or repayment date.

Subsequent to the year end, borrowings of \$3,124,293 from Silver Mountain Mining Nominee Pty Ltd ATF Silver Mountain Mining Trust have been converted to equity.

13. ISSUED CAPITAL

	2016		2015
	Shares	s	Shares	\$
Balance at 1 July	950,010	950,010	950,010	950,010
Shares issued
Less; share issue costs
Balance 30 June	950,010	950,010	950,010	950,010

14. RESERVES

	2016 \$	2015 \$
Foreign currency translation reserve
Balance 1 July	80,683	(2,025)
Exchange gains (losses) for the year	20,311	82,708
Balance 30 June	100,994	80,683

Foreign currency translation reserve

The foreign currency translation reserve records unrealised exchange gains and losses on translation of controlled entitles accounts during the year.

15. CASH FLOW INFORMATION

	2016 s	2015 s
Reconciliation of cash flows from operating activities with loss after income tax
Loss after income tax	(688,605)	(1,156,752)
Non-cash items Included in profit or loss
Depreciation expense	3,941	5,780

Changes in assets and liabilities;
(lncrease)/decrease in receivables	219	(422)
(Increase)/decrease in prepayments	(1,213)	(5,864)
(lncrease)/decrease in capitalised exploration costs		(749,904)
(Decrease)/increase in accounts payable and accruals	25,991	(9,107)
(Decrease)/lncrease in reserves	20,311	82,708
Net cash outflows from Operating Activities	(639,356)	(1,833,561)

16. SEGMENT INFORMATION

The Group's operations are in one reportable business segment being the exploration of base and precious metals. The Group operates in one geographical segment being in Arizona, USA.

17. SUBSEQUENT EVENTS

On 23 November 2017, \$3,264,155 AUD in loaned funds to The Company from Silver Mountain Mining Nominee Pty Ltd as trustee for the Silver Mountain Mining Trust ("the Trust") was converted into equity. 3,264,155 ordinary shares In the Company at \$1 per share were issued to the Trust in satisfaction of the above amount owed by the Company.

The Trust holds 4,214,165 ordinary shares (previously 950,010 ordinary shares) in the Company after the share issue on 23 November 2017.

is. CONTINGENT ASSETS AND LIABILITIES

The Consolidated entity has an exploration service agreement with Dragon's Deep Exploration, Inc., an Arizona corporation ("Dragon").

Included in this agreement is a performance bonus payable to Dragon consisting of cash together with shares In Silver Mountain Mining Pty Ltd (shares at market price, escrowed as required by the appropriate exchange) within 10 days of the events detailed below;

Criteria	Cash Bonus	Shares of Value
completed by the of 24 holes Minimum Consolidated Entity with 70% success within 24 months of first drilling1	US \$50,000	US \$150,000
Calculation of a JORC-compliant Resource equal or greater than US\$500 million value within 36 months of first drilling2	US \$100,000	US \$200,000

Success defined as a minimum 40 gram-metre zone (Au equivalent) within each drill hole for 70% of non-condemnation holes drilled.
2, Resource to be calculated by competent person not related to either party unless otherwise agreed.

Other than the above, the Consolidated entity has no contingent assets or liabilities outstanding at the end of the period.

19. COMMITMENTS

(a) Exploration Expenditure

	2016	2015
	\$ USD	\$ USD
Within lyear	112,612	88,881
1 to 5 years	219,120	331,732
Total	331,732	420,613

(b) Asset acquisition

The consolidated entity has no commitments for asset acquisitions at 30 June 2016.

20. FINANCIAL INSTRUMENTS

21. CONTROLLED ENTITY

Silver Mountain Mining Pty Ltd is the ultimate parent entity of the consolidated group.

The following was a controlled entity at the period end date and has been included in the consolidated financial statements.

Name	Country of Incorporation	Percentage interest Held 2016
Silver Mountain Mining LLC	United States of America	100%

Page 20

22. PARENT ENTITY INFORMATION

	Parent	Parent
	2016	2015
	s	\$
Assets
Current assets	81,735	44,909
Non-current assets	3,652,120	3,262,518
Total Assets	3,733,855	3,307,427
Liabilities
Current liabilities	3,169,292	2,602,430
Mon-current liabilities
Total Liabilities	3,169,292	2,602,430
Equity
Issued capital	950,010	950,010
Reserves
Accumulated losses	(385,447)	(245,013)
Total Equity	564,563	704,997
Loss for the period	(140,434)	(138,742)
Other comprehensive income
Total comprehensiue loss for the period	(140,434)	(138,742)

23. SHARE BASED PAYMENTS

The were no share-based payment arrangements in existence during the current and prior reporting periods.

DIRECTORS' DECLARATION

The directors of Silver Mountain Mining Pty Ltd declare that;

The financial statements and notes are in accordance with the Corporations Act 2001 including compliance with accounting standards and:
(a) comply with International Financial Reporting Standards as disclosed in notel(a); and
(b) give a true and fair view of the Consolidated entity's financial position as at 30 June 2016 and of its performance as represented by the results of its operations, changes in equity and its cash flows for the Year Ended on that date; and
At the date of this statement there are reasonable grounds to believe that the consolidated entity 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 made pursuant to S.295(S) of the Corporations Act 2001.

Charles Benpett Bass Director

Dated at Perth this 5 th day of December 2017

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SILVER MOUNTAIN MINING PTY LTD AND CONTROLLED ENTITIES

Report on the Financial Report

We have audited the accompanying financial report of Silver Mountain Mining Pty Ltd (the Company) and the entities it controlled at the year's end or from time to time during the financial year (the consolidated entity). The financial report comprises the consolidated statement of financial position as at 30 June 2016, consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes comprising ^asummary of significant accounting policies and other explanatory information, and the directors' declaration.

Directors' Responsibility for the Financial Report

Auditor's Responsibility

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of the financial report that gives ^atrue and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide williambuck.cotn ^abasis for our audit opinion.

CHARTERED ACCOUNTANTS & ADVISORS

Level 3,15 Labouchere Road South Perth WA 6151 PO Box 748 South Perth WA 6951 Telephone: +61 8 6436 2888

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SILVER MOUNTAIN MINING PTY LTD AND CONTROLLED ENTITIES (CONT)

Independence

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

Auditor's Opinion

In our opinion:

a) the financial report of the consolidated entity is in accordance with the Corporations Act 2001, including:
i. giving a true and fair view of the consolidated entity's financial position as at 30 June 2016 and of its performance for the year ended on that date; and
ii. complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and
b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.

William Buck Audit (WA) Pty Ltd ABN 67 125 012 124

Contley Manifis Dir/ector

Dated this 5 th day of December 2017

SILVER MOUNTAIN MINING PTY LTD

ABN 16 163 828 466

FINANCIAL REPORT

FOR THE YEAR ENDED 30 JUNE 2017

CONTENTS PAGE

1 CORPORATE DIRECTORY
2 DIRECTORS' REPORT
4 AUDITOR'S INDEPENDENCE DECLARATION
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
5 COMPREHENSIVE INCOME
6 CONSOLIDATED STATEMENT OF FINANCIAL POSITION
7 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
8 CONSOLIDATED STATEMENT OF CASH FLOWS
9 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22 DIRECTORS' DECLARATION
23 INDEPENDENT AUDITOR'S REPORT

CORPORATE DIRECTORY

Brett Anthony Rowe Director Appointed 17 May 2013

Charles Bennett Bass Director Appointed 19 September 2017

COMPANY SECRETARY

Brett Anthony Rowe

DIRECTORS REGISTERED OFFICE

Level 3 15 Labouchere Road South Perth WA 6151

AUDITORS

Appointed 17 May 2013 William Buck Audit (WA) Pty Ltd Level 3 15 Labouchere Road South Perth WA 6151

DIRECTORS' REPORT

The Directors present their report on Silver Mountain Mining Pty Ltd ("SMM" or the "Company") and its controlled entity (the "Consolidated entity") for the year ended 30 June ²⁰¹⁷

DIRECTORS

Brett Anthony Rowe	Director (appointed 17 May 2013)
Sylvia Culham Bass	Director (appointed 17 May 2013, resigned 19 September 2017)
Matthew Harrison Bass	Director (appointed 17 May 2013, resigned 19 September 2017)
Samuel David Bass	Director (appointed 17 May 2013, resigned 19 September 2017)
Charles Bennett Bass	Director (appointed 19 September 2017)

COMPANY SECRETARY

Brett Anthony Rowe (appointed 17 May 2013)

REVIEW OF OPERATIONS

Silver Mountain Mining Pty Ltd was incorporated on 17 May 2013.

The operating loss after income tax of the Consolidated entity for the year ended 30 June 2017 was \$313,755 (2016: \$688,605).

No dividend has been paid during or is recommended for the financial year ended 30 June 2017.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

No significant changes in the consolidated group's state of affairs occurred during the financial year.

PRINCIPAL ACTIVITIES

The consolidated group's principal activity is mineral exploration for base and precious metal in Arizona, USA. The main project is the Silver Mountain Project (SMP) situated in Yavapai County, approximately lOOKm to the NW of Phoenix in the Bradshaw Mountains of central Arizona. The SMP is comprised of 26 Patented Mining Claims, 342 Unpatented Mining Claims and 5 Arizona State Exploration Permits. The SMP is prospective for base metals (Cu) and precious metals (Au and Ag) across three key areas: Pacific Horizon, Scarlett and Red Mule.

No significant change in the nature of these activities occurred during the year.

EVENTS SUBSEQUENT TO THE END OF THE REPORTING PERIOD

On 23 November 2017, \$3,264,155 AUD in loaned funds to The Company from Silver Mountain Mining Nominee Pty Ltd as trustee for the Silver Mountain Mining Trust ("the Trust") was converted into equity. 3,264,155 ordinary shares in the Company at \$1 per share were issued to the Trust in satisfaction of the above amount owed by the Company.

The Trust holds 4,214,165 ordinary shares (previously 950,010 ordinary shares) in the Company after the share issue on 23 November 2017

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

Likely developments In the operations of the consolidated group and the expected results of those operations In future financial years have not been Included In this report as the Inclusion of such Information Is likely to result In unreasonable prejudice to the consolidated group.

ENVIRONMENTAL ISSUES

The Board believes that the Consolidated entity has adequate systems in place for the management of Its environmental requirements. The Consolidated entity aims to ensure the appropriate standard of environmental care is achieved, and In doing so, that it is aware of and is in compliance with all environmental legislation. The Directors of the Consolidated entity are not aware of any breach of environmental legislation for the financial year under review.

SHARE OPTIONS

No options over issued shares or Interests in the Consolidated entity were granted during or since the end of the financial year and there were no options outstanding at the date of this report.

No shares were issued during or since the end of the year as a result of the exercise of an option over unissued shares or interests.

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

No indemnities have been given or insurance premiums paid, during or since the end of the financial year, for any person who is or has been an officer or auditor of the Consolidated entity.

PROCEEDINGS ON BEHALF OF THE CONSOLIDATED ENTITY

No person has applied for leave of court to bring proceedings on behalf of the Consolidated entity or Intervene in any proceedings to which the Consolidated entity is a party for the purpose of taking responsibility on behalf of the Consolidated entity for all or any part of those proceedings.

The company was not a party to any such proceedings during the year.

AUDITOR'S INDEPENDENCE DECLARATION

This report has been madej^accordance with a resolution of the Board of Directors.

Charfes Bennett Bass

Director

Dated at Perth this 5 th day of December 2017

AUDITOR'S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF SILVER MOUNTAIN MINING PTY LTD

I declare that, to the best of my knowledge and belief during the year ended 30 June 2017 there have been;

no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.

William Buck Audit (WA) Pty Ltd ABN 67 125 012 124

CorVey Manifis Director

Dated this 5 th day of December 2017

CHARTERED ACCOUNTANTS & ADVISORS

Level 3,15 Labouchere Road South Perth WA 6151 PO Box 748 South Perth WA 6951 Telephone: +61 8 6436 2888 williambuck.com

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the Year Ended 30 June 2017

		2017	2016
	Notes	\$	\$
Continuing Operations
Other Revenue	4(a)	387	445
Administration costs		(82,994)	(110,736)
Consultancy expense		(30,090)	(40,455)
Depreciation expense		(2,596)	(3,941)
Exploration costs		(198,462)	(532,975)
Other expenses	4(b)		(943)
Loss before income tax		(313,755)	(688,605)
Income tax expense	5
Loss after Income tax from continuing operations		(313,755)	(688,605)
Other comprehensive income (loss), net of income tax
Gain/(loss) on foreign currency exchange	14	(7,186)	20,311
Total comprehensive income (loss) for the period		(320,941)	(668,294)

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

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2017

		2017	2016
	Note	\$	\$
Current Assets
Cash and cash equivalents	6	174,231	399,115
Trade and other receivables	7	992	2,321
Prepayments	8	7,356	7,076
Total Current Assets		182,579	408,512
Non Current Assets
Exploration and evaluation expenditure - Land	9	969,897	969,897
Property, plant, and equipment	10	4,563	7,159
Total Non Current Assets		974,460	977,056
TOTAL ASSETS		1,157,039	1,385,568
Current Liabilities
Trade and other payables	11	68,122	65,709
Borrowings	12	3,214,292	3,124,293
Total Current Liabilities		3,282,414	3,190,002
TOTAL LIABILITIES		3,282,414	3,190,002
NET ASSETS		(2,125,375)	(1,804,434)
Equity
Issued capital	13	950,010	950,010
Reserves	14	93,808	100,994
Accumulated losses		(3,169,193)	(2,855,438)
TOTAL EQUITY		(2,125,375)	(1,804,434)

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

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the Year Ended 30 June 2017

	Issued capital	Foreign Currency Translation Reserve	Accumulated losses	Total
	\$	S	\$	s
Balance at 1 July 2015	950,010	80,683	(2,166,833)	(1,136,140)
Loss for the period			(688,605)	(688,605)
Other comprehensive income for the period, net of income tax		20,311		20,311
Total comprehensive loss for the period		20,311	(688,605)	(668,294)
Issue of shares
Capital raising costs
Issue of options
Balance at 30 June 2016	950,010	100,994	(2,855,438)	(1,804,434)

	Issued capital	Foreign Currency Translation Reserve	Accumulated losses	Total
	s	S	\$	\$
Balance at 1 July 2016	950,010	100,994	(2,855,438)	(1,804,434)
Loss for the period			(313,755)	(313,755)
Other comprehensive income for the period, net of income tax		(7,186)		(7,186)
Total comprehensive loss forthe period		(7,186)	(313,755)	(320,941)
Issue of shares
Capital raising costs
Issue of options
Balance at 30 June 2017	950,010	93,808	(3,169,193)	(2,125,375)

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

CONSOLIDATED STATEMENT OF CASH FLOWS

For the Year Ended 30 June 2017

		2017	2016
	Note	\$	S
Cash Flows from Operating Activities
Payments to suppliers and employees		(110,952)	(126,413)
Payments for exploration and evaluation		(205,380)	(513,607)
Interest received		119	445
GST (paid) received		1,329	219
Net cash used in operating activities	15	(314,884)	(639,356)

Cash Fiows from Financing Activities
Loans from (to) related parties		90,000	544,637
Net cash generated by financing activities		90,000	544,637

Net increase (decrease) in cash held		(224,884)	(94,719)
Cash and cash equivalents at the beginning of the period		399,115	493,834
Cash and cash equivalents at the end of the period	6	174,231	399,115

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended 30 June 2017

The Consolidated entity is a for-profit entity for financial reporting purposes under Australian Accounting Standards. The financial statements for the year ended 30 June 2017 were approved and authorised for issue by the Board of Directors on ⁵ th December 2017.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation

(i) Going Concern

As at 30 June 2017, the Consolidated entity had cash assets of \$174,231 and working capital deficit of \$3,099,835. Subsequent to the year end, borrowings of \$3,214,292 from Silver Mountain Mining Nominee Pty Ltd ATP Silver Mountain Mining Trust have been converted to equity.

(il) New Accounting Standards for Application in Future Periods

Application of new and revised Accounting Standards

New, revised or amending Accounting Standards and Interpretations adopted

The Consolidated entity has adopted all of the new, revised or amending Accounting Standards and interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the Consolidated entity during the financial period.

Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

New Accounting Standards and Interpretations not yet mandatory or early adopted

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the Consolidated entity for the reporting year ended 30 June 2017. The Consolidated entity's assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the Consolidated entity, are set out below.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

AASB 9 Financial Instruments

This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard replaces all previous versions of MSB 9 and completes the project to replace IAS 39 'Financial Instruments: Recognition and Measurement¹ . AASB 9 introduces new classification and measurement models for financial assets. A financial asset shall be measured at amortised cost, if it is held within a business model whose objective is to hold assets in order to collect contractual cash flows, which arise on specified dates and solely principal and interest. All other financial instrument assets are to be classified and measured at fair value through profit or loss unless the entity makes an irrevocable election on initial recognition to present gains and losses on equity instruments (that are not held-for-trading) in other comprehensive income ('OCI'). For financial liabilities, the standard requires the portion of the change in fair value that relates to the entity's own credit risk to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge accounting requirements are intended to more closely align the accounting treatment with the risk management activities of the entity. New impairment requirements will use an 'expected credit loss' ('ECL') model to recognise an allowance. Impairment will be measured under a 12-month ECL method unless the credit risk on a financial instrument has increased significantly since initial recognition in which case the lifetime ECL method is adopted. The standard introduces additional new disclosures. The Consolidated entity will adopt this standard from 1 July 2018 but the impact of its adoption is yet to be assessed by the Consolidated entity.

AASB 16 Leases

(b) Exploration, Evaluation and Development Expenditure

Exploration and evaluation expenditure is generally written off in the year incurred, except for acquisition of exploration properties which is capitalised and carried forward.

When production commences, any accumulated costs for the relevant area of interest which have been capitalised and carried forward will be amortised over the life of the area according to the rate of

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(c) Financial Instruments

Financial instruments in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale investments, as appropriate. When financial instruments are recognised initiallv, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transactions costs. The Consolidated entity determines the classification of its financial instruments after initial recognition and, when allowed and appropriate, re-evaluates this designation at each financial year-end.

(i) Financial assets at fair value through profit or loss

(ii) Held-to-maturity investments

Loans and receivables OH)

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

(iv) Available-for-sale investments

Available-for-sale investments are those non-derivative financial assets that are designated as available-for-sale or are not classified as any of the three preceding categories. After initial recognition, available-for sale investments are measured at fair value with gains or losses being recognised as a separate component of equity until the investment Is derecognised or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is recognised in profit or loss.

M Financial Liabilities

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost using the effective interest rate method.

Impairment

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Derecognition

(d) Borrowings

(e) Cash and Cash Equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts.

(f) Impairment of Assets

At each reporting date, the Consolidated entity reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from the other assets, the Consolidated entity estimates the recoverable amount of the cash-generating unit to which the asset belongs.

If the recoverable amount of an asset (or cash-generated unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) Is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease. Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years.

^Areversal of an impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation increase.

(g) Property, plant and equipment

IT equipment and other equipment

it to be capable of operating in the manner intended by the Consolidated entity's management. IT equipment and other equipment are subsequently measured using the cost model, cost less subsequent depreciation and impairment losses. Depreciation is recognised on ^adiminishing value basis to write down the cost less estimated residual value of IT equipment and other equipment.

The following useful lives are applied:

IT equipment: 2-5 years
Other equipment: 3-12 years

Material residual value estimates and estimates of useful life are updated as required, but at least annually.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(h) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverabiefrom the Australian Tax Office ("ATO"). In these circumstances, the GST is recognised as partofthe cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST.

The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the statement of financial position.

Cash flows are included in the statement of cashflows on a gross basis. The GST components of cashflows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.

(i) Taxation

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised.

(j) Trade and Other Payables

(k) Issued Capital

(I) Critical Accounting Estimates and Judgments

Key Estimates - Impairment

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Key Estimates - Taxation

Balances disclosed in the financial statements and the notes thereto related to taxation are based on the best estimates of the directors. These estimates take into account both the financial performance and position of the Consolidated entity as they pertain to current income taxation legislation, and the directors' understanding thereof. No adjustment has been made for pending or future taxation legislation. The current income tax position represents that directors' best estimate, pending an assessment by the Australian Taxation Office.

Key Judgment-Environmental Issues

(m) Fair Value of Assets and Liabilities

The Consolidated entity measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis, depending on the requirements of the applicable Accounting Standard.

To the extent possible, market information is extracted from either the principal market for the asset or liability (ie the market with the greatest volume and level of activity for the asset or liability) or, in the absence of such a market, the most advantageous market available to the entity at the end of the reporting period (ie the market that maximises the receipts from the sale of the asset or minimises the payments made to transfer the liability, after taking into account transaction costs and transport costs).

The fair value of liabilities and the entity's own equity instruments (excluding those related to share-based payment arrangements) may be valued, where there Is no observable market price in relation to the transfer of such financial instruments, by reference to observable market information where such instruments are held as assets. Where this information is not available, other valuation techniques are adopted and, where significant, are detailed in the respective note to the financial statements.

Valuation techniques

In the absence of an active market for an identical asset or liability, the Consolidated entity selects and uses one or more valuation techniques to measure the fair value of the asset or liability. The Consolidated entity selects a valuation technique that is appropriate in the circumstances and for which sufficient data is available to measure fair value. The availability of sufficient and relevant data primarily depends on the specific characteristics of the asset or liability being measured. The valuation techniques selected by the Consolidated entity are consistent with one or more of the following valuation approaches:

Market approach: valuation techniques that use prices and other relevant information generated by market transactions for identical or similar assets or liabilities.

Income approach: valuation techniques that convert estimated future cash flows or income and expenses into a single discounted present value.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Cost approach; valuation techniques that reflect the current replacement cost of an asset at its current service capacity.

Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when pricing the asset or liability, including assumptions about risks. When selecting a valuation technique, the Consolidated entity gives priority to those techniques that maximise the use of observable inputs and minimise the use of unobservable inputs. Inputs that are developed using market data (such as publicly available information on actual transactions) and reflect the assumptions that buyers and sellers would generally use when pricing the asset or liability are considered observable, whereas inputs for which market data is not available and therefore are developed using the best information available about such assumptions are considered unobservable.

Fair value hierarchy

Level 1

Measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 2

Measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3

Measurements based on unobservable inputs for the asset or liability.

The Consolidated entity would change the categorisation within the fair value hierarchy only in the following circumstances:

(i) if a market that was previously considered active (Level 1) became inactive (Level 2 or Level 3) or vice versa; or if significant inputs that were previously unobservable (Level 3) became observable (Level 2) or vice versa. (ii)

RELATED PARTY TRANSACTIONS

Transactions between related parties are on commercial terms and conditions, no more favourable than those available to other parties unless otherwise stated.

	2017	2016
	S	\$
Other related party transactions
Administration Fees - Bass Group (AUS) Pty Ltd	54,000	80,000

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended 30 June 2017 (continued)

Deferred tax asset not brought to account

Income tax attributable to entity

REMUNERATION OF AUDITORS

				2017	2016
				S	s
	Audit of the financial statements			10,000	10,000
	Total			10,000	10,000
	The auditor of Silver Mountain Mining Pty Ltd is William Buck Audit (WA) Pty Ltd.
	LOSS FROM ORDINARY ACTIVITIES
				2017	2016
				\$	s
(a)	Other revenue
	Interest received			119	445
	Realised foreign exchange gains			268
	Total other revenue from ordinary activities			387	445
(b)	Other expense
	Realised foreign exchange losses				(943)
	Total other expense from ordinary activities				(943)
	INCOME TAX EXPENSE
	Current tax
	Deferred tax
		Consolidated		Parent
		2017	2016	2017	2016
		\$	\$	\$	s
(a)	The prima facie tax on loss from ordinary activities before income tax is reconciled to the Income tax as follows:
	Loss before tax	(313,755)	(688,605)	(115,256)	(140,434)
	Net (Income)/ loss attributable to U.S subsidiary not
	subject to income tax in Australia The prima facie tax on loss from ordinary activities	198,499	548,171
	attributable to parent entity before income tax:	(115,256)	(140,434)	(115,256)	(140,434)
	Prima facie tax (benefit) on loss from ordinary activities before income tax at 30%	(34,577)	(42,130)	(34,577)	(42,130)
	Add/(Less) tax effect of:
	Accrued expenditure	6,750	6,750	6,750	6,750

27,827

35,380

27,827

35,380

s. CASH AND CASH EQUIVALENTS

	2017	2016
	\$	\$
Cash at bank	174,231	399,115
Total	174,231	399,115
TRADE AND OTHER RECEIVABLES
	2017	2016
	S	s
GST Receivable	992	2,321
Total	992	2,321
PREPAYMENTS
	2017	2016
	s	\$
Prepaid insurance	7,356	7,076
Total	7,356	7,076
EXPLORATION AND EVALUATION EXPENDITURE - LAND
	2017	2016
(a)	\$	\$
Capitalised exploration land carried forward
Movement during the year
Carrying value - beginning of year	969,897	969,897
Additions
Carrying value - end of the year	969,897	969,897

io. PROPERTY, PLANT AND EQUIPMENT

	2017	2016
	\$	\$
IT and Other Equipment at cost	19,270	19,270
Less: accumulated depreciation	(14,707)	(12,111)
Balance	4,563	7,159

		IT and other

	equipment \$
Balance at 1 July 2016	7,159
Additions
Disposals
Depreciation	(2,596)
Balance at 30 June 2017	4,553

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended 30 June 2017 (continued)

n. TRADE AND OTHER PAYABLES

		2017 \$	2016 \$
	Current
	Trade creditors and accrued expenses	68,122	65,709
	Total	68,122	65,709
12.	BORROWINGS
		2017 \$	2016 \$
	Current
	Silver Mountain Mining Nominee Pty Ltd ATF Silver Mountain Mining Trust	3,214,292	3,124,293
	Total	3,214,292	3,124,293

Silver Mountain Mining Nominee Pty Ltd ATF Silver Mountain Mining Trust ("The Trust") is the sole shareholder of the parent entity. The Trust has loaned further funds to the parent entity during the year ended 30 June 2017. The loan is non-interest bearing and has no fixed repayment terms or repayment date.

Subsequent to the year end, borrowings of \$3,214,292 from Silver Mountain Mining Nominee Pty Ltd ATF Silver Mountain Mining Trust have been converted to equity.

13. ISSUED CAPITAL

	2017
	Shares	S	Shares	S
Balance at 1 July	950,010	950,010	950,010	950,010
Shares issued
Less: share issue costs
Balance 30 June	950,010	950,010	950,010	950,010

14. RESERVES

2017 s	2016 \$

100,994	80,683
(7,186)	20,311
93,80S	100,994

Foreign currency translation reserve

The foreign currency translation reserve records unrealised exchange gains and losses on translation of controlled entities accounts during the year.

15. CASH FLOW INFORMATION

	2017	2016
	\$	s
Reconciliation of cash flows from operating activities with loss after income tax
Loss after income tax	(313,755)	(688,605)
Non-cash items included in profit or loss
Depreciation expense	2,596	3,941

Changes In assets and liabilities:
(lncrease)/decrease in receivables	1,329	219
(Increasej/decrease in prepayments	(279)	(1,213)
(Decrease)/increase in accounts payable and accruals	2,411	25,991
(Decrease)/lncrease in reserves	(7,186)	20,311
Net cash outflows from Operating Activities	(314,884)	(639,356)

16. SEGMENT INFORMATION

The Group's operations are in one reportable business segment being the exploration of base and precious metals. The Group operates in one geographical segment being in Arizona, USA.

17. SUBSEQUENT EVENTS

On 23 November 2017, \$3,264,155 AUD in loaned funds to The Company from Silver Mountain Mining Nominee Pty Ltd as trustee for the Silver Mountain Mining Trust ("the Trust") was converted into equity, 3,264,155 ordinary shares in the Company at \$1 per share were issued to the Trust in satisfaction of the above amount owed by the Company.

The Trust holds 4,214,165 ordinary shares (previously 950,010 ordinary shares) in the Company after the share issue on ²³ November 2017.

18. CONTINGENT ASSETS AND LIABILITIES

The Consolidated entity has an exploration service agreement with Dragon's Deep Exploration, Inc., an Arizona corporation ("Dragon"),

Criteria	Cash Bonus	Shares of Value
Minimum of 24 holes completed by the Consolidated Entity with 70% success within 24 months of first drilling1	US \$50,000	US \$150,000
Calculation of a JORC-compliant Resource equal or greater than US\$500 million value within 36 months of first drilling2	US \$100,000	US \$200,000

Success defined as a minimum 40 gram-metre zone (Au equivalent) within each drill hole for 70% of non-condemnation holes drilled.
Resource to be calculated by competent person not related to either party unless otherwise agreed.

Other than the above, the Consolidated entity has no contingent assets or liabilities outstanding at the end of the period.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended 30 June 2017 (continued)

19. COMMITMENTS

Exploration Expenditure (a)

	2017	2016
	\$ USD	\$ USD
Within 1 year	112,010	112,612
1 to 5 years	107,110	219,120
Total	219,120	331,732

(b) Asset acquisition

The consolidated entity has no commitments for asset acquisitions at 30 June 2017.

20. FINANCIAL INSTRUMENTS

21. CONTROLLED ENTITY

Silver Mountain Mining Pty Ltd is the ultimate parent entity of the consolidated group.

The following was a controlled entity at the period end date and has been included in the consolidated financial statements.

Name	Country of Incorporation	Percentage Interest Held 2017
Silver Mountain Mining LLC	United States of America	100%

22. PARENT ENTITY INFORMATION

	2017 \$	2016 \$
Assets
Current assets	70,988	81,735
Non-current assets	3,660,112	3,652,120
Total Assets	3,731,100	3,733,855

Liabilities
Current liabilities	3,281,792	3,169,292
Non-current liabilities
Total Liabilities	3,281,792	3,169,292

Equity
Issued capital	950,010	950,010
Reserves
Accumulated losses	(500,703)	(385,447)
Total Equity	449,307	564,563

Loss for the period	(115,256)	(140,434)
Other comprehensive income
Total comprehensive loss for the period	(115,256)	(140,434)

Parent

23. SHARE BASED PAYMENTS

The were no share-based payment arrangements in existence during the current and prior reporting periods.

DIRECTORS' DECLARATION

The directors of Silver Mountain Mining Pty Ltd declare that:

The financial statements and notes are in accordance with the Corporations Act 2001 including compliance with accounting standards and:
(a) comply with International Financial Reporting Standards as disclosed in notel(a); and
(b) give 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 Year Ended on that date; and
At the date of this statement there are reasonable grounds to believe that the consolidated entity 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 made pursuant to S.295(5) of the Corporations Act 2001.

Charles Bennett Bass Director

Dated at Perth this 5 th day of December 2017

Silver Mountain Mining Pty Ltd

Independent auditor's report to members of Slfver Moimtam Pt)' Ltd and controlled entities

Report on the Audit of the Financial Report

Opinion

We have audited the financial report of Silver Mountain Mining Pty Ltd (the Company and its subsidiary (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, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the financial statements, including ^asummary of significant accounting policies and other explanatory information, 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 then ended; 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 auditor independence requirements of 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. CHARTERED ACCOUNTANTS

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.

& ADVISORS

Level 3,15 Labouchere Road South Perth WA 6151 PO Box 748 South Perth WA 6951 Telephone: +61 8 6436 2888 willianibuck.com

Independent auditor's report to members of Silver Mountain Pty Ltd and controlled entities (cont.)

Other Information

The directors are responsible for the other information. The other information comprises the information included 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 accordingly 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

Independent auditor's report to members of Silver Mountaii Ply Ltd and controlled entities (cont.)

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.

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may Involve collusion, forgery. Intentional omissions, misrepresentations, or the override of Internal control.
Obtain an understanding of internal control relevant to the audit In order to design audit procedures that are appropriate In the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's Internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial report or. if such disclosures are Inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report. Including the disclosures, and whether the financial report represents the underlying transactions and events In a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

Independent auditor's report to members of Silver Mountain Pty Ltd and controlled entities (cont.)

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

SUA

William Buck Audit (WA) Pty Ltd ABN: 67 125 012 124

Con ley Man if is Di/ector

Dated this 5 th day of December 2017

ABN 16 163 828 466

Consolidated Financial Statements

For the Half Year Ended 31 December 2017

ABN 16 163828466

Consolidated Financial Statements

For the Half Year Ended 31 December ²⁰¹⁷

Financial Statements	Page
Directors' Report
Auditor's Independence Declaration	1
Consolidated Statement of Profit or Loss and	3
Other Comprehensive Income Consolidated Statement of Financial Position	4
Consolidated Statement of Changes in Equity	5
Consolidated Statement of Cash Flows	6
Notes to the Consolidated Financial Statements	7
Declaration by Directors	8
Independent Review Report	11
	12

ABN 16 163 828 466

Consolidated Financial Statements

For the Half Year Ended 31 December 2017

Your directors present their Report on the Company and its subsidiaries (the Group) for the half year ended 31 December 2017.

Directors

The names of the directors in office at any time during, or since the end of, the period are:

Brett Anthony Rowe Sylvia Culham Bass (Resigned 19 September 2017) Matthew Harrison Bass (Resigned 19 September 2017) Samuel David Bass (Resigned 19 September 2017) Charles Bennett Bass (Appointed 19 September 2017)

Review of operations

The consolidated group's principal activity is mineral exploration for base and precious metal in Arizona, USA. The main project is the Silver Mountain Project (SMP) situated in Yavapai County, approximately lOOKm to the NW of Phoenix in the Bradshaw Mountains of central Arizona. The SMP is comprised of 26 Patented Mining Claims, 342 Unpatented Mining Claims and 5 Arizona State Exploration Permits. The SMP is prospective for base metals (Cu) and precious metals (Au and Ag) across three key areas; Pacific Horizon, Scarlett and Red Mule.

No significant change in the nature of these activities occurred during the period.

For the period ended 31 December 2017 the Group recorded a consolidated loss of \$314,785 (2016: \$157,851) and incurred net cash out flows of \$29,980 (2016: \$165,273).

On 23 November 2017, \$3,264,155 AUD in loaned funds to The Company from Silver Mountain Mining Nominee Pty Ltd as trustee for the Silver Mountain Mining Trust ("the Trust") was converted into equity. 3,264,155 ordinary shares in the Company at \$1 per share were issued to the Trust in satisfaction of the above amount owed by the Company.

The Trust held 4,214,165 ordinary shares (previously 950,010 ordinary shares) in the Company after the share issue on 23 November 2017.

On 27 November 2017, the Trust entered into a Share Sale Deed pursuant to which Eagle Mountain Mining Ltd, agreed to purchase, and the Trust agreed to sell, all of the fully paid ordinary shares in Silver Mountain Mining Pty Ltd, effective on 7 December 2017.

Subsequent Events

There were no material events subsequent to 31 December 2017.

ABN 16 163828466

Consolidated Financial Statements

For the Half Year Ended 31 December ²⁰¹⁷

Disclosure Statement

It is recommended that this report is read in conjunction with the annual report for the year ended 30 June 2017.

Auditors Independence Declaration

^Acopy of the Auditors Independence Declaration by the lead auditor as required under section 307C of the Corporations Act 2001 is included on Page 3 to this half year report.

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

,' Director: Mr Brett Anthony Rowe Dated this 15th day of January ²⁰¹⁸

AUDITOR'S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF SILVER MOUNTAIN MINING PTY LTD

I declare that, to the best of my knowledge and belief during the half year ended 31 December 2017 there have been:

no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the review; and
no contraventions of any applicable code of professional conduct in relation to the review.

{fjllt *^(i law*

William Buck Audit (WA) Pty Ltd ABN 67 125 012 124

ronley Manifis 'irector

Dated this 15th day of January 2018

CHARTERED ACCOUNTANTS & ADVISORS

Level 3,15 Labouchere Road South Perth WA 6151 PO Box 748 South Perth WA 6951 Telephone: +61 8 6436 2888 williambuck.com

ABN 16 163 828 466

Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the Half Year Ended 31 December ²⁰¹⁷

	31 December 31 2017 \$	December 2016 \$
Other revenue
Administration costs	10	340
Consultancy expense	(41,250)	(39,873)
Depreciation expense	(49,150)	(3,010)
Exploration costs	(906) (223,489)	(1.298)
Net loss before tax		(114,010)
Income tax (expense)/benefit	(314,785)	(157,851)
Net loss for the half year after tax	(314,785)	(157,851)
Loss for the half year is attributable to: Owners^ofSHverJVlountainJ^	(314,785)	(157,851)
Other Comprehensive Income Items that will be reclassified to profit or loss Gain /(loss) on foreign
currency exchange Other Comprehensive Income for the half	(3,543)	3,442
year, net of tax	(3,543)	3,442
Total comprehensive loss for the half year	(318,328)	(154,409)
Total comprehensive loss for the half year attributable to Owners of SilveMVIountaii^VIinin^Pt^t^^^^^^^^^^^^^^^^^^^^^^	(318,328)
		(154,409)

ABN 16 163 828 466

Consolidated Statement of Financial Position

As At 31 December 2017

ASSETS	Note	31 December 2017 \$	30 June 2017 \$
Current assets
Cash and cash equivalents
Trade and other receivables	6	144,251	174,231
Prepayments		9,180	992
Total current assets		14,686	7,356
		168,117	182,579
Non-current assets Exploration and evaluation
expenditure - Land Property, plant and equipment		969,897	969,897
		3,657	4,563
Total non-current assets		973,554	974,460
TOTAL ASSETS		1,141,671	1,157,039
LIABILITIES
Current liabilities Trade and other
payables Borrowings		43,155	68,122
	8	278,064	3,214,292
Total current liabilities		321,219	3,282,414
TOTAL LIABILITIES		321,219	3,282,414
NET ASSETS		820,452	(2,125,375)

EQUITY
Issued capital	7
Reserves		4,214,165 90,265	950,010
Accumulated losses		(3,483,978)	93,808 (3,169,193)
TOTAL EQUITY
		820,452	(2,125,375)

ABN 16 163 828 466

Consolidated Statement of Changes in Equity

For the Half Year Ended 31 December ²⁰¹⁷

31 December 2017

Balance at 1	Issued Capital \$	Foreign Currency Translation Reserve \$	Accumulated losses \$	Total \$
July 2017 Loss for the half year	950,010	93,808	(3,169,193)	(2,125,375)
Other comprehensive income;			(314,785)	(314,785)
- Unrealised foreign exchange gains (losses)
Total comprehensive loss for the half year		(3,543)		(3,543)
Shares issued during the year (net of costs)		(3,543)	(314,785)	(318,328)
Balance as at 31 December 2017	3,264,155			3,264,155
	4,214,165	90,265	(3,483,978)	820,452

31 December 2016

Balance at 1 July 2016	Issued Capital \$	Foreign Currency Translation Reserve \$	Accumulated losses \$	Total \$
Loss for the half year	950,010	100,994	(2,855,438)	(1,804,434)
Other comprehensive income:		-	(157,851)	(157,851)
- Unrealised foreign exchange gains (losses)
Total comprehensive income (loss)		3,442		3,442
for the half year
Balance as at 31 December 2016		3,442	(157,851)	(154,409)
	950,010	104,436	(3,013,289)	1,958,843

ABN 16 163828466

Consolidated Statement of Cash Flows

For the Half Year Ended 31 December ²⁰¹⁷

		31 December 31	December
	Note	2017 \$	2016 \$
Cash generated from operating activities: Payments to suppliers and employees
Payments for exploration and evaluation		(131,877) (227,032)	(55,439) (110,301)
Interest received GST (paid) received		10	72
Net cash outflow in operating activities		992 (357,907)	439 (165,229)
Cash flows from financing activities: Loans from (to) related parties
Net cash inflow (outflow) from financing activities		327,927 327,927	(44) m
Net increase/(decreases) in cash and cash equivalents Cash and cash equivalents at beginning of period		(29,980) 174,231	(165,273) 399,115
Cash and cash equivalents at end of period	6	144,251	233,842

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

ABN 16 163828466

Notes to the Consolidated Financial Statements

For the Half Year Ended 31 December ²⁰¹⁷

¹Basis of Preparation

These been prepared general purpose financial statements for the half year reporting period ended 31 December 2017 have Corporations Act in accordance with Accounting Standard AASB 134; Interim Financial Reporting and the Reporting Standard IAS 2001. Compliance with AASB 134 ensures compliance with International Financial 34: Interim Financial Reporting.

These half year financial statements do not include all the notes of the type normally included in the annual performance, financial statements and therefore cannot be expected to provide as full an understanding of the financial financial position and financing and investing activities of the consolidated entity as the full annual financial statements. Accordingly, these half year financial statements are to be read in conjunction with the financial statements for the year ended 30 June 2017.

The same accounting policies and methods of computation have generally been followed in these half year of financial statements as compared with the most recent annual financial statements; except for the adoption the following new and revised accounting standards.

Going Concern

The business financial report has been prepared on the going concern basis, which assumes continuity of normal activities and realisation of assets and settlement of liabilities in the ordinary course of business.

As \$153,102. at 31 December 2017, the Consolidated group had cash assets of \$144,251 and working capital deficit of

capability The shareholder of the Consolidated group. Eagle Mountain Mining Ltd, which has sufficient financial Consolidated has provided a letter of support indicating that it will provide the required financial support to the group as and when required to ensure the Consolidated group has sufficient funds to continue trading and to pay its debts as and when they fall due.

The Based on these factors, the directors are satisfied that the going concern basis of preparation is appropriate. normal financial business report has therefore been prepared on a going concern basis, which assumes continuity of business. activities and realisation of assets and settlement of liabilities in the ordinary course of

Standards and Interpretations adopted in the current year:

The Group has adopted all of the new and revised Standards and Interpretations Accounting issued by the Australian Standards Board that are relevant to their operations and are effective for the current financial pronouncements, reporting period, being the half year ended 31 December 2017. In adopting these new and revised position the Group has determined that there has been no material impact to the Group's reported or performance.

ABN 16 163 828 466

Notes to the Consolidated Financial Statements

For the Half Year Ended 31 December ²⁰¹⁷

²Contingent Liabilities and Assets

Exploration, On 3 January 2018, a service agreement that Silver Mountain Mining Pty Ltd held with Dragon's Deep transferred Inc., an Arizona corporation ("Dragon") which required a performance bonus share issue was to the new parent entity. Eagle Mountain Mining Limited.

The cash bonus payable is still a contingent liability of Silver Mountain Mining Pty Ltd.

The paid performance within 10 days bonus payable to Dragon consisting of cash payable by Silver Mountain Pty Ltd must be of the events detailed below:

Criteria
Minimum of 24 holes completed by the Consolidated	Cash Bonus
Entity with 70% success within 24 months of first drilling i	US\$50,000
Calculation of a JORC-compliant Resource equal or
greater than US\$500 million value within 36 months of first drilling2	US\$100,000

condemnation 1. Success defined as a minimum 40 gram-metre zone (Au equivalent) within each drill hole for 70% of nonholes drilled.

Resource to be calculated by competent person not related to either party unless otherwise agreed.

3 Subsequent Events

Aside from the matter noted above in note 2 there were no other material events subsequent to 31 December

4 Capital Commitments

There have been no changes in capital or exploration commitments since the end of the previous annual reporting period, 30 June 2017.

⁵Related Party Transactions

Transactions and balances with related parties

All transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

⁶Cash and Cash Equivalents

	31 December
Cash and Cash Equivalents: Cash at bank	2017 \$	30 June 2017 \$
	144,251	174,231
Total	144,251	174.231

ABN 16 163 828 466

Notes to the Consolidated Financial Statements

For the Half Year Ended 31 December ²⁰¹⁷

⁷Issued Capital

	31 December 2017		30 June 2017
Ordinary shares	No	\$	No	\$
Opening balance 1 July - Shares issued in half - year	950,010 3,264,155	950,010 3,264,155	950,010	950,010
Total	4,214,165	4,214,165	950,010	950,010

Nominee On 23 November 2017, \$3,264,155 AUD in loaned funds to The Company from Silver Mountain Mining 3,264,155 Pty Ltd as trustee for the Silver Mountain Mining Trust ("the Trust") was converted into equity. above amount ordinary shares in the Company at \$1 per share were issued to the Trust in satisfaction of the owed by the Company.

The share Trust held 4,214,165 ordinary shares (previously 950,010 ordinary shares) in the Company after the issue on 23 November 2017.

Ltd On 27 agreed November 2017, the Trust entered into a Share Sale Deed pursuant to which Eagle Mountain Mining Mining to purchase, and the Trust agreed to sell, all of the fully paid ordinary shares in Silver Mountain Pty Ltd, effective on 7 December 2017.

⁸Borrowings

	31 December
Current Silver Mountain Mining Nominee Pty Ltd ATP Silver Mountain Mining Trust	2017 \$	30 June 2017 \$ 3,214,292
Eagle Mountain Mining Ltd	278,064
Total	278,064	3,214,292

Refer to note 7 regarding conversion of the Trust debt into fully paid ordinary shares.

9 Disclosure Statement

It is recommended that this report is read in conjunction with the annual report for the year ended 30 June

¹⁰Segment Reporting

metals. The Group's operations are in one reportable business segment being the exploration of base and precious The Group operates in one geographical segment being in Arizona, USA.

ABN 16 163 828 466

Declaration by Directors

The directors of the company declare that:

1. The financial statements and notes, as set out on pages 4 to 10 are in accordance with the Corporations Act 2001 and:
(a) give a true and fair view of the financial position of the consolidated entity as at 31 December 2017 and of its performance as represented by the results of its operations and cash flows for the half year ended on that date; and
(b) comply with Accounting Standard AASB 134: Interim Financial Reporting, Corporations Regulations 2001 and other mandatory professional reporting requirements; and
1. become there are reasonable grounds to believe that the company will be able to pay its debts as and when they due and payable.

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

• -BrefrAr Director nthony Rowe

Dated 15 January 2018

Silver Mountain Mining Pty Ltd

Independent auditor's review report to members

Report on the Review of the Half-Year Financial Report

Conclusion

We have reviewed the accompanying half-year financial report of Silver Mountain Mining Pty Ltd (the company) and the entity it controlled at the half-year's end or from time to time during the half year (the consolidated entity) on pages 4 to 11 which comprises the consolidated statement of financial position as at 31 December 2017, 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, notes comprising a summary of significant accounting policies and other explanatory information, and the declaration by directors.

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Silver Mountain Mining Pty Ltd on pages 4 to 11 is not in accordance with the Corporations Act 2001 including:

a) giving a true and fair view of the consolidated entity's financial position as at 31 December 2017 and of its performance for the half year ended on that date; and
b) complying with Australian Accounting Standard 134 Interim Financial Reporting and the Corporations Regulations 2001.

Responsibilities of the Directors' for the Half-Year Financial Report

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

Auditor's Responsibilities for the Review of the Half-Year Financial Report

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 financial report is not in accordance with the Corporations Act 2001 including:

giving a true and fair view of the consolidated entity'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.

CHARTERED ACCOUNTANTS & ADVISORS

Level 3,15 Labouchere Road South Perth WA 6151 PO Box 748 South Perth WA 6951 Telephone: +61 8 6436 2888 williambuck.com

Independent auditor's review report to members (cont)

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

{]ilU fioxl

William Buck Audit (WA) Pty Ltd ABN; 67 125 012 124

pnley Manifis i rector

Dated this 15,h day of January 2018

AI assistant

EAGLE MOUNTAIN MINING LIMITED — Regulatory Filings 2018

64839_rns_2018-03-13_406cf9d7-90de-4339-abe1-2a206856b7f6.pdf

SILVER MOUNTAIN MINING PTY LTD

FINANCIAL REPORT

CONTENTS PAGE

CORPORATE DIRECTORY

Brett Anthony Rowe Director Appointed 17 May 2013

COMPANY SECRETARY

DIRECTORS REGISTERED OFFICE

AUDITORS

DIRECTORS' REPORT

DIRECTORS

COMPANY SECRETARY

REVIEW OF OPERATIONS

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

PRINCIPAL ACTIVITIES

EVENTS SUBSEQUENT TO THE END OF THE REPORTING PERIOD

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

ENVIRONMENTAL ISSUES

SHARE OPTIONS

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

PROCEEDINGS ON BEHALF OF THE CONSOLIDATED ENTITY

AUDITOR'S INDEPENDENCE DECLARATION

AUDITOR'S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF SILVER MOUNTAIN MINING PTY LTD

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the Year Ended 30 June 2015

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED STATEMENT OF CASH FLOWS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended 30 June 2015

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation

(!) Going Concern

(il) New Accounting Standards for Application in Future Periods

Application of new and revised Accounting Standards

New, revised or amending Accounting Standards and Interpretations adopted

New Accounting Standards and Interpretations not yet mandatory or early adopted

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

AASB 9 Financial Instruments

AASB 16 Leases

(b) Exploration, Evaluation and Development Expenditure

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(c) Financial Instruments

(i) Financial assets atfair value through profit or loss

(ii) Held-to-maturity investments

(iv) Available-for-sale investments

M Financial Liabilities

Impairment

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Derecognition

(d) Borrowings

(e) Cash and Cash Equivalents

ffj Impairment of Assets

(g) Property, plant and equipment

IT equipment and other equipment

(h) Goods and Services Tax (GST)

0) Taxation

(j) Trade and Other Payables

(k) Issued Capital

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(I) Critical Accounting Estimates and Judgments

Key Estimates - Impairment

(m) Fair Value of Assets and Liabilities

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Fair value hierarchy

Level 1

Level 2

Level 3

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

RELATED PARTY TRANSACTtONS

REMUNERATION OF AUDITORS

LOSS FROM ORDINARY ACTIVITIES

INCOME TAX EXPENSE

6' CASH AND CASH EQUIVALENTS

TRADE AND OTHER RECEIVABLES

PREPAYMENTS

EAGLE MOUNTAIN MINING LIMITED Regulatory Filings 2018