EAGLE MOUNTAIN MINING LIMITED — Regulatory Filings 2018

Mar 13, 2018

EAGLE MOUNTAIN MINING LIMITED

ABN 34 621 541 204

FINANCIAL REPORT

FOR THE PERIOD 6 SEPTEMBER 2017 TO 31 DECEMBER 2017

CONTENTS PAGE

	Page
Corporate Directory	2
Directors' Report	3-5
Auditor's Independence Declaration	6
Consolidated Statement of Profit or Loss and Other Comprehensive Income	7
Consolidated Statement of Financial Position	8
Consolidated Statement of Changes in Equity	9
Consolidated Statement of Cash Flows	10
Notes to the Consolidated Financial Statements	11-26
Directors' Declaration	27
Independent Auditor's Report	28

CORPORATE DIRECTORY

DIRECTORS

Rick Crabb Charles Bass Roger Port

ALTERNATE DIRECTOR

Brett Rowe (Alternate Director for Charles Bass)

COMPANY SECRETARY

Mark Pitts

REGISTERED OFFICE

Ground Floor 22 Stirling Highway Nedlands WA 6009

AUDITORS

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

DIRECTORS' REPORT

The Directors present their report on Eagle Mountain Mining Limited ("EMM" or the "Company") and its controlled entities(the "Consolidated Entity" or "Group") for the period 6 September 2017 to 31 December 2017.

DIRECTORS

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

Rick Crabb (Appointed 6 September 2017) Charles Bass (Appointed 6 September 2017) Roger Port (Appointed 6 September 2017)

COMPANY SECRETARY

Mark Pitts

REVIEW OF OPERATIONS

Eagle Mountain Mining Limited was incorporated on 6 September 2017.

The operating loss after income tax of the Consolidated Entity for the period from incorporation to 31 December 2017 was \$132,340.

During the period the Company completed the acquisition of Silver Mountain Mining Pty Ltd.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

• o On 7 December 2017 the Company completed the acquisition of Silver Mountain Mining Pty Ltd by the issue of consideration of 37,500,000 ordinary fully paid shares at a deemed price of 10 cents per share and 4,500,000 options over unissued shares exercisable at 30 cents per share each and expiring 3 years from the date of issue;
• o On 12 December 2017 the Company issued 15,000,000 ordinary fully paid shares to pre-IPO investors at 10 cents per share.

Other than the matters above, no significant changes in the Consolidated Entity's state of affairs occurred during the financial period.

PRINCIPAL ACTIVITIES

The Company's principal activities have been the acquisition of Silver Mountain Mining Pty Ltd which holds the Silver Mountain Project in Arizona, United States of America and preparations for an application for quotation on the Australian Securities Exchange.

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

DIRECTORS' REPORT

EVENTS SUBSEQUENT TO THE END OF THE REPORTING PERIOD

o On 15 January 2018 the Company issued 7,000,000 options to Directors, alternate Director, chief geologist and company secretary and 75,000 performance share rights to the chief geologist.

Other than the matters stated above, there has not arisen in the interval between the end of the financial period and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company to affect substantially the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent financial years.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

The Group intends to submit its application for quotation on the Australian Securities Exchange following an initial public offer (IPO) and undertake exploration programs at the Silver Mountain Project in Arizona, United States.

Any other likely developments in the operations of the Consolidated Entity 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 Entity.

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 operations and proposed activities of the Consolidated Entity are subject to United States Federal and Arizona State laws and regulations concerning the environment.

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 period under review.

SHARE OPTIONS

• o During the period the Company issued 4,500,000 options over unissued shares, exercisable at 30 cents each and expiring 3 years from the date of grant in part consideration for the acquisition of Silver Mountain Mining Pty Ltd.
• o On 15 January 2018, the Company issued 7,000,000 options over unissued shares, exercisable at 20 cents each and expiring 5 years from the date of grant. The options were issued to Directors, alternate Director, chief geologist and company secretary.

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

DIVIDENDS

No dividend has been paid during or is recommended for the financial period.

DIRECTORS' REPORT

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

No indemnities have been given or insurance premiums paid, during or since the end of the financial period, 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 period.

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 review of the financial report. This Independence Declaration is set out on the following page and forms part of this Directors' report for the period ended 31 December 2017.

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

Rick Crabb Director

Dated at Perth this 18th day of January 2018

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the Period Ended 31 December 2017

		Period from 6 September 2017 to 31 December 2017
	Notes	A\$
Continuing Operations
Other Revenue	4 (a)	402
Administration costs		(70,464)
Consultancy expense		(29,723)
Depreciation expense		(153)
Exploration costs		(32,402)
Loss before income tax		(132,340)
Income tax expense	5	-
Loss after income tax from continuing operations		(132,340)
Other comprehensive income (loss), net of income tax
Gain/(loss) on foreign currency exchange	15	(4,246)
Total comprehensive income (loss) for the period		(136,586)
		cents
Basic and diluted loss per share		(1.3)

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 31 December 2017

		31 December 2017
	Note	A\$
Current Assets
Cash and cash equivalents	6	1,067,549
Trade and other receivables	7	60,928
Prepayments	8	122,929
Total Current Assets		1,251,406
Non-Current Assets
Exploration and evaluation expenditure – Land	9	969,897
Property, plant, and equipment	10	270,567
Total Non-Current Assets		1,240,464
TOTAL ASSETS		2,491,870
Current Liabilities
Trade and other payables	11	309,732
Share issue liability	12	8,000
Total Current Liabilities		317,732
TOTAL LIABILITIES		317,732
NET ASSETS		2,174,138
Equity
Issued capital	14	5,181,000
Reserves	15	(2,874,522)
Accumulated losses		(132,340)
TOTAL EQUITY		2,174,138

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the Period Ended 31 December 2017

	Issued capital	Foreign currency translation reserve	Share based payment reserve	Common control reserve	Accu mulated losses	Total
	A\$	A\$	A\$	A\$	A\$	A\$
Balance at 6 September 2017	-	-	-	-	-	-
Loss for the period	-	-	-	-	(132,340)	(132,340)
Other comprehensive income for the period, net of income tax	-	(4,246)	-	-	-	(4,246)
Total comprehensive loss for the period	-	(4,246)	-	-	(132,340)	(136,586)
Recognised on completion of common control transaction (note 15,23)	-	-	-	(3,014,276)	-	(3,014,276)
Issue of shares	5,250,000	-	-	-	-	5,250,000
Capital raising costs	(69,000)	-	-	-	-	(69,000)
Issue of options	-	-	144,000	-	-	144,000
Balance at 31 December 2017	5,181,000	(4,246)	144,000	(3,014,276)	(132,340)	2,174,138

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

CONSOLIDATED STATEMENT OF CASH FLOWS For the Period Ended 31 December 2017

		Period from 6 September 2017 to 31 December 2017
	Note	A\$
Cash Flows from Operating Activities
Payments to suppliers and employees		(119,948)
Payments for exploration and evaluation		(32,402)
Interest received		402
Net cash used in operating activities	16	(151,948)
Cash Flows from Investing Activities
Cash recognised on acquisition of subsidiary		36,079
Payments for purchase of fixed assets		(66,244)
Net cash used in investing activities		(30,165)
Cash Flows from Financing Activities
Funds received for share issues		1,508,000
Payments for share issue costs		(172,891)
Loan repayments		(85,447)
Net cash generated by financing activities		1,249,662
Net increase (decrease) in cash held		1,067,549
Cash and cash equivalents at the beginning of the period		-
Cash and cash equivalents at the end of the period	6	1,067,549

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

These consolidated financial statements and notes represent those of Eagle Mountain Mining Limited and its controlled entities(the "Consolidated Entity"). Eagle Mountain Mining Limited is a public 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 period from 6 September 2017 to 31 December 2017 were approved and authorised for issue by the Board of Directors on 18th January 2018.

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

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

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.

(i) 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.

(ii) New Accounting Standards for Application in Future Periods

Application of new and revised Accounting Standards

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 period ended 31 December 2017.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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:

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-fortrading) 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 'right-of-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 Consolidated Entity will adopt this standard from 1 July 2019. Management has reviewed the impact and recognises there will be a material change in relation to the accounting treatment for leases for its office lease. Whilst this will result in recognising both an asset and liability, it will not impact the overall net asset position, nor will it affect any financial covenants for financiers (for which there presently are none).

(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 reporting period 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 the end of each reporting period and the Directors are satisfied that the value is recoverable.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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.

(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 initially, 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 period-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 at fair 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-tomaturity 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 asthe 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.

(iii) Loans and receivables

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.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(v) Financial Liabilities

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

(vi) 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.

(vii) 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.

(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.

A reversal 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.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(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 a diminishing 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.

(i) 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 sheetliability 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.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

(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.

(l) 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 externally 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 the Directors' best estimate, pending an assessment by the ATO.

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).

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.

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:

• o Market approach: valuation techniques that use prices and other relevant information generated by market transactions for identical or similar assets or liabilities.
• o Income approach: valuation techniques that convert estimated future cash flows or income and expenses into a single discounted present value.
• o 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:

o 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.

o 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.

o 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
• (ii) if significant inputs that were previously unobservable (Level 3) became observable (Level 2) or vice versa.

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.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

n) Comparative Information

No comparative information has been included as the Company was incorporated on 6 September 2017.

2. 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.

• o During the reporting period the Company issued 37,500,000 ordinary fully paid shares at a deemed price of 10 cents per share and 4,500,000 options over unissued shares, exercisable at 30 cents each and expiring 3 years from the date of grant to Silver Mountain Mining Nominee Pty Ltd, an entity associated with a Director Mr Charles Bass, in consideration for the acquisition of the issued capital of Silver Mountain Mining Pty Ltd (refer note 23).
• o During the period an amount of \$85,447 owing by the Group to Silver Mountain Mining Nominee Pty Ltd, an entity associated with Mr Charles Bass was repaid in full.
• o The Company has entered into a lease agreement with Elk Mountain Mining Limited, an entity associated with Mr Charles Bass, for the lease of the Company's administration offices in Perth, Western Australia (refer note 20 for details of commitments under the lease agreement).

3. REMUNERATION OF AUDITORS

	Period from 6 September 2017 to 31 December 2017
	A\$
Audit of the financial statements	8,500
Other services	9,050
Total	17,550

The auditor of Eagle Mountain Mining Limited is William Buck Audit (WA) Pty Ltd. During the reporting period William Buck Audit (WA) Pty Ltd provided audit services to Silver Mountain Mining Pty Ltd. During the period William Buck (WA) Pty Ltd also provided accounting assistance to Silver Mountain Mining Pty Ltd.

4. LOSS FROM ORDINARY ACTIVITIES

		Period from 6
		September 2017 to
		31 December 2017
		A\$
(a)	Other revenue
	Interest received	402
	Realised foreign exchange gains	-
	Total other revenue from ordinary activities	402

5. INCOME TAX EXPENSE

		Period from 6 September 2017 to 31 December 2017 A\$
	Current tax	-
	Deferred tax	- -
(a)	The prima facie tax on loss from ordinary activities before income tax is reconciled to the income tax as follows:
	Loss before tax The prima facie tax on loss from ordinary activities attributable to parent entity before income tax:	(132,340)
	Prima facie tax (benefit) on loss from ordinary activities before income tax at 27.5%	(36,394)
	Add/(Less) tax effect of:
	Deferred tax asset not brought to account	36,394
	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

	31 December 2017
	A\$
Cash at bank	1,067,549
Total	1,067,549

7. TRADE AND OTHER RECEIVABLES

	31 December 2017 A\$
GST Receivable	60,928
Total	60,928

8. PREPAYMENTS

	31 December 2017 A\$
Prepaid IPO costs1	108,242
Other prepaid expenses	14,687
Total	122,929

1Prepaid IPO costs relate to costs incurred by the Group in respect of the proposed initial public offer (IPO) on the Australian Securities Exchange.

9. EXPLORATION AND EVALUATION EXPENDITURE – LAND

	31 December 2017 A\$
Capitalised exploration land carried forward	969,897
Movement during the period
Carrying value – beginning of period	-
Recognised on acquisition of Silver Mountain Mining Pty Ltd1	969,897
Carrying value – end of the period	969,897

1Capitalised exploration asset acquisition costs recognised on acquisition of Silver Mountain Mining Pty Ltd.

10. PROPERTY, PLANT AND EQUIPMENT

	Leasehold	Office	Field	Total
	improvements	equipment	equipment
	A\$	A\$	A\$	A\$
Cost at the beginning of the period	-	-	-	-
Additions	266,909	-	-	266,909
Recognised on acquisition of Silver
Mountain Mining Pty Ltd1	-	2,998	16,272	19,271
Cost at the end of the period	266,909	2,998	16,272	286,180
Accumulated depreciation at the beginning of the period	-	-	-	-
Depreciation charged in the period	-	(51)	(102)	(153)
Recognised on acquisition of Silver Mountain Mining Pty Ltd1	-	(1,679)	(13,781)	(15,460)
Accumulated depreciation at the end of the period	-	(1,730)	(13,883)	(15,613)
Net book value at the beginning of the period	-	-	-	-
Net book value at the end of the period	266,909	1,268	2,389	270,567

1Net book value of property, plant and equipment recognised by the Group on completion of acquisition of Silver Mountain Mining Pty Ltd.

11. TRADE AND OTHER PAYABLES

	31 December 2017 A\$
Current
Trade creditors and accrued expenses	309,732
Total	309,732

12. SHARE ISSUE LIABILITY

	31 December 2017 A\$
Current
Refundable share application monies	8,000
Total	8,000

The share issue liability relates to excess application funds received by the Company in respect of a capital raising completed on 12 December 2017.

13. OPTIONS

	Number
Options on issue at 6 September 2017	-
Options issued during the period1	4,500,000
Options on issue at 31 December 2017	4,500,000

1During the reporting period the Company issued 4,500,000 options over unissued shares exercisable at 30 cents each and expiring 3 years from the date of grant in part consideration for the acquisition of Silver Mountain Mining Pty Ltd (refer note 15b and note 23).

Subsequent to the end of the reporting period the Company issued 7,000,000 options over unissued shares, exercisable at 20 cents each and expiring 5 years form the date of grant, to officers and employees of the Company following shareholder approval received on 15 January 2018.

14. ISSUED CAPITAL

	Period 6 September 2017 to 31 December 2017
	Issue price	Shares	A\$
Balance at 6 September 2017		-	-
Shares issued on incorporation	\$0.20	1	-
Shares issued to acquire Silver Mountain Mining Pty Ltd (note 23)	\$0.10	37,500,000	3,750,000
Shares issued to pre-IPO investors	\$0.10	15,000,000	1,500,000
Less: share issue costs		-	(69,000)
Balance at 31 December 2017		52,500,001	5,181,000

15. RESERVES

		As at 31 December 2017 A\$
	Foreign currency translation reserve	(4,246)
	Share based payments reserve	144,000
	Common control reserve	(3,014,276)
		(2,874,522)
Movements:		Period 6 September 2017 to 31 December 2017
		A\$
a)	Foreign currency translation reserve
	Balance 6 September 2017	-
	Exchange gains/(losses) for the year Balance 31 December 2017	(4,246) (4,246)
	Foreign currency translation reserve The foreign currency translation reserve records unrealised exchange gains and losses on translation of controlled entities accounts during the year.	Period 6 September 2017 to 31 December 2017 A\$
b)	Share based payments reserve
	Balance 6 September 2017	-
	Fair value of options issued during the period (note 13, 23)	144,000
	Balance 31 December 2017	144,000
	Share based payments reserve The share based payments reserve has been used to recognise the fair value of options issued and vested but not exercised as at the end of the reporting period.	Period 6 September 2017 to 31 December
		2017 A\$
c)	Common control reserve
	Balance 6 September 2017	-
	Common control transactions during the period	(3,014,276)
	Balance 31 December 2017	(3,014,276)

Common control reserve

The amount recognised in the common control reserve represents the excess in fair value consideration given, over the net assets acquired, on the acquisition of Silver Mountain Mining Pty Ltd from Silver Mountain Mining Nominees Pty Ltd on 7 December 2017 (refer note 23).

On 7 December 2017 the Directors determined that the acquisition was undertaken between entities which were under common control due to respective share ownership.

16. CASH FLOW INFORMATION

	Period 6 September 2017 to 31 December 2017 A\$
Reconciliation of cash flows from operating activities with loss after income tax
Loss after income tax	(132,340)
Non-cash items included in profit or loss
Depreciation expense	153
Changes in assets and liabilities:
(Increase)/decrease in receivables	(8,635)
(Increase)/decrease in prepayments	1,509
(Decrease)/increase in accounts payable and accruals	(8,389)
(Decrease)/Increase in reserves	(4,246)
Net cash outflows from Operating Activities	(151,948)

17. SEGMENT INFORMATION

The Group's operational activities are in one reportable business segment being the exploration of base and precious metals. The Group operates in one geographical segment being in Arizona, United States of America.

18. SUBSEQUENT EVENTS

o On 15 January 2018 the Company issued 7,000,000 options to Directors, alternate Director, chief geologist and company secretary and 75,000 performance share rights to the chief geologist.

Other than the matters stated above, there has not arisen in the interval between the end of the financial period and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company to affect substantially the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent financial years.

19. CONTINGENT ASSETS AND LIABILITIES

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

CONTINGENT ASSETS AND LIABILITIES (Continued)

Included in this agreement is a performance bonus payable to Dragon consisting of cash together with shares in Eagle Mountain Mining Limited (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
Minimum of 24 holes completed by the Consolidated Entity with 70% success within 24 months of first drilling1	US \$50,000	US \$150,000
Commencement of a preliminary feasibility study in respect of any land covered by any mining claims or permits held by Silver Mountain Mining LLC and located in Arizona, USA.2	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. The milestone satisfaction date is the date on which the Company announces to the Australian Securities Exchange that it has commenced a pre-feasibility study on the relevant mining claims or permits. "Pre-feasibility Study" is as defined in the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (2012 Edition).

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

20. 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 United States of America, as follows:

	31 December 2017 \$ USD
Within 1 year	118,910
After 1 year but not more than 5 years	286,040
Total	404,950

(b) Operating lease commitments

The Company has entered into a 5 year lease commencing 1 January 2018 in respect of its offices at 22 Stirling Highway, Nedlands. The initial lease cost, inclusive of estimated outgoings, is \$81,420 per annum, with a 2% increase applied annually. Operating lease commitments are as follows:

	31 December 2017
	A\$
Due within 1 year	81,420
Due after 1 year but not more than 5 years	342,293
Due after more than 5 years	-
	423,713

(c) Asset acquisition

The Consolidated Entity has no commitments for asset acquisitions at 31 December 2017.

21. 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.

22. CONTROLLED ENTITIES

Eagle Mountain Mining Limited is the ultimate parent entity of the Consolidated Entity.

The following were controlled entities at the period end date and have been included in the consolidated financial statements.

Name	Country of Incorporation	Percentage Interest Held 2017	Date acquired
Silver Mountain Mining Pty Ltd	Australia	100%	7 December 2017
Silver Mountain Mining LLC1	United States of America	100%	7 December 2017

1Silver Mountain Mining LLC is a 100% owned subsidiary of Silver Mountain Mining Pty Limited.

23. ACQUISITION OF SILVER MOUNTAIN MINING PTY LTD

During the period the Company acquired a 100% interest in the share capital of Silver Mountain Mining Pty Ltd (SMM), from Silver Mountain Mining Nominee Pty Ltd, an entity associated with a Director Mr Charles Bass. The acquisition was completed on 7 December 2017.

Silver Mountain Mining Pty Ltd is the holder of the Silver Mountain Project located in Arizona, United States.

Consideration given by the Company in respect of the acquisition of SMM was:

		Fair value
Details	Number	A\$
Ordinary fully paid shares (refer note 14)	37,500,000	3,750,000
Options exercisable at 30 cents each and expiring 3 years
from the date of issue (refer note 13 and 15b)	4,500,000	144,0001
		3,894,000

1The options given in consideration were valued using the Black Scholes valuation model using the following inputs:

Underlying share price at date of valuation	\$0.10
Option exercise price	\$0.30
Period to expiry	3 years
Volatility	87.5%
Risk free rate	1.95%

ACQUISITION OF SILVER MOUNTAIN MINING PTY LTD (Continued)

The net assets of the Silver Mountain Mining Pty Ltd group acquired by the Company on 7 December 2017 were:

Details	Net asset value A\$
Cash assets	36,079
Other receivables and prepaid expenses	24,075
Property, plant and equipment	3,810
Capitalised exploration acquisition costs	969,897
Trade and other payables	(68,690)
Loan	(85,447)
	879,724

The difference between the fair value of the consideration given by the Company, and the underlying net asset value of the SMM group as at the date of acquisition amounting to \$3,014,276 has been recognised in the Common Control Reserve (refer note 15c).

24. LOSS PER SHARE

Loss used in calculation of loss per share	\$(132,340)
Weighted average number of shares used in the calculation of loss per share	10,576,924
Basic and diluted loss per share	(1.3 cents)

Options to acquire ordinary shares granted by the Company and not exercised at the reporting date are included in the determination of diluted loss per share, to the extent that they are dilutive. There are 4,500,000 options on issue at 31 December 2017 that are not considered dilutive.

25. PARENT ENTITY INFORMATION

	Parent
	2017
	A\$
Assets
Current assets	1,083,287
Non-current assets1	1,365,428
Total Assets	2,448,715
Liabilities
Current liabilities	(274,577)
Non-current liabilities	-
Total Liabilities	274,577)
Equity
Issued capital	5,181,000
Reserves	144,000
Accumulated losses	(3,150,862)
Total Equity	2,174,138
Loss for the period1	(3,150,862)
Other comprehensive income	-
Total comprehensive loss for the period	(3,150,862)

1The Company has recognised a provision against the investment in subsidiary holdings to the extent that parent company net assets exceed those of the Group.

DIRECTORS' DECLARATION

The Directors of Eagle Mountain Mining Limited declare that:

• 1. The financial statements and notes are in accordance with the Corporations Act 2001 and:
• (a) give a true and fair view of the Consolidated Entity's financial position as at 31 December 2017 and of its performance as represented by the results of its operations and its cash flows for the period ended on that date; and
• (b) comply with Accounting Standard 134: Interim Financial Reporting, Corporations Regulations 2001 and other mandatory professional reporting requirements; and
• 1. 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.

Rick Crabb

Director

Dated at Perth this 18th day of January 2018