ELEVRA LITHIUM LIMITED — Interim / Quarterly Report 2015

Feb 19, 2015

SAYONA MINING LIMITED AND CONTROLLED ENTITIES

ABN 26 091 951 978

FINANCIAL REPORT

FOR THE HALF - YEAR ENDED 31 DECEMBER 2014

The information contained in this report is to be read in conjunction with the Company’s 2014 annual report and any announcements to be the market by during the half-year period ending 31 December 2014.

SAYONA MINING LIMITED AND CONTROLLED ENTITIES ABN 26 091 951 978

DIRECTORS’ REPORT

Your Directors present their report of the Company and its controlled entities for the half year ended 31 December 2014.

DIRECTORS

The names of the Company’s Directors in office during the half year or until the date of this report are set out below.

Dennis O’Neill Alan Buckler Paul Crawford James Brown

REVIEW OF OPERATIONS

The loss of the consolidated group after providing for income tax for the half year was $364,999 (2013: $271,521 loss).

During the period, the Company continued working through its restructuring plan with a view to restoring value to shareholders.

In December 2013 Sayona initiated legal proceedings in the High Court in London against Mantle Diamonds Plc for the recovery of USD $500,000 retained by Mantle as part of warranties and indemnities provisions of the Sale and Purchase agreement for their purchase of the Lerala Diamond mine.

On 24 September 2014 the Company settled its legal proceedings against Mantle Diamonds Limited. Agreement with Mantle and Kimberley Diamonds Limited provided a mutual release of claims by the parties and payment to Sayona of cash and scrip in Kimberley totalling US$340,000.

The Company is actively assessing projects on a worldwide basis with a view to acquiring an advanced exploration/development project to add to its portfolio of assets. During the period, Directors assessed the acquisition of a number of projects both in Australia and elsewhere.

During the first half of the year the, the Company entered into a heads of agreement with Freedom Minerals Pty Ltd, Great Sandy Pty Ltd and Kalamazoo Resources Pty Ltd (“Talga”). The parties entered into this agreement to record the basis on which they may enter into an Option Agreement in relation to iron ore rights within some of the tenements under the control of Talga. At the completion of due diligence procedures the Company paid to Talga a signing fee of $50,000 and $45,455 for the reimbursement of costs for a Native Title Heritage Survey. The company has therefore exercised its right under this heads of agreement and as a result entered into an option agreement with Talga.

Under the terms of the option agreement the company has been granted the option to acquire a 70% interest in the iron ore rights of the tenements controlled by Freedom Minerals Pty Ltd and Great Sandy Pty Ltd. The Company may only exercise its option under this agreement by performing the following:

• Complete a minimum ten (10) hole drilling programme of at least 1,000 meters anywhere within the tenements 45/3679, E45/3857, 45/4136 and 45/4137;

• Pay to Talga the sum of $599,000;

• Grant to Talga 25,000,000 ordinary share options which the holder may exercise at any time within three (3) years from grant date at an issue price of $0.025 per share.

Field work comprising drilling, sampling and analysis was completed late December. Assessment of the drilling results is currently being undertaken. At the date of this report the Company has not fulfilled its obligations in order to exercise its option to acquire the 70% interest in the iron ore rights.

SAYONA MINING LIMITED AND CONTROLLED ENTITIES ABN 26 091 951 978

DIRECTORS’ REPORT

SUBSEQUENT EVENTS

No material matters or circumstances have arisen since balance date, except for a continued decrease in the ASX quoted price of shares in Kimberley Diamonds Limited to approximately $0.095 at the date of signing this Report.

The non-adjusting subsequent event of a further impairment in the financial asset of $24,500 has not been included in the financial statements.

AUDITOR INDEPENDENCE

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is attached.

Signed in accordance with a resolution of the Directors.

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Dennis C. O’Neill Director Brisbane

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Paul A. Crawford Director

19 February 2015

Accountants, Advisors & Au d itors

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Hayes Knight Audit (Qld) Pty Ltd ABN 49 115 261 722 Registered Audit Company 299289 Level 2 3 , 10 Eagle Street, Brisbane Ql d 4000 GPO Bo x 1189, Brisba n e Qld 4001 T : +61 7 32292022 F : + 61 7 3229327 7 E : emai l @hayesknight q ld.com.au www.hayesknight.com.au

Auditor’s Independence Declaration Under Section 307C of the Corporations Act 2001

To the Directors of Sayona Mining Limited

I d eclare tha t , to the bes t of my kn o wledge an d belief, du r ing the hal f -year ende d 31 December 2 0 14 there h a ve been no contraven t ions of:

• i . the a u ditor inde p endence re q uirements as set out i n the Corp o rations Ac t 2001 in rel a tion to the review; an d

• i i . any a p plicable c o de of prof e ssional co n duct in rel a tion to the review.

T h is declara t ion is in r e spect of Sayona Mining Limite d and the e ntities it c o ntrolled d u ring the h a lf-year.

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Hayes Knight Audit (Qld) Pty Ltd

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A M Robertson Director

Date: 19 Fe b ruary 201 5

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A n independent Member of the Hayes Knight G roup and Morison Internation a l. L iability limited b y a scheme approved under P rofessional St a ndards Legisla t ion A ssociated Offi c es : Sydney | M elbourne | Ad e laide | Perth | D arwin | Auckla n d

SAYONA MINING LIMITED AND CONTROLLED ENTITIES ABN 26 091 951 978

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME for the half-year ended 31 December 2014

Revenue Administrative expenses Current period exploration & evaluation expenditure written-off Foreign exchange losses Loss on financial assets held for trading Loss before income tax Income tax expense Loss for the half-year Other comprehensive income Items that will be reclassified subsequently to profit or loss when specific conditions are met: Net exchange differences on translation of foreign controlled entities Items that will not be reclassified subsequently to profit or loss Total comprehensive income for the half-year Total comprehensive loss attributable to members Earnings per Share From continuing operations Basic earnings per share (cents per share) Diluted earnings per share (cents per share) Dividends per share (cents per share)	Note	Consolidated Group 31 December 31 December 2014 2013 $ $
	2 13 2 9 9	39,723 20,733 (161,090) (175,038) (201,962) (114,336) - (2,880) (41,670) -
		(364,999) (271,521) - -
		(364,999) (271,521)
		- (3,214)
		- (3,214) - -
		- (3,214)
		(364,999) (274,735)
		(0.09) (0.07) (0.09) (0.07)
		- -

The accompanying notes form part of these financial statements.

SAYONA MINING LIMITED AND CONTROLLED ENTITIES ABN 26 091 951 978

CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December 2014

Note	Consolidated Group 31 December 30 June 2014 2014 $ $
ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables 3 Other financial assets 4 Other assets Total Current Assets NON-CURRENT ASSETS Property, plant and equipment Total Non-Current Assets TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables 5 Borrowings 6 Total Current Liabilities TOTAL LIABILITIES NET ASSETS / DEFICIENCY EQUITY Issued capital 7 Reserves Accumulated losses TOTAL EQUITY	983,457 1,201,357 27,424 367,625 117,693 - 21,397 5,164
	1,149,971 1,574,146
	3,197 4,031
	3,197 4,031
	1,153,168 1,578,177
	129,136 103,896 - 115,250
	129,136 219,146
	129,136 219,146
	1,024,032 1,359,031
	50,069,511 50,039,511 (4,527,230) (4,527,230) (44,518,249) (44,153,250)
	1,024,032 1,359,031

The accompanying notes form part of these financial statements.

SAYONA MINING LIMITED AND CONTROLLED ENTITIES

ABN 26 091 951 978

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the half year-ended 31 December 2014

Note	Issued Capital Accumulated Losses Foreign Currency Translation Reserve Option Reserve Total $ $ $ $ $
Balance at 1 July 2013 Loss attributable to members of entity Other comprehensive income for period Total comprehensive income (loss) Reserve transferred to retained earnings Shares issued during the period 7 Transaction Costs 7 Balance at 31 December 2013 Balance at 1 July 2014 Loss attributable to members of entity Other comprehensive income for period Total comprehensive income (loss) Reserve transferred to retained earnings Shares issued during the period 7 Transaction Costs Balance at 31 December 2014	48,358,511 (44,528,397) (4,549,793) 260,999 (458,680) - (271,521) - - (271,521) - - (3,214) - (3,214)
	- (271,521) (3,214) - (274,735) - 260,999 - (260,999) - 1,718,500 - - - 1,718,500 (37,500) - - - (37,500)
	50,039,511 (44,538,919) (4,553,007) - 947,585
	50,039,511 (44,153,250) (4,527,230) - 1,359,031 - (364,999) - - (364,999) - - - - -
	- (364,999) - - (364,999) - - - - - 30,000 - - - 30,000 - - - - -
	50,069,511 (44,518,249) (4,527,230) - 1,024,032

The accompanying notes form part of these financial statements.

SAYONA MINING LIMITED AND CONTROLLED ENTITIES ABN 26 091 951 978

CONSOLIDATED STATEMENT OF CASH FLOWS for the half-year ending 31 December 2014

	Consolidated Group 31 December 31 December 2014 2013 $ $
CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees Interest received Net cash provided by (used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment Proceeds from settlement of deferred sale consideration 3 Net cash provided by (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Repayment of borrowings Net cash provided by (used in) financing activities Net increase/(decrease) in cash held Cash at 1 July Effect of exchange rates on cash holdings in foreign currencies Cash at 31 December	(344,174) (454,996) 13,276 20,733
	(330,898) (434,263)
	- (5,172) 227,660 -
	227,660 (5,172)
	(127,652) (30,000)
	(127,652) (30,000)
	(230,890) (469,435) 1,201,357 1,867,893 12,990 4
	983,457 1,398,462

The accompanying notes form part of these financial statements.

Notes to the Financial Statements for the half year-ended 31 December 2014

SAYONA MINING LIMITED AND CONTROLLED ENTITIES ABN 26 091 951 978

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation

The general purpose interim financial statements for the half-year reporting period ended 31 December 2014 have been prepared in accordance with requirements of the Corporations Act 2001 and Australian Accounting Standard AASB 134: Interim Financial Reporting. The Group is a forprofit entity for financial reporting purposes under Australian Accounting Standards.

This interim financial report is intended to provide users with an update on the latest annual financial statements of the Company and its controlled entities ("Group). As such it does not contain information that represents relatively insignificant changes occurring during the half-year within the Group It is therefore recommended that this financial report be read in conjunction with the annual financial statements of the Group for the year ended 30 June 2014, together with any public announcements made during the following half-year.

These interim financial statements were authorised for issue on 19 February 2015.

Going Concern

As at 31 December 2014 the company had cash reserves of $983,457. The Board believes that based upon current spending forecasts there is adequate funding to provide for the Group's requirements to complete its strategic plan and in any case beyond 12 months of operations from the date of signing this report.

Accounting Policies

The same accounting policies and methods of computation have been followed in this interim financial report as were applied in the most recent annual financial statements, subject to the following changes:

New and Revised Accounting Requirements Applicable to the Current Half-year Reporting Period

Interpretation 21: Levies is mandatorily applicable for annual financial reporting periods commencing 1 January 2014 and became applicable to the Group for the first time in the current half-year reporting period 1 July 2014 to 31 December 2014. The Interpretation clarifies that a liability to pay a government levy should be recognised when the activity triggering the payment has occurred. This change did not impact on the amounts reported in the group's financial statements.

NOTE 2: RESULT FOR THE PERIOD The following revenue and expense items are relevant in explaining the financial performance for the interim period: Revenue Interest received from other persons Foreign exchange gains Expenses Exploration expenditure expensed during period Impairment of financial assets Foreign exchange losses Depreciation	Half year ended 31 Dec 2014 Half year ended 31 Dec 2013 $ $
	13,276 20,733 26,447 -
	39,723 20,733
	201,962 114,336 41,670 - - 2,880 834 316

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SAYONA MINING LIMITED AND CONTROLLED ENTITIES ABN 26 091 951 978

Notes to the Financial Statements for the half year-ended 31 December 2014

NOTE 3: TRADE AND OTHER RECEIVABLES Current (unsecured): Deferred sale consideration (a) Other Debtors	31 December 2014 30 June 2014 $ $
	- 361,164 27,424 6,461
	27,424 367,625

• (a) On 24 September 2013, the Company entered into an Agreement with Mantle Diamonds Plc and Kimberley Diamonds Limited to settle the legal proceedings. The Agreement provided for a mutual release of claims by the parties and payments to the Company totalling US$340,000 by 1 October 2014.

The settlement consideration comprised US$200,000 cash and shares in Kimberley Diamonds to a value of US$140,000.

NOTE 4: FINANCIAL ASSETS	31 December 2014	30 June 2014
	$	$
Current:
Financial assets at fair value through profit and loss (a)	117,693	-
(a) These assets comprise shares in Kimberley Diamonds
Limited, received as part of settlement of the Company's
claims.
Shares are held for trading for the purpose of short-term
profit taking. Changes in fair value are included in the
statement of comprehensive statement.
NOTE 5: TRADE AND OTHER PAYABLES
Current:
Trade creditors	116,736	25,896
Sundry creditors and accrued expenses	12,400	15,000
Amounts payable to related parties	-	63,000
Total trade & other payables (unsecured)	129,136	103,896
NOTE 6: BORROWINGS
Current:
Unsecured loan Flamenco (Pty) Ltd - expense funding	-	30,270
Secured loan Flamenco (Pty) Ltd - working capital (a)	-	84,980
	-	115,250

(a) Flamenco (Pty) Ltd loan security

Under a Deed of Loan and Security between Sayona Mining Limited (formerly DiamonEx Limited) and Flamenco (Pty) Ltd, Flamenco provided a working capital loan of US$80,000, secured against all monies owing to the Company from Mantle Diamonds Plc. Loans were repaid in October 2014 following settlement of the deferred sale proceeds with Mantle Diamonds.

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SAYONA MINING LIMITED AND CONTROLLED ENTITIES ABN 26 091 951 978

Notes to the Financial Statements for the half year-ended 31 December 2014

NOTE 7: ISSUED CAPITAL 411,534,809 (2013:405,534,809) fully paid ordinary shares Ordinary shares Balance at the beginning of the reporting period Shares issued during the year: Issued 24 December 2014 at $0.005 each to settle director fees outstanding from prior years Transaction costs relating to share issues Balance at reporting date Balance at the beginning of the reporting period Shares issued during the year: 24 December 2014 Shares consolidation undertaken during the period: 5 November 2013 Balance at reporting date	31 December 2014 30 June 2014 $ $
	50,069,511 50,039,511
	50,039,511 48,358,511 1,718,500 30,000 - - (37,500)
	50,069,511 50,039,511
	31 December 2014 30 June 2014 No. No.
	405,534,809 884,450,924 859,250,000 6,000,000 - (1,338,166,115)
	411,534,809 405,534,809

• (a) In November 2013, the Company completed a share consolidation. The consolidation involved the conversion of every 4.3 fully paid ordinary shares into one fully paid ordinary share.

NOTE 8: RELATED PARTY TRANSACTIONS

Related party transactions are on normal commercial terms and conditions, no more favourable than those available to other parties unless otherwise stated. In the current period, arrangements with related parties continue to be in place, consistent with those reported at 30 June 2014.

NOTE 9: EARNINGS PER SHARE The earnings figures used in the calculation of both the basic EPS and the dilutive EPS are the same. Weighted average number of ordinary shares outstanding during the year used in the calculation of basic EPS Weighted average number of dilutive securities outstanding Weighted average number of ordinary shares and potential ordinary shares outstanding during the period used in the calculation of diluted EPS	Half year ended 31 Dec 2014 Half year ended 31 Dec 2013 No. No.
	405,763,070 381,314,069 - -
	405,763,070 381,314,069

As discussed in Note 7, the company completed a share consolidation in November 2013, In accordance with Australian Accounting Standards, the weighted average number of shares issued during the period have been adjusted to calculate the EPS for the current and corresponding period.

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SAYONA MINING LIMITED AND CONTROLLED ENTITIES ABN 26 091 951 978

Notes to the Financial Statements for the half year-ended 31 December 2014

NOTE 10: DIVIDENDS

No dividends were declared or paid during the period.

NOTE 11: CONTINGENT LIABILITIES

There were no material contingent liabilities at the end of the reporting period.

NOTE 12: EVENTS AFTER THE END OF THE INTERIM PERIOD

No material matters or circumstances have arisen since balance date, except for a continued decrease in the ASX quoted price of shares in Kimberley Diamonds Limited to approximately $0.095 at the date of signing this Report.

The non-adjusting subsequent event of a further impairment in the available for sale financial asset of $24,500 has not been included in the financial statements.

NOTE 13: JOINT ARRANGEMENTS

During the first half of the year the, the Company entered into a heads of agreement with Freedom Minerals Pty Ltd, Great Sandy Pty Ltd and Kalamazoo Resources Pty Ltd (“Talga”). The parties entered into this agreement to record the basis on which they may enter into an Option Agreement in relation to iron ore rights within some of the tenements under the control of Talga. At the completion of due diligence procedures the company paid to Talga a signing fee of $50,000 and $45,455 for the reimbursement of costs for a Native Title Heritage Survey. The company has therefore exercised its right under this heads of agreement and as a result entered into an option agreement with Talga.

Under the terms of the option agreement the company has been granted the option to acquire a 70% interest in the iron ore rights of the tenements controlled by Freedom Minerals Pty Ltd and Great Sandy Pty Ltd. The company may only exercise its option under this agreement by completing the following:

• Complete a minimum ten (10) hole drilling programme of at least 1,000 meters anywhere within the tenements 45/3679, E45/3857, 45/4136 and 45/4137;

• Pay to Talga the sum of $599,000;

• Grant to Talga 25,000,000 ordinary share options which the holder may exercise at any time within three (3) years from grant date at an issue price of $0.025 per share.

During the current period, $201,962 has been expended on the joint operation.

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SAYONA MINING LIMITED AND CONTROLLED ENTITIES ABN 26 091 951 978

Notes to the Financial Statements for the half year-ended 31 December 2014

NOTE 14: FAIR VALUE MEASUREMENT

The group measures and recognises the following assets at fair value on a recurring basis after initial recognition:

• available-for-sale financial assets

The group does not subsequently measure any remaining assets at fair value on a non-recurring basis or any liabilities at fair value on a recurring or non-recurring basis.

(a) Fair Value Hierarchy

AASB 13: Fair Value Measurement 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	Level 2	Level 3
Measurements based on quoted	Measurements based on inputs	Measurements based on
prices (unadjusted) in active	other than quoted prices	unobservable inputs for the
markets for identical assets or	included in Level 1 that are	asset or liability.
liabilities that the entity can access	observable for the asset or
at the measurement date.	liability, either directly or
	indirectly.

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.

Valuation techniques

The group 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 group 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 group 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.

The following tables provide the fair values of the group’s assets and liabilities measured and recognised on a recurring basis after initial recognition and their categorisation within the fair value hierarchy:

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SAYONA MINING LIMITED AND CONTROLLED ENTITIES ABN 26 091 951 978

Notes to the Financial Statements for the half year-ended 31 December 2014

NOTE 14: FAIR VALUE MEASUREMENT (continued)

Recurring fair value measurements 31 December 2014 Financial assets (refer Note 4) - Shares in listed companies Total financial assets recognised at fair value on a recurring basis Recurring fair value measurements 30 June 2014 Financial assets (refer Note 4) - Shares in listed companies Total financial assets recognised at fair value on a recurring basis	Level 1 Level 2 Level 3 Total $ $ $ $
	117,693 - - 117,693
	117,693 - - 117,693
	Level 1 Level 2 Level 3 Total $ $ $ $
	- - - -
	- - - -

There were no transfers between Level 1 and Level 2 or Level 3 for assets measured at fair value on a recurring basis during the reporting period (30 June 2014: Nil transfers).

(b) Disclosed Fair Value Measurements

The following table provides the level of the fair value hierarchy within which the disclosed fair value measurements are categorised in their entirety and a description of the valuation technique and inputs used:

		Fair Value
Description	Note	Hierarchy	Valuation Technique(s)	Inputs Used
		Level
Assets
Shares in listed companies	4	1	Closing quoted bid prices	Closing quoted bid prices

• (c) Recurring and Non-recurring Fair Value Measurement Amounts and the Level of the Fair Value Hierarchy within which the Fair Value Measurements Are Categorised

Recurring fair value measurements Available for sale financial assets	Fair Value Measurements at 31 December 2014 Using: Quoted Prices in Active Markets for Identical Assets Significant Observable Inputs Other than Level 1 Inputs Significant Unobservable Inputs $ $ $ (Level 1) (Level 2) (Level 3) 117,693 - -

There were no available for sale financial assets at 30 June 2014.

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SAYONA MINING LIMITED AND CONTROLLED ENTITIES ABN 26 091 951 978

Notes to the Financial Statements for the half year-ended 31 December 2014

NOTE 14: SEGMENT REPORTING

The economic entity has operated internationally, in the mineral exploration industry. Segment reporting is based on the whole of entity. Geographical segment information is as follows:

REVENUE Revenue Total segment revenue RESULT Loss from ordinary activities before income tax expense ASSETS Segment assets LIABILITIES Segment liabilities	Australia USA Economic Entity Half Year ended 31 December Half Year ended 31 December Half Year ended 31 December 2014 2013 2014 2013 2014 2013 $ $ $ $ $ $
	39,723 20,733 - - 39,723 20,733
	39,723 20,733 - - 39,723 20,733
	(364,999) (271,425) - (96) (364,999) (271,521)
	December June December June December June 2014 2014 2014 2014 2014 2014 $ $ $ $ $ $
	1,153,168 1,578,177 - - 1,153,168 1,578,177
	129,136 219,146 - - 129,136 219,146

There were no transfers between segments reflected in the revenues, expenses or result above. The pricing of any intersegment transactions is based on market values.

Segment accounting policies are consistent with the economic entity.

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SAYONA MINING LIMITED AND CONTROLLED ENTITIES ABN 26 091 951 978

DIRECTORS’ DECLARATION

The directors of the company declare that:

1. The attached financial statements and notes are in accordance with the Corporations Act 2001 including:

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

3. (b) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2014 and of its performance for the half-year ended on that date.

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

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

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Dennis C. O’Neill Director

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Paul Crawford Director

Dated this: 19th day of February 2015

Hayes Knight Audit (Qld) Pty Ltd ABN 49 115 261 722 Registered Audit Company 299289 Level 2 3 , 10 Eagle Street, Brisbane Ql d 4000 GPO Bo x 1189, Brisba n e Qld 4001 T : +61 7 32292022 F : + 61 7 3229327 7 E : emai l @hayesknight q ld.com.au www.hayesknight.com.au

Accountants, Advisors & Au d itors

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INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS OF SAYONA MINING LIMITED

Report on the Half-Year Financial Report

W e have rev i ewed the a c companyin g half-year financial re p ort of Say o na Mining Limited, w h ich comprises the consolidated sta t ement of fi n ancial posi t ion as at 31 December 2 014, the c o nsolidated statement o f profit o r loss and other com p rehensive i n come, co n solidated st a tement of c hanges in e q uity and co n solidated s t atement of c ash flows f o r the half-y e ar ended o n that date, notes co m prising a s ummary o f significant accountin g policies a nd other e x planatory i n formation, a nd the direc t ors’ declar a tion.

Directors’ Responsibility for the Half-Year Financial Report

T h e directors of Sayona M ining Li m ited are res p onsible for the prepar a tion of the half-year fi n ancial rep o rt that giv e s a true a n d fair view in accorda n ce with A u stralian A c counting S t andards (in c luding Aust r alian Acco u nting Inter p retations) a n d the Corp o rations Act 2001 and f o r such inter n al control as the direct o rs determin e is necessar y to enable t he preparat i on of the h a lf-year fina n cial report t hat gives a t rue and fair view and is free from m aterial misstatement, w h ether due t o fraud or er r or.

Auditor’s Responsibility

O u r responsi b ility is to e xpress a c o nclusion on the half-year financial report based on our r e view. We conducted our review in accordance with Auditing S tandard on Review E n gagements A SRE 2410 : Review of a Financial R eport Perf o rmed by th e Independe n t Auditor o f the Entity, in order to state whet h er, on the basis of th e procedure s described, we have b e come awar e of any ma t ter that ma k es us belie v e that the half-year fin a ncial report is not in a c cordance w i th the Cor p orations A c t 2001 incl u ding: givin g a true and fair view o f Sayona M ining Limit e d’s financi a l position a s at 31 Dec e mber 2014 and its perf o rmance for the halfy e ar ended on that date, a n d complyin g with Acco u nting Stan d ard AASB 1 3 4: Interim F inancial R e porting an d the Corpo r ations Reg u lations 200 1 . As the auditor of Sa y ona Mining Limited, ASRE 2410 r e quires that we comply with the et h ical require m ents relev a nt to the au d it of the a n nual financ i al report.

A review of a half-year financial re p ort consist s of makin g enquiries, primarily o f persons r e sponsible for financial a n d accounti n g matters, a n d applying analytical a n d review pr o cedures. A review is s u bstantially less in scop e than an a u dit conduct e d in accor d ance with A ustralian A u diting Sta n dards and c onsequentl y does not enable us to obtain assu r ance that w e would b e come awar e of all signi f icant matte r s that might be identifie d in an audi t . Accordingly, we do n o t express a n audit opini o n.

Independence

I n conductin g our revie w , we have complied w ith the in d ependence requiremen t s of the C o rporations Act 2001 . We confir m that the independe n ce declarat i on require d by the C o rporations Act 2001 , p r ovided to t h e directors of Sayona M ining Limi t ed as attac h ed to the d i rector’s rep o rt, has not changed as a t the time of this auditor’s review rep o rt.

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A n independent Member of the Hayes Knight G roup and Morison Internation a l. L iability limited b y a scheme approved under P rofessional St a ndards Legisla t ion A ssociated Offi c es: Sydney | Melbourne | Adelaide | Perth | Darwin | Auckland

INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS OF SAYONA MINING LIMITED (CONTINUED)

Conclusion

Based on our review which, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Sayona Mining Limited is not in accordance with the Corporations Act 2001 including:

• (i) giving a true and fair view of Sayona Mining Limited’s financial position as at 31 December 2014 and of its performance for the half-year ended on that date; and

• (ii) complying with AASB 134: Interim Financial Reporting and the Corporations Regulations 2001 .

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Hayes Knight Audit (Qld) Pty Ltd

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A M Robertson Director

Level 23, 10 Eagle Street, Brisbane, QLD, 4000

Date: 19 February, 2015