ELEVRA LITHIUM LIMITED — Interim / Quarterly Report 2019

Mar 14, 2019

SAYONA MINING LIMITED AND CONTROLLED ENTITIES

ABN 26 091 951 978

FINANCIAL REPORT

FOR THE HALF YEAR ENDED

31 DECEMBER 2018

The information contained in this report is to be read in conjunction with the Company’s 2018 Annual Report and any announcements made to the market during the half year ended 31 December 2018.

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 2018.

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 $1,149,203 (2017: $1,172,140).

AUTHIER LITHIUM PROJECT, CANADA

The Company’s primary focus during the half-year has been on completing work required to commence the development of the project, including the definitive feasibility study, community consultation and permitting. Authier is a near-term development project and cash-flow generation opportunity. The Company believes it will create significant share value-uplift potential for shareholders as the project advances towards development.

Authier is a hard rock spodumene lithium deposit scheduled for development as an open cut mine, initially producing a 6% spodumene concentrate. Production is planned to commence in 2020.

Definitive Feasibility Study

On 24 September 2018, the Company announced a positive DFS for the flagship Authier project. The DFS confirmed the project’s potential to deliver a profitable and sustainable new lithium mine that will provide new jobs, investment and other benefits for all stakeholders.

Key findings of the DFS include:

• Pre-tax net present value (NPV) of C$184.8m (AUD $194.0m), pre-tax internal rate of return (IRR) of 33.7% and estimated payback of 2.6 years

• Annual average concentrate production of 87,400 tonnes at 6% Li2O;

• Average annual revenue of C$80 million;

• Mine gate cash costs of C$416/t and FOB Port cash costs of C$482/t (US$366/t);

• Initial capital expenditure of C$89.9 million;

• Updated Ore Reserve of 12.10 Mt @ 1.00% Li2O (Proven Reserve 6.10Mt @ 0.99% Li2O and Probable Reserve 6.00 Mt @ 1.02% Li2O) delivers a mine life of 18 years.

Permitting Process

The Authier project has been designed to access the permitting route under Section 22 of the Quebec Environmental Quality Act. This requires the project to remain under a maximum production threshold of 2,000 tonnes per day (tpd). Under this mechanism, environmental studies and public consultation is undertaken by the Company in accordance with Mining Act specifications.

On 20 December 2018, Sayona lodged a mining lease application for the Authier deposit. A mining lease grants rights of access and use of the surface for mining purposes. Supporting documentation included:

• rehabilitation plan;

SAYONA MINING LIMITED AND CONTROLLED ENTITIES ABN 26 091 951 978

DIRECTORS’ REPORT

• definitive feasibility study; and

• certified report describing the nature and extent of the deposit and its probable value.

Sayona also filed an application to the Ministry of the Environment for initial overburden stripping and the construction of an overburden stockpile, water management facilities, an access road and other minor related infrastructure. The application included an updated Environmental and Social Evaluation (ESE) study. The update of the ESE reflects the company’s commitment to comply with, or exceed, all Provincial and municipal regulatory requirements for the mine development. This application triggers the review process of the Authier project within the Ministry of the Environment.

Subsequent to the end of the period, the Quebec Environment Minister advised that the Authier project would be subject to the environmental impact assessment and review procedures under the BAPE (bureau d'audiences publiques en environnement). This is an extended permitting process. The Company continues reviewing options to take the project forward to development.

Community Consultation

On 18 August 2018, the Company ended its three month consultation period. Sayona held three public consultation sessions with different stakeholders located near the Project (La Motte, Pikogan and Amos). The purpose of these meetings was to present the results of the environmental studies, the progress of the project and to take into account the concerns of people in relation to the project. Communication channels continue to be maintained with stakeholders to ensure full transparency with local partners.

During the period, Sayona opened an office in La Motte, which is north-west of Montreal and the seat of the municipal council region where Authier is located. This will become the new head office for the Sayona team in Quebec. The office is also open to the community to access information about the Authier project.

Subsequent to period end, the company also announced the appointment of Serge Rouillier as Manager for Sustainable Development. Serge is an experienced executive with a sound background in the mining industry.

Marketing and Finance

The Company’s strategy is to initially develop Authier and sell lithium concentrate while it completes the test work and feasibility study for a downstream processing facility producing lithium carbonate and/or hydroxide. The strategy is analogous to other lithium developers in Quebec including Nemaska and North American Lithium.

During the period, the Company has actively engaged with a number of potential product off-takers. Strong interest has been received from Chinese concentrate converters interested in purchasing Authier concentrates or value-adding in country. The Company has undertaken marketing roadshows in China and Asia. The Company plans on building on this work to secure binding off-take contracts for the Authier production.

In addition, the Company is engaged with a number of parties interested in financing the Authier project. Potential financing strategies include royalties, concentrate pre-sales and convertible notes. The objective of the financing strategy it to minimise dilution to shareholders.

Tansim Exploration Project

Tansim is situated 82 kilometres south-west of the Authier project in Quebec. It comprises 65 mineral claims of approximately 12,000 hectares, and is prospective for lithium, tantalum and beryllium.

During the period large spodumene crystals were identified in an initial reconnaissance visit to the site. Mapping and sampling programs were undertaken to define drill targets.

SAYONA MINING LIMITED AND CONTROLLED ENTITIES ABN 26 091 951 978

DIRECTORS’ REPORT

Selective sampling was undertaken at priority prospects, Viau-Dallaire, Viau and Gauthier with a total of 21 samples taken over exposed pegmatites.

Encouraging assay results include:

• Viau-Dallaire : 14 grab selective samples ranging from 0.96% Li20 to 2.47% Li20

• Viau: 4 grab selective samples ranging from 0.22% Li20 to 4.5% Li20

• Gauthier: 3 grab selective samples that did not return significant Li20% grade

In all cases high-grade lithium results were associated with albite-spodumene pegmatite with coarse grain spodumene crystals up to 30 centimetres in length. The assays reported were all very low in iron content (averaging 0.63%).

A drilling program to follow up identified targets is scheduled to commence in February 2019. Exploration is being closely co-ordinated with the local First Nations Group, Long Point First Nation, who will provide support services for work programs.

WESTERN AUSTRALIAN PROJECTS

Western Australia is a premium lithium province with world-class, high-grade lithium deposits associated with rare metal pegmatites.

Sayona’s leases In the Pilbara region cover some 1,898km[2] and are centred in the world class Pilgangoora lithium district. Exploration during the half-year included RC drilling at the Mallina project, where three zones of spodumene pegmatite were targeted. Other work included the collection of 260 rock and 619 soil geochemical samples during reconnaissance over regional tenure as well as detailed soil geochemistry and pegmatite mapping at Tabba Tabba.

At the Tabba Tabba project, new pegmatites were identified in the north of the project area. These are tantalum rich and returned up to 352ppm Li2O and 581ppm tantalum (not same sample).

At Moolyella pegmatite in the southern project area returned up to 1.40% Li2O.

These encouraging results require further systematic exploration.

Great Sandy Option

In December 2018, the Company made the final option payment to Great Sandy Pty Ltd (“Great Sandy”) to acquire an 80% interest in a package of 6 tenements covering 694 km[2] in the Pilgangoora lithium district of Western Australia.

In January 2019, the Company entered into an agreement with Great Sandy to acquire the remaining 20% interest for $100,000. Settlement was made through the issue of new shares in Sayona. The Company now holds a 100% interest in the tenement package.

Corporate

At balance date, assets totalled $22,421,220, which included a cash balance of $4,495,764.

SUBSEQUENT EVENTS

In addition to advancing its Australian and Canadian exploration projects, the following matters or circumstances have arisen since balance date:

1. On 14 January 2019, the Company entered into an agreement to acquire the remaining 20% of the tenure acquired under the option to purchase agreement with Great Sandy Pty Ltd. Sayona holds a 100% unencumbered interest in the tenement package.

2. On 6 March 2019, the Quebec Environment Minister announced that the Authier project would be subject to the environmental impact assessment and review procedures under the BAPE

SAYONA MINING LIMITED AND CONTROLLED ENTITIES ABN 26 091 951 978

DIRECTORS’ REPORT

(bureau d'audiences publiques en environnement). This is an extended permitting process. The Company continues reviewing options to take the project forward to development.

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

Paul A. Crawford Director

Brisbane 14 March 2019

Reference to Previous ASX Releases

This report refers to the following previous ASX releases:

• Authier Project Expanded JORC Ore Reserves & Resources - 24 September 2018; and

• Positive Authier Definitive Feasibility Study - 24 September 2018.

The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and all material assumptions and technical parameters continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcements.

Forward Looking Statements

This document may contain certain forward looking statements. Such statements are only predictions, based on certain assumptions and involve known and unknown risks, uncertainties and other factors, many of which are beyond Sayona Limited’s control. Actual events or results may differ materially from the events or results expected or implied in any forward looking statement. The inclusion of such statements should not be regarded as a representation, warranty or prediction with respect to the accuracy of the underlying assumptions or that any forward looking statements will be or are likely to be fulfilled. Sayona Mining Limited undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this presentation (subject to securities exchange disclosure requirements). The information in this presentation does not take into account the objectives, financial situation or particular needs of any person. Nothing contained in this presentation constitutes investment, legal, tax or other advice.

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

To the Directors of Sayona Mining Limited

I declare that, to the best of my knowledge and belief, during the half-year ended 31 December 2018 there have been no contraventions of:

• i. the auditor independence requirements as set out in the Corporations Act 2001 in relation to the review; and

• ii. any applicable code of professional conduct in relation to the review.

This declaration is in respect of Sayona Mining Limited and the entities it controlled during the half year.

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Nexia Brisbane Audit Pty Ltd

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N D Bamford Director

Date: 14 March 2019

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SAYONA MINING LIMITED AND CONTROLLED ENTITIES

ABN 26 091 951 978

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 31 DECEMBER 2018

Note	31 December 31 December 2018 2017 $ $ Consolidated Group
Revenue and other income 2 Administrative expenses Current period exploration & evaluation expenditure written-off 2 Employee benefit expense Occupancy expenses Loss before income tax Income tax expense Loss for the period Other comprehensive income: 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) 9 Diluted earnings per share (cents per share) 9 Dividends per share (cents per share)	90,329 25,740 (621,602) (622,234) (56,752) (85,170) (513,774) (459,609) (47,404) (30,867)
	(1,149,203) (1,172,140) - -
	(1,149,203) (1,172,140) (32,797) 122,793
	(32,797) 122,793
	(1,182,000) (1,049,347)
	(0.07) (0.11) (0.07) (0.11)
	- -

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 2018

Note	31 December 30 June 2018 2018 $ $ Consolidated Group
ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables Other assets 3 Total Current Assets NON-CURRENT ASSETS Property, plant and equipment Exploration and evaluation asset 4 Total Non-Current Assets TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables 5 Provisions Total Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 6 Reserves Accumulated losses TOTAL EQUITY	4,495,764 10,275,738 331,234 484,445 103,071 175,134
	4,930,069 10,935,317
	70,005 5,518 17,421,146 13,319,187
	17,491,151 13,324,705
	22,421,220 24,260,022
	909,033 1,531,489 39,877 47,811
	948,910 1,579,300
	948,910 1,579,300
	21,472,310 22,680,722
	79,157,089 79,183,501 (52,071) (19,274) (57,632,708) (56,483,505)
	21,472,310 22,680,722

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 2018

Consolidated Group Note	Issued Capital Accumulated Losses Foreign Currency Translation Reserve Option Reserve Total $ $ $ $ $
Balance at 1 July 2017 63,165,259 (54,177,564) (125,752) - 8,861,943 Loss for the period - (1,172,140) - - (1,172,140) Other comprehensive income for the period - - 122,793 - 122,793 Total comprehensive income/(loss) for the period - (1,172,140) 122,793 - (1,049,347) Transactions with owners in their capacity as owners and other transfers Shares issued during the period 6 5,074,101 - - - 5,074,101 Transaction costs 6 (536,270) - - - (536,270) Share based payments/transactions 6 240,000 - - 22,522 262,522 Total transactions with owners 4,777,831 - - 22,522 4,800,353 Balance at 31 December 2017 67,943,090 (55,349,704) (2,959) 22,522 12,612,949 Balance at 1 July 2018 79,183,501 (56,483,505) (19,274) - 22,680,722 Loss for the period - (1,149,203) - - (1,149,203) Other comprehensive income/(loss) - - (32,797) - (32,797) - (1,149,203) (32,797) - (1,182,000) Transactions with owners in their capacity as owners and other transfers Shares issued during the period 6 16 - - - 16 Transaction costs 6 (38,928) - - - (38,928) Share based payments/transactions 6 12,500 - - - 12,500 Total transactions with owners (26,412) - - - (26,412) Balance at 31 December 2018 79,157,089 (57,632,708) (52,071) - 21,472,310 Total comprehensive income/(loss) for the period	63,165,259 (54,177,564) (125,752) - 8,861,943 - (1,172,140) - - (1,172,140) - - 122,793 - 122,793
	- (1,172,140) 122,793 - (1,049,347)
	(26,412) - - - (26,412)
	79,157,089 (57,632,708) (52,071) - 21,472,310

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 ENDED 31 DECEMBER 2018

	31 December 31 December 2018 2017 $ $ Consolidated Group
CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees Interest received Sale of geological information Insurance refunds Net cash provided by (used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment Capitalised exploration expenditure Net cash provided by (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares Costs associated with shares & option issues 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	(1,791,132) (1,105,864) 82,969 13,240 - 12,500 7,360 -
	(1,700,803) (1,080,124)
	(67,130) (2,339) (3,973,715) (1,219,126)
	(4,040,845) (1,221,465)
	16 5,074,101 (38,928) (536,270)
	(38,912) 4,537,831
	(5,780,560) 2,236,242 10,275,738 1,216,054 586 (187)
	4,495,764 3,452,109

The accompanying notes form part of these financial statements.

SAYONA MINING LIMITED AND CONTROLLED ENTITIES ABN 26 091 951 978

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2018

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation

These general purpose interim financial statements for the half year reporting period ended 31 December 2018 have been prepared in accordance with requirements of the Corporations Act 2001 and Australian Accounting Standard AASB 134: Interim Financial Reporting. Sayona Mining Limited ("the Company") is a for-profit 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 ("the 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 2018, together with any public announcements made during the following half year.

These interim financial statements were authorised for issue on 14 March 2019.

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.

The Company has considered the implications of new or amended Accounting Standards, but determined that their application to the financial statements either is not relevant or not material.

NOTE 2: RESULT FOR THE PERIOD Revenue Interest received from other persons Sale of geological information Insurance refunds Expenses Exploration expenditure expensed during period Foreign exchange loss Depreciation NOTE 3: OTHER ASSETS Current: Deposits Prepayments The following revenue and expense items are relevant in explaining the financial performance for the interim period:	Half Year Ended 31 Dec 2018 Half Year Ended 31 Dec 2017 $ $
	82,969 13,240 - 12,500 7,360 -
	90,329 25,740
	56,752 85,170 1,141 11,039 1,983 2,966
	31 December 2018 30 June 2018 $ $
	2,184 2,154 100,887 172,980
	103,071 175,134

SAYONA MINING LIMITED AND CONTROLLED ENTITIES

ABN 26 091 951 978

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2018

NOTE 4: EXPLORATION AND EVALUATION ASSET Exploration and evaluation phase - company interest 100% Exploration and evaluation phase - subject to joint operation Opening balance - at cost Capitalised exploration expenditure Carrying amount at 31 December 2018 Opening balance - at cost Capitalised exploration & evaluation expenditure Carrying amount at 31 December 2018 Exploration and evaluation expenditure carried forward in respect of areas of interest are: (b) Movement in exploration and evaluation expenditure: (a) Movement in exploration and evaluation expenditure:	31 December 2018 30 June 2018 $ $
	16,229,431 12,712,550 1,191,715 606,637
	17,421,146 13,319,187
	Non-Joint Operation
	12,712,550 7,697,147 3,516,881 5,015,403
	16,229,431 12,712,550
	Subject toJoint Operation
	606,637 127,014 585,078 479,623
	1,191,715 606,637

Recoverability of the carrying amount of exploration assets is dependent on the successful exploration and development of projects, or alternatively, through the sale of the areas of interest.

Movements during the period on exploration & evaluation assets included $3,269,969 on the Authier Lithium project in Canada.

Commitments in respect of exploration projects are set out in Note 7. In addition, the Group has options for an interest in projects as set out below:

Sayona Lithium Pty Ltd

On 4 February 2016, the Company entered into a binding heads of agreement with Mr Bruce Legendre to acquire a 100% interest in Western Australian mineral tenement E59/2092.

The agreement provided for an initial payment of $15,000 and issue of 1,000,000 fully paid ordinary shares in the parent entity to acquire 80% of the tenement with a further 3 year option to acquire the remaining 20% for $100,000.

The Group holds an 80% interest in the project at balance date. Under the agreement, the vendor is entitled to receive a 1% gross production royalty and is entitled to explore for and develop other non-lithium commodity within the Tenement during the option period.

On 4 February 2017, the Company entered into an option agreement with Great Sandy Pty Ltd to acquire a number of tenements in the Pilgangoora lithium district of Western Australia.

The option provides for the Company to acquire an 80% interest in all the tenements by making staged payments in cash or shares, at Great Sandy’s election, of $300,000 within 12 months and a further $300,000 within 24 months of the agreement date. The Agreement also provides for a free carried interest of Grant Sandy up to decision to mine. Great Sandy can elect to convert the 20% interest to a 2% gross smelter royalty.

SAYONA MINING LIMITED AND CONTROLLED ENTITIES

ABN 26 091 951 978

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2018

NOTE 4: EXPLORATION AND EVALUATION ASSET (CONT)

On 19 December 2017, the Group exercised its option and made the initial $300,000 payment under the agreement. Of this, $80,000 was settled through the issue of 1,869,159 ordinary shares.

On 18 December 2018, the Group exercised its option and made the second $300,000 payment under the agreement.

Sayona Quebec Inc.

On 16 March 2017, the Company entered into an option-to-purchase agreement to acquire a tenement to the east of the company's Authier project in Quebec, Canada. The option to purchase CDC2187652 is exercisable anytime in the next five years, by making payments including CAD$25,000 on signing, $5,000 on each anniversary between years two to five, and CAD$75,000 on exercise of the option.

The Group held no interest in the project at 31 December 2018.

On 15 October 2018, the Group entered into an agreement to purchase four additional Mineral Claims 2472424, 2472425, 2480180, 2507910, to extend the Authier project. The agreement provided for an initial share issue of CAD$12,500 worth of shares, and a payment of CAD$12,500 in cash. On 27 November 2018, the Group paid AUD$12,500 through a share issue of 492,126 shares.

NOTE 5: TRADE AND OTHER PAYABLES

NOTE 5: TRADE AND OTHER PAYABLES Current: Trade creditors Sundry creditors and accrued expenses Total trade & other payables (unsecured) NOTE 6: ISSUED CAPITAL 1,716,024,391 (30 June: 1,715,532,065) fully paid ordinary shares (a) Ordinary shares Balance at the beginning of the reporting period Shares issued during the period: 27 November 2018, new issue of shares at $0.078 per share following the conversion of options. 27 November 2018, new issue of shares at $0.025 per share in part settlement of tenement acquisition. Balance at reporting date (b) Options on issue are as follows: (i) Unlisted employee and officer options Balance at beginning of reporting period Granted during the period Exercised during the period Expired during the period Balance at reporting date	31 December 2018 30 June 2018 $ $
	770,384 1,115,265 138,649 416,224
	909,033 1,531,489
	31 December 2018 30 June 2018 $ $
	79,157,089 79,183,501
	Half Year Ended 31 Dec 2018 Half Year Ended 31 Dec 2017 No. No.
	1,715,532,065 974,796,586 500,227,175 200 - 492,126 -
	1,716,024,391 1,475,023,761
	- - - 5,000,000 - (5,000,000) - -
	- -

SAYONA MINING LIMITED AND CONTROLLED ENTITIES

ABN 26 091 951 978

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2018

NOTE 7: COMMITMENTS

(a) Exploration commitments

The entity must meet minimum expenditure commitments on granted exploration tenements to maintain those tenements in good standing. If the relevant mineral tenement is relinquished the expenditure commitment also ceases.

The following commitments exist at balance date but have not been brought to account.

Not later than 1 year Between 1 year and 5 years Total commitment n brought to account.	31 December 2018 30 June 2018 $ $
	675,052 3,904 1,625,663 3,579
	2,300,715 7,483

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, there were no arrangements with related parties in place.

NOTE 9: EARNINGS PER SHARE

TE 9: EARNINGS PER SHARE The earnings figures used in the calculation of both the basic 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 2018 Half Year Ended 31 Dec 2017 No. No.
	1,715,623,038 1,111,456,393 - -
	1,715,623,038 1,111,456,393

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.

SAYONA MINING LIMITED AND CONTROLLED ENTITIES ABN 26 091 951 978

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2018

NOTE 12: EVENTS AFTER THE END OF THE INTERIM PERIOD

Key events since the end of the financial year have been:

On 24 January 2019, the Group exercised the final option payment to Great Sandy Pty Ltd, by issuing 5,235,602 shares ($100,000) to acquire the final 20% of the tenure. The Group now holds 100% unecumbered interest in the tenement package.

On 6 March 2019, the Quebec Environment Minister announced that the Authier project would be subject to the environmental impact assessment and review procedures under the BAPE (bureau d'audiences publiques en environnement). This is an extended permitting process. The Company continues reviewing options to take the project forward to development.

NOTE 13: SHARE BASED PAYMENTS

On 27 November 2018, the Company issued 492,126 shares (value $12,500) as part settlement of the acquistion of additional mining claims for the Authier project in Canada.

NOTE 14: OPERATING SEGMENTS

The Group 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	2018 2017 2018 2017 2018 2017 $ $ $ $ $ $ Australia Overseas Consolidated Group Half Year Ended 31 December Half Year Ended 31 December Half Year Ended 31 December
	88,729 25,430 1,600 310 90,329 25,740
	88,729 25,430 1,600 310 90,329 25,740
	(1,030,111) (1,163,366) (119,092) (8,774) (1,149,203) (1,172,140)
	7,432,879 5,350,609 14,988,341 7,848,710 22,421,220 13,199,319
	182,460 363,835 766,450 222,535 948,910 586,370

Segment accounting policies are consistent with the economic entity.

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 2018 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

Paul Crawford Director

Dated this: 14th day of March 2019

17

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

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Sayona Mining Limited, which comprises the consolidated condensed statement of financial position as at 31 December 2018, the consolidated condensed statement of profit or loss and other comprehensive income, consolidated condensed statement of changes in equity and consolidated condensed 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 directors’ declaration.

Directors’ Responsibility for the Half-Year Financial Report

The directors of Sayona Mining Limited are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards (including Australian Accounting Interpretations) 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 Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410: Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of Sayona Mining Limited’s financial position as at 31 December 2018 and its performance for the half-year ended on that date, and complying with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Sayona Mining Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and 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, provided to the directors of Sayona Mining Limited as attached to the director’s report, would be in the same terms if given to the directors as at the time of this auditor’s review report.

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

Conclusion

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 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 2018 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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Nexia Brisbane Audit Pty Ltd

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N D Bamford

Director

Level 28, 10 Eagle Street, Brisbane, QLD, 4000

Date: 14 March 2019

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