FENIX RESOURCES LTD — Interim / Quarterly Report 2016

Mar 13, 2016

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EMERGENT RESOURCES LIMITED

ABN 68 125 323 622

Interim Financial Report

For The Half-Year Ended 31 December 2015

Emergent Resources Limited ABN 68 125 323 622

Contents

	Page
Directors’ Report	3
Auditor’s Independence Declaration	5
Statement of Profit or Loss and Other Comprehensive Income	6
Statement of Financial Position	7
Statement of Changes in Equity	8
Statement of Cash Flows	9
Notes to the Interim Financial Statements	10
Directors’ Declaration	13
Independent Auditor’s Review Report	14

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Emergent Resources Limited ABN 68 125 323 622

Directors’ Report

Directors’ Report

The Directors present their interim financial report of Emergent Resources Limited for the half-year ended 31 December 2015.

Directors

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

Edmond Yao (Non-Executive Chairman) (Appointed 16 November 2015) Bevan Tarratt (Non-executive Director) (Appointed 11 August 2015) Jian-Hua Sang (Non-Executive Director) (Resigned as Chairman on 16 November 2015) Wolfgang Fischer (Non-Executive Director) (Resigned 11 August 2015) Sai Kit Wong (Non-Executive Director) (Resigned 16 November 2015) Faldi Ismail (Non-Executive Director) (Resigned 16 November 2015)

Company Secretary

Matthew Foy (Company Secretary) (Appointed 25 January 2016) Patrick Burke (Company Secretary) (Resigned 15 January 2016)

Review of Operations

The net loss after income tax for the half-year was $1,658,404 (31 December 2014: $49,281). At the end of the half-year the Company had $2,009,645 (30 June 2015: $2,191,839) in cash and at call deposits. Capitalised mineral exploration and evaluation expenditure is $nil (30 June 2015: $1,500,000).

New Projects

The half year represented a period of consolidation for the Company, with the company reviewing the opportunity for new projects, including the potential acquisition of a non-mining asset.

Beyondie Iron Project

Following its recent technical review of its Beyondie Iron-Ore tenements, and having regard to the poor state and outlook for the iron-ore market and its desire to best apply funds, the Company decided not to seek a further renewal of its Beyondie tenement E52/1806, with this tenement having been surrendered at the end of its current term on 13 November 2015. All exploration and evaluation expenditure capitalised on this project has been written-off at the date of surrender. The Company has retained and continues to develop its remaining iron-ore tenement, E52/2215, all exploration and evaluation expenditure capitalised on this project has been impaired to nil as at 31 December 2015.

Extension Gold Project

As part of the Company’s consolidation, the extension gold project E52/2559 has also been relinquished, exploration and evaluation expenditure capitalised on this project has been written-off at the date of surrender.

Significant Changes in the State of Affairs

Other than the above, there were no significant changes occurred during the reporting period.

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Emergent Resources Limited ABN 68 125 323 622

Directors’ Report

Events occurring after the balance sheet date

There has not arisen in the interval between the end of the 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 Company, the results of those operations or the state of affairs of the Company in subsequent financial years.

Auditor’s Independence Declaration

A copy of the Auditor’s Independence Declaration as required under Section 307C of the Corporations Act is set out on Page 5.

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

Dated at Perth this 14[th] day of March 2016.

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Bevan Tarratt Non-Executive Director

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Level 1

10 Kings Park Road West Perth WA 6005

Correspondence to: PO Box 570 West Perth WA 6872

Auditor’s Independence Declaration

T +61 8 9480 2000 F +61 8 9322 7787 E info.wa@au.gt.com W www.grantthornton.com.au

To The Directors of Emergent Resources Limited

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the review of Emergent Resources Limited for the half-year ended 31 December 2015, I declare that, to the best of my knowledge and belief, there have been:

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

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

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GRANT THORNTON AUDIT PTY LTD Chartered Accountants

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C A Becker Partner - Audit & Assurance

Perth, 14 March 2016

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

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

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.

Emergent Resources Limited ABN 68 125 323 622

Statement of Profit or Loss and Other Comprehensive Income For the half-year ended 31 December 2015

Note Continuing Operations Interest income Total revenue Administration expenses Employee expenses Corporate expenses Occupancy expenses Marketing expenses Depreciation expenses Exploration costs written off Exploration costs impaired Loss before income tax 3 Income tax expense Net loss for the period Other comprehensive income, net of tax Total comprehensive loss for the period Loss per share Basic loss per share (cents) Diluted loss per share (cents)	31 December 2015 31 December 2014 $ $ 30,280 34,233
	30,280 34,233 (63,798) (43,887) - (2,303) (47,030) (33,411) (2,000) (1,503) - (50) (1,830) (2,360) (1,318,190) - (255,836) -
	(1,658,404) (49,281) - -
	(1,658,404) (49,281)
	- -
	(1,658,404) (49,281)
	(0.73) (0.02) (0.73) (0.02)

The above Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

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Emergent Resources Limited ABN 68 125 323 622

Statement of Financial Position As at 31 December 2015

Current assets Cash and cash equivalents Trade and other receivables Total current assets Non-current assets Property, plant and equipment Capitalised mineral exploration and evaluation expenditure 4 Total non-current assets Total assets Current liabilities Trade and other payables Total current liabilities Total liabilities Net assets Equity Issued capital 5 Accumulated losses Total equity	31 December 2015 30 June 2015 $ $ 2,009,645 2,191,839 23,451 11,922
	2,033,096 2,203,761
	17,317 19,147 - 1,500,000
	17,317 1,519,147
	2,050,413 3,722,908
	13,030 27,121
	13,030 27,121
	13,030 27,121
	2,037,383 3,695,787
	19,375,907 19,375,907 (17,338,524) (15,680,120)
	2,037,383 3,695,787

The above Statement of Financial Position should be read in conjunction with the accompanying notes.

7

Emergent Resources Limited ABN 68 125 323 622

Statement of Changes in Equity For the half-year ended 31 December 2015

Note Balance at 1 July 2014 Loss for the period Other comprehensive income Total comprehensive income/(loss) Balance at 31 December 2014 Balance at 1 July 2015 Loss for the period Other comprehensive income Total comprehensive income/(loss) Balance at 31 December 2015	Issued capital – Ordinary Shares Accumulated Losses Total $ $ $ 19,375,907 (12,329,007) 7,046,900 - (49,281) (49,281) - - -
	- (49,281) (49,281) 19,375,907 (12,378,288) 6,997,619
	19,375,907 (15,680,120) 3,695,787
	- (1,658,404) (1,658,404)
	- - -
	- (1,658,404) (1,658,404)
	19,375,907 (17,338,524) 2,037,383

The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.

8

Emergent Resources Limited ABN 68 125 323 622

Statement of Cash Flows For the half-year ended 31 December 2015

Cash flows from operating activities Interest received Payments to suppliers and employees Net cash used in operating activities Cash flows from investing activities Payments for exploration and evaluation Security bonds returned Net cash used in investing activities Net increase/(decrease) in cash held Cash at the beginning of the period Cash at the end of the period	31 December 2015 31 December 2014 $ $ 30,280 35,371 (138,171) (103,744)
	(107,891) (68,373)
	(74,303) (119,758) - 46,700
	(74,303) (73,058)
	(182,194) (141,431) 2,191,839 2,517,454
	2,009,645 2,376,023

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

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Emergent Resources Limited ABN 68 125 323 622

Notes to the Interim Financial Statements For the half-year ended 31 December 2015

Note 1 Basis of preparation of half-year report

This general purpose financial report for the interim half-year reporting period ended 31 December 2015 has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting , Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. Compliance with AASB 134 ensures compliance with IAS 34 ‘Interim Financial Reporting’.

This interim financial report does not include all the disclosure and notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2015 and any public announcements made by Emergent Resources Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.

The half year report has been prepared on an accruals basis and is based on historic costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.

Adoption of new and revised accounting standards

In the half year ended 31 December 2015, the Company has reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for annual reporting periods beginning on or after 1 January 2015. It has been determined by the Company that none of the new accounting standards adopted during the reporting period, have any impact, material or otherwise, and therefore no change is necessary to Company accounting policies.

New accounting standards adopted since the end of the last reporting period

The Company has also reviewed all new Standards and Interpretations that have been issued but are not yet effective for the half-year ended 31 December 2015. As a result of this review the Directors have determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change necessary to Company accounting policies.

No retrospective change in accounting policy or material reclassification has occurred requiring the inclusion of a third Statement of Financial Position as at the beginning of the comparative financial period, as required under AASB 101.

The interim financial statements were approved by the Board of Directors on 14 March 2016.

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Emergent Resources Limited ABN 68 125 323 622

Notes to the Interim Financial Statements For the half-year ended 31 December 2015

Note 2 Segment information

The Company has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors in assessing performance and determining the allocation of resources. The Company is managed on the basis that it is a mineral exploration company operating in the geographical region of Australia. The Company’s Beyondie Project in the Mid-West region of Western Australia is considered the only business segment.

Note 3 Loss for the period

Loss before income tax includes the following specific expenses:

Depreciation: Office equipment Plant and equipment Exploration costs written off Exploration costs impaired	31 December 2015 31 December 2014 $ $ (1,109) (1,484) (721) (876) (1,830) (2,360) (1,318,190) - (255,836)

Note 4 Non-current assets – Capitalised mineral exploration and evaluation expenditure

In the exploration and evaluation phase: Capitalised exploration costs at the start of the year Exploration costs capitalised during the year Exploration costs written off during the year Exploration costs impaired during the year Capitalised exploration costs at the end of the year	31 December 2015 30 June 2015 1,500,000 4,480,333 74,026 182,397 (1,318,190) - (255,836) (3,162,730)
	- 1,500,000

The recoverability of the carrying amount of the exploration and evaluation assets is dependent upon successful development and commercial exploitation, or alternatively, sale of the respective areas of interest.

During the period it was decided by the Board and management to provide impairment on all of its capitalised exploration projects. The basis for impairment was comparable peer transactions within the past 6 months together with comparable peer value based on enterprise value per resource tonne of iron ore. This resulted in an impairment charge totalling $255,836 (Dec 2014: $nil).

Capitalised exploration expenditure of $1,318,190 relating to the Beyondie Tenement was written off upon surrender on 13 November 2015.

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Emergent Resources Limited ABN 68 125 323 622

Notes to the Interim Financial Statements For the half-year ended 31 December 2015

Note 5 Issued capital – Ordinary fully paid shares

Issue price Balance at the start of the period Balance at the end of the period	31 December 2015 30 June 2015 31 December 2015 30 June 2015 No. No. $ $ 226,991,001 226,991,001 19,375,907 19,375,907
	226,991,001 226,991,001 19,375,907 19,375,907

Note 6 Dividends

No dividends were paid or proposed during the period.

The Company has no franking credits available as at 31 December 2015 (31 December 2014: Nil).

Note 7 Contingencies

(i) Contingent liabilities

There were no material contingent liabilities not provided for in the financial statements of the Company as at the reporting dates, other than:

Native Title and Aboriginal Heritage

Native title claims have been made with respect to areas which include tenements in which the Company has an interest. The Company is unable to determine the prospects for success or otherwise of the claims and, in any event, whether or not and to what extent the claims may significantly affect the Company or its projects. Agreement is being or has been reached with various native title claimants in relation to Aboriginal Heritage issues regarding certain areas in which the Company has an interest.

There has been no change in contingent liabilities since the last annual reporting date.

(ii) Contingent assets

There were no material contingent assets as at the reporting dates.

Note 7 Events occurring after the balance sheet date

There has not arisen in the interval between the end of the 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 Company, the results of those operations or the state of affairs of the Company in subsequent financial years.

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Emergent Resources Limited ABN 68 125 323 622

Directors’ Declaration

The Directors of Emergent Resources Limited declare that:

• (a) the interim financial statements and notes set out on pages 6 to 12 are in accordance with the Corporations Act 2001, including:

• (i) complying with Australian Accounting Standard AASB134 – Interim Financial Reporting , and the Corporations Regulations; and

• (ii) give a true and fair view of the financial position as at 31 December 2015 and of the performance for the half-year ended on that date of the Company.

• (b) 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 signed in accordance with a resolution of the Board of Directors made pursuant to s.303(5) of the Corporations Act 2001.

Signed at Perth this 14[th] day of March 2016

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Bevan Tarratt Non-Executive Director

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Level 1 10 Kings Park Road West Perth WA 6005

Correspondence to: PO Box 570 West Perth WA 6872

Independent Auditor’s Review Report

T +61 8 9480 2000 F +61 8 9322 7787 E info.wa@au.gt.com W www.grantthornton.com.au

To the Members of Emergent Resources Limited

We have reviewed the accompanying half-year financial report of Emergent Resources Limited (‘Company’), which comprises the statement of financial position as at 31 December 2015, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, notes comprising a statement or description of accounting policies, other explanatory information and the directors’ declaration.

Directors’ responsibility for the half-year financial report

The directors of Emergent Resources 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 and the Corporations Act 2001 and for such controls as the directors determine is necessary to enable the preparation of the half-year financial report that 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 the Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including giving a true and fair view of the Emergent Resources Limited financial position as at 31 December 2015 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.

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

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

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.

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As the auditor of Emergent Resources Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

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

Independence

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

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 Emergent Resources Limited is not in accordance with the Corporations Act 2001, including:

• a giving a true and fair view of the Company’s financial position as at 31 December 2015 and of its performance for the half-year ended on that date; and

• b complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001.

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GRANT THORNTON AUDIT PTY LTD Chartered Accountants

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C A Becker Partner - Audit & Assurance

Perth, 14 March 2016