FireFly Metals Ltd. — Interim / Quarterly Report 2014

Mar 11, 2014

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Monax Mining Limited and Controlled Entities

Consolidated Half-Year Financial Report

31 December 2013

CORPORATE DIRECTORY

Monax Mining Limited ACN 110 336 733 ABN 96 110 336 733 Incorporated in SA Registered Office 140 Greenhill Road UNLEY SA 5061 Telephone: ( 08) 8373 6271 / (08) 8373 5588 Facsimile: (08) 8373 5917 Email: info@monaxmining.com.au

Share Registrar

Computershare Investor Services Pty Ltd Level 5, 115 Grenfell Street ADELAIDE SA 5000 Telephone: 1300 556 161 (within Australia) +61 3 9415 4000 (outside Australia) Facsimile: +61 8 8236 2305 Email: info@computershare.com.au

Auditor

Grant Thornton Chartered Accountants 67 Greenhill Road Wayville SA 5034

Monax Mining Limited and Controlled Entities

Directors’ Report

The directors present their report together with the half-year financial report of Monax Mining Limited (“the Company”) and its controlled entities (“Consolidated entity”) for the period ended 31 December 2013 and the auditor’s independent review report thereon.

Directors

The names of the directors of the Company during the half-year and until the date of this report are:

Robert M Kennedy ( Non-Executive Chairman)

Glenn S Davis Gary M Ferris ( Managing Director)

Alternate Directors

Ian R Witton – alternate for Glenn S Davis

Principal activities

The consolidated entity’s principal activity is mineral exploration.

Review and results of operations

Monax Mining Limited (“Monax”) is an Adelaide based mineral explorer with projects located on the Gawler Craton region in South Australia. During the six months ended December 2013, Monax has been focused on copper gold exploration at Punt Hill and Alliance projects with strategic alliance partner, a wholly-owned subsidiary of major Chilean copper producer Antofagasta plc (“Antofagasta”), and graphite exploration at Waddikee.

In August 2013, Monax announced its maiden JORC Inferred Mineral Resource for the Wilclo South graphite deposit, part of the Company’s Waddikee Graphite Project in South Australia. The Wilclo South deposit comprises a total combined Inferred resource of 6.4 million tonnes grading 8.8% total graphitic carbon (TGC) for the 550,000 tonnes of contained graphite using a 5% cut-off. The resource includes a high grade component of 1.75 Mt grading 12.5% TGC using a 10% TGC cut-off.

In November 2013, Monax announced the establishment of a Designated Project (“Millers Creek DP”) with its strategic alliance partner Antofagasta, via its wholly-owned subsidiary, Monax Alliance Pty Ltd (“Alliance”). The Millers Creek DP comprises three Alliance tenements together with four ASX-listed Maximus Resources Limited (“Maximus”) tenements located within the Woomera Prohibited Area (WPA) in South Australia’s Far North.

In November 2013, the Company increased its project landholding with the addition of three new Exploration Licence Applications within the tightly-held Musgrave Province, located in South Australia’s Far North. The three tenements cover an area in total of 3396km2 within the eastern part of the Musgrave Province where Alliance will be targeting copper and copper-nickel style mineralisation.

In December 2013, Monax announced that Antofagasta has opted to proceed to the next stage of a Farm-In Option Agreement (“Agreement”) at its flagship Punt Hill Copper-Gold project in South Australia. Under the agreement, Antofagasta can earn a 51% interest (Phase 1) in the Punt Hill project, located within the Olympic Iron-Oxide copper-gold (IOCG) Province in South Australia, by expending US$4 million over four years. Antofagasta has currently expended $US3.95 million and has approved the next phase of exploration including further drilling, which when started, will trigger Phase 2 of the Agreement.

The net (loss)/ profit after income tax for the half-year was $(6,658,533) (December 2012 profit $1,911,837).

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Monax Mining Limited and Controlled Entities Directors’ Report (continued)

Likely developments

Further information about likely developments in the operations of the Company and the expected results of those operations in future years have not been included in this report because disclosure of the information would be likely to result in unreasonable prejudice to the Company.

Table 1 and Competent Person Statement

Wilclo South JORC Code Compliant Inferred Mineral Resource

The Mineral Resource for the Wilclo South deposit is outlined in Tables 1-3 below.

Table 1. Wilclo South Inferred Mineral Resource (no cut-off).

- TOTAL INVENTORY (no cut off)

TOTAL INVENTORY (no cut- off)
Fault Zone	Oxidation State	Tonnage (Mt)	TGC (%)	Density (g/cc)
Upper Block	Oxide	1.32	7.3	2.3
	Fresh	3.56	7.4	2.3
Middle Block	Oxide	0.39	7.9	2.1
	Fresh	1.83	9.2	2.1
Lower Block	Oxide	0.32	7.1	2.1
	Fresh	0.40	8.5	2.1
Subtotals	Oxide	2.02	7.4	2.2
	Fresh	5.79	8.0	2.3
TOTAL INFERRED (no cut-off)		7.81	7.9	2.2

Note: totals may not exactly balance due to the effects of rounding

Table 2. Wilclo South Inferred Mineral Resource (>5% TGC cut-off).

TOTAL INVENTORY (above 5% TGC)

Fault Zone	Oxidation State	Tonnes (Mt)	TGC (%)	Density (g/cc)
Upper Block	Oxide	1.02	8.4	2.3
	Fresh	2.67	8.7	2.3
Middle Block	Oxide	0.36	8.2	2.1
	Fresh	1.72	9.5	2.1
Lower Block	Oxide	0.25	7.9	2.1
	Fresh	0.36	9.1	2.1
Subtotals	Oxide	1.63	8.3	2.2
	Fresh	4.74	9.0	2.2
TOTAL INFERRED >5% TGC		6.38	8.8	2.2

Note: totals may not exactly balance due to the effects of rounding

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Monax Mining Limited and Controlled Entities Directors’ Report (continued)

Table 3. Wilclo South Inferred Mineral Resource (>10% TGC cut-off).

	TOTAL INVENTORY (above 10% TGC)	TOTAL INVENTORY (above 10% TGC)
	Fault Zone	Oxidation State	Tonnes (Mt)	TGC (%)	Density (g/cc)
	Upper Block	Oxide	0.23	11.9	2.3
		Fresh	0.76	11.9	2.3
	Middle Block	Oxide	0.07	12.0	2.1
		Fresh	0.60	13.3	2.1
	Lower Block	Oxide	0.03	11.8	2.1
		Fresh	0.08	14.3	2.1
	Subtotals	Oxide	0.33	11.9	2.2
		Fresh	1.43	12.6	2.2
	TOTAL INFERRED >10% TGC		1.75	12.5	2.2

Note: totals may not exactly balance due to the effects of rounding

The information in this report that relates to Exploration Results is based on information compiled by Mr G M Ferris, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Ferris is employed full time by the Company as Managing Director and, has a minimum of five years relevant experience in the style of mineralisation and type of deposit under consideration and qualifies as a Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” Mr Ferris consents to the inclusion of the information in this report in the form and context in which it appears.

Information in this report that relates to Mineral Resources was compiled by Ms Sharron Sylvester, who is a Member of the Australian Institute of Geoscientists (RPGeo 10125). Ms Sylvester is a full-time employee of AMC Consultants Pty Ltd and has sufficient experience relevant to the styles of mineralisation and to the activities which are being reported to qualify as a Competent Person as defined by the JORC Code, 2012 and consents to the release of the information compiled in this report in the form and context in which it appears.

Auditors independence declaration

Section 307C of the Corporations Act 2001 requires the Company’s auditors, Grant Thornton, to provide the directors of Monax Mining Limited with an Independence Declaration in relation to the review of the halfyear financial report. The Independence Declaration is set out on the following page and forms part of this Directors’ Report.

Dated at ……Adelaide…… this ……11th……… day of ……March…… 2014.

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

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Robert Michael Kennedy Director

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Level 1, 67 Greenhill Rd Wayville SA 5034

Correspondence to: GPO Box 1270 Adelaide SA 5001

T 61 8 8372 6666 F 61 8 8372 6677 E info.sa@au.gt.com W www.grantthornton.com.au

AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS OF MONAX MINING LIMITED

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the review of Monax Mining Limited for the half-year ended 31 December 2013, 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

S J Gray Partner – Audit & Assurance

Adelaide, 11 March 2014

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.

Our Ref: Monax Mining Limited_Dec 13.Docx

Monax Mining Limited and Controlled Entities

Consolidated Statement of Profit or Loss and Other Comprehensive Income For the half-year ended 31 December 2013

Consolidated Statement of Profit or Loss and For the half-year ended 31 December 2013	Other Comprehensive Incom
Note	Consolidated Dec 2013 $ Dec 2012 $
Other revenues from ordinary activities 3 Total other revenue Administrative expenses Consultancy expenses Depreciation Occupancy expenses Employment expenses Impairment of assets Service fees Loss on disposal of available for sale asset Share of loss from equity accounted investments Profit/(loss) before income tax expense Income tax (expense) Profit/(loss) for the period Loss attributed to members of the parent entity Items that maybe reclassified to profit or loss: Changes in fair value of available for sale financial assets Income tax relating to these items Other comprehensive income Total comprehensive income for the period Basic earnings per share (cents) Diluted earnings per share (cents)	47,878 2,415,311
	47,878 2,415,311 134,793 138,272 50,848 67,314 10,276 4,908 42,163 - 109,933 111,268 6,176,695 41,687 48,717 86,982 121,991 - - 53,043
	(6,647,538) 1,911,837 (10,995) -
	(6,658,533) 1,911,837
	(6,658,533) 1,911,837 (118,656) (551,700) - -
	(118,656) (551,700) - -
	(6,777,189) 1,360,137
	(4.4) 1.28 (4.4) 1.28

The accompanying notes form part of these financial statements.

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Monax Mining Limited and Controlled Entities

Consolidated Statement of Financial Position

As at 31 December 2013

As at 31 December 2013
Note	Consolidated Dec 2013 $ Jun 2013 $
Current assets Cash and cash equivalents 6 Trade and other receivables Available for sale financial assets 10 Other assets Total current assets Non-current assets Plant and equipment Investments accounted for using the equity method 9 Available for sale financial assets 10 Exploration and evaluation expenditure 7 Deferred tax asset Total non-current assets Total assets Current liabilities Trade and other payables Provisions Total current liabilities Non-current liabilities Deferred tax liability Provisions Total non-current liabilities Total liabilities Net assets Equity Issued capital 12 Reserves Retained losses Total equity	1,338,782 1,396,231 53,658 225,217 206,059 - 5,656 30,220
	1,604,155 1,651,668
	101,711 93,742 1 1 - 782,428 5,832,825 11,737,172 208,460 244,057
	6,142,997 12,857,400
	7,747,152 14,509,068
	573,403 614,152 36,012 87,482
	609,415 701,634
	208,460 244,057 86,850 36,080
	295,310 280,137
	904,725 981,771
	6,842,427 13,527,297
	19,776,016 19,683,697 661,624 780,280 (13,595,213) (6,936,680)
	6,842,427 13,527,297

The accompanying notes form part of these financial statements

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Monax Mining Limited and Controlled Entities

Consolidated Statement of Changes in Equity For the half-year ended 31 December 2013

	Issued capital $ Reserves $ Retained losses $ Total $
Balance at 1 July 2012 Transactions with owners in their capacity as owners: Options issued during the period Total comprehensive income Balance as at 31 December 2012 Balance at 1 July 2013 Transactions with owners in their capacity as owners: Shares issued during the period Cost associated with shares issued during the period Total comprehensive income Balance as at 31 December 2013	19,683,697 742,915 (7,022,447) 13,404,165 - 17,875 - 17,875
	19,683,697 760,790 (7,022,447) 13,422,040 - (551,700) 1,911,837 1,360,137
	19,683,697 209,090 (5,110,610) 14,782,177
	19,683,697 780,280 (6,936,680) 13,527,297 117,974 - - 117,974 (25,655) - - (25,655)
	19,776,016 780,280 (6,936,680) 13,619,616 - (118,656) (6,658,533) (6,777,189)
	19,776,016 661,624(13,595,213) 6,842,427

The accompanying notes form part of these financial statements.

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Monax Mining Limited and Controlled Entities

Consolidated Statement of Cash Flows

For the half-year ended 31 December 2013

Consolidated Statement of Cash Flows For the half-year ended 31 December 2013
	Consolidated Dec 2013 $ Dec 2012 $
Cash flows from operating activities Cash receipts in the course of operations Cash payments in the course of operations Interest received Net cash (used in) operating activities Cash flows from investing activities Payments for plant and equipment Joint venture receipts Payments for mining tenements and exploration Proceeds from sale of investment Proceeds from sale of mining tenements Loans to related entities Payments associated with sale of investments Net cash provided by investing activities Cash flows from financing activities Proceeds from issue of shares Payments associated with the issue of shares Net cash provided by financing activities Net (decrease)/increase in cash held Cash at the beginning of the half-year Cash at the end of the half-year	127,366 255,290 (467,858) (438,939) 16,861 67,631
	(323,631) (116,018)
	(27,113) (3,000) 473,386 2,649,058 (748,017) (2,951,723) 335,722 649,208 - 25,000 150,880 (35,133) - (1,682)
	184,858 331,728
	117,974 - (36,650) -
	81,324 -
	(57,449) 215,710 1,396,231 2,409,725
	1,338,782 2,625,435

The accompanying notes form part of these financial statements.

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Monax Mining Limited and Controlled Entities

Condensed Notes to the Financial Statements

For the half-year ended 31 December 2013

1 Basis of preparation of interim report

Monax Mining Limited (Monax or the Company) is a company domiciled in Australia. The consolidated interim financial report of the Company for the six months ended 31 December 2013 comprises the Company and its subsidiaries (together referred to as the consolidated entity).

The consolidated annual financial report of the consolidated entity for the year ended 30 June 2013 is available upon request from the Company’s registered office at 140 Greenhill Road, Unley SA or at www.monaxmining.com.au.

The interim consolidated financial statements are a general purpose report prepared in accordance with AASB 134 Interim Financial Reporting, and the Corporations Act 2001. This interim financial report is intended to provide users with an update on the latest annual financial statements of the consolidated entity. As such, this interim financial report does not include full disclosures of the type normally included in the annual report. It is recommended that this interim financial report be read in conjunction with the annual financial report for the year ended 30 June 2013 and any public announcements made by Monax during the interim reporting period in accordance with the continuous disclosure requirements of the ASX Listing Rules.

2 Significant accounting policies

The half-year financial statements have been prepared in accordance with the accounting policies adopted in the Group’s last annual financial statements for the year ended 30 June 2013, except for the application of the following standards as of 1 January 2013:

• AASB 10 Consolidated Financial Statements;

• AASB 11 Joint Arrangements; and

• AASB 119 Employee Benefits (September 2011)

Management has reviewed the new requirements of the above standards and has concluded that there is no effect on the classification or presentation of balances as the group has no arrangements within the scope of the above standards.

In addition to the above, the following mandatory accounting standards were required to be adopted by the consolidated entity during the current period and their effect on the half-year financial statements as below:

• AASB 112 Disclosure of Interests in Other Entities; AASB 12 includes all of the disclosures that were previously in AASB 127 Consolidated and Separate Financial Statements and AASB 131 Interest in Joint Ventures. These disclosures relate to an entity’s interests in subsidiaries, joint arrangements, associates and structured entities. The revised standard requires a number of disclosures which are consistent with previous disclosures made by the consolidated entity and has no impact on the consolidated entity’s financial position or performance.

• AASB 13 Fair Value Measurement; AASB 13 establishes a single source of guidance under accounting standards for all fair value measurements. AASB 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under AASBs when fair value is required or permitted. The required additional disclosures relating to AASB 13 are provided in Note 15.

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Monax Mining Limited and Controlled Entities

Condensed Notes to the Financial Statements

For the half-year ended 31 December 2013

Other mandatory accounting standards issued and required to be adopted by the consolidated entity have not been included above as they are not expected to have a material impact on the Consolidated half-year Financial Statements.

These financial statements were authorised for issue by the board of directors on 11 March 2014.

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Monax Mining Limited and Controlled Entities

Condensed Notes to the Financial Statements

For the half-year ended 31 December 2013

3		Dec 2013 $ Dec 2012 $
	Other revenues from ordinary activities Included in other revenues from ordinary activities: Interest: other parties Realised gain on sale of investment in associates Gain on reclassification of financial assets Other revenue	16,861 60,193 - 546,109 - 1,525,632 31,017 283,377
		47,878 2,415,311

4 Contingent liabilities 5 Commitments

There have been no material changes to the aggregate of contingent liabilities since 30 June 2013.

There have been no material changes to commitments disclosed in the 30 June 2013 annual report.

	Dec 2013 $ Jun 2013 $
Cash and cash equivalents Cash at bank Deposits at call	723,782 781,231 615,000 615,000
	1,338,782 1,396,231

6 Cash and cash equivalents

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Monax Mining Limited and Controlled Entities Condensed Notes to the Financial Statements For the half-year ended 31 December 2013

7 Exploration and evaluation expenditure

7 Exploration and evaluation expenditure
	Consolidated
	Dec 2013 $ Jun 2013 $
Movement: Carrying amount at beginning of year Additional costs capitalised during the year Sale of Interest Impairment Carrying amount at end of year Closing balance comprises: Exploration and evaluation - 100% owned Exploration and evaluation phase - Joint Venture	11,737,172 9,886,721 272,348 1,923,529 - (27,500) (6,176,695) (45,578)
	5,832,825 11,737,172
	5,586,557 10,011,660 246,268 1,725,512
	5,832,825 11,737,172

The ultimate recoupment of costs carried forward for exploration phase is dependent on the successful development and commercial exploitation or sale of the respective areas.

8 Controlled entities

(a) Entities forming part of the Monax Mining Limited consolidated group are as follows:

	Country of	Percentage	owned (%)
	incorporation
		Dec 2013	Jun 2013
Parent entity:
Monax Mining Limited	Australia
Subsidiaries of Monax Mining Limited:
Monax Alliance Pty Ltd	Australia	100%	100%

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Monax Mining Limited and Controlled Entities Condensed Notes to the Financial Statements For the half-year ended 31 December 2013

9 Investments in associates

Interests are held in the following associated companies.

Name	Principal activities	Country of	Shares	Ownership	Ownership	Carrying	amount of
		incorporation		interest %		investment
Unlisted				Dec	Jun	Dec	Jun
				2013	2013	2013	2013
Groundhog Services Pty	Administration	Australia	Ord	50	50	1	1
Ltd	services

Groundhog Services Pty Ltd is in the process of being wound up and the assets have been transferred to Groundhogs Services Partnership and its Partners, Monax Mining Limited and Marmota Energy Limited.

10 Available for sale financial assets

	Dec 2013 $ Jun 2013 $
Current Available for sale investments Non current Available for sale investments	206,059 -
	206,059 -
	- 782,428
	- 782,428

11 Operating segments

AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Consolidated entity that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance. The Consolidated entity has identified its operating segments to be Gawler Craton, Kangaroo Island, and North Queensland based on different geological regions and the similarity of assets within those regions. This is the basis on which internal reports are provided to the Board of Directors for assessing performance and determining the allocation of resources within the Consolidated entity.

The Consolidated entity operates primarily in one business, namely the exploration of minerals.

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Monax Mining Limited and Controlled Entities Condensed Notes to the Financial Statements

For the half-year ended 31 December 2013

11 Operating segments continued

Details of the performance of each of these operating segments for the six month periods ended 31 December 2013 and 31 December 2012 are set out below:

December 2013 Segment assets Segment asset increases for the period: Capital expenditure Impairment Reconciliation of segment assets to group assets Cash and cash equivalents Trade and other receivables Other current assets Plant and equipment Investments accounted for using the equity method Available for sale financial assets Deferred tax asset Total consolidated assets June 2013 Segment assets Segment asset increases for the period: Capital expenditure (less disposals) Impairment Reconciliation of segment assets to group assets Cash and cash equivalents Trade and other receivables Other current assets Plant and equipment Investments accounted for using the equity method Available for sale financial assets Deferred tax asset Total consolidated assets	Gawler Craton Kangaroo Island North Queensland Total $ $ $ $ 5,586,557 246,268 - 5,832,825 223,419 48,778 151 272,348 (6,176,544) - (151) (6,176,695)
	(5,953,125) 48,778 - (5,904,347) - - - 1,338,782 - - - 53,658 - - - 5,656 - - - 101,711 - - - 1 - - - 206,059 - - - 208,460
	5,586,557 246,268 - 7,747,152
	11,539,682 197,490 - 11,737,172 1,652,961 197,490 45,578 1,896,029 - - (45,578) (45,578)
	1,652,961 197,490 - 1,850,451 - - - 1,396,231 225,217 - - - 30,220 - - - 93,742 - - - 1 - - - 782,428 - - - 244,057
	11,539,682 197,490 - 14,509,068

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Monax Mining Limited and Controlled Entities Condensed Notes to the Financial Statements

For the half-year ended 31 December 2013

11 Operating segments continued

December 2013 Segment revenue Segment results Gross segment result before depreciation, amortisation and impairment Impairment Interest income Loss on sale of available for sale asset Other expenses Profit/(loss) before tax Income tax benefit/(expense) Net profit after tax December 2012 Segment revenue Segment results Gross segment result before depreciation, amortisation and impairment Impairment Interest income Gain on sale of associate Share of associate’s net profit/(loss) Other expenses Profit/(loss) before tax Income tax benefit/(expense) Net profit after tax	Gawler Craton Kangaroo Island North Queensland Total $ $ $ $ 31,017 - - 31,017 31,017 - - 31,017 (6,176,544) - (151) (6,176,695)
	(6,145,527) - (151) (6,145,678) - - - 16,861 - - - (121,991) - - - (396,730)
	(6,145,527) - - (6,647,538) - - - (10,995)
	(6,145,527) - - (6,658,533)
	258,378 - 25,000 283,378 258,378 - 25,000 283,378 - - (41,687) (41,687)
	258,378 - (16,687) 241,691 - - - 60,193 - - - 2,071,740 - - - (53,043) - - - (408,744)
	258,378 - (16,687) 1,911,837 - - - -
	258,378 - (16,687) 1,911,837

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Monax Mining Limited and Controlled Entities

Condensed Notes to the Financial Statements

For the half-year ended 31 December 2013

12 Issued capital

Issued and paid-up share capital 154,147,257 (June 2013: 149,514,803) ordinary shares, fully paid Ordinary shares Balance at the beginning of the period Shares issued during the year - 700,000 (June 2013: 700,000) shares issued to rightsholders as part of an Employee Incentive Scheme - 3,932,454 (June 2013: Nil) shares issued under a non renounceable rights issue Less transaction costs arising from issue of shares net of tax Balance at end of period	Dec 2013 $ Jun 2013 $ 19,776,016 19,683,697
	19,683,697 19,683,697 - - 117,974 - (25,655) -
	19,776,016 19,683,697

As at 31 December 2013, there were 975,000 (June 2013: 1,900,000) unissued shares for which the following options and right were outstanding.

• 425,000 unlisted options exercisable at $0.0917 by 5 March 2015

• 225,000 unlisted options exercisable at $0.051 by 28 July 2016

• 325,000 unlisted options exercisable at $0.053 by 23 July 2017

13 Events subsequent to reporting date

There has not arisen in the interval between 31 December 2013 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 significantly the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity, in future years.

14 Going Concern

The financial report has been prepared on the basis of going concern.

The Consolidated Entity incurred a net loss of $6,658,533. In addition, the Group incurred a net cash outflow of $474,495 from operations and investing activities excluding the proceeds from the sale of Marmota Energy Limited shares of $335,722. The Consolidated Entity’s planned expenditure exceeds its current cash held and the Group continues to be reliant on the completion of a capital raising for continued operations and the provision of working capital.

If the additional capital is not obtained, the going concern basis may not be appropriate with the result that the company and consolidated entity may have to realise its assets and extinguish its liabilities, other than in the ordinary course of business in amounts different from those stated in the financial report.

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Monax Mining Limited and Controlled Entities Condensed Notes to the Financial Statements

For the half-year ended 31 December 2013

15 Fair value measurement of assets and liabilities

Fair value hierarchy

AASB 13 requires disclosure of fair value measurements by level of the following fair value hierarchy:

• (a) Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)

• (b) Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly (level 2), and

• (c) Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3)

All financial instruments were valued using level 1 valuation techniques. There were no changes in valuation techniques for financial instruments in the period.

Available for sale financial assets are measured at fair value using the closing price on the reporting dates as listed on the Australian Securities Exchange limited (ASX). The carrying value of trade receivables and payables are assumed to approximate their fair values due to their short term nature.

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Monax Mining Limited and Controlled Entities

Directors’ Declaration

For the half-year ended 31 December 2013

Directors’ declaration

The Directors of the Company declare that:

• (a) the half-year financial statements and notes, set out on pages 6 to 18, are in accordance with the Corporations Act 2001, including:

• (i) giving a true and fair view of the financial position of the consolidated entity as at 31 December 2013 and of its performance for the half year ended on that date; and

• (ii) complying with Accounting Standard AASB 134: Interim Financial Reporting;

• (b) 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.

Dated at ………Adelaide…… this ………11th…… day of …………March…… 2014.

This declaration is made in accordance with a resolution of the directors:

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Robert Michael Kennedy Director

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Level 1, 67 Greenhill Rd Wayville SA 5034

Correspondence to: GPO Box 1270 Adelaide SA 5001

T 61 8 8372 6666 F 61 8 8372 6677 E info.sa@au.gt.com W www.grantthornton.com.au

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

We have reviewed the accompanying half-year financial report of Monax Mining Limited (“Company”), which comprises the consolidated financial statements being the statement of financial position as at 31 December 2013, 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 of the consolidated entity, comprising both the Company and the entities it controlled at the half-year’s end or from time to time during the half-year.

Directors’ responsibility for the half-year financial report

The directors of Monax 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 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 consolidated 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 consolidated entity’s financial position as at 31 December 2013 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 Monax Mining Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

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a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

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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 Monax Mining Limited is not in accordance with the Corporations Act 2001, including:

• a giving a true and fair view of the consolidated entity’s financial position as at 31 December 2013 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.

Material uncertainty regarding continuation as a going concern

Without qualifying our conclusion expressed above, we draw attention to Note 14 of the half-year financial report, which indicates that the consolidated entity incurred a net loss of $6,658,533 during the period ended 31 December 2013. In addition, the Group incurred a net cash outflow of $474,495 from operating and investing activities, excluding the proceeds from the one off sale of Marmota Energy Limited shares of $335,722. These conditions, along with other matters as set forth in Note 14, indicate the existence of a material uncertainty which may cast significant doubt about the consolidated entity’s ability to continue as a going concern and therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business, and at the amounts stated in the half-year financial report.

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GRANT THORNTON AUDIT PTY LTD Chartered Accountants

S J Gray Partner – Audit & Assurance

Adelaide, 11 March 2014