GALILEO MINING LTD — Interim / Quarterly Report 2019

Mar 7, 2019

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FINANCIAL REPORT

For the Half‐Year Ended 31 December 2018

GALILEO MINING LTD ABN 70 104 114 132

CONTENTS

DIRECTORS’ REPORT .................................................................................................................................................................... 3 AUDITOR’S INDEPENDENCE DECLARATION ................................................................................................................... 13 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ................................................................................. 14 CONSOLIDATED STATEMENT OF FINANCIAL POSITION ........................................................................................... 15 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ............................................................................................. 16 CONSOLIDATED STATEMENT OF CASH FLOWS ........................................................................................................... .17 NOTES TO FINANCIAL STATEMENTS .................................................................................................................................. 18 DIRECTORS’ DECLARATION .................................................................................................................................................... 24 INDEPENDENT AUDITOR’S REVIEW REPORT ................................................................................................................... 25

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GALILEO MINING LTD ABN 70 104 114 132

DIRECTORS’ REPORT

FOR THE HALF-YEAR ENDED 31 DECEMBER 2018

The directors present their report on the Company and the Group (consisting of the Company and the entities it controlled during the period) for the half-year ended 31 December 2018.

DIRECTORS

The following directors have been in office since the start of the financial year to the date of this report unless otherwise stated:

• Simon Jenkins (Chairman)

• Richard (Brad) Underwood (Managing Director)

• Noel O’Brien (Technical Director)

The Directors were in office for the entire period unless otherwise stated.

The Company Secretary is Mr Mathew Whyte.

PRINCIPAL ACTIVITIES

The principal activity of the Group during the period was mineral exploration.

FINANCIAL RESULTS AND FINANCIAL POSITION

The net loss of the Group for the half-year after providing for income tax amounted to $637,371 (2017: $43,333).

The Group has not reached a stage in its development where it is generating an operating profit. All the Group’s efforts go into project exploration and evaluation.

At the end of the financial period the Group had cash on hand, including deposits of $9,123,627 (30 June 2018: $11,275,323) and Net Assets of $16,326,878 (30 June 2018: $16,665,935).

REVIEW OF OPERATIONS

Highlights of the Company’s Activities during the half year included:

Norseman Cobalt Project (100% owned)

• High-grade cobalt produced from metallurgical test work on Norseman cobalt resources

• Maiden JORC 2012 Inferred Resource delivered at the Goblin Prospect

• Norseman JORC compliant resource now stands at 25.1Mt @ 0.11% cobalt (at a 0.06% cobalt cutoff) for 26,600t cobalt and 122,400t nickel (Refer figure 5)

• Cobalt exploration continuing with 43 RC drill hole campaign at Mission Sill South intercepting additional cobalt

Fraser Range Project (JV with the Creasy Group)

• New Fraser Range target identified at Empire Rose

• EM and IP survey at the Empire Rose Prospect highlights drill target

• Up to 7,000m of planned aircore drilling at Nightmarch and Lantern Prospects scheduled to begin in February 2019

Corporate

• Strong cash position of $9.1 million at the end of December 2018.

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GALILEO MINING LTD ABN 70 104 114 132

Galileo has two highly prospective West Australian resource and exploration projects being:

• 1) The Norseman Cobalt Project with a JORC compliant cobalt-nickel resource; and

• 2) The Fraser Range Project with exploration tenements prospective for nickel-copper-cobalt deposits.

Figure 1 – Galileo Mining Ltd Project Areas and Regional Battery Metal Mines & Projects

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1. Norseman Cobalt Project, Norseman, WA (Galileo 100%)

During the period, the Company has scaled up its activities at the Norseman Project, which consists of two granted exploration licenses and 16 granted prospecting licenses covering a total ground holding of 276 km[2] in the Goldfields-Esperance region.

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GALILEO MINING LTD ABN 70 104 114 132

Figure 2 – Norseman Cobalt Project tenure (blue outline) with Geology and Prospects

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Metallurgical test work on drill core from the Norseman Project has demonstrated the ability to produce a high-grade cobalt concentrate. Using commercially available sizing techniques a maximum coarse-grained cobalt concentrate of 2.57% was produced, with medium sized concentrate giving a range of values from 0.12% to 0.51% cobalt. Overall preliminary results suggest an average concentrate grade of 0.3% cobalt may be achievable making Galileo’s Norseman Cobalt Project one of the highest-grade cobalt plays in Australia.

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GALILEO MINING LTD ABN 70 104 114 132

Laboratory leach test work on concentrate samples was completed at ALS Metallurgy’s Perth Laboratory under the direction of Galileo consultants SGS-Bateman. Three extraction tests were completed with the results shown in Table 1 below.

Table 1: Metallurgical extraction of cobalt, nickel and manganese over 24 hours for three Norseman concentrate samples (from ALS Metallurgy Results, 28 November 2018).

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All tests were conducted over 24 hours at atmospheric pressure with a temperature of 70[o] C. The tests used low amounts of SO2 (sulphur dioxide) and H2SO4 (sulphuric acid) to achieve a maximum 95.7% cobalt extraction and 66.1% nickel extraction (test HY6905).

Galileo is highly encouraged by these cobalt and nickel metal extraction rates from concentrate with all three tests delivering significantly higher returns than previous test work undertaken prior to the listing of the Company.

Based on the test results, the assumed leach extraction rate of concentrate material for the purpose of scoping level CAPEX and OPEX estimation will be 90% for cobalt and 60% for nickel. This represents a conservative scoping level approach given that the average metal extractions for cobalt and nickel over the three tests performed were 93.4% and 62.1% respectively.

In addition, the Company continued to advance its exploration program, most notably with a maiden JORC 2012 Inferred Resource at the Goblin prospect.

The Goblin Prospect has reported a JORC resource of 4.9Mt at 0.08% Co[(1)] for 4,100 tonnes of contained cobalt, representing an 18% increase in overall contained cobalt at the Norseman Project.

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GALILEO MINING LTD ABN 70 104 114 132

Figure 3‐ Goblin Prospect Inferred Resource area. Oblique view looking NE. Green shell = 0.04% Cobalt interpreted mineralisation wireframe, Red blocks = >0.06% Cobalt Inferred resource blocks

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With the addition of the Goblin Prospect, the global resource base of the Norseman Cobalt Project has expanded to 25.1Mt @ 0.11% cobalt (at a 0.06% cobalt cut-off) for 26,600t cobalt and 122,400t nickel[(1)] .

The Goblin Prospect is located 3km south of Galileo’s main resource and has an identified strike of cobalt mineralisation of greater than 2km. The cobalt mineralisation occurs at shallow depths of between 12m and 60m and is consistent in style with the Company’s existing JORC resources at Norseman.

During the period, the Norseman Project has continued to establish its cobalt credentials with additional mineralisation also intersected in extension drilling at the Mission Sill South Prospect.

(1) Refer to Figure 5 below for full details on Galileo Mining JORC Resources

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GALILEO MINING LTD ABN 70 104 114 132

Figure 4 ‐ Mission Sill South 2018 Cobalt Drillhole Locations showing the Existing JORC Resource Boundary and New Cobalt Boundary (red dotted line ‐ greater than 0.06% cobalt)

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In October the Company announced the results of a 43 reverse-circulation drill campaign, which yielded a number of thick cobalt intercepts. Best results included:

• 12m @ 0.1% Cobalt from 54m (drill hole NRC172)

• 27m @ 0.09% Cobalt from 33m (drill hole NRC174)

• 15m @ 0.09% Cobalt from 33m (drill hole NRC187)

The Company continues to build confidence in the Mission Sill South Prospect, with cobalt mineralisation remaining open to the northeast beyond the recent drilling.

Planned work programs commencing in the March 2019 quarter for the Norseman Cobalt Project include:

• Conceptual Mining Study by CSA Global for use in Scoping Study level financial modelling

• Flora and Fauna Surveys within Mine Lease Application area

• Aeromagnetic survey of the entire project area to assist exploration target development

• Continued metallurgical domaining of the current JORC compliant resources

• Ongoing ore characterization test work to determine optimum concentrate size range

• Figure 5 ‐ JORC Mineral Resource Estimates for the Norseman Cobalt Project (“Estimates”) (refer to

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GALILEO MINING LTD ABN 70 104 114 132

ASX “Prospectus” announcement dated May 25th 2018 and ASX announcement dated 11th December 2018, accessible at http://www.galileomining.com.au/investors/asx‐announcements/ ). Galileo confirms that all material assumptions and technical parameters underpinning the Estimates continue to apply and have not materially changed).

Cut-off Cobalt %	Class	Tonnes Mt		Co		Ni
			%	Tonnes	%	Tonnes
MT THIRSTY SILL
0.06 %	Indicated Inferred Total	10.5 2.0 12.5	0.12 0.11 0.11	12,100 2,200 14,300	0.58 0.51 0.57	60,800 10,200 71,000
MISSION SILL
0.06 %	Inferred	7.7	0.11	8,200	0.45	35,000
GOBLIN
0.06 %	Inferred	4.9	0.08	4,100	0.36	16,400
TOTAL JORC COMPLIANT RESOURCES
0.06 %	Total	25.1	0.11	26,600	0.49	122,400

2. Fraser Range Project, Fraser Range, WA (Galileo 67%/Creasy Group 33%)

Results from work undertaken at Galileo’s Fraser Range project continue to increase the Company’s interest in the region which currently hosts two major nickel-copper-cobalt deposits, Nova-Bollinger and Silver Knight. The presence of two significant discoveries in the Fraser Range indicates that the area is a developing mineral province and that new discoveries may be forthcoming in the future.

Galileo holds two Joint Ventures with the Creasy Group in the Fraser Range covering four active exploration tenements totalling 437km[2] of tenure. Galileo also has five Fraser Range applications covering 419km[2] of highly prospective ground. All five tenements are in a ballot process with numerous exploration and mining companies interested in applying for the ground. Two of the competing tenement applications are adjacent to the Creasy Group tenement which hosts the Silver Knight deposit.

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GALILEO MINING LTD ABN 70 104 114 132

Figure 6 – Galileo’s Fraser Range tenement holdings (blue) with Empire Rose, Nightmarch and Lantern prospects as marked. Silver Knight and Nova Deposits are shown by mine symbols.

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During the period the Company conducted first pass air-core drilling at the Empire Rose prospect which yielded anomalous zones of nickel in mafic and ultramafic rocks, similar to the host rocks that occur at the Nova and Silver Knight deposits. The best intercept from the maiden drilling was 36m @ 0.2% nickel from 18m (drill hole EARC015).

An electromagnetic survey completed at the prospect delineated a strongly conductive target with a modelled conductivity of 2,100 siemens. The top of the conductor was modelled at around 250m below surface with a sub-vertical geometry suggesting that it extends further at depth.

Subsequent to the end of the period the Company completed an Induced Polarisation (IP) survey at Empire Rose which has delivered outstanding results.

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GALILEO MINING LTD ABN 70 104 114 132

Figure 7 ‐ Empire Rose Prospect cross section through drillhole ERAC015 showing the location of the EM conductor. A proposed 300m drillhole to test both the conductor and IP chargeable anomaly is shown.

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The IP survey has demonstrated a highly chargeable response, coincident with the results of the electromagnetic (EM) survey completed in 2018. IP surveying is most commonly used in the exploration for sulphide mineralisation which gives a chargeable response when a current is passed through the ground.

Corporate

Capital structure

As at the date of this report the Company’s Capital structure is as follows:

Quoted Securities:

Quoted Securities:
Number	Class
88,679,037	Ordinary Fully Paid Shares (Shares)

Un-Quoted Securities

Number	Class
28,094,895	Shares- held in escrow for 24 months from 29 May 2018
3,600,000	Shares- held in escrow for 12 months from 16 May 2018
15,000,000	Class A Options Ex @$0.20 Exp 31/1/2023- held in escrow for 24 months from 29/5/2018 Vestingcondition 60-dayVWAP >$0.60
2,200,000	Performance Rights Vesting @ $1.00/ Exp 31/1/2023 Vestingcondition 10-dayVWAP > $1.00

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GALILEO MINING LTD ABN 70 104 114 132

SIGNIFICANT EVENTS AFTER THE BALANCE DATE

There has not arisen in the interval between the end of the financial period and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect significantly the operations, the results of those operations, or the state of affairs of the Group in future financial years.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

Other than reported above in the Review of Operations, there were no significant changes in the state of affairs of the Group during the reporting period.

AUDITOR INDEPENDENCE

The Auditor’s Independence Declaration immediately follows this Report and forms part of this Report. The Directors are satisfied as to the independence of the auditors.

Signed in accordance with a resolution of directors.

For and on Behalf of the Board of Directors

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Mr Brad Underwood Managing Director Perth, 7 March 2019

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AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the review of the consolidated financial report of Galileo Mining Ltd for the halfyear ended 31 December 2018, I declare that to the best of my knowledge and belief, there have been no contraventions of:

• a) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

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

Perth, Western Australia N G Neill 7 March 2019 Partner

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GALILEO MINING LTD ABN 70 104 114 132

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2018

Notes Other income Employee benefits and director fees expense Consulting fees Share-based payment Depreciation expense Exploration & evaluation expenses Impairment of capitalised exploration and evaluation expenses Legal and audit expenses Other expenses 4 Loss before income tax expense Income tax expense Net loss after income tax Other comprehensive income Total comprehensive loss for the year Loss per share (cents per share) Basic loss per share for the year Diluted loss per share for the year	31 December 2018 $ 118,290 (119,869) (115,555) (298,314) (5,467) (99,194) - (21,942) (95,320) (637,371) - (637,371) - (637,371) ¢ (0.53) (0.53)	31 December 2017 $ 1 - - - - - (29,311) - (14,023)
		(43,333) - (43,333)
		-
		(43,333)
		¢ (0.21) (0.21)

The above Consolidated Statement of Comprehensive Income is to be read in conjunction with the Notes to the Financial Statements.

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GALILEO MINING LTD ABN 70 104 114 132

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2018

Notes ASSETS Current Assets Cash and cash equivalents Cash on term deposits Trade and other receivables Other 5 Total Current Assets Non-Current Assets Property, plant and equipment Exploration and evaluation expenditure Other assets 6 Total Non-Current Assets TOTAL ASSETS LIABILITIES Current Liabilities Trade and other payables Other 7 Total Current Liabilities Non-Current Liabilities Other Total Non-Current Liabilities TOTAL LIABILITIES NET ASSETS ACCUMULATED EQUITY Issued capital Reserves Accumulated losses 8 TOTAL EQUITY	31 December 2018 $ 4,123,627 5,000,000 84,999 30,352 9,238,978 25,627 7,405,232 26,071 7,456,930 16,695,908 332,735 26,480 359,215 9,815 9,815 369,030 16,326,878 18,416,434 499,616 (2,589,172) 16,326,878	30 June 2018 $ 4,275,323 7,000,000 226,901 18,222
		11,520,446
		16,662 5,287,404 26,071
		5,330,137
		16,850,583
		170,290 11,848
		182,138
		2,510
		2,510
		184,648
		16,665,935
		18,416,434 201,302 (1,951,801)
		16,665,935

The above Consolidated Statement of Financial Position is to be read in conjunction with the Notes to the Financial Statements.

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GALILEO MINING LTD ABN 70 104 114 132

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2018

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As at 1 July 2018 Loss for the year Other comprehensive income Total comprehensive loss for the year Share based payments As at 31 December 2018	Issued capital Share based payment reserve Accumulated losses Total $ $ $ $ 18,416,434 201,302 (1,951,801) 16,665,935 - - (637,371) (637,371) - - - - - - (637,371) (637,371) - 298,314 - 298,314 18,416,434 499,616 (2,589,172) 16,326,878
As at 1 July 2017 Loss for the year Other comprehensive income Total comprehensive loss for the year As at 31 December 2017	2,200 - (1,274,428) (1,272,228) - - (43,333) (43,333) - - - - - - (43,333) (43,333) 2,200 - (1,317,761) (1,315,561)

The above Consolidated Statement of Changes in Equity is to be read in conjunction with the Notes to the Financial Statements.

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GALILEO MINING LTD ABN 70 104 114 132

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2018

Notes Cash Flow From Operating Activities Payments to suppliers and employees Payments for exploration and evaluation expenditure Interest received Net GST refunded Other Income Security deposit paid Net cash (used in) operating activities Cash Flow From Investing Activities Payment for property, plant & equipment Net cash (used in) investing activities Cash Flow From Financing Activities Cash transferred from term deposits Borrowings from related party Net cash provided by financing activities Net decrease in cash held Cash at the beginning of the year (i) Cash at the end of the year (i)	31 December 2018 $ (336,162) (2,041,243) 112,188 142,254 250 (9,881) (2,132,594) (19,102) (19,102) 2,000,000 - 2,000,000 (151,696) 4,275,323 4,123,627	31 December 2017 $ (14,024) (748,856) 1 - - -
		(762,879)
		-
		-
		- 752,000
		752,000
		(10,879) 14,803
		3,924

(i) Excludes cash held on term deposits with maturity greater than three months.

The above Consolidated Statement of Cash Flows is to be read in conjunction with the Notes to the Financial Statements.

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GALILEO MINING LTD ABN 70 104 114 132

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF-YEAR ENDED 31 DECEMBER 2018

1. CORPORATE INFORMATION

The financial report of Galileo Mining Ltd for the half-year ended 31 December 2018 was authorised for issue in accordance with a resolution of directors on 7 March 2019.

Galileo Mining Ltd is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange.

The address of the registered office is 13 Colin Street, West Perth WA 6005.

The Company’s principal activity during the year was mineral exploration. Major exploration activities during the period are outlined in the Review of Operations as contained in the Directors’ Report.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

• (a) Basis of preparation

This half-year financial report for the half-year ended 31 December 2018 is a condensed general purpose financial report prepared in accordance with applicable accounting standards including AASB 134 Interim Financial Reporting, Accounting Interpretations and other authoritive pronouncements of the Australian Accounting Standards Board (“AASB”) and the Corporations Act 2001. Compliance with AASB 134 ensures compliance with IAS 34 Interim Financial Reporting.

The half-year financial report does not include all notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the Company as the full financial report.

For the purpose of preparing the financial report, the Company is a for-profit entity.

The half-year financial report should be read in conjunction with the most recent annual financial report for the year ended 30 June 2018.

It is also recommended that the half-year financial report be considered together with any public announcements made by Galileo Mining Ltd during the half year ended 31 December 2018 in accordance with the continuous disclosure obligations arising under the ASX Listing Rules.

The accounting policies and methods of computation are the same as those adopted in the most recent annual financial report and are consistent with Australian Accounting Standards except for the impact (if any) of the new and revised standards and interpretations outlined in (c) below. The financial statements have been prepared on a historical cost basis, except for the valuation of certain non-current assets and financial instruments.

The Company is domiciled in Australia and all amounts are presented in Australian dollars which is the functional currency.

(b) Statement of compliance

The financial statements comply with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the interim financial statements and notes thereto, complies with International Financial Reporting Standards (IFRS).

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GALILEO MINING LTD ABN 70 104 114 132

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

(c) Adoption of new and revised standards

From 1 July 2018 the Group has adopted all Australian Accounting Standards and Interpretations effective from 1 July 2018. The adoption of new and amended standards and interpretations had no impact on the financial position or performance of the Company.

Standards and Interpretations in issue not yet adopted

AASB 16 provides a new lessee accounting model which requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. This standard will primarily affect the accounting for the Group’s operating lease. As at 30 June 2018, the Group has $334,499 of non-cancellable operating lease commitments relating to a property lease. The Group is considering the available options to account for this transition, but the Group expects a change in reported earnings before interest, tax, depreciation and amortisation (EBITDA) and increase in lease assets and liabilities recognition. The lease standard is also expected to have a considerable impact on deferred tax balances. This will however be dependent on the lease arrangements in place when the new standard is effective. The Group has commenced the process of evaluating the impact of the new lease standard.

The Group has not elected to early adopt any new standards or amendments that are issued but not yet effective.

(d) Significant accounting estimates and judgements

The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates.

The judgements, estimates and assumptions applied in the financial statements, including the key sources of estimation uncertainty were the same as those applied in the Group’s last annual financial statements for the year ended 30 June 2018, except for the impact of the new Standards and Interpretations effective 1 July 2018 as disclosed above.

3. SEGMENT INFORMATION

For management purposes, the Group is organised into one main business and geographic segment, which involves exploration of mineral deposits. All of the Group’s activities are interrelated, and discrete financial information is reported to the Board (Chief Operating Decision Makers) as a single segment. Accordingly, all significant operating decisions are based upon analysis of the Group as one segment. The financial results from the segment are equivalent to the financial statement of the Group as a whole.

4. OTHER INCOME Interest revenue Other income Total other income	6 months to 31 December 2018 6 months to 31 December 2017 $ $ 118,040 250 1 -
	118,290 1

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GALILEO MINING LTD ABN 70 104 114 132

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF-YEAR ENDED 31 DECEMBER 2018

5. TRADE AND OTHER RECEIVABLES Current Other Debtors Accrued Interest Net GST receivable 6. EXPLORATION AND EVALUATION EXPENDITURE Costs carried forward in respect of: Exploration and evaluation phase – at cost Reconciliation Opening balance Acquisition of tenements Incurred during the year Written off during the year Total exploration and evaluation expenditure		6 months to 31 December 2018 Year to 30 June 2018 $ $ - 5,852 79,147 5,500 - 221,401 84,999 226,901 7,405,232 5,287,404
		5,287,404 2,943,081 62,926 2,054,902 1,400,000 973,634 - (29,311)
		7,405,232 5,287,404

The ultimate recoupment of the Group’s deferred mining tenements and exploration expenditure carried forward in respect of areas of interest still in the exploration and/or evaluation phases is dependent on successful development and commercial exploitation or, alternatively, sale of the respective areas.

7. TRADE AND OTHER PAYABLES Current Trade creditors	31 December 2018 30 June 2018 $ $ 332,735 170,290

Trade and other payables are non-interest bearing and are normally settled on 30 day terms. Due to the short term nature of these payables, their carrying value is assumed to approximate their fair value.

8. ISSUED CAPITAL (a) Ordinary shares	31 December 2018 30 June 2018 $ $ 18,416,434 18,416,434

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GALILEO MINING LTD ABN 70 104 114 132

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF-YEAR ENDED 31 DECEMBER 2018

Movements of ordinary shares

Shares on issue Beginning of financial year Subdivision of shares (4,850 for 1) Consolidation (1 for 2.38) Add shares issued - AGR-Loan repayment - Acquire tenements - IPO capital raise - Convert notes Less capital raising costs As at the end of the period	6 months to 31 December 2018 Year to 30 June 2018 Number $ Number $ 120,373,932 18,416,434 10,001 2,200 - - 48,504,850 -
	- - 20,372,037 2,200 - - - - 16,491,440 510,455 3,298,288 51,045 - - 75,000,000 15,000,000 - - 8,000,000 800,000 - - - (735,099)
	120,373,932 18,416,434 120,373,932 18,416,434

9. RELATED PARTY TRANSACTIONS

• 1) Price Sierakowski Corporate a company of which Simon Jenkins is a director, provided legal advice to the Company in relation to the IPO Prospectus and on other work totalling $10,816 (excluding GST) (30 June 2018: $72,780).

10. SHARE-BASED PAYMENTS

(a) Options

There were no options issued in the reporting period to 31 December 2018.

The following table illustrates the number and weighted average exercise prices (WAEP) and movements in employee share options during the period.

Outstanding at the beginning of the period Granted during the period Exercised during the period Expired or Cancelled during the period Outstanding at the end of the period Exercisable at reporting date	Six months to 31 December 2018 Year to 30 June 2018 Number WAEP $ Number WAEP $ 15,000,000 0.20 - - - - 15,000,000 0.20 - - - - - - - -
	15,000,000 0.20 15,000,000 0.20
	- - - -

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GALILEO MINING LTD ABN 70 104 114 132

FOR THE HALF-YEAR ENDED 31 DECEMBER 2018

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(a) Performance Rights

During the period ended 31 December 2018 the following performance rights were granted to employees:

Class	Expiry date	Exercise price	Date granted	Number	Grant date spotprice	Expected Vesting date
Performance Rights	31 Jan 2023	Nil	9 Oct 2018	500,000	$0.19	30 June 2022

Performance Rights were issued free of charge. Each Performance Right entitles the holder to subscribe for one (1) fully paid ordinary share in the Company based on achieving vesting conditions at a nil exercise price.

The terms and conditions including the service and performance criteria that must be met are as follows:-

• (a) Subject to the below paragraphs (b) to (d), each Performance Right will only vest and become exercisable when the 10 day volume weighted average market price (as defined in the ASX Listing Rules) of the Company’s quoted Shares first exceeds $1.00 per Share (Vesting Condition).

• (b) Maintain a minimum of 12 months continuous service with the Company.

• (c) Each Performance Right will automatically be cancelled and will be redeemed by the Company for nil consideration if employment with the Company is terminated for any reason before the Vesting Condition is met.

• (d) If a Good Leaver and the Vesting Condition has been satisfied at the date of termination the Performance Rights may be exercised within 20 Business Days of termination of employment or contracting (as applicable) with the Company. If a Bad Leaver and the Vesting Condition has been satisfied at the date of termination the Performance Rights will terminate.

• *As defined in the Galileo Mining Ltd Employee Incentive Plan

Each Performance Right, issued for nil consideration, entitles the participant to acquire one (1) fully paid ordinary share, by way of issue of new Shares or transfer of existing Shares.

All Performance Rights that have not vested by the expiry date will automatically lapse and be forfeited.

Movement of Performance Rights:

ovement of Performance Rights:
Outstanding at beginning of the year Granted during the year Outstanding at the end of the year	6 months to 31 December 2018 Year to 30 June 2018 Number Number 1,700,000 500,000 - 1,700,000
	2,200,000 1,700,000

11. FINANCIAL INSTRUMENTS

Risk Management Activities

The risk management activities are consistent with those of the previous financial year unless otherwise stated.

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GALILEO MINING LTD ABN 70 104 114 132

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF-YEAR ENDED 31 DECEMBER 2018

Financial Instruments

Set out below is an overview of financial instruments held by the Group:

out below is an overview of financial instruments held by the Group:
Financial assets: Cash and cash equivalents Term deposits Trade and other receivables – at amortised cost Total Financial liabilities: Trade and other payables – at amortised cost Total	31 December 2018 $ 30 June 2018 $ 4,123,627 4,275,323 5,000,000 7,000,000 84,999 226,901
	9,208,626 11,502,224
	332,735 170,290
	332,735 170,290

Fair Values

Due to the nature of the Company’s financial instruments, carrying value is considered to approximate fair value for all classes of financial instruments at 31 December 2018.

There has been no material impact on the Group from the adoption of AASB 9.

12. EVENTS SUBSEQUENT TO BALANCE DATE

No matters or circumstances have occurred subsequent to balance date that have or may significantly affect the operations or the state of affairs of the Group in subsequent financial years.

13. GUARANTEES AND CONTINGENT LIABILITIES

The Group did not have any guarantees or contingent liabilities at balance date.

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GALILEO MINING LTD ABN 70 104 114 132

DIRECTORS’ DECLARATION

FOR THE HALF-YEAR ENDED 31 DECEMBER 2018

In the opinion of the Directors of Galileo Mining Ltd (the ‘Company’):

• a. the accompanying interim financial statements and notes are in accordance with the Corporations Act 2001 including:

• i. giving a true and fair view of the Group’s financial position as at 31 December 2018 and of its performance for the half-year then ended; and

• ii. complying with Australian Accounting Standards, the Corporations Regulations 2001, professional reporting requirements and other mandatory requirements.

• 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.

• c. the interim financial statements and notes thereto are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board.

This declaration is signed in accordance with a resolution of the board of Directors.

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Mr Brad Underwood Managing Director Perth, 7 March 2019

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INDEPENDENT AUDITOR’S REVIEW REPORT

To the members of Galileo Mining Ltd

Report on the Condensed Half-Year Financial Report

Conclusion

We have reviewed the accompanying half-year financial report of Galileo Mining Ltd (“the company”) which comprises the condensed consolidated statement of financial position as at 31 December 2018, the condensed consolidated statement of comprehensive income, the condensed consolidated statement of changes in equity and the condensed consolidated statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory notes, and the directors’ declaration, for the Group comprising the company and the entities it controlled at the half-year end or from time to time during the half-year.

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 Galileo Mining Ltd is not in accordance with the Corporations Act 2001 including:

• (a) giving a true and fair view of the Group’s financial position as at 31 December 2018 and of its performance for the half-year ended on that date; and

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

Directors’ responsibility for the half-year financial report

The directors of the Galileo Mining Ltd 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 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 the Group’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 Galileo Mining Ltd, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

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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 have complied with the independence requirements of the Corporations Act 2001 .

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N G Neill
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HLB Mann Judd N G Neill Chartered Accountants Partner

Perth, Western Australia 7 March 2019

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