GATEWAY MINING LIMITED — Interim / Quarterly Report 2012

Mar 14, 2012

GATEWAY MINING LIMITED ABN: 31 008 402 391

INTERIM FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2011

CONTENTS

Directors’ Report	2
Auditor’s Independence Declaration	4
Statement of Comprehensive Income	5
Statement of Financial Position	6
Statement of Changes in Equity	7
Statement of Cash Flows	8
Notes to the Financial Statements	9 – 10
Directors’ Declaration	11
Independent Auditor’s Review Report	12 – 13

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GATEWAY MINING LIMITED ABN: 31 008 402 391

DIRECTORS’ REPORT

Your directors submit the financial report of the company for the half-year ended 31 December 2011.

DIRECTORS

The names of directors who held office during or since the end of the half-year:

Mr. Brian Gomez (Chairman) Dr. Robert A. Creelman Mr. Mark J. Lynch

REVIEW OF OPERATIONS

Ongoing work at Gidgee has confirmed the prospectivity for VMS-style mineralisation. This work has included lithogeochemical and alteration analysis of multi-element geochemical data throughout the project area, and reconnaissance ground work over a number of areas.

The lithogeochemical work has confirmed the potential for VMS mineralisation, with the results outlining possible large scale alteration systems, with styles and zonation typical of those seen in VMS districts.

Of particular interest are the under-drilled tenements that include the Gravel Pit and Gossans Galore prospects, which have returned very promising results to date. These prospects exhibit geological, geophysical and geochemical signatures that can be considered indicative of VMSmineralised systems.

Reconnaissance is ongoing over the Bungarra tenements, which were recently acquired by Gateway from Legend Mining. Preliminary thoughts indicate that this area too is prospective forVMS mineralisation; however the prospective stratigraphy has been disrupted due to the intrusion of the Bungarra Intrusive Complex. Rock chip sampling has delineated separate zinc and copper trends.

Programmes of work for planned aircore and reverse circulation drilling programmes over Gateway and joint venture tenements have been approved by the Department of Mines and Petroleum. Approved drilling includes 2,975m of RC and 6,780m of aircore.

Work at the Cowra Project in NSW has included a review of all data, and Gateway is currently looking to attract a new JV partner.

No work was completed over the Surprise EPMs.

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GATEWAY MINING LIMITED ABN: 31 008 402 391

DIRECTORS’ REPORT (CONTINUED)

On 20[th] December 2011, the company raised $368,000 by issuing 16,000,000 fully paid ordinary shares at 2.3 cents per share with 28,800,000 options attached at an exercise price of 2 cents per share expiring on 15[th] November 2014.

On 30[th] November 2011, a total of 4,000,000 options with an exercise price of 30 cents per option issued to executives, staff and consultants expired.

AUDITOR’S INDEPENDENCE DECLARATION

The auditor’s independence declaration under Section 307C of the Corporations Act 2001 is set out on page 4 for the half-year ended 31 December 2011.

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

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BRIAN GOMEZ Director

Dated this 15th day of March 2012

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GATEWAY MINING LIMITED ABN: 31 008 402 391

AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF GATEWAY MINING LIMITED

I declare that, to the best of my knowledge and belief, during the half-year ended 31 December 2011 there have been:

• (a) no contraventions of the auditor independence requirements as set out in 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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Priestley & Morris Chartered Accountants

P A Cordwell

Partner Dated this 15th day of March 2012 Parramatta

Liability is limited by a scheme approved under Professional Standards Legislation

4

GATEWAY MINING LIMITED ABN: 31 008 402 391

STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2011

NOTE Revenue 2 Other income 2 Depreciation expense Employee benefits expense Professional services rendered Office expenses Compliance fees Share registry fees Travelling and entertainment Other expenses Loss before income tax Income tax expense 3 Loss for the period Other comprehensive income: Net gain on revaluation of financial assets Other comprehensive income for the year, net of tax Total comprehensive income (loss) for the period attributable to members of the company Earnings per share Basic earnings per share Diluted earnings per share	31 December 2011		31 December 2010
	$ 45 7,053		$ 2,553 213,078
	7,098 (802) (83,671) (32,856) (27,430) (12,791) (4,545) (14,394) (17,915)		215,631 (1,127) (83,671) (43,233) (26,480) (18,172) (9,091) (24,523) (32,974)
	(187,306) -		(23,640) -
	(187,306) 5,329		(23,640) 241,113
	5,329		241,113
	(181,977)		217,473
	(0.0014)		(0.0003)
	(0.0010)		(0.0002)

The accompanying notes form part of these financial statements

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GATEWAY MINING LIMITED ABN: 31 008 402 391

STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2011

TATEMENT OF FINANCIAL POSITION S AT 31 DECEMBER 2011
NOTE ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables TOTAL CURRENT ASSETS NON-CURRENT ASSETS Trade and other receivables Financial assets 4 Plant and equipment Deferred exploration and evaluation expenditure TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables TOTAL CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated losses TOTAL EQUITY	31 Dec 2011		30 June 2011
	$ 162,218 131,074		$ 199,197 80,625
	293,292		279,822
	12,608 583,020 4,275 9,047,887		12,608 573,941 5,076 8,880,254
	9,647,790		9,471,879
	9,941,082		9,751,701
	119,542		94,104
	119,542		94,104
	119,542		94,104
	9,821,540		9,657,597
	22,823,980 312,268 (13,314,708)		22,478,060 306,939 (13,127,402)
	9,821,540		9,657,597

The accompanying notes form part of these financial statements

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GATEWAY MINING LIMITED ABN: 31 008 402 391

STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2011

Balance at 1.7.2010 Share issued during the period Transaction costs Gain on available-for-sale financial assets Loss for the period Balance at31.12.2010 Balance at1.7.2011 Shares issued during the period Transaction costs Total other comprehensive income Loss for the period Balance at 31.12.2011	Issued Capital	Accumulated losses	Investments revaluation reserve	Share Based payments reserve	Total
	$ 21,892,160 495,000 (24,750) - -	$ (12,730,713) - - - (23,640)	$ 175,366 - - 241,113 -	$ 133,000 - - - -	9,469,813 495,000 (24,750) 241,113 (23,640)
	22,362,410	(12,754,353)	416,479	133,000	10,157,536
	22,478,060 368,000 (22,080) - -	(13,127,402) - - - (187,306)	173,939 - - 5,329 -	133,000 - - - -	9,657,597 368,000 (22,080) 5,329 (187,306)
	22,823,980	(13,314,708)	179,268	133,000	9,821,540

The accompanying notes form part of these financial statements.

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GATEWAY MINING LIMITED ABN: 31 008 402 391

STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2011

CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees Interest and other income received NET CASH USED IN OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of non-current assets Purchase of plant & equipment Purchase of non-current assets Expenditure on mining interests NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares Placement fees NET CASH FROM FINANCING ACTIVITIES NET INCREASE (DECREASE) IN CASH HELD Cash at 1 July 2011 CASH AT 31 DECEMBER 2011	31 December 2011		31 December 2010
	$ (240,694) 7,098		$ (284,578) 2,553
	(233,596)		(282,025)
	- - (3,750) (167,633)		219,744 (1,152) (17,815) (333,282)
	(171,383)		(132,505)
	368,000 -		495,000 -
	368,000		495,000
	(36,979)		80,470
	199,197		35,640
	162,218		116,110

The accompanying notes form part of these financial statements

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GATEWAY MINING LIMITED ABN: 31 008 402 391

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2011

NOTE 1: BASIS OF PREPARATION

These general purpose interim financial statements for half-year reporting period ended 31 December 2011 have been prepared in accordance with requirements of the Corporations Act 2001 and Australian Accounting Standards including AASB 134: Interim Financial Reporting.

This interim financial report is intended to provide users with an update on the latest annual financial statements of Gateway Mining Limited. As such, it does not contain information that represents relatively insignificant changes occurring during the half-year within the company. It is therefore recommended that this financial report be read in conjunction with the annual financial statements of the company for the year ended 30 June 2011, together with any public announcements made during the half-year.

The same accounting policies and methods of computation have been followed in this interim financial report as were applied in the most recent annual financial statements.

NOTE 2: REVENUE AND OTHER INCOME

Interest received from: - other persons Other income: - Administration fee - Gain on disposal of non-current investments	31 December 2011		31 December 2010
	$ 45		$ 2,553
	7,053 -		- 213,078
	7,053		213,078

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GATEWAY MINING LIMITED ABN: 31 008 402 391

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2011 (CONTINUED)

NOTE 3: INCOME TAX EXPENSE

Prima facie tax payable (benefit) on profit (loss) from ordinary activities before income tax at 30% Add tax effect of permanent difference Tax effect of capital losses used and carried forward separately Income tax expense (benefit) arising from profit (loss) Benefit of tax loss not brought to account Income tax expense attributable to profit (loss)	31 December 2011		31 December 2010
	$ (56,191)		$ (7,092)
	-		- -
	(56,191)		(7,092)
	56,191		7,092
	-		-

NOTE 4: FINANCIAL ASSETS

Available for sale financial assets: Shares in listed corporations at fair value Shares in unlisted corporations at cost	31 December 2011		30 June 2011
	$ 552,193 30,827		$ 543,114 30,827
	583,020		573,941

NOTE 5: SEGMENT INFORMATION

The company operates in Australia predominantly in the mineral exploration industry and mainly in gold.

NOTE 6: EVENTS SUBSEQUENT TO REPORTING DATE

There is no significant event subsequent to reporting date.

10

GATEWAY MINING LIMITED ABN: 31 008 402 391

DIRECTORS’ DECLARATION

The directors of the company declare that:

1. The financial statements and notes, as set out on pages 5 – 10 are in accordance with the Corporations Act 2001, including:

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

3. b. giving a true and fair view of the company’s financial position as at 31 December 2011 and of its performance for the half-year ended on that date.

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

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

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BRIAN GOMEZ Director

Dated this 15th day of March 2012

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GATEWAY MINING LIMITED ABN: 31 008 402 391

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

Report on the Half-year Financial Report

We have reviewed the accompanying half-year financial report of Gateway Mining Limited which comprises the statement of financial position as at 31 December 2011, the statement of comprehensive income, the statement of changes in equity, the statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration.

Directors’ Responsibility for the Half-Year Financial Report

The directors of Gateway Mining Limited are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards (including Australian Accounting Interpretations) and the Corporations Act 2001 and for such 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 Auditing Standard on Review Engagements ASRE 2410: Review of an Interim 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 Gateway Mining Limited’s financial position as at 31 December 2011 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 Gateway Mining Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

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

Matters Relating to Electronic Publication of the Audited Financial Report

This review report relates to the financial report of Gateway Mining Limited for the half-year ended 31 December 2011 included on the website of Gateway Mining Limited. The directors of the company are responsible for the integrity of the website and we have not been engaged to report on its integrity. This review report refers only to the subject matter described above. It does not provide an opinion on any other information which may have been hyperlinked to or from the financial report. If users of the financial report are concerned with the inherent risk arising from the publication on a website, they are advised to refer to the hard copy of the reviewed financial report to confirm information contained in this website version of the financial report.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act was provided to the directors of Gateway Mining Limited on the date of this review report.

Liability is limited by a scheme approved under Professional Standards Legislation

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GATEWAY MINING LIMITED ABN: 31 008 402 391

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

Conclusion

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

• giving a true and fair view of the company’s financial position as at 31 December 2011 and of its performance for the half-year ended on that date; and

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

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Priestley & Morris Chartered Accountants

P A Cordwell

Partner Dated this 15th day of March 2012 Parramatta

Liability is limited by a scheme approved under Professional Standards Legislation

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