GENESIS RESOURCES LIMITED — Interim / Quarterly Report 2019

Mar 14, 2019

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Level 7, 333 Collins Street, Melbourne, Victoria, Australia, 3000 Tel: +61 3 8622 3354 www.genesisresourcesltd.com.au

GENESIS RESOURCES LIMITED ABN 22 114 787 469 and its controlled entities

INTERIM FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2018

Lodged with ASX under Listing Rule 4.2A This information should be read in conjunction with 30 June 2018 Annual Report

Genesis Resources Limited

Financial Report for the half-year ended 31 December 2018

TABLE OF CONTENTS

	Page
Directors’ Report	1
Auditor’s Independence Declaration	9
Financial Report for the half-year ended 31 December 2018
Consolidated Statement of Profit or Loss and Other Comprehensive	10
Income
Consolidated Statement of Financial Position	11
Consolidated Statement of Changes in Equity	12
Consolidated Statement of Cash Flows	13
Notes to the Financial Statements	14
Directors’ Declaration	20
Independent Auditor’s Review Report	21

Genesis Resources Limited

Financial Report for the half-year ended 31 December 2018

Directors’ Report

The Directors present their report together with the interim financial report of Genesis Resources Limited ( Genesis or the Company ) , for the six months ended 31 December 2018 ( Half Year ) and independent auditor’s review report thereon. This financial report has been prepared in accordance with Australian Equivalents to International Financial Reporting Standards.

Directors

The names of Directors who held office during or since the end of the Half Year and until the date of this report are as below:

Name	Position	Period of directorship
		6 March 2009 – present
Mr Eddie Lung Yiu Pang	Managing Director / Executive Chairman	(Chairman 1 December 2013 – 27 September 2015; and
		26 November 2015 – present)
		11 December 2009 – 26 November
Mr Deric Wee	Non-Executive Director	2012; and
		16 January 2013 – present
Mr Kim Heng Lim	Non-Executive Director	31 May 2016 – present
Mr Chin Niap Mah	Non-Executive Director	31 May 2016 – present
Mr James Patterson	Non-Executive Director	24 October 2016 – present
Mr Yau Young Lim	Non-Executive Director	21 November 2016 – present

The Company Secretary is Ms Sophie Karzis.

The Chief Financial Officer is Ms Patricia Wong.

Principal Activities

The principal activities of the Group during the period were exploration for and evaluation of gold, manganese and base metals. There was no significant change in the nature of the Group’s activities during the period.

REVIEW OF OPERATIONS

PLAVICA AU-AG-CU PROJECT

• No drilling was completed during the Period. Field work consisted of continued collection of data from water monitoring boreholes, wells and surface monitoring points throughout the project and collection of Flora and Fauna data to be used in an Environmental & Social Impact Assessment (ESIA). Mining, Metallurgical and Geotechnical studies are continuing in preparation for a Mining Study to be submitted to the Macedonian Government as per Macedonian Mining legislation.

• Resource Calculations were submitted to the Macedonian Geological Survey for review as per Macedonian Mining legislation.

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Genesis Resources Limited

Financial Report for the half-year ended 31 December 2018

PLAVICA HIGH SULPHIDATION EPITHERMAL GOLD-COPPER-SILVER PROJECT

(Figure 1)

Following the granting of the 30-year Exploitation Licence at Plavica in May 2015, drilling was completed in 2017 at Plavica and Maricanski Rid prospects with a focus on the oxide gold potential.

As announced to the market on 24 November 2017, an updated JORC 2012 compliant resource was released for the Plavica project. The total Measured, Indicated and Inferred Mineral Resources as at November 2017 are estimated at 37.4 million tonnes (MT) at 0.77 grams per tonne of gold (ppm Au) containing 926,000 ounces of gold and 7.7 M ounces of silver. The resources are shown in plan view in Figure 2.

No drilling was completed during the Half Year period. Field work consisted of continued collection of data from water monitoring boreholes, wells and surface monitoring points throughout the project and collection of Flora and Fauna data to be used in an ESIA. In addition, a number of mining studies are being completed to look at the viability of a number of processing options for this resource.

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Genesis Resources Limited

Financial Report for the half-year ended 31 December 2018

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Figure 1 Location of Plavica Gold-Copper-Silver Project, Republic of Macedonia. Bottom Image overlies a Digital Terrain Model (DTM).

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Figure 2: Plan view of the Mineral Resource Classification for Plavica and Maricanski Rid

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Genesis Resources Limited

Financial Report for the half-year ended 31 December 2018

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Figure 3 Location of Australian Projects.

AUSTRALIA

ARLTUNGA PROJECT: (EL25238) Copper, Gold, (GES 100%)

The Arltunga Gold Project consists of Exploration License EL25238 covering 95.2 sq km, is located approximately 110 km northeast of Alice Springs (Figure 3) in the vicinity of the Arltunga Goldfield. Thirty three historical gold mines and prospects are known in the license area.

A License Renewal Application was lodged on 4 November 2018 requesting another two-year period. The current expiry date is 7 November 2018. This Application is pending. EL25238 currently covers 31 sub-blocks.

The 12[th] Annual Technical Report was lodged on 9 November 2018.

The Mining Management Plan (MMP) update was lodged on 28 February 2018.

An extension of the Central Land Council Sacred Site Clearance Certificate was approved on 7 December 2018. The new expiry date is 31 December 2019.

A full review of all available data is currently underway, with the aim of defining targets for Reverse Circulation drilling in 2019.

No field work was carried out during the current Quarter.

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Genesis Resources Limited

Financial Report for the half-year ended 31 December 2018

ALICE SPRINGS PROJECT: (EL24817) Copper, Gold, Iron (GES 100%)

The Alice Springs Project consists of Exploration License EL24817 covering 372.59 sq km, is located approximately 110-155 km northeast from Alice Springs in the Northern Territory (Figure 3) .

The Mining Management Plan (MMP) update was lodged on 9 March 2018.

A License Renewal Application was lodged on 9 April 2018 requesting another two-year period. This Application was approved on 9 October 2018. The new expiry date is 17 April 2020. All 118 sub-blocks were retained.

The 12[th] Annual Technical Report was lodged on 18 April 2018 and accepted as satisfactory by the DME on 19 April 2018.

An extension of the Central Land Council Sacred Site Clearance Certificate was approved on the 7 December 2018. The new expiry date is 31 December 2019.

No field work was carried out. In addition, a full review of all available data is underway to define targets for RC drill testing during 2019.

GLADSTONE PROJECT: (EPM15771) Manganese (GES 100%)

The Gladstone-Mount Miller Project consists of Exploration License EPM15771 covering 42.62sq km and is located approximately 15 km by road from the port of Gladstone on the east coast of central Queensland (Figure 3).

The largest mine on the tenements controlled by Genesis was at Mount Miller. The mine opened in 1895 and operated intermittently until 1916 and then from 1958 to 1960. A total of 21,785 tonnes of ore was mined with a grade which ranged from 71% to 75% MnO2.

A License Renewal Application was lodged on 17 February 2017 and approved on the 17 March 2017. The new expiry date is 19 June 2019. All 7 sub-blocks were retained.

The 11[th] Annual Technical Report was lodged on 21 June 2018.

No field work was carried out. A review of all available data is underway to confirm if more drilling is necessary at the Mt Miller mine and if other prospect areas on the tenement require drill testing during 2019.

The Company previously held a Mining Lease 80166 (ML) Application covering 32.24 Ha of the Gladstone-Mount Miller Manganese Project. In May 2017, the Company submitted an application to the Queensland Government’s Department of Natural Resources and Mines to withdraw its ML application. The withdrawal application was accepted by the Department on 17 May 2017. The Company’s decision not to progress the ML from application to grant stage was consistent with its strategy of focusing on a program of works for the exploration permit, rather than the ML application itself.

Genesis’ withdrawal of the ML application has allowed the area to fall back within the underlying exploration permit held by Genesis, and for exploration activities to continue. The withdrawal has not affected any entitlements that Genesis currently has through the underlying exploration permit, and the permit continues to provide the Company with security of tenure for any future mining lease applications.

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Genesis Resources Limited

Financial Report for the half-year ended 31 December 2018

The Company intends to continue its exploration programs at this tenement, whilst re-assessing the viability of submitting another mining lease application at a later stage.

PIONEER PROJECT: (EPM15619) Gold (GES 100%)

The Pioneer Project consists of one granted Exploration Permit Mineral EPM15619 covering 6.23 sq km approximately 70 km by road from Bundaberg via the Bruce Highway in Queensland (Figure 3) .

The project lies within the Gaeta Goldfield and has undergone previous exploration for gold, uranium and base metals, with numerous historical gold workings located throughout the area. Historical mining was primarily focused on the Pioneer Reef which was the largest producer, but mining activities also included several other reefs including Gympie, Lord Nelson, West Yorkshire and Happy Jack.

A License Renewal Application was lodged on 9 April 2018 and approved on 31 July 2018 for a further two-year period. The new expiry date is 2 August 2020. The 2 sub-blocks were retained.

The 12[th] Annual Technical Report was lodged on 3 August 2018.

No field work was carried out. A review of all available data is underway to compile all geological mapping and define targets for drill testing during 2019.

MCARTHUR RIVER PROJECT: (EL24814) Manganese (GES 100%)

The McArthur River project consists of Exploration License EL24814 covering 380.88 sq km and is located approximately 850 km south-east of Darwin in the Northern Territory and 450 km north-west of Mount Isa in Queensland (Figure 3) .

The project area contains the Masterton No 2 manganese occurrence.

The Mining Management Plan Update was lodged on 14 November 2018.

A License Renewal Application was lodged on 9 April 2018 requesting another two-year period. This Application was approved on 9 October 2018. The new expiry date is 17 April 2020. All 116 sub-blocks were retained.

The 12[th] Annual Technical Report was lodged on 18 April 2018 and accepted as satisfactory by the DME on 19 April 2018.

No field work was carried out. A full review of all data available is underway to guide further exploration on the tenement.

LAURA RIVER PROJECT: (EMP15242) Gold, Iron (GES 100%)

The Laura River project consists of Exploration License EPM15242 covering 82.67 sq km is centered on the Cape York Peninsular township of Laura, 210km north-west of Cairns and 88km west of Cooktown in North Queensland (Figure 3) . The area is prospective for gold. Several historical alluvial workings are found in the vicinity of the Laura River and tributaries.

The 11[th] Annual Technical Report was lodged on 24 August 2018.

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Genesis Resources Limited

Financial Report for the half-year ended 31 December 2018

A License Renewal Application was lodged on 11 May 2018 requesting another two-year period. The current expiry date is 23 August 2018. This application is pending. EPM15242 currently covers 25 subblocks.

No field work was carried out.

FENN GAP PROJECT: (EMP24839) (Manganese, Iron) (GES 100%)

The Fenn Gap project consists of one Exploration License EL24839 which covers a total area of 26.93 sq km, is located approximately 25 km south-west of Alice Springs in the Northern Territory (Figure 3) . The project is 25 km from major infrastructure such as the Stuart Highway and Alice to Adelaide Railway.

The Mining Management Plan (MMP) update was lodged on 2 January 2018 and approved on 10 January 2018.

A License Renewal Application requesting another two-year period was lodged on 4 May 2018. This Application was approved on 9 October 2018. The new expiry date is 5 May 2020. All 14 sub-blocks were retained.

The 10[th] Annual Technical Report was lodged on 7 May 2018 and accepted as satisfactory by the DME on 10 May 2018.

No field work was carried out. A full review of existing data has been completed. A further, more detailed review of drilling data is underway to determine if drilling has adequately tested the known manganese mineralisation.

COMPETENT PERSON

The information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by James Patterson, a Competent Person who is a Member of the Australian Institute of Geoscientists.

James Patterson is a Non-Executive Director and exploration consultant of Genesis Resources Limited. James Patterson has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. James Patterson consents to the inclusion in the report of the matters based on his information in the form and context of which it appears.

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Genesis Resources Limited

Financial Report for the half-year ended 31 December 2018

TENEMENTS AS AT 31 DECEMBER 2018

PROJECT	TENEMENT NUMBER COMMODITY COMPANY’S BENEFICIAL INTEREST CURREN T AREA **(KM2) **	CURRENT HOLDER COUNTRY/ STATE
Alice Springs Arltunga Fenn Gap Laura River Pioneer McArthur River Gladstone	EL24817 Copper-Iron- Gld 100% 372.59	Genesis NT
	o EL25238 Gold-PGE 100% 95.2	Genesis NT
	EL24839 Iron- Manganese 100% 26.93	Genesis NT
	EMP15242 Gold-PGE 100% 82.67	Genesis QLD
	EPM15619 Gold 100% 6.23	Genesis QLD
	EL24814 Manganese- Base Metals 100% 380.88	Genesis NT
	EPM15771 Manganese 100% 42.62	Genesis QLD
Plavica &CrnVrv	19-6648/1 Gold-Silver- Copper 62% 16.85	Silgen Resources Macedonia

*Silgen Resources International Ltd, Kratovo, is an incorporated joint venture entity owned by Genesis and its Macedonian-based joint venture partner RIK Sileks AD Kratovo in 62% and 38% proportions respectively.

**All tenements noted above are Exploration Licences except Plavica in Macedonia which is an Exploitation Licence.

Results

The loss of the Group for the period ended 31 December 2018 was $984,761 (31 December 2017: loss of $1,008,109).

Matters subsequent to the end of the Half Year

• (i) On 8 January 2019, the Company obtained $250,000 total loan facility from Mr Eddie Pang and Mr KH Lim. These loan facilities are unsecured and were drawn down on 14 January 2019. These loans bear no interest and are repayable 10 business days after the date that Genesis has cleared funds from capital raising.

• (ii) On 11 February and 21 February 2019, the Company secured a $100,000 loan which was drawn down in February 2019. The interest rate is 10% per annum and is repayable 10 business days after the date that Genesis has cleared funds from capital raising.

• (iii) On 12 March 2019, the Company obtained loan facilities of $200,000 and $200,000 from Mr Eddie Pang and Mr YY Lim respectively. These loan facilities are unsecured and bear no interest and are repayable 10 business days after the date that Genesis has cleared funds from capital raising.

Other than the above, no matter or circumstance has arisen since 31 December 2018 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.

Auditor’s Independence Declaration

The lead auditor’s independence declaration is set out on page 9 and forms part of the directors’ report for the period ended 31 December 2018.

This report is made in accordance with a resolution of directors, pursuant to section 306(3)(a) of the Corporations Act 2001.

Eddie Pang Managing Director 15 March 2019

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RSM Australia Partners

Level 21, 55 Collins Street Melbourne VIC 3000 PO Box 248 Collins Street West VIC 8007 T +61 (0) 3 9286 8000 F +61 (0) 3 9286 8199

www.rsm.com.au

AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the audit of the financial report of Genesis Resources Limited for the half-year ended 31 December 2018, I declare that, to the best of my knowledge and belief, there have been no contraventions of:

• (i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

• (ii) any applicable code of professional conduct in relation to the audit.

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RSM AUSTRALIA PARTNERS

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J S CROALL Partner

Dated: 15 March 2019 Melbourne, Victoria

THE POWER OF BEING UNDERSTOOD AUDIT | TAX | CONSULTING

RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Partners ABN 36 965 185 036

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9

Liability limited by a scheme approved under Professional Standards Legislation

Genesis Resources Limited

Financial Report for the half-year ended 31 December 2018

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

Other income Employee costs Administrative and other expenses Finance income Finance expenses (Loss) / Profit on foreign exchange Loss before income tax Income tax expense Loss for the half-year Attributable to non-controlling interests Attributable to owners of the Genesis Group Other comprehensive income Exchange differences arising on translating foreign operations Other comprehensive loss for the half-year, net of tax Total comprehensive loss for the half-year Attributable to non- controlling interests Attributable to owners of the Genesis Group Earnings per share Basic loss per share (cents per share) Diluted loss per share (cents per share) ,	31 Dec 2018 31 Dec 2017 $ $ 211 1,670 (321,401) (518,552) (387,874) (315,951) 87 1,166 (286,829) (161,084) 11,045 (15,358)
	(984,761) (1,008,109) -
	(984,761) (1,008,109)
	(197) (265) (984,564) (1,007,844)
	(2,505) (2,192)
	(2,505) (2,192)
	(987,266) (1,010,301)
	(197) (265) (987,069) (1,010,036)
	(0.001) (0.001) (0.001) (0.001)

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

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Genesis Resources Limited

Financial Report for the half-year ended 31 December 2018

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2018

Notes Assets Current Assets Cash and cash equivalents Trade and other receivables Other financial assets Total Current Assets Non-Current Assets Other financial assets Property, plant and equipment Exploration and evaluation assets Total Non-Current Assets Total Assets Current Liabilities Trade and other payables Borrowings 6 Derivative liability Total Current Liabilities Total Liabilities Net Assets Equity Share capital 5 Reserves Accumulated losses Total equity attributable to members of Genesis Group Non-controlling interests 7 Total Equity	31 Dec 2018 30 June 2018 $ $ 42,806 493,752 202,677 24,301 311 459
	245,794 518,512
	98,737 98,722 36,626 35,849 21,197,210 21,065,578
	21,332,573 21,200,149
	21,578,367 21,718,661
	1,573,779 1,191,667 4,432,296 3,917,687 118,689 168,438
	6,124,764 5,277,792
	6,124,764 5,277,792
	15,453,603 16,440,869
	32,317,746 32,317,746 (259,363) (256,858) (16,575,867) (15,591,303)
	15,482,516 16,469,585 (28,913) (28,716)
	15,453,603 16,440,869

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

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Genesis Resources Limited

Financial Report for the half-year ended 31 December 2018

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

FOR THE HALF YEAR ENDED 31 DECEMBER 2018
Balance at 1 July 2018 Loss for the period Foreign currency translation Total comprehensive income for the period Transactions with owner in their capacity as owners Issued during the year net of transaction costs Balance at 31 December 2018	Issued Capital Accumulated (Losses) Reserve Non- controlling interests Total equity $ $ $ $ $ 32,317,746 (15,591,303) (256,858) (28,716) 16,440,869 - (984,564) - (197) (984,761) - - (2,505) - (2,505) - (984,564) (2,505) (197) (987,266) - - - - - - - - - -
	32,317,746 (16,575,867) (259,363) (28,913) 15,453,603

For the half-year ended	31 Dec 2017
	Issued Capital	Accumulated (Losses)	Reserve	Non- controlling interests	Total equity
	$	$	$	$	$
Balance at 1 July 2017	30,983,016	(14,011,985)	(246,495)	1,946	16,726,482
Loss for the period	-	(1,007,844)	-	(265)	(1,008,109)
Foreign currency translation	-	-	(2,192)		(2,192)
Total comprehensive income for the period	-	(1,007,844)	(2,192)	(265)	(1,010,301)
Transactions with owner in their
capacity as owners	-	-	-	-	-
Issued during the year net of
transaction costs	1,120,841	-	-	-	1,120,841
Balance at 31 December 2017	32,103,857	(15,019,829)	(248,687)	1,681	16,837,022

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

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Genesis Resources Limited

Financial Report for the half-year ended 31 December 2018

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

Cash Flows from Operating Activities Receipts from customers and suppliers Payments to suppliers and employees (inclusive of goods and services tax) Interest (paid) /received Net cash used in operating activities Cash Flows from Investing Activities Payments for property, plant and equipment Payments for investment in related entities Payments of exploration and evaluation expenditure Net cash used in investing activities Cash Flows from Financing Activities Proceeds from issue of ordinary shares Proceeds from long term borrowings Net cash from financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at 1 July Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at 31 December	31 Dec 2018 31 Dec 2017 $ $ 211 1,670 (677,224) (850,431) 87 971
	(676,926) (847,790)
	(10,648) (12,119) - (7,536) (131,912) (1,243,177)
	(142,560) (1,262,832)
	- 500,000 360,000 1,438,713
	360,000 1,938,713
	(459,486) (171,909) 493,752 279,927 8,540 (2,420)
	42,806 105,598

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

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Genesis Resources Limited

Financial Report for the half-year ended 31 December 2018

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

1. Basis of preparation of half-year report

The consolidated interim financial report for the half-year ended 31 December 2018 has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001 .

The consolidated interim financial report does not include all the notes of the type normally included in an annual financial report of Genesis Resources Limited (“GES”) and its controlled entity (the “consolidated entity” or the “Group”). Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2018 and any public announcements made by GES 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, unless otherwise stated.

New or amended Accounting Standards and Interpretations adopted

The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period.

Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

Both AASB 15 Revenue from Contracts with Customers and AASB 9 Financial Instruments have been adopted by the consolidated entity. There has been no material impact when adopting these standards and therefore no adjustments were deemed necessary.

2. Principles of Consolidation

The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by GES at the end of the reporting period. A controlled entity is any entity over which GES has the power to govern the financial and operating policies so as to obtain benefits from the entity’s activities. Control will generally exist when the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity. In assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are also considered.

Where controlled entities have entered or left the Group during the year, the financial performance of those entities are included only for the period of the year that they were controlled.

In preparing the consolidated financial statements, all inter-group balances and transactions between entities in the consolidated group have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those adopted by the parent entity.

Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent, are shown separately within the Equity section of the consolidated Statement of Financial Position and Statement of Comprehensive Income. The non-controlling interests in the net assets comprise their interests at the date of the original business combination and their share of changes in equity since that date.

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Genesis Resources Limited

Financial Report for the half-year ended 31 December 2018

3. Going concern

The financial statements have been prepared on a going concern basis, which contemplates continuity of normal business activities and the realisation of assets and discharge of liabilities in the normal course of business.

As disclosed in the financial statements, the consolidated entity incurred a loss of $984,761 (2017: $1,008,109), and had net cash outflows from operating activities of $676,926 (2017: $847,790) and from investing activities of $142,560 (2017: $1,262,832) for the half-year ended 31 December 2018. As at that date the consolidated entity had net current liabilities of $5,878,970 (30 June 2018: $4,759,280).

These factors indicate a material uncertainty which may cast significant doubt over the ability of the consolidated entity to continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.

The Directors believe that there are reasonable grounds to believe that the consolidated entity will be able to continue as a going concern, after consideration of the following factors:

• The consolidated entity’s ability to delay spending on exploration and evaluation activities should the need arise, subject to meeting its minimum expenditure requirements described in Note 10;

• As alluded to in Note 11, Subsequent Events, a total of $750,000 in loan facilities have been secured post balance date;

• The directors have received confirmation that the loans described in Note 6 will not be called upon for a period of 12 months from 31 December 2018; and

• The directors will seek further capital through equity funding, which, based on previous history, they believe is likely to be successful.

Accordingly, the Directors believe that the consolidated entity will be able to continue as a going concern and that it is appropriate to adopt the going concern basis in the preparation of the financial report.

The financial report does not include any adjustments relating to the amounts or classification of recorded assets or liabilities that might be necessary if the consolidated entity does not continue as a going concern.

4. Segment information

The Group has reportable segments, as described below, which are the Group’s business units. The two business units are managed separately because they are regulated under different authorities. For each of the business units, the Group’s Board of Directors, which acts as the Chief Operating Decision Maker, reviews internal reports on at least a quarterly basis. The following summary describes the operations in each of the Group’s reportable segments:

• Australia: includes copper, iron, gold, manganese and other base metal exploration projects in the Northern Territory and Queensland.

• Macedonia: includes a gold, silver and base metal exploration project.

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Genesis Resources Limited

Financial Report for the half-year ended 31 December 2018

4. Segment information (continued)

Information regarding the results of each reportable segment is included below. As both segments are in the early stages of exploration, there is no associated segment profit or loss, as expenditure is capitalised in accordance with the company’s accounting policy. Comparative segment information has been presented in conformity with the requirements of Accounting Standard AASB 8 Operating Segments.

Australia	Australia	Macedonia	Macedonia	Macedonia		Head Office	Head Office		Total	Total
31 Dec	31 Dec	31 Dec		31	Dec	31 Dec	31 Dec		31 Dec	31 Dec
2018	2017	2018		2017		2018	2017		2018	2017
$	$	$			$	$		$	$	$
Other income -	-	221			2,745	77		91	298	2,836
Operating
expenses -	-	(129,394)		(318,481)		(855,665)	(692,464)		(985,059)	(1,010,945)
Reportable
segment net
loss before
income tax -	-	(129,173)		(315,736)		(855,588)	(692,373)		(984,761)	(1,008,109)
31 Dec	30 June	31 Dec		30 June		31 Dec	30 June		31 Dec	30 June
2018	2018	2018		2018		2018	2018		2018	2018
Exploration and
evaluation
assets 2,218,361	2,217,461	18,978,849	18,848,117			-		-	21,197,210	21,065,578
Total segment
assets 2,218,361	2,217,461	19,238,506	18,805,601			121,500	695,599		21,578,367	21,718,661
Total segment
liabilities -	-	336,876			284	5,787,888	5,647,960		6,124,764	5,648,244
5. Share Capital
		31 Dec 2018			30 Jun	2018	31 Dec 2018		30 Jun	2018
	No. of Shares			No. of Shares				$		$
Balance at beginning of period		782,841,294			638,999,119		32,317,746		30,983,016
Transactions during
the period
Issue of shares			-		143,842,175			-	1,438,422
Rights issue			-			-		-		-
Transaction costs			-			-		-	(103,692)
Balance at end	of	782,841,294			782,841,294		32,317,746		32,317,746
period

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Genesis Resources Limited

Financial Report for the half-year ended 31 December 2018

Unissued ordinary shares of the Company under options at the end of the reporting period are:

Options on issue as Options on issue at Expiry date Exercise price ($) 31 Dec 2018 30 Jun 2018 - - - -

6. Borrowings

Director’s loan Loan facility	31 Dec 2018 30 Jun 2018 $ $ 580,000 570,000 3,852,296 3,347,687
	4,432,296 3,917,687

The borrowings consist of loan amounts with five different parties. The following details are the face value amounts before fair value adjustments. All figures are in AUD.

• a. S Active Holding Sdn Bhd:

• i. $1,500,000 at an interest rate of 10%, repayable 5 business days after the date that Genesis has cleared funds from capital raising.

• ii. $1,000,000 at an interest rate of 16%, repayable 12 months from the draw down date.

• iii. $1,038,416 at an interest free rate, repayable 10 business days after the date that Genesis has cleared funds from capital raising.

• iv. $425,050 at an interest rate of 8%, repayable 1 month from the draw down date. This can be converted to shares at the sole discretion of the borrower.

• b. Dazeline Pty Ltd:

• i. $50,000 at an interest rate of 10%, repayable 10 business days after the date that Genesis has cleared funds from capital raising.

• c. Insurnet Consultancy Sdn Bhd:

• i. $300,000 at an interest rate of 10%, repayable 10 business days after the date that Genesis has cleared funds from capital raising.

• d. Eddie Pang:

• i. $210,000 at an interest free rate, repayable 10 business days after the date that Genesis has cleared funds from capital raising.

• e. Yan Young Lim:

• i. $370,000 at an interest free rate, repayable 10 business days after the date that Genesis has cleared funds from capital raising. This can be converted to shares at the sole discretion of the borrower.

7. Equity – Non-Controlling interest

Issued Capital Foreign currency translation Accumulated Loss TOTAL	31 Dec 2018 30 June 2018 $ $ - 2,836 - - (28,913) (31,551)
	(28,913) (28,715)

The non-controlling interest has a 38% (2017: 38%) equity holding in Silgen Resources International Ltd.

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Genesis Resources Limited

Financial Report for the half-year ended 31 December 2018

8. Contingent Assets and Liabilities

There have been no changes of a material nature in contingent liabilities or assets since the last annual reporting date.

9. Related party transactions

Related parties of the consolidated entity consist of Key Management Personnel.

Further, from 31 May 2016, Mr KH Lim, a non-executive director, holds a director position in another entity that results in him having control or significant influence over the financial or operating policies of this entity. This entity transacted with Genesis during the 6 months ended 31 December 2018. The terms and conditions of the transactions with this entity were no more favourable than those available, or which might reasonably be expected to be available.

Loans from related parties*	31 Dec 2018 30 Jun 2018 $ $ 4,132,296 3,917,687
	4,132,296 3,917,687

*The borrowings consist of loan amounts with three different parties. The following details are the face value amounts before fair value adjustments. All figures are in AUD.

• a. S Active Holding Sdn Bhd.:

• i. $1,500,000 at an interest rate of 10%, repayable 5 business days after the date that Genesis has cleared funds from capital raising.

• ii. $1,000,000 at an interest rate of 16%, repayable 12 months from the draw down date.

• iii. $1,038,416 at an interest free rate, repayable 10 business days after the date that Genesis has cleared funds from capital raising.

• iv. $425,050 at an interest rate of 8%, repayable 1 month from the draw down date. This can be converted to shares at the sole discretion of the borrower.

b. Dazeline Pty Ltd:

• i. $50,000 at an interest rate of 10%, repayable 10 business days after the date that Genesis has cleared funds from capital raising.

c. Eddie Pang:

• ii. $210,000 at an interest free rate, repayable 10 business days after the date that Genesis has cleared funds from capital raising.

d. Yan Young Lim:

• i. $370,000 at an interest free rate, repayable 10 business days after the date that Genesis has cleared funds from capital raising. This can be converted to shares at the sole discretion of the borrower.

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Genesis Resources Limited

Financial Report for the half-year ended 31 December 2018

10. Commitments

In order to maintain current rights of tenure to exploration permits, the Company is required to perform minimum exploration work to meet minimum expenditure requirements. These obligations may vary over time, depending on the Company’s exploration program and priorities.

These obligations, which include a portion relating to rent, are not provided for in the financial report and are payable as follows:

are payable as follows:
Note Within one year One to five years Later than five years	31 Dec 2018 30 Jun 2018 $ $ 782,371 740,797 150,000 40,000 - -
	932,371 780,797

11. Events after balance date

• (i) On 8 January 2019, the Company obtained total loan facilities of $50,000 and $200,000 from Mr Eddie Pang and Mr KH Lim respectively. These loan facilities are unsecured and were drawn down on 14 January 2019. These loans bear no interest and are repayable 10 business days after the date that Genesis has cleared funds from capital raising.

• (ii) On 11 February and 21 February 2019, the Company secured a $100,000 loan which was drawn down in February 2019. The interest rate is 10% per annum and is repayable 10 business days after the date that Genesis has cleared funds from capital raising.

• (iii) On 12 March 2019, the Company obtained loan facilities of $200,000 and $200,000 from Mr Eddie Pang and Mr YY Lim respectively. These loan facilities are unsecured and bear no interest and are repayable 10 business days after the date that Genesis has cleared funds from capital raising.

Other than the above, no matter or circumstance has arisen since 31 December 2018 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.

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Genesis Resources Limited

Financial Report for the half-year ended 31 December 2018

DIRECTORS’ DECLARATION

In the opinion of the directors of Genesis Resources Limited, (“the Company”):

1. the financial statements and notes set out on pages 10 to 19 are in accordance with the Corporations Act 2001 , including:

2. a. complying with Accounting Standards, the Corporations Regulations 2011 and other mandatory professional reporting requirements, and

3. b. giving a true and fair view of the consolidated entity’s financial position as at 31 December 2018 and of its performance for the half-year ended on that date, and

4. 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.

Eddie Pang

Managing Director 15 March 2019

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RSM Australia Partners

Level 21, 55 Collins Street Melbourne VIC 3000 PO Box 248 Collins Street West VIC 8007 T +61 (0) 3 9286 8000 F +61 (0) 3 9286 8199

www.rsm.com.au

INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS OF GENESIS RESOURCES LIMITED

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Genesis Resources Limited which comprises the consolidated statement of financial position as at 31 December 2018, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated 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 of the consolidated entity comprising the company and the entities it controlled at the half-year end or from time to time during the half-year.

Directors’ Responsibility for the Half-Year Financial Report

The directors of the company 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 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 consolidated entity’s financial position as at 31 December 2017 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 Genesis 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.

THE POWER OF BEING UNDERSTOOD

AUDIT | TAX | CONSULTING

RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Partners ABN 36 965 185 036

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Liability limited by a scheme approved under Professional Standards Legislation

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Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations act 2001 , which has been given to the directors of Genesis Resources Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.

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 Genesis Resources 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 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 Corporations Regulations 2001 .

Material Uncertainty Related to Going Concern

Without modifying our conclusion, we draw attention to Note 3 in the financial report, which indicates that the consolidated entity incurred a loss of $984,761 and had net cash outflows from operating activities of $676,926 and investing activities of $142,560 and had net current liabilities of $5,878,970 as at 31 December 2018. These conditions, along with other matters as set forth in Note 3, 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.

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RSM AUSTRALIA PARTNERS

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J S CROALL Partner

Dated: 15 March 2019 Melbourne, Victoria

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