GLOBE METALS & MINING LIMITED — Interim / Quarterly Report 2018

Mar 14, 2018

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GLOBE METALS & MINING LIMITED ABN 33 114 400 609 AND CONTROLLED ENTITIES

Half Year Financial Report 31 December 2017

GLOBE METALS & MINING LIMITED ABN 33 114 400 609 AND CONTROLLED ENTITIES

CONTENTS

DIRECTORS' REPORT .............................................................................................................................. 1 AUDITOR’S INDEPENDENCE DECLARATION ........................................................................................... 4 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ................................................................ 5 CONSOLIDATED STATEMENT OF FINANCIAL POSITION ......................................................................... 6 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ......................................................................... 7 CONSOLIDATED STATEMENT OF CASH FLOWS ..................................................................................... 8 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS .................................................................... 9 DIRECTORS’ DECLARATION .................................................................................................................. 14 INDEPENDENT AUDITOR’S REVIEW REPORT ....................................................................................... 15

GLOBE METALS & MINING LIMITED ABN 33 114 400 609 AND CONTROLLED ENTITIES

DIRECTORS' REPORT

The directors of Globe Metals & Mining Limited (‘ Globe ’ or ‘ the Company ’) submit the financial report of the Company and its controlled entities for the half year ended 31 December 2017.

DIRECTORS

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

Ms Alice Wong Chairperson Alistair Stephens Managing Director, Deputy Chairperson and Chief Executive Officer William Hayden Non-Executive Director Bo Tan Non-Executive Director Alex Ko Non-Executive Director

Directors have held office for the entire period and to date of this report.

COMPANY SECRETARY

Michael Fry

RESULTS

The result for the half year ended 31 December 2017 attributable to members of Globe was a net loss after tax of $0.691 Million (2016: $0.979 Million).

REVIEW OF OPERATIONS

During the half year ending 31 December 2017, Globe’s main operational focus was on the advancement of its niobium project in Malawi (Africa).

Kanyika Niobium Project

During the half year, the Company continued to seek parties interested in off-take agreements for niobium and tantalum and explored a range of financing and investment options.

At the same time, the Company continued to examine opportunities for project enhancement, including reconfiguration of the project design. Arising from this, the mining and plant designs and engineering study components of the Definitive Feasibility Study are in the process of being revised and updated to incorporate the findings from improvement programs and other engineering design changes.

The Definitive Feasibility Study will remain incomplete until costing of the capital and operating costs have been tendered and accessed. Results are anticipated to be available in the second half of the 2018 financial year.

Chiziro Graphite Project

In September 2017, Globe took the decision to relinquish the Chiziro Graphite Project due to a determination that the investment required to advance the project to a decision to mine was not warranted against the considerable risks and projected return, and oversupply and overcapacity of operations in the graphite market.

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GLOBE METALS & MINING LIMITED ABN 33 114 400 609 AND CONTROLLED ENTITIES

DIRECTORS' REPORT ( Continued )

Mineral Tenement Schedule

Project	Location	Status	Tenement	Globe’s interest
Kanyika Niobium (i)	Malawi	Granted	Under mining lease application	100%
Kanyika Exploration	Malawi	Granted	EPL0421/15	100%

(i) a Mining lease application lodged with Malawi’s Ministry of Natural Resources, Energy & Mining on 5 December 2014 covering in part the area previously covered by EPL1088/05 and has been approved subject to the finalisation of a Development Agreement. This agreement currently remains with the Malawi Government.

Note: EPL: Exclusive Prospecting Licence (Malawi)

Project Location Map

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GLOBE METALS & MINING LIMITED ABN 33 114 400 609 AND CONTROLLED ENTITIES

DIRECTORS' REPORT ( Continued )

AUDITOR’S INDEPENDENCE DECLARATION

The lead 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 2017.

Rounding of amounts

The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Report) Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to the ‘rounding off’ of amounts in the directors’ report. Therefore, amounts in the directors’ report and the half-year financial report have been rounded off in accordance with that Instrument to the nearest thousand dollars, unless otherwise indicated.

This report is made in accordance with a resolution of directors.

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_________ Mr Alistair Stephens Managing Director

Dated this 12[th] day of March 2018

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Ernst & Young Tel: +61 8 9429 2222 11 Mounts Bay Road Fax: +61 8 9429 2436 Perth WA 6000 Australia ey.com/au GPO Box M939 Perth WA 6843

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Auditor’s Independence Declaration to the Directors of Globe Metals & Mining Limited

As lead auditor for the review of Globe Metals & Mining Limited for the half-year ended 31 December 2017, I declare to the best of my knowledge and belief, there have been:

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

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

This declaration is in respect of Globe Metals & Mining Limited and the entities it controlled during the financial period.

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Ernst & Young

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T G Dachs Partner Perth 12 March 2018

A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

TD:JS:GMM:005

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GLOBE METALS & MINING LIMITED ABN 33 114 400 609 AND CONTROLLED ENTITIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the Half Year Ended 31 December 2017

Other comprehensive income after tax Total comprehensive loss for the half year Loss Per Share attributable to ordinary equity holders of the Company Basic and diluted loss per share Interest income Other Income Administrative expenses Business Development Compliance and regulatory expenses Depreciation expenses Directors fees Employee benefits expenses Occupancy expenses Travel expenses Foreign currency gain/(loss) Other expenses Loss before income tax Income tax expense Loss for the half year Other comprehensive loss after tax Items that may be reclassified to profit or loss Changes in the fair value of available-for-sale financial assets	31 December 2017 $’000 31 December 2016 $’000
	124 58 - 2 (171) (198) - (17) (60) (73) (9) (40) (130) (132) (346) (404) (29) (49) (16) (12) (6) (15) (48) (99)
	(691) (979) - -
	(691) (979)
	12 -
	12 -
	(679) (979)
	Cents Cents (0.14) (0.21)

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

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GLOBE METALS & MINING LIMITED ABN 33 114 400 609 AND CONTROLLED ENTITIES

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2017

Note CURRENT ASSETS Cash and cash equivalents Trade and other receivables Other current assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Exploration and evaluation expenditure 3 Available-for-sale financial assets Plant and equipment TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Provisions 4 TOTAL CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 5 Financial Assets Reserve Accumulated losses TOTAL EQUITY	31 December 2017 $’000 30 June 2017 $’000
	10,458 11,347 57 49 97 126
	10,612 11,522
	27,270 27,103 46 34 196 203
	27,512 27,340
	38,124 38,862
	269 320 582 590
	851 910
	851 910
	37,273 37,952
	80,825 80,825 12 - (43,564) (42,873)
	37,273 37,952

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

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GLOBE METALS & MINING LIMITED ABN 33 114 400 609 AND CONTROLLED ENTITIES

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the Half Year Ended 31 December 2017

Balance at 1 July 2016 Loss for the period Other comprehensive loss Total comprehensive loss for the period Balance at 31 December 2016 Balance at 1 July 2017 Loss for the period Other comprehensive income Total comprehensive loss for the period Balance at 31 December 2017	Contributed Equity Accumulated Losses Financial Assets Reserve Total $’000 $’000 $’000 $’000 80,825 (41,222) - 39,603
	- (979) - (979) - - - -
	- (979) - (979)
	80,825 (42,201) 38,624
	80,825 (42,873) - 37,952
	- (691) - (691) - - 12 12
	- (691) 12 (679)
	80,825 (43,564) 12 37,273

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

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GLOBE METALS & MINING LIMITED ABN 33 114 400 609 AND CONTROLLED ENTITIES

CONSOLIDATED STATEMENT OF CASH FLOWS

For the Half Year Ended 31 December 2017

Cash flows from operating activities Payments to suppliers and employees (inclusive of value added taxes) Proceeds from other income Interest received Net cash outflow from operating activities Cash flows from investing activities Payment for Term Deposit Payments for exploration and evaluation assets Proceeds from the sale of plant and equipment Payments for plant and equipment Net cash outflow from investing activities Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of half year Effects of exchange rate on cash and cash equivalents Cash and cash equivalents at the end of half year	31 December 2017 $’000 31 December 2016 $’000
	(851) (961) 3 2 124 45
	(724) (914)
	- (10,000) (157) (160) - 26 (2) (8)
	(159) (10,142)
	(883) (11,056) 11,347 13,245 (6) (15)
	10,458 2,174

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

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GLOBE METALS & MINING LIMITED ABN 33 114 400 609 AND CONTROLLED ENTITIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Half Year Ended 31 December 2017

NOTE 1: BASIS OF PREPARATION OF HALF-YEAR REPORT

This consolidated interim financial report for the half-year reporting period ended 31 December 2017 has been prepared in accordance with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001.

This consolidated interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2017 and any public announcements made by Globe Metals & Mining Limited (the “Company”) 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, except as set out below:

New or revised standards and interpretations that are first effective in the current reporting period

The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current half-year. There are no new and revised standards that have any material impact of the Group’s Financial Statements.

The Group have also considered all standards issued but not yet effective and concluded that none of these standards will have any material impact on the Group’s financial statements.

NOTE 2: SEGMENT INFORMATION

The consolidated entity has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors to make decisions about resources to be allocated to the segments and assess their performance.

The reportable segments are based on aggregated operating segments determined by the similarity of the economic characteristics, the nature of the activities and the regulatory environment in which those segments operate.

The consolidated entity has two reportable segments based on the development stage of the projects and of the mineral resource and exploration activities in Africa. Unallocated results, assets and liabilities represent corporate amounts that are not core to the reportable segments.

Activity by segment

Africa-Kanyika

The Africa-Kanyika segment includes the Kanyika Niobium project in Malawi with an estimated resource of 68 million tonnes.

Africa-Exploration

The Africa-Exploration segment includes the following exploration projects:

• Chiziro Graphite project in Malawi

• Kanyika Niobium project in Malawi

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GLOBE METALS & MINING LIMITED ABN 33 114 400 609 AND CONTROLLED ENTITIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Half Year Ended 31 December 2017

NOTE 2: SEGMENT INFORMATION (CONT)

(i) Segment performance Six months ended 31 December 2017 Segment revenue Segment result Reconciliation of segment result to group net loss before tax Unallocated items: • Other revenue • Other corporate expenses Net loss before tax from continuing operations (ii) Segment assets As at 31 December 2017 • Plant and equipment • Exploration and evaluation expenditure • Cash and cash equivalents • Other assets Total Segment assets Reconciliation of segment assets to group assets • Cash and cash equivalents • Other corporate assets Total Assets (iii) Segment performance Six months ended 31 December 2016 Segment revenue Segment result Reconciliation of segment result to group net loss before tax Unallocated items: • Other revenue • Other corporate expenses Net loss before tax from continuing operations (iv) Segment assets As at 30 June 2017 • Plant and equipment • Exploration and evaluation expenditure • Other assets Total Segment assets Reconciliation of segment assets to group assets • Cash and cash equivalents • Other corporate assets Total Assets	Africa - Kanyika Africa - Exploration $’000 $’000 - -		Total $’000 - (766) 124 (37) (679) 163 27,270 33 97 27,563 10,458 103 38,124 - (804) 60 (235) (979) 166 27,103 113
	(447) (319)
	27 136 27,270 - 17 16 85 12
	27,399 164
	- -
	(430) (374)
	29 137 27,103 - 98 15
	27,230 152		27,382
			11,347 133
			38,862

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GLOBE METALS & MINING LIMITED ABN 33 114 400 609 AND CONTROLLED ENTITIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Half Year Ended 31 December 2017

NOTE 3: EXPLORATION AND EVALUATION EXPENDITURE

NOTE 3: EXPLORATION AND EVALUATION EXPENDITURE
	Half year ended Year Ended Half year ended
	31 December	30 June	31 December
	2017	2017	2016
	$’000	$’000	$’000
Non-Current
Costs carried forward in respect of areas of interest in:
Exploration and evaluation phases – at cost	27,270	27,103	27,054
Opening balance	27,103	26,918	26,918
Exploration expenditure capitalised during half year	167	190	136
Write-off of exploration expenditure(a)	-	(5)	-
At reporting date	27,270	27,103	27,054

(a) Write off for the comparative period relates to the Chiziro Graphite Project area of interest.

The value of the Group’s interest in exploration expenditure is dependent upon:

• the continuance of the consolidated entity’s rights to tenure of the areas of interest;

• the results of future exploration;

• the recoupment of costs through successful development and exploitation of the areas of interest, or alternatively, by their sale; and

• no significant changes in laws and regulations that greatly impact the company’s ability to maintain tenure.

The Group’s exploration properties may be subjected to claim(s) under native title, or contain sacred sites, or sites of significance to indigenous people. As a result, exploration properties or areas within the tenements may be subject to exploration restrictions, mining restrictions and/or claims for compensation. At this time, it is not possible to quantify whether such claims exist, or the quantum of such claims.

NOTE 4: PROVISIONS

Current Employee benefit provisions Provision for foreign tax	December 2017 $’000 June 2017 $’000 76 77 506 513
	582 590

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GLOBE METALS & MINING LIMITED ABN 33 114 400 609 AND CONTROLLED ENTITIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Half Year Ended 31 December 2017

NOTE 4: PROVISIONS (cont’d)

Movement in the provision for foreign tax is comprised as follows:

Opening balance Add: provision raised during the year Less: Amounts previously provided for replaced by assessment (Less)/Add: foreign currency exchange adjustment	December 2017 $’000 June 2017 $’000 December 2016 $’000 513 687 687 3 1 - - (145) - (10) (30) 13
	506 513 700

The provision for foreign tax is based upon assessments received which the Company is defending. The provision has been estimated by the Company in accordance with the requirements of Australian Accounting Standards.

NOTE 5: ISSUED CAPITAL

Fully paid ordinary shares	31 December 2017 30 June 2017 $’000 Number $’000 Number 80,825 469,729,062 80,825 469,729,062

NOTE 6: COMMITMENTS

(a) Exploration commitments

In order to maintain current rights of tenure to mining tenements, the Company has the following exploration expenditure requirements up until expiry of leases. These obligations, which are subject to renegotiation upon expiry of the leases, are not provided for in the financial statements and are payable:

Not longer than one year Longer than one year, but not longer than 5 years	31 December 2017 $’000 31 December 2016 $’000 318 886 - 135	31 December 2017 $’000 31 December 2016 $’000 318 886 - 135
	318	1,021

If the Company decides to relinquish certain leases and/or does not meet these obligations, assets recognised in the Consolidated statement of financial position may require review to determine the appropriateness of carrying values. The sale, transfer or farm-out of exploration rights to third parties will reduce or extinguish these obligations.

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GLOBE METALS & MINING LIMITED ABN 33 114 400 609 AND CONTROLLED ENTITIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Half Year Ended 31 December 2017

NOTE 6: COMMITMENTS (cont’d)

(b) Operating lease expenditure commitments

Operating lease expenses relate to leases for office and staff accommodation in Malawi, and office accommodation in Perth:

Not longer than one year Longer than one year, but not longer than 5 years	31 December 2017 $’000 31 December 2016 $’000 113 121 47 86	31 December 2017 $’000 31 December 2016 $’000 113 121 47 86
	160	207

NOTE 7: EVENTS SUBSEQUENT TO REPORTING DATE

There have been no events subsequent to reporting date of a material nature requiring disclosure.

NOTE 8: CONTINGENT ASSETS AND LIABILITIES

There are no material contingent assets and liabilities that exist as at reporting date.

NOTE 9: DIVIDENDS

No dividends have been paid or provided for the period.

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GLOBE METALS & MINING LIMITED ABN 33 114 400 609 AND CONTROLLED ENTITIES

DIRECTORS’ DECLARATION

In the directors’ opinion:

• (a) The financial statements set out on pages 5 to 13 are in accordance with the Corporations Act 2001 including:

• (i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and

• (ii) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2017 and of its performance for the half year ended on that date, and

• (b) there are reasonable grounds to believe that Globe Metals & Mining Limited 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 directors.

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_________ Mr Alistair Stephens Managing Director

Dated this 12[th] day of March 2018

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Ernst & Young 11 Mounts Bay Road Perth WA 6000 Australia GPO Box M939 Perth WA 6843

Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au

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Independent auditor's review report to the members of Globe Metals & Mining Limited

Report on the half-year financial report

Conclusion

We have reviewed the accompanying half-year financial report of Globe Metals & Mining Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 31 December 2017, the consolidated statement of 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.

Based on our review, which is not an audit, nothing has come to our attention that causes us to believe that the half-year financial report of the Group is not in accordance with the Corporations Act 2001 , including:

• a) giving a true and fair view of the consolidated financial position of the Group as at 31 December 2017 and of its consolidated financial 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 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, anything has come to our attention that causes us to 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 consolidated financial position as at 31 December 2017 and its consolidated financial 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 the Group, 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.

A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

TD:JS:GMM:004

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Independence

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

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Ernst & Young

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T G Dachs Partner Perth

12 March 2018

A member firm of Ernst & Young Global Limited

Liability limited by a scheme approved under Professional Standards Legislation

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