GREENWING RESOURCES LTD — Annual Report 2014

Sep 29, 2014

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ABN 31 109 933 995

Annual Financial Accounts For the year ended 30 June 2014

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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Table of Contents

CORPORATE DIRECTORY	2
DIRECTORS’ REPORT	3
STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME	14
STATEMENT OF FINANCIAL POSITION	15
STATEMENT OF CHANGES IN EQUITY	16
STATEMENT OF CASH FLOWS	17
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES	18
INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF BASS METALS LTD	47
AUDITOR’S INDEPENDENCE DECLARATION	49
DIRECTORS DECLARATION	51

1

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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1. CORPORATE DIRECTORY

DIRECTORS

Mr Richard Stacy Anthon - Non-Executive Chairman – (appointed on 4 October 2013) Mr Mark Richard Sykes - Non-Executive Director – (appointed 11 February 2014) Mr Patrick Anthony Treasure – Non-Executive Director – (appointed 2 December 2008)

COMPANY SECRETARY

Arno de Vos

REGISTERED OFFICE

Level 5, 10 Market Street Brisbane, QLD, 4000

GPO Box 2676 Brisbane, QLD, 4001

Telephone: (07) 3221 0783 Website: www.bassmetals.com.au Email: info@bassmetals.com.au

LEGAL ADVISORS

Ashurst Level 32, Exchange Plaza 1 The Esplanade Perth WA 6000

SHARE REGISTRY

Computershare Investor Services Pty Ltd Level 2, 45 St Georges Terrace Perth WA 6000 Telephone: 1300 557 010

AUDITORS

Grant Thornton Audit Pty Ltd Level 1, 10 Kings Park Road West Perth WA 6005

STOCK EXCHANGE LISTINGS

ASX Ltd (Code: BSM) Deutsche Börse (R2F-Ber (Berlin) and R2F-FRA (Frankfurt))

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ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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2. DIRECTORS’ REPORT

The directors of Bass Metals Ltd present their report together with the financial statements of the entity, being Bass Metals Ltd (“Bass Metals” or “Company”) for the year ended 30 June 2014 and the independent auditors report thereon.

Directors

The Company’s directors in office during the financial year and until the date of this report are as follows. Directors were in office for the entire period unless otherwise stated.

Mr Rick Anthon - Non-Executive Chairman

BA (ANU) LLB (ANU) MAICD

Appointed - 4 October 2013

Member of Audit Committee

Mr Anthon has practiced extensively in corporate, mining and resources law for over 30 years. He has advised on numerous acquisitions, joint ventures, and debt and capital raisings both in Australia and overseas. Additionally, Rick has acted as non-executive director and chairman for a number of public resource companies over the last 25 years and has chaired audit and remuneration committees for those companies.

Other Listed Company Directorships include:

• Laneway Resources Limited (ASX: LNY) (appointed June 1996)

• Stratum Metals (ASX: SXT) (appointed May 2011)

• Metals Finance Limited (ASX: MFC) (appointed October 2009).

Mr Patrick Anthony Treasure – Independent Non-Executive Director B.Sc (Hons), MAIMM, MAICD

Appointed – 2 December 2008 Chairman of the Audit Committee

Mr Treasure is a geologist by profession who has been actively involved in the resource and metal recovery industry for over 36 years, holding senior executive positions with a number of publicly listed companies in the process metallurgy and mining fields. Mr Treasure has extensive experience in corporate management, technology development, project evaluation and development.

Other Current Directorships:

Mr Treasure is director of Nickel Developments Limited, a subsidiary of Metals Finance Ltd.

Previous directorships (last 3 years):

Metals Finance Ltd – Resigned 1 May 2013.

Mr Mark Sykes – Non-Executive Director B.Eng (Mining) (WASM) Appointed - 11 February 2014

Mr Sykes is an experienced Mining Engineer with a wealth of operations and business development experience, during a career of some 22 years. Mark’s career includes time with BHP in an operational capacity and with Mitsubishi Development in a senior corporate investment role. Mark has exposure to a broad range of commodities including coal, uranium, iron ore, platinum group metals and other minerals. Mark brings exceptional experience in areas of corporate and strategic development, transactional due diligence, operations, technical engineering and project management

Previous Directors:

Mr Craig Ian McGown – Independent Non-Executive Chairman Appointed – 7 July 2004 Removed by Shareholders – 4 October 2013

Mr Michael Benjamin Rosenstreich – Managing Director Appointed – 15 December 2004 Removed by Shareholders – 4 October 2013

Mr Barry James Kevin Sullivan – Non-Executive Director Appointed – 9 January 2012 Removed by Shareholders – 4 October 2013

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ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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2. DIRECTORS’ REPORT (continued)

Mr Arno De Vos – Company Secretary

B Com., B Com (Hons), B Compt. (Hons), CA, CPA, PMP, MAICD Appointed – 9 May 2013

Arno is a Chartered Accountant with over 20 years of experience in accounting, audit, corporate finance, treasury and company secretarial. For 6 years he was Chief Financial Officer and Company Secretary of Metals Finance Limited and for the preceding 8 years, he was Chief Financial Officer of a property industry related company. Arno has served as a director for more than 34 private companies and was employed for a period of 5 years by Deloitte where Arno also worked with numerous listed entities.

Arno is a member of the Institute of Chartered Accountants Australia (ICAA), member of Chartered Public Accountants Australia (CPA), member of the Australian Institute of Company Directors (MAICD), affiliate of Governance Institute Australia, Registered Project Management Professional with the Project Management Institute and member of the Australian Institute of Project Management (AIPM) and Registered with the Australian Office of Fair Trading as Principal Real Estate Agent and Property Developer.

Mr Pierre Jacques Malherbe – Company Secretary

BCom Inv. Management, BCom Hons Acc, MCom Business Management Appointed – 1 May 2013 Resigned - 31 May 2014

Mr Malherbe has over 24 years’ experience in the financial and accounting industry with extensive experience in South Africa and Australia in the Investment Banking, Finance and Mining industries.

Working in a senior capacity for several leading financial institutions he was responsible for managerial, transactional and financial input across a varied spectrum of businesses, including: mining, construction and aviation.

Mr Malherbe holds a Master of Business Management (Master of Commerce) postgraduate degree from the University of Johannesburg, an Honours degree majoring in Accounting - Bachelor of Commerce (Hons) (Acc) and a Bachelor of Commerce Investment Management degree from the University of Johannesburg.

More recently he has held senior management positions within mining and financial industries in Australia where he held the positions of Associate Director, Chief Financial Officer and Company Secretary for a number of listed mining companies including Millennium Minerals Ltd, Zambezi Resources Ltd and Minrex Resources NL and the Linq Resources Fund.

Principal Activities

The principal activities of the Company for the period, in this annual report consisted of mineral exploration and site care and maintenance activities in Tasmania and project generation work in Australia and off shore.

Dividends

No dividends have been paid during the period and no dividends have been recommended by the directors.

Result for the Financial Year

The loss from ordinary activities after income tax expense for the Company was $2,087,478 (2013: $12,167,052).

Review of Operations

A review of the operations during the financial year is set out in Section 2 of this report.

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ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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2. DIRECTORS’ REPORT (continued)

Remuneration Report (Audited)

This report details the amount and nature of remuneration of key management personnel including each director’s of the Company and executives receiving the highest remuneration.

Remuneration Policy

The principles used to determine the nature and amount of remuneration are applied through a remuneration policy which ensures the remuneration package properly reflects the person’s duties and responsibilities and that the remuneration is competitive in attracting, retaining and motivating people of the highest quality.

The remuneration policy, setting the terms and conditions for the directors and other executives has been developed by the Board after seeking professional advice and taking into account market conditions and comparable salary levels for entities of a similar size and operating in similar sectors.

The remuneration policy is to provide a fixed remuneration component and a specific equity related component. The Board believes that this remuneration policy is appropriate given the stage of development of the Company and the activities which it undertakes and is appropriate in aligning Director and executive objectives with shareholder and business objectives.

The remuneration framework has regard to shareholders’ interests in the following ways:

• Focuses on sustained growth as well as focussing the executive on key non-financial drivers of value; and

• • Attracts and retains high calibre executives.

The remuneration framework has regard to executives’ interests in the following ways:

• Rewards performance, capability and experience;

• Reflects competitive reward for contributions to shareholder growth;

• Provides a clear structure for earning rewards; and

• Provides recognition for contribution.

Non-Executive Directors

The Board policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment and responsibilities. The Board determines payments to the non-executive directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought on an annual basis. The maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval by shareholders at a general meeting. Fees for non-executive directors are not linked to the performance of the Company. However, to align non-executive directors’ interests with shareholder interests, non-executive directors are encouraged to hold shares in the Company and may receive options as long-term incentive remuneration.

The Board has resolved that director’s fees will be $85,000 per annum for the Chairman and $60,000 per annum for non-executive directors, inclusive of statutory superannuation contributions effective 1 April 2011. All Directors were remunerated less than the prescribed amounts during the period in respect of their roles as non-executive directors. Shareholders approved on 30 November 2010 the aggregate remuneration for all non-executive directors at an amount of $350,000 per annum. This amount does not include the value of options provided to non-executive directors or committee member fees.

Directors are eligible for participation in the Bass Metals Ltd Employee Share Loan Scheme and the Bass Metals Ltd Employee Performance Incentive Plan which were approved by shareholders at the 2010 annual general meeting held on 30 November 2010. Any issue of shares to directors under the Bass Metals Ltd Employee Share Loan Scheme or options or performance rights under the Bass Metals Ltd Employee Performance Incentive Plan will be subject to shareholder approval pursuant to the provisions of the ASX Listing Rules and the Corporations Act 2001.

From time to time non-executive directors have undertaken specific tasks in addition to their role as non-executive directors. The basis of remuneration for such tasks was agreed between the non-executive director and the Company.

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ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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2. DIRECTORS’ REPORT (continued)

Executives

Executive directors and executives receive either a salary plus superannuation guarantee contributions as required by law, currently set at 9.50%, or provide their services via a consultancy arrangement. Individuals may elect to sacrifice part of their salary to increase payments towards superannuation. Bonus payments are at the discretion of the Board and are based on an executive’s performance. In addition, long term incentives are received through participation in the Bass Metals Ltd Employee Share Loan Scheme and the Bass Metals Ltd Employee Performance Incentive Plan.

All remuneration paid to directors and executives is valued at cost to the Company and expensed. Options are valued using the Black-Scholes methodology and are expensed over the vesting period of the options.

Base Salary

Executive remuneration is structured as a “total employment cost” package comprising cash, leave benefits and superannuation, and is reviewed annually with regard to competitiveness and performance. There are no guaranteed salary increases fixed in any senior executive contracts.

Benefits

Directors and executives may receive reimbursements of out-of-pocket expenses incurred in the undertaking of their duties, including reasonable travel, accommodation and entertainment expenses.

Bass Metals Ltd Employee Share Loan Scheme

Information on the Bass Metals Ltd Employee Share Loan Scheme is set out in Note 22.

Bass Metals Ltd Employee Performance Incentive Plan

Information on the Bass Metals Ltd Employee Performance Incentive Plan is set out in Note 22.

Relationship between the Remuneration Policy and Company Performance

The remuneration policy has been tailored to increase goal congruence between shareholders, directors and executives. Two methods have been applied to achieve this aim, the first being a performance-based incentive based on performance milestones, and the second being the issue of options and shares to directors, executives and employees to encourage the alignment of personal and shareholder interests. The Company believes this policy is effective in contributing to increasing shareholder returns.

The performance milestones are set annually, with a certain level of consultation with key management personnel to ensure buy-in. The measures are specifically tailored to the area each individual is involved in and has a level of control over. The performance milestones target areas the Board believes hold greater potential for group expansion and profit, covering financial and non-financial as well as short and long-term goals. The level set for each performance milestone is based on the Company’s production plans and respective industry standards.

Performance in relation to the performance milestones is assessed annually, with bonuses being awarded depending on the degree to which the milestone has been achieved. Following the assessment, the performance milestones are reviewed by the Remuneration Committee in light of the desired and actual outcomes, and their effectiveness in achieving the Company’s goals and shareholder returns. The performance milestones are then set for the following year.

During each year executives of the Company may be issued with options and shares. The Board considers that this is an appropriate way to attract persons of experience and ability to the Company; foster and promote loyalty by providing an incentive to remain in the Company’s employment for the long term; and to recognise the ongoing ability of key management personnel to contribute to the performance and success of the Company. During the period under review, the Company did not issue any shares or options to executives of the Company.

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ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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2. DIRECTORS’ REPORT (continued)

Performance Conditions Linked to Remuneration

The Company seeks to emphasise reward incentives for results and continued commitment to the Company through the provision of various cash bonus reward schemes, specifically the incorporation of incentive payments based on the achievement of performance milestones and continued employment with the Company. No cash bonuses have been paid out during the year or post year end.

The performance related proportions of remuneration based on these targets are included in the following remuneration table. The objective of the reward scheme is to both reinforce the short and long-term goals of the Company and provide a common interest between management and shareholders.

The satisfaction of the performance conditions are evidenced by execution of contracts or agreements and whole of Board assessment and approval. The Board does not consider that performance conditions should include a comparison with factors external to the Company at this time.

Details of Key Management Personnel

The Company considers the following persons as key management personnel:

Chairman – Non-executive

Mr RA Anthon – Appointed 4 October 2013.

Mr C I McGown – Appointed 7 July 2004. Removed by Shareholders on 4 October 2013

Executive Directors

Mr M B Rosenstreich – Appointed 15 December 2004. Removed by Shareholders on 4 October 2013

Non-executive Directors

Mr P A Treasure – Appointed 2 December 2008. Mr M R Sykes – Appointed 11 February 2014

Mr B J K Sullivan – Appointed 9 January 2012. Removed by Shareholders on 4 October 2013

Other Key Management Personnel

Mr A de Vos - Chief Financial Officer & Company Secretary – Appointed 9 May 2014

Mr PJ Malherbe – Chief Financial Officer & Company Secretary – Appointed 1 April 2013. Resigned 31 May 2014

Mr A J Brazier – Chief Financial Officer – Appointed 27 June 2011. Resigned 2 August 2012.

Refer to the remuneration report contained on the following page for details of the remuneration paid or payable to each member of the Company’s key management personnel for the year ended 30 June 2014.

Employment Contracts

No director or key management personnel are employed under an official contract of service.

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ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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2. DIRECTORS’ REPORT (continued)

Compensation of Key Management Personnel for the year ended 30 June 2014

The following table discloses the remuneration of the key management personnel of the Company. The information in this table is audited.

	Short-term benefits (salary and leave) Short- term benefits (performance bonus) Post- Employment benefits (superannuation) Non cash benefits Termination benefits Share- based payments (shares/ options) Total remuneration represented by performance bonus Total remuneration represented by shares/ options Total $ $ $ $ $ $ % % $
Executive Directors Mr M B Rosenstreich1 Non-executive Directors Mr RA Anthon Mr P A Treasure2 Mr MR Sykes3 Mr HG Solomon Mr B J K Sullivan4 Mr C I McGown5
	2014 71,565 - 6,913 - 106,085 - - - 184,563
	2013 333,710 - 13,374 - - - - - 347,084
	2014 40,826 - 3,776 - - - - - 44,602
	2013 0 - - - - - - - 0
	2014 55,750 - - - - - - - 55,750
	2013 51,000 - - - - - - - 51,000
	2014 54,983 - - - - - - - 54,983
	2013 0 - - - - - - - 0
	2014 14,699 - 1,359 - - - - - 16,058
	2013 0 - - - - - - - 0
	2014 8,670 - 2,339 - - - - - 11,009
	2013 74,311 - 6,688 - - - - - 80,999
	2014 24,885 - - - - - - - 24,885
	2013 104,469 - - - - - - - 104,469
Total Directors	2014 271,378 - 14,387 - 106,085 - - - 391,850
	2013 563,490 - 20,062 - - - - - **583,552 **
Company Executives Mr P J Malherbe6 Mr A J Brazier7 Mr A de Vos
	2014 165,897 - 16,958 - 33,548 - - - 216,403
	2013 55,384 - 4,984 - - - - - 60,368
	2014 0 - 0 - 0 - - - 0
	2013 24,576 - 2,211 - 18,679 - - - 45,466
	2014 12,500 - 0 - - - - - 12,500
Total Executives	2014 178,397 - 16,958 - 33,548 - - - 228,903
	2013 79,960 - 7,195 - 18,679 - - - 105,834

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ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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2. DIRECTORS’ REPORT (continued)

Note 1: During 2013, Mr Rosenstreich’s was removed by Shareholders as Director on 4 October 2013 and termination benefits paid of $106,085.

Note 2: During 2013 $53,670 of Mr Treasure’s short-term benefits listed above were paid to Karton Investments Ltd in 2014 in which Mr Treasure was a Director and $51,000 in 2013 was paid to Metals Finance Ltd, a company in which Mr Treasure was a director up to 1 May 2013.

Note 3: Mr Sykes was paid $7,000 as a Director of the company and $47,983 for the period he acted as Chief Operating Officer.

Note 4: Mr Sullivan was removed by Shareholders as Director on 4 October 2014.

Note 5: During 2013 Mr McGown’s was removed by Shareholders as Director on 4 October 2013 and short-term benefits listed above were paid to Resource Investment Capital Advisors Pty Ltd of which Mr McGown is a director.

Note 6: Mr Malherbe resigned as Chief Financial Officer and Company Secretary on 31 May 2014.

Note 7: Mr Brazier resigned as Chief Financial Officer on 2 August 2012.

Other than the executive director and Company executives, no other person is concerned in, or takes part in, the management of, or has authority and responsibility for planning, directing and controlling the activities of the Company. As such, during the financial year, the Company did not have any person, other than directors and Company executives, that complied with the definition of “Key Management Personnel” for the purposes of AASB 124: Related Party Disclosures or “Company Executive” for the purposes of Section 300A of the Corporations Act 2001 (“Act”).

Other Information

There were consultants engaged in relation to the remuneration of key management personnel during the financial year.

The Company did not receive a “no vote” of 25% or more on its remuneration report at its 2013 AGM.

Shareholdings of Key Management Personnel

Shares held directly and indirectly in the Company:

2014	Balance at 1 July 2013 On Exercise of Options On market Transactions Net Change Other Balance at 30 June 2014
Mr C I McGown2 Mr M B Rosenstreich2 Mr B Sullivan2 Mr P A Treasure1 Mr R S Anthon Mr M R Sykes	3,851,461 - - - 3,851,461 2,353,973 - - - 2,353,973 250,000 - - - 250,000 100,000 - - - 100,000 - - - - - - - - - -
	6,555,434 - - 6,555,434

1 The opening balance of Mr Treasure’s shareholding has been reduced from 29,846,778 shares as disclosed in the 2012 annual report to 100,000 shares in 2013 as the 2012 number included an indirect interest of Metals Finance Ltd, a company of which Mr Treasure was the Managing Director of, up to 1 May 2013.

2 Number of shares held on date ceasing to hold office as a Director of the Company

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ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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2. DIRECTORS’ REPORT (continued)

Options held by Key Management Personnel

Details of options over shares provided as compensation to each key management personnel of the Company are set out below. When exercised each option is convertible to one ordinary share in the Company.

2014	Balance at 1 July 2013 Issued during the Year Exercised during the Year Lapsed during the Year Balance at 30 June 2014 Vested and Exercisable at the End of the Year 1,283,333 - - 1,283,000 - - - - - - - - 3,333,333 - - - 3,333,333 3,333,333 - - - - - - - - - - - -
Directors Mr C I McGown Mr M B Rosenstreich Mr P A Treasure Mr R S Anthon Mr M R Sykes Company Executives Mr A de Vos Mr P J Malherbe
	4,616,666 - 1,283,000 3,333,333 3,333,333
	- - - - - - - - - - - -
	- - - - - -

Options Issued as Part of Remuneration

No options were issued to Directors and executives as part of their remuneration and all options to employees have either lapsed or have been cancelled and no options to employees have been exercised during the financial period.

Loans to Key Management Personnel

The loans to key management personnel during the year are as follows:

2013 Mr M Rosenstreich	Balance at 1 July 2012 Additional Loans Repayment / Cancellation of Loans Balance at 30 June 2013 $ $ $ $ 100,000 - - 100,000 100,000 - - 100,000 Balance at 1 July 2013 Additional Loans Repayment/ Cancellation of Loans Balance at 1 July 2014
2014
Mr M Rosenstreich	$ $ $ $ 100,000 - (100,000) -
	100,000 - (100,000) -

Under the terms of the Employee Share Loan Scheme no interest is payable in respect of the above loans. On the removal of Mr Rosenstreich as managing director the loan was settled.

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ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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2. DIRECTORS’ REPORT (continued)

Based on fringe benefits tax benchmark interest rate of 7.8% (2013: 7.8%) the following amounts would have been charged on an arm’s length basis for the period outstanding during the year.

Mr M B Rosenstreich	2014 $ 2013 $ - 7,800
	- 7,800

All loans granted under this scheme are unsecured and are made for either a period of 10 years, until the employee repays the loan, the Company forgives the loan or until the employee ceases employment with the Company, whichever occurs first.

(End of remuneration report)

Share Options

At the date of this report unissued ordinary shares of the Company under option are:

Grant Date Date of expiry Exercise price	Number under **option **
26 September 20111 30 September 2014 20.0 cents 1 November 20111 30 September 2014 20.0 cents 31 August 2012 31 August 2015 1.3 cents	28,666,667 61,471,011 15,000,000
	105,137,678

1 Since the end of the financial year, 90,137,678 options lapsed on 30 September 2014.

Directors’ Interest

The relevant interest of each director in the shares and options over shares issued by the Company at the date of this report are as follows:

Director Mr P A Treasure1	Ordinary Shares Options
	Direct Indirect Direct Indirect
	- 100,000 - -

Note 1: Mr Treasure holds 100,000 shares in the Company through Karton Investments Pty Ltd acting as trustee for the Karton Investments Pty Ltd Superfund of which Mr Treasure is a beneficiary.

Company Performance

Comments on performance are set out in the review of operations.

Significant Changes in the State of Affairs

On 6 July 2013 the Company announced that it had signed a non-binding memorandum of understanding (MoU) with a private Turkish group with strong mining credentials under which the two companies will acquire, explore and develop mining projects in Turkey through a 50:50 Turkish joint venture company (TJVC) structure. In October 2013 the Board decided not to pursue this option any further. The company has since then been pursuing other opportunities apart from continuing its exploration activities in Tasmania.

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ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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2. DIRECTORS’ REPORT (continued)

Likely Developments and Expected Results

The likely developments in the operation of the Company and the expected results of those operations in future financial years are as follows:

• Maintain a strategic land position in Tasmania incorporating a full spectrum of targets from advanced prospects to conceptual large scale anomalies, potentially with a joint venture partner earning-in; and

• Continue to assess opportunities to expand its business via development of its existing assets and potential project acquisitions both within Australia and overseas.

Environmental Regulation

The Company is subject to environmental regulation in respect of its exploration activities. The Company makes every effort to comply with the relevant regulations and, during the year, has not been advised by the regulatory authority of any breaches in relation to the regulations within the State in which it operates.

Meetings of Directors

The following table sets out the number of meetings of the Company’s Directors held during the year ended 30 June 2014 and the number of meetings attended by each Director.

Director	Directors’	Meetings	Audit	Committee	Remuneration Committee1	Remuneration Committee1
	A	B	A	B	A	B
Mr R Anthon	6	6	1	1	-	-
Mr P A Treasure	9	9	2	2	-	-
Mr M Sykes	5	3	-	-	-	-
Mr H Solomon	4	4	-	-	-	-
Mr C I McGown	6	6	1	1	-	-
Mr M B Rosenstreich	6	6	-	-	-	-
Mr B J K Sullivan	6	6	-	-	-	-

• A: Number of meetings eligible to attend

B: Number of meetings attended

Note 1: The Remuneration Committee was dissolved at a directors’ meeting held on 27 June 2012. It was resolved that the directors address the remuneration matters in the regular board meetings.

Note 2: The directors met as the Nomination Committee on an as required basis during the year ended 30 June 2014.

Note 3: The current members of the Audit committee are Mr Treasure (Chairman) and Mr Anthon.

Proceedings on Behalf of the Company

No person has applied to the Court under Section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part of the proceedings.

No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under Section 237 of the Corporations Act 2001.

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ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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2. DIRECTORS’ REPORT (continued)

Indemnification and Insurance of Directors and Officers

Indemnification

The Company has agreed to indemnify current directors and officers and past directors and officers against all liabilities to another person (other than the Company or a related body corporate), including legal expenses that may arise from their position as directors and officers of the Company and its controlled entities, except where the liability arises out of conduct involving a lack of good faith. The agreement stipulates that the Company will meet the full amount of any such liabilities, including costs and expenses.

Insurance

The directors have not included details of the premiums paid in respect of directors’ and officers’ liability insurance as such disclosure is prohibited under the terms of the contract.

Events Subsequent to Reporting Date

There were no significant changes in the state of affairs of the company during the financial year.

Non-audit Services

The directors are satisfied that the provision of non-audit services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the services disclosed below did not compromise the external auditor’s independence for the following reasons:

• all non-audit services are reviewed and approved by the Managing Director/Executive Director(s) prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and

• the nature of the services provided do not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.

No fees were paid/payable to Grant Thornton for non-audit services provided during the year ended 30 June 2014 (2013: $ Nil).

Auditors Independence Declaration

Section 307C of the Corporations Act 2001 requires the Company’s auditors, Grant Thornton Audit Pty Ltd, to provide the directors with a written Independence Declaration in relation to their audit of the financial report for the year ended 30 June 2014. This written Auditor’s Independence Declaration is attached to the Auditor’s Independent Audit Report to the members and forms part of this Directors’ Report.

Signed in accordance with a resolution of directors.

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RA Anthon Chairman Brisbane, Queensland 30 September 2014

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ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2014

Note Continuing Operations Sales revenue 3 Final sales adjustments 3 Cost of sales 4 Operating profit/(loss) Other income 3 Other expenses 4 Share-based payments 4 Finance costs 4 Loss before income tax Income tax benefit 5 Loss after income tax from continuing operations Loss for the year from discontinued operations Loss for the year Other comprehensive income, net of tax Total comprehensive loss for the year Loss attributed to: Owners of the parent entity Total comprehensive loss attributed to: Owners of the parent entity Earnings per share Basic loss per share from continuing operations (cents) 6 Basic loss per share from discontinued operations (cents) Diluted loss per share from continuing operations (cents) 6 Diluted loss per share from discontinued operations (cents) Total basic loss per share (cents) 6 Total diluted loss per share (cents)	Parent Consolidated 2014 $ 2013 $* - 1,573,421 - (4,777,791) - (132,587)
	- (3,336,957) 86,238 631,045 (2,232,381) (5,383,092) - (302,697) (18,238) (522,791)
	(2,164,381) (8,914,492) 76,903 30,758
	(2,087,478) (8,883,734)
	- (3,283,318)
	(2,087,478) (12,167,052)
	- - (2,087,478) (12,167,052)
	(2,087,478) (12,167,052)
	(2,087,478) (12,167,052)
	(0.65) (2.87) - (1.06) (0.65) (2.87) - (1.06) (0.65) (3.93) (0.65) (3.93)

The above should be read in conjunction with the accompanying notes.

• The 2013 numbers above include the consolidated balances of the Group up until the sale of the Group’s only subsidiary in February 2013.

14

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014

Note CURRENT ASSETS Cash and cash equivalents 7 Trade and other receivables 8 Other assets 9 Total Current Assets NON-CURRENT ASSETS Trade and other receivables 8 Plant and equipment 10 Mine properties 11 Capitalised exploration and evaluation 12 Total Non-Current Assets TOTAL ASSETS CURRENT LIABILITIES Trade and other payables 14 Provisions 15 Total Current Liabilities NON-CURRENT LIABILITIES Provisions 15 Total Non-Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 16 Reserves 17 Retained profits TOTAL EQUITY	Parent Parent 2014 $ 2013 $ 507,843 2,399,554 176,446 190,910 28,629 31,824
	712,918 2,622,288
	712,918 2,622,288
	670,500 815,500 55,959 223,104 - - 3,066,801 3,066,801
	3,793,260 4,105,405
	4,506,178 6,727,693
	63,220 221,749 42,148 79,341
	105,368 301,090
	694,242 740,758
	694,242 740,758
	799,610 1,041,848
	3,706,568 5,685,845
	61,782,248 61,674,048 1,302,817 1,924,410 (59,378,497) (57,912,613)
	3,706,568 5,685,845

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

15

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014

Balance at 1 July 2012 Total comprehensive loss for the year Transactions with owners, recorded directly in equity Transfer on expiry of options Share based payments Balance at 30 June 2013	Issued Capital Retained Profits/ (Accumulated Losses) Option Reserve $ $ $ 61,524,048 (50,787,839) 6,813,992	Total Equity $ 17,550,201
	- (12,167,052) - - 5,042,278 (5,042,278) 150,000 - 152,696	(12,167,052) - 302,696
	61,674,048 (57,912,613) 1,924,410	5,685,845
Balance at 1 July 2013	61,674,048 (57,912,613) 1,924,410	5,685,845
Total comprehensive loss for the year	- (2,087,478) -	(2,087,477)
Transactions with owners, recorded directly in equity
Shares issued during the period	108,200 - -	108,200
Transfer on expiry of options	- 621,593 (621,593)	-
Share based payments	- - -	-
Balance at 30 June 2014	61,782,248 (59,378,498) 1,302,817	3,706,568

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

16

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014

Note Cash flows from operating activities Cash receipts in the course of operations Cash payments in the course of operations Income tax refunds Interest received Interest paid Net cash (used in) operating activities 20(a) Cash flows from investing activities Proceeds from sale of subsidiary Purchase of property, plant and equipment Proceeds from sale of plant and equipment Payments for exploration and evaluation Settlement of derivative financial instruments Net cash (used in) / provided by investing activities Cash flows from financing activities Proceeds from issue of shares Repayment of borrowings Proceeds from other financing activities Net cash (used in) /provided by financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 7	Parent Consolidated 2014 $ 2013 $* 241,852 4,512,799 (1,965,903) (11,832,392) - 30,758 53,023 162,047 (18,238) (386,969)
	(1,689,266) (7,513,757) - 11,000,000 (1,310) - 70,450 (292,335) (363,270) - 602,375
	(293,645) 11,309,555 91,200 - - (5,268,193) - 200,000
	91,200 (5,068,193) (1,891,711) (1,272,395) 2,399,554 3,671,949
	507,843 2,399,554

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

• The 2013 numbers above include the consolidated balances of the Group up until the sale of the Group’s only subsidiary in February 2013.

17

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

(a) General Information and Statement of Compliance

These general purpose financial statements of the Group have been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board. Compliance with Australian Accounting Standards results in full compliance with the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). Bass Metals Ltd is a for-profit entity for the purpose of preparing the financial statements.

Bass Metals Ltd (”the Company”) ultimate parent company, and is a public company incorporated and domiciled in Australia. During the prior reporting period, as disclosed in the 30 June 2013 annual report, the Company sold its sole subsidiary. Therefore any references to “Group” relates to the Company’s former status.

The financial statements for the year ended 30 June 2014 (including comparatives) were approved and authorised for issue by the Board of Directors on 30 September 2014.

(b) New and Revised Standards that are effect for these Financial Statements

The AASB has issued a number of new and revised Accounting Standards and Interpretations are effective for annual periods beginning or after 1 July 2013. These new and revised standards are:

• AASB 10 Consolidated Financial Statements

• AASB 11 Joint Arrangements

• AASB 12 Disclosure of Interests in Other Entities

• AASB 13 Fair Value Measurements

• Amendments to AASB 119 Employee Benefits

The Company has adopted each of the above new and amended standards. The application of these standards did not have a material impact on the results of the Company for the reporting period.

(c) Standards issued but not yet effective and not early adopted by the Company

The AASB has issued a number of new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting period, some of which are relevant to the Company. The new and amended standards that are relevant to the Company are listed below:

• AASB 9 Financial Instruments

• AASB 2012-3 Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities

• AASB 2013-3 Recoverable Amount Disclosures for Non-Financial Assets

• AASB 2014-1 Amendments to Australian Accounting Standards (Part A: Annual Improvements 2010–2012 and 2011–2013 Cycles)

The Company has decided not to early adopt any of the above new and amended pronouncements. When the above new and amended Standards are adopted, they not considered to have a material impact on the Company.

(d) Summary of Accounting Policies

Overall Considerations

The significant accounting policies that have been used in the preparation of these financial statements are summarised below.

The financial statements have been prepared using the measurement bases specified by Australian Accounting Standards for each type of asset, liability, income and expense. The measurement bases are more fully described in the accounting policies below.

18

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Basis of Consolidation

The Group financial statements previously consolidated those of the Parent Company and its sole subsidiary up to its sale on 13 February 2013. As the Company sold its only subsidiary during the prior period, the statement of financial position at 30 June 2014 represents that of the Company.

Subsidiaries are all entities over which the Group has the power to control the financial and operating policies. The Group obtains and exercises control through more than half of the voting rights. The sold subsidiary had a reporting date of 30 June.

All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains and losses on transactions between Group companies. Where unrealised losses on intra-group asset sales are reversed on consolidation, the underlying asset is also tested for impairment from a group perspective. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.

Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable.

Non-controlling interests, presented as part of equity, represent the portion of a subsidiary's profit or loss and net assets that is not held by the Group. The Group attributes total comprehensive income or loss of subsidiaries between the owners of the parent and the non-controlling interests based on their respective ownership interests.

Investments in Joint Ventures

Joint arrangements represent the contractual sharing of control between parties in a business venture where unanimous decisions about relevant activities are required.

Separate joint venture entities providing joint venturers with an interest to net assets are classified as a joint venture and accounted for using the equity method. Under the equity method, the share of the profits or losses of the associate is recognised in profit or loss and the share of the movements in equity is recognised in other comprehensive income. Investments in associates are carried in the statement of financial position at cost plus postacquisition changes in the Company’s share of net assets of the associate. Dividends received or receivable from associates reduce the carrying amount of the investment.

Joint venture operations represent arrangements whereby joint operators maintain direct interests in each asset and exposure to each liability of the arrangement. The Company’s interests in the assets, liabilities, revenue and expenses of the joint operations are included in the respective line items of the financial statements.

Foreign Currency Translation

Functional and Presentation Currency

The financial statements are presented in Australian dollars (AUD), which is also the functional currency of the Company.

Foreign Currency Transactions and Balances

Foreign currency transactions are translated into the functional currency, using the exchange rates prevailing at the dates of the transactions (spot exchange rate). Foreign exchange gains and losses resulting from the settlement of such transactions and from the re-measurement of monetary items at year end exchange rates are recognised in profit or loss.

Non-monetary items are not retranslated at year-end and are measured at historical cost (translated using the exchange rates at the date of the transaction), except for non-monetary items measured at fair value which are translated using the exchange rates at the date when fair value was determined.

19

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Segment Reporting

Previously, in identifying its operating segments, management generally followed the Company’s operations and activities:

• The activities undertaken by the Tasmanian Operations – Mining segment include the mining of ore containing zinc, lead, copper, silver and gold;

• The activities undertaken by the Tasmanian Operations – Processing segment include the processing of the ore generated by the Group’s mining activities; and

• The activities of the Exploration segment include the search for new and additional mineral resources.

All inter-segment transfers were carried out at arm's length prices.

The measurement policies the Company uses for segment reporting under AASB 8 are the same as those used in its financial statements, except that: (a) post-employment benefit expenses; and (b) expenses relating to share-based payments are not included in arriving at the operating profit of the operating segments.

Now, as the Company has sold its Tasmanian mining and processing operations in the prior year, the Directors have identified that for the year ending 30 June 2014, it has no operating segments disaggregated within the Company. This has been determined based on the fact that the Board of Directors (chief operating decision makers) assesses performance of the Company with no further review at a disaggregated level.

Revenue

Revenue previously arose from the sale of metal concentrate. It was measured by reference to the fair value of consideration received or receivable, excluding goods and services tax (GST), rebates, and trade discounts.

The Company applies the revenue recognition criteria set out below:

Concentrate Sales

Contract terms for the Company’s sale of metal concentrates allows for a price adjustment based on final assay results by the customer to determine metal content. Recognition of sales revenue for these commodities is based on the most recently determined estimate of metal concentrates (based on initial assay results) and the spot price at the date of shipment, with a subsequent adjustment made upon final determination.

The terms of concentrate sales contracts with third parties contain provisional pricing arrangements whereby the selling price is based on prevailing spot prices on a specified future date after shipment to the customer (“quotation period”). Adjustments to the sales price occur based on movements in quoted market prices up to the date of final settlement. The period between provisional invoicing and final settlement can be between one and six months.

The provisionally priced sales of metal concentrates contain an embedded derivative, which is required to be separated from the host contract for accounting purposes. The host contract is the sale of metal concentrates and the embedded derivative is the forward contract for which the provisional sale is subsequently adjusted. Accordingly, the embedded derivative, which does not qualify for hedge accounting, is recognised at fair value, with subsequent changes in the fair value recognised in profit or loss each period until final settlement. Changes in fair value over the quotation period and up until final settlement are estimated by reference to forward market prices.

Interest

Interest is reported on an accrual basis using the effective interest method.

Other Income

Other income is recognised as and when it is receivable and has been recorded as part of other receivables if it has not yet been received.

Operating Expenses

Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their origin.

Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is necessary to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed in the period in which they are incurred and reported in “finance costs”.

20

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Property, Plant and Equipment

Equipment is initially recognised at acquisition or manufacturing cost, including any costs directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by the Group’s management.

Depreciation is recognised on a straight-line basis to write down the cost less estimated residual value of the asset. The following depreciation rates are applied:

Asset	Depreciation Rate
Computer equipment	33.33 to 50%
Exploration, Plant & environmental equipment	20 to 33.33%
Motor vehicles	20%
Office equipment	20%

Motor vehicles also include assets held under a finance lease (see Leased Assets ). Motor vehicles are subsequently measured using the cost model, cost less subsequent depreciation and impairment losses.

Material residual value estimates and estimates of useful life are updated as required, but at least annually.

Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the disposal proceeds and the carrying amount of the assets and are recognised in profit or loss within other income or other expenses.

Leased Assets

Finance Leases

The economic ownership of a leased asset is transferred to the lessee if the lessee bears substantially all the risks and rewards of ownership of the leased asset. Where the Company is a lessee in this type of arrangement, the related asset is recognised at the inception of the lease at the fair value of the leased asset or, if lower, the present value of the lease payments plus incidental payments, if any. A corresponding amount is recognised as a finance lease liability.

See Property, Plant and Equipment for the depreciation methods and useful lives for assets held under finance lease. The corresponding finance lease liability is reduced by lease payments net of finance charges. The interest element of lease payments represents a constant proportion of the outstanding capital balance and is charged to profit or loss, as finance costs over the period of the lease.

Operating Leases

All other leases are treated as operating leases. Where the Company is a lessee, payments on operating lease agreements are recognised as an expense on a straight-line basis over the lease term. Associated costs, such as maintenance and insurance, are expensed as incurred.

Exploration and Evaluation

Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. Exploration and evaluation expenditure is capitalised in the year in which is occured when it is expected to be recouped through the successful development of the area in future periods.

The total accumulated costs of the exploration and evaluation asset are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.

Accumulated costs in relation to an abandoned area are written off in full against profit or loss in the year in which the decision to abandon the area is made.

A regular review for impairment is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.

21

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Financial Instruments

Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the financial instrument, and are measured initially at fair value adjusted by transaction costs, except for those carried at fair value through profit or loss, which are measured initially at fair value. Subsequent measurement of financial assets and financial liabilities are described below.

Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and all substantial risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.

Classification and Subsequent Measurement of Financial Assets

For the purpose of subsequent measurement, financial assets other than those designated and effective as hedging instruments are classified into the following categories upon initial recognition:

• loans and receivables;

• financial assets at fair value through profit or loss (FVTPL);

• held-to-maturity (HTM) investments; and

• available-for-sale (AFS) financial assets.

The category determines subsequent measurement and whether any resulting income and expense is recognised in profit or loss or in other comprehensive income.

All financial assets except for those at FVTPL are subject to review for impairment at least at each reporting date to identify whether there is any objective evidence that a financial asset or a group of financial assets is impaired. Different criteria to determine impairment are applied for each category of financial assets, which are described below.

All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs, finance income or other financial items, except for impairment of trade receivables which is presented within other expenses.

Loans and Receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition, these are measured at amortised cost using the effective interest method, less provision for impairment. Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables fall into this category of financial instruments.

Individually significant receivables are considered for impairment when they are past due or when other objective evidence is received that a specific counterparty will default. Receivables that are not considered to be individually impaired are reviewed for impairment in groups, which are determined by reference to the industry and region of a counterparty and other shared credit risk characteristics. The impairment loss estimate is then based on recent historical counterparty default rates for each identified group.

Classification and Subsequent Measurement of Financial Liabilities

The Company's financial liabilities include borrowings, trade and other payables and derivative financial instruments.

Financial liabilities are measured subsequently at amortised cost using the effective interest method, except for financial liabilities held for trading or designated at FVTPL, that are carried subsequently at fair value with gains or losses recognised in profit or loss. All derivative financial instruments that are not designated and effective as hedging instruments are accounted for at FVTPL.

22

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income Taxes

Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in other comprehensive income or directly in equity.

Current income tax assets and/or liabilities comprise those obligations to, or claims from, the Australian Taxation Office and other fiscal authorities relating to the current or prior reporting periods, that are unpaid at the reporting date. Current tax is payable on taxable profit, which differs from profit or loss in the financial statements. Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.

Deferred income taxes are calculated using the liability method on temporary differences between the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill or an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. Deferred tax on temporary differences associated with investments in subsidiaries and joint ventures is not provided if reversal of these temporary differences can be controlled by the Company and it is probable that reversal will not occur in the foreseeable future.

Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted by the end of the reporting period.

Deferred tax assets are recognised to the extent that it is probable that they will be able to be utilised against future taxable income, based on the Company’s forecast of future operating results which is adjusted for significant nontaxable income and expenses and specific limits to the use of any unused tax loss or credit. Deferred tax liabilities are always provided for in full. Deferred tax assets and liabilities are offset only when the Company has a right and intention to set off current tax assets and liabilities from the same taxation authority.

Changes in deferred tax assets or liabilities are recognised as a component of tax income or expense in profit or loss, except where they relate to items that are recognised in other comprehensive income or directly in equity, in which case the related deferred tax is also recognised in other comprehensive income or equity, respectively.

Cash and Cash Equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with other short term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

Non-current Assets and Liabilities Classified as Held-for-Sale and Discontinued Operations

When the Company intends to sell a non-current asset or a group of assets (a disposal group), and if sale within 12 months is highly probable, the asset or disposal group is classified as “held for sale” and presented separately in the statement of financial position. Liabilities are classified as “held for sale” and presented as such in the statement of financial position if they are directly associated with a disposal group.

Assets classified as “held for sale” are measured at the lower of their carrying amounts immediately prior to their classification as held for sale and their fair value less costs to sell. However, some “held for sale” assets such as financial assets or deferred tax assets, continue to be measured in accordance with the Company's accounting policy for those assets. Once classified as “held for sale”, the assets are not subject to depreciation or amortisation.

Any profit or loss arising from the sale or re-measurement of discontinued operations is presented as part of a single line item, profit or loss from discontinued operations (see Profit or Loss from Discontinued Operations ).

Equity and Reserves

Share capital represents the fair value of shares that have been issued. Any transaction costs associated with the issuing of shares are deducted from share capital, net of any related income tax benefits.

Other components of equity include the options reserve. This comprises costs associated with share-based payments (see Share-based Employee Remuneration).

Retained earnings includes all current and prior period retained profits.

All transactions with owners of the parent are recorded separately within equity.

23

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Post-employment Benefits and Short-term Employee Benefits

The Company provides post-employment benefits through defined contribution plans.

Defined Contribution Plans

The Company pays fixed contributions into independent entities for individual employees. The Company has no legal or constructive obligations to pay contributions in addition to its fixed contributions, which are recognised as an expense in the period that relevant employee services are received.

Short-term Employee Benefits

Short-term employee benefits, including annual leave entitlement, are current liabilities included in employee benefits, measured at the undiscounted amount that the Company expects to pay as a result of the unused entitlement.

Share-based Employee Remuneration

The Company operates equity-settled share-based remuneration plans for its employees. None of the Company's plans feature any options for a cash settlement.

All goods and services received in exchange for the grant of any share-based payment are measured at their fair values. Where employees are rewarded using share-based payments, the fair values of employees' services are determined indirectly by reference to the fair value of the equity instruments granted. This fair value is appraised at the grant date and excludes the impact of non-market vesting conditions (ie: profitability and sales growth targets and performance conditions).

All share-based remuneration is ultimately recognised as an expense in profit or loss with a corresponding credit to share option reserve. If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest.

Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognised in the current period. No adjustment is made to any expense recognised in prior periods if share options ultimately exercised are different to that estimated on vesting.

Upon exercise of share options, the proceeds received net of any directly attributable transaction costs are allocated to share capital.

Provisions, Contingent Assets and Liabilities

Provisions for legal disputes, onerous contracts or other claims are recognised when the Company has a present legal or constructive obligation as a result of: (a) a past event; (b) it is probable that an outflow of economic resources will be required from the Company; and (c) amounts can be estimated reliably. Timing or amount of the outflow may still be uncertain.

Restructuring provisions are recognised only if a detailed formal plan for the restructuring has been developed and implemented, or management has at least announced the plan’s main features to those affected by it. Provisions are not recognised for future operating losses.

Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the reporting date, including the risks and uncertainties associated with the present obligation. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. Provisions are discounted to their present values, where the time value of money is material.

Any reimbursement that the Company can be virtually certain to collect from a third party with respect to the obligation is recognised as a separate asset. However, this asset may not exceed the amount of the related provision.

In those cases where the possible outflow of economic resources as a result of present obligations is considered improbable or remote, no liability is recognised.

24

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST.

Cash flows are presented in the statement of cash flows on a gross basis, except for the GST components of investing and financing activities, which are disclosed as operating cash flows.

Comparative Figures

Where required by accounting standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

Significant Management Judgement in Applying Accounting Policies

When preparing the financial statements, management undertakes a number of judgements, estimates and assumptions about the recognition and measurement of assets, liabilities, income and expenses.

Information about estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses is provided below. Actual results may be substantially different.

Provision for Restoration and Rehabilitation

The Company assesses its mine rehabilitation provision annually. Significant estimates and assumptions are made in determining the provision for mine rehabilitation as there are numerous factors that will affect the ultimate liability. These factors include estimates of the extent and costs of rehabilitation activities, technological changes, regulatory changes, cost increases as compared to inflation rates, and changes in discount rates. These uncertainties may result in future actual expenditure differing from the amounts currently provided. The provision at 30 June 2013 represents management’s best estimate of the present value of the future rehabilitation costs required. Changes to estimated future costs are recognised in the statement of financial position by either increasing or decreasing the rehabilitation liability and rehabilitation asset, if the initial estimate was originally recognised as part of an asset measured in accordance with AASB 116: Property, Plant and Equipment . Any reduction in the rehabilitation liability and therefore any deduction from the rehabilitation asset may not exceed the carrying amount of that asset. If it does, any excess over the carrying value is taken immediately to profit or loss.

If the change in estimate results in an increase in the rehabilitation liability and therefore an addition to the carrying value of the asset, the entity is required to consider whether this is an indication of impairment of the asset as a whole and test for impairment in accordance with AASB 136: Impairment of Assets . If, for mature mines, the revised mine assets net of rehabilitation provisions exceeds the recoverable value, that portion of the increase is charged directly to expense. For closed sites, changes to estimated costs are recognised immediately in profit or loss. Also, rehabilitation obligations that arose as a result of the production phase of a mine should be expensed as incurred.

Share-based Payment Transactions

The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using the Black-Scholes model taking into account the terms and conditions upon which the instruments were granted. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and equity.

Estimation of Useful Lives of Assets

The Company’s management determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment. The useful lives could change significantly as a result of technical innovations or some other event. Management will increase the depreciation and amortisation charge where useful lives are less than previously estimated lives, or it will write off or write down technically obsolete or non-strategic assets that have been abandoned or sold.

25

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Going Concern

The financial statements for the year ended 30 June 2014 have been prepared on the basis of going concern, which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business.

During the year, the consolidated entity incurred a loss after tax of $2,087,478 (2013: $12,167,052). Net cash outflows from operations during the period were $1,689,266 (2013: $7,513,757) and at reporting date current assets exceeded current liabilities by $607,550 (2013: $2,321,198).

The ability of the consolidated entity to continue as a going concern is principally dependent upon one or more of the following:

• the ability of the company to raise additional capital in the future; and

• the successful exploration and subsequent exploitation of the consolidated entity’s tenements.

These conditions give rise to material uncertainty over the consolidated entity’s ability to continue as a going concern.

The Directors will continue to monitor the capital requirements of the Company on a go forward basis and will include additional capital raisings in future periods as required. The ability of the Company to continue as a going concern is also dependent upon the continued successful exploration of its existing mining tenements, settlement of the LionGold claim as well as the successful implementation of other new project opportunities that may arise.

The Directors recognise that the above factors represent a material uncertainty as the Company’s ability to continue as a going concern, however, the Directors are confident that the Company will be able to continue its operations into the foreseeable future.

Should the Company be unable to raise sufficient funding as described above, there is a material uncertainty whether the Company will be able to continue as a going concern, and therefore, whether it will be required to realise its assets and extinguish its liabilities other than in the normal course of business and at amounts different from these stated in the financial report. The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that may be necessary should the Company be unable to continue as a going concern.

26

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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2. Assets and Disposal Groups Classified as Held for Sale

• (a) On 23 February 2013, the Company disposed of its wholly-owned subsidiary, Hellyer Mill Operations Pty Ltd, to Ivy Resources Pty Ltd for $11 million. The first instalment payment of $600,000 was received on 8 February 2013 and the remaining $10.4 million was paid on completion, with settlement occurring on 23 February 2013. The subsidiary was classified as held for sale in the 30 June 2012 financial statements.

For further details on the disposed subsidiary refer to the 30 June 2013 Annual Report.

3. Revenue

Note (a) Sales revenue Concentrate sales Sales adjustment on final assay results1 Total sales revenue (b) Other income Interest received Realised foreign currency gains Other revenue Other Fees2 Total other income	2014 $ 2013 $ - 1,573,421 - (4,777,791)
	- (3,204,370)
	53,023 162,048 5,485 23,434 27,730 245,563 - 200,000
	86,238 631,045

1Concentrate Sales

In the prior year sales adjustments on final invoicing of ($4,777,791) arose as per the contract terms for the Company’s sale of metal concentrates which allows for price adjustments based on final assay results by the customer to determine metal content. Recognition of sales revenue for these commodities is based on the most recently determined estimate of metal concentrates (based on initial assay results) and the spot price at the date of shipment, with a subsequent adjustment for both metal content and exchange rate made upon final determination. The period between provisional invoicing and final settlement can be between one and six months.

2Other Fees

During the prior period, Ivy Resource Pty Ltd paid the Company a $200,000 non-refundable fee for the right to due diligence on the Company’s assets held for sale.

4. Loss for the Year

The loss for the year is stated after taking into account the following:

Expenses

(a) Cost of sales Production costs Royalties adjustments Treatment charge adjustments on final assay results Total cost of sales (b) Share-based payments Share-based payments	2014 $ 2013 $ - 447,283 - (176,956) - (137,740)
	- **132,587 **
	- 302,697

27

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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4. Loss for the Year (continued)

(c) Other expenses Employee benefits expense Contracting & consulting expenses Finance lease expenses Operating lease expenses Administration expenses Environmental expenses Legal expenses Insurance expenses Hedge settlements Depreciation – plant & equipment Additional mine properties amortisation on revised mine plan Exploration expenditure expensed Development expenditure expensed Mine closure expenses Impairment charges Gain/(loss) on sale of fixed assets Total other expenses (d) Finance costs Interest charges Borrowing costs Finance costs Total finance costs Total expenses	557,072 1,118,719 184,331 221,843 6,449 40,620 - 42,394 525,505 918,809 312,763 515,247 137,881 582,250 36,655 237,027 - 94,412 134,836 193,159 - - 303,270 346,469 - - - 527,967 - - 33,619 544,176
	2,232,381 **5,383,092 **
	- 240,860 - 281,931 18,238 -
	18,238 **522,791 **
	2,250,618 6,341,167

5. Income Tax Expense

The prima facie tax on loss before income tax is reconciled as follows:

(a) The components of tax expense comprise: Deferred tax Under provision in respect of prior years (b) The prima facie tax on loss before income tax at 30% (2013: 30%) Add tax effect of: Non-deductible expenditure Equity based payments Add tax effect of: Deferred Tax Asset not brought to account Under provision in respect of prior years Income tax (benefit) attributable to loss from ordinary activities before tax The applicable weighted average effective tax rates are as follows:	Consolidated 2014 $ 2013 $ (76,903) (30,758) - -
	(76,903) (30,758)
	(649,314) (3,659,343)
	64,606 87,704 - 90,809
	(584,708) (3,480,830) 507,805 3,450,072 - -
	(76,903) (30,758)
	0% 0%

28

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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5. Income Tax Expense (continued)

Unrecognised temporary differences

At 30 June 2014, there are no unrecognised temporary differences associated with the Company's investments in subsidiaries, associate or joint venture, as the Company has no liability for additional taxation should unremitted earnings be remitted (2013: $Nil).

Deferred tax balances The following deferred tax assets and liabilities have been recognised: Deferred tax asset – losses available Deferred tax liability – exploration expenditure Net recognised tax balances The following deferred tax assets and liabilities have not been brought to account: Unrecognised deferred tax assets comprise: Losses available for offset against future taxable income Plant and equipment Transaction costs on equity issue Provisions	$
	920,040
	(920,040)
	-
	19,671,142
	90,197
	289,108
	13,234
	20,063,681

(c) Deferred tax balances

Deferred tax asset not recognised is $6.02 million.

The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the company can utilise the benefits from.

The potential deferred tax assets will only be obtained if:

• (i) the Company derives future assessable income of a nature and an amount sufficient to enable the benefit to be realised in accordance with Division 170 of the Income Tax Assessment Act 1997;

• (ii) the Company continues to comply with the conditions for deductibility imposed by the law; and

• (iii) no changes in tax legislation adversely affect the Company in realising the benefits.

6. Earnings Per Share

(a) Basic Earnings Per Share (Loss) for the year from continuing operations Weighted average number of ordinary shares used in the calculation of basic earnings per share Basic loss per share from continuing operations (cents)	Consolidated 2014 $ 2013 $ (2,087,478) (8,883,734) 321,941,364 309,080,282
	(0.65) (2.87)

There is no dilutive potential for ordinary shares as the exercise of options to ordinary shares would have the effect of decreasing the loss per ordinary share and would therefore be non-dilutive.

29

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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7. Cash and Cash Equivalents

Cash at bank and in hand Short-term bank deposit	2014 $ 2013 $ 462,843 2,399,554 45,000 -
	507,843 2,399,554

The effective interest rate on short-term bank deposits at 30 June 2014 was 3.15% (2013: 3.45%). These deposits have an average maturity of 90 days.

8. Trade and Other Receivables

Current Trade receivables Other receivables Non-current Tenement security deposits1 Operating lease bonds Hellyer operating infrastructure guarantees1 Loans to key management personnel2	2014 $ 2013 $ 93,889 108,510 82,557 82,400
	176,446 190,910
	170,500 170,500 - 45,000 500,000 500,000 - 100,000
	670,500 815,500

Note 1: Tenement security deposits and Hellyer operating infrastructure guarantees are held in fixed term deposits relating to the Que River project.

Note 2: Further information relating to the loan to key management personnel is set out in the remuneration report.

All of the Company’s trade and other receivables have been reviewed for indicators of impairment. No trade receivables are impaired at balance date (2013: nil).

9. Other Assets

Current Prepayments	2014 $ 2013 $ 28,629 31,824
	28,629 31,824

30

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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10. Plant & Equipment

Plant & Equipment – Other At cost Accumulated depreciation Total Plant & Equipment	2014 $ 2013 $ 702,715 702,715 (646,756) (479,611)
	55,959 223,104

Movements in carrying amounts

The carrying amounts of each class of plant and equipment between the beginning and end of the current and last financial year are set out below:

Parent Balance at 1 July 2012 Additions Disposals Depreciation expense Balance at 30 June 2013 Parent	Plant & Equipment Ore Processing	Plant & Equipment Hellyer Mill Refurbishment	Plant & Equipment – Other	Total
	$ - - - -	$ - - - -	$ 421,077 - (4,814) (193,159)	$ 421,077 - (4,814) (193,159)
	-	-	223,104	223,104
	Plant & Equipment Ore Processing	Plant & Equipment Hellyer Mill Refurbishment	Plant & Equipment – Other
				Total
	$	$	$	$
Balance at 1 July 2013	-	-	223,104	223,104
Additions	-	-	-	-
Disposals	-	-	(32,309)	(32,309)
Depreciation expense	-	-	(134,836)	(134,836)
Balance at 30 June 2014	-	-	55,959	55,959

There was no impairment losses recognised during the current or prior reporting periods.

Property, plant and equipment pledged as security for liabilities

There is no fixed and floating charge over any of the assets in the Company.

31

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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11. Mine Properties

Que River Capital Infrastructure At cost Accumulated depreciation Que River Mine Closure and Restoration At cost Accumulated depreciation Que River Mine Development At cost Accumulated depreciation Fossey Capital Infrastructure At cost Accumulated depreciation Fossey Mine Closure and Restoration At cost Accumulated depreciation Fossey Mine Development At cost Accumulated depreciation Total Mine Properties	2014 $ 2013 $
	663,273 663,273 (663,273) (663,273)
	- -
	1,118,930 1,118,930 (1,118,930) (1,118,930)
	- -
	13,060,366 13,060,366 (13,060,366) (13,060,366)
	- -
	5,760,940 5,760,940 (5,760,940) (5,760,940)
	- -
	483,285 483,285 (483,285) (483,285)
	- -
	34,826,539 34,826,539 (34,826,539) (34,826,539)
	- -
	- -

12. Capitalised Exploration and Evaluation Expenditure

The Company has mineral exploration costs carried forward in respect of areas of interest currently in the phase of exploration and evaluation: Balance at the beginning of the year Expenditure capitalised for the period Write-off resulting from relinquished tenements Balance at the end of the year	2014 $ 2013 $ 3,066,801 3,050,000 - 16,801 - - 3,066,801 3,066,801

Ultimate recoupment of costs carried forward in respect of areas of interest in the exploration and evaluation phase is dependent on successful development and commercial exploitation, or alternatively, sale of respective areas at an amount at least equivalent to the carrying value. During the period the Company expensed $203,405 in exploration and evaluation expenditure.

32

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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13. Interests in Tenements

Agreements have been entered into with third parties, whereby Bass Metals Ltd can earn an interest in exploration areas by expending specified amounts in the exploration areas along with Bass Metals Ltd’s contribution. The incoming Company’s percentage interests in the future output, having fulfilled its obligations are as follows:

Tenement	Interest
EL31/2003 Heazlewood1	100%
EL36/2003WhyteRiver2	100%
EL48/2003 Mt Block5	100%
EL24/2004 Bulgobac River5	100%
EL28/2009 Lake Margaret1	75%
EL20/1010 Sock Creek2	75%
CML 103M/1987 Hellyer Mine Lease3 & 5	100%
CML68M/1984QueRiver MineLease5	100%
ML 10W/1980 Access Easement to QRML	100%
RL11/1997 Mt Charter Retention4 & 5	100%

Notes:

1. Applications were lodged to surrender part or all of the tenements in September 2014

2. Subject to joint venture with Clancy Exploration Limited.

3. CML 103/1987 is owned by HMO a 100% subsidiary of Ivy Resources Ltd. Bass has 100% interest in all of the existing base metal resources and base metal exploration rights through a Sublease Agreement.

4. RL11/1997 is owned by Bass, but HMO has a 100% interest in the existing gold resource and gold exploration rights through a Sublease Agreement. Bass retains all base metal exploration rights.

5. Intec Limited holds a 2.5% NSR Royalty over all product from Bass’ interests in RL11/1997, EL24/2004, EL48/2003, CML68M/1984 and CML103M/1987.

14. Trade and Other Payables

Trade and Other Payables
Current Unsecured liabilities: Trade payables GST payable PAYG Payable Superannuation payable Accrued expenses	2014 $ 2013 $ 31,353 132,915 - 21,283 7,596 24,469 1,966 13,082 22,305 30,000
	63,220 221,749

Accrued expenses are recognised when the Company has identified a present obligation from the result of past events. These amounts include interest, employee payment obligations and statutory obligations.

(a) Fair value

Due to the short-term nature of these payables, their carrying value is assumed to approximate their fair value.

(b) Related party payables

For terms and conditions relating to related party payables refer to Note 24.

(c) Interest rate, foreign exchange and liquidity risk

Information regarding interest rate, foreign exchange and liquidity risk exposure is set out in Note 25.

33

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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15. Provisions

The carrying amounts and class of provisions between the beginning and end of the current financial year are set out below:

Balance at 1 July 2012 Additions Amounts used during the period Amounts included in disposal groups held for sale Refer Note 2 Balance at 30 June 2013	Fossey Mine Closure & Restoration Short- term Employee Benefits	Long-term Employee Benefits $ 41,296 5,220 - -	Total $ 888,521 5,220 (73,642) -
	$ $ 694,242 152,983 - - - (73,642) - -
	694,242 79,341	46,516	820,099
Additions	- -	8,528	8,528
Amounts used during the period	- (37,193)	(55,044)	(92,237)
Balance at 30 June 2014	694,242 42,148	-	736,390
Analysis of total provisions Provision for short term employee entitlements Provision for long term employee entitlements Rehabilitation of mine properties
		2014 $	2013 $ 79,341 46,516 694,242
		42,148
		-
		694,242
		736,390	820,099

Provision for Mine Closure & Restoration – Fossey

The provision recognises the costs to be incurred in restoration of the Fossey and Que mine sites used for the extraction of base metals. Restoration of the mine site has commenced and is ongoing.

16 Issued Capital

326,105,104 (2013: 309,450,145) fully paid ordinary shares	2014 $ 2013 $ 61,782,248 61,674,048

Ordinary shares

The Company has 326,105,104 (2013: 309,450,145) fully paid ordinary shares.

Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of fully paid ordinary shares.

On a show of hands every holder of ordinary shares present at a meeting, in person or by proxy, is entitled to one vote and upon a poll each share is entitled to one vote.

The Company has no authorised share capital and the shares have no par value.

Options

• Refer to Note 22 for information relating to the Company employee option plan, including details of options issued, exercised and lapsed during the financial year.

• Refer to the remuneration report for information relating to share options issued to key management personnel during the financial year.

34

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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16 Issued Capital (Continued)

Capital management

Management controls the capital of the Company by monitoring performance against budget to provide the shareholders with adequate returns and ensure the Company can fund its operations and continue as a going concern.

The Company’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.

Management effectively manages the Company’s capital by assessing the Company’s financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues.

There have been no changes in the strategy adopted by management to control the capital of the Company since the prior year.

There are no externally reported capital requirements, except those disclosed in Note 16.

The movement in ordinary shares during the year are as follows:

At the beginning of the year Issued during the year Ordinary shares issued at $0.006 on exercise of options on 23 September 2013 Ordinary shares issued in lieu of cash for geological consulting services provided in terms of a Technical services Agreement dated 28 March 2013 @ $0.0117 Ordinary shares issued in lieu of cash for geological consulting services provided in terms of a Technical services Agreement dated 28 March 2013 @ $0.0117 Ordinary shares issued at zero cents to Intec Limited as consideration to extinguish the Hellyer processing royalty on 9 July 20121 Less share issue costs Current and previously unrecognised tax benefit relating to share issue costs Balance at the end of the year	2014 Number of Shares 2014 $ 2013 Number of Shares	2013 $
	309,450,145 61,674,048 294,450,145	61,524,048
	15,200,000 91,200 - 855,858 10,000 - 599,101 7,000 - - - 15,000,000 - - - - - -	- - - 150,000 - -
	326,105,104 61,782,248 309,450,145	61,674,048

Non-Cash Financing Activities

1. 1 On 9 July 2012, the Company announced that it has issued 15,000,000 shares to Intec Limited for no consideration as part of the restructure of the Hellyer Processing Royalty. Under AASB 2: Share Based Payments, the issuing of the ordinary shares have been valued at the fair value of the shares at the date of the issue.

35

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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17. Reserves

Option Reserve

The option reserve records items recognised as expenses on valuation of employee share options and as consideration for loans received and for acquiring tenements or rights to participate in joint ventures. An analysis of movements in this reserve is provided in the Statement of Changes in Equity.

Option reserve Movement	2014 $ 2013 $ 1,924,410 1,924,410 (621,593) -
	1,302,817 1,924,410

18. Capital and Leasing Commitments

(i) Operating Lease Commitments Non-cancellable operating leases contracted for but not capitalised in the financial statements Payable – minimum lease payments: Not later than 12 months Between 12 months and five years	2014 $ 2013 $ 20,116 16,636 1,289 8,805
	21,405 25,441

The Company has entered into the following operating lease:

A non-cancellable lease for computer equipment located at the Company’s Perth head office. The lease has a five-year term and was entered into on the 24 August 2010. Lease payments are payable in advance.

During 2014 the Company’s total operating lease expenditure was $32,499 (2013, $42,394).

Exploration Commitments

The Company has minimum exploration commitments totalling $212,000 for the next financial reporting period.

19. Operating Segments

Segment information

The operating segments identified are based on geographical location, different risk profiles and performance assessment criteria.

The Company has identified for the year ending 30 June 2014 that it has no operating segments disaggregated within the Company. This has been determined based on the fact that the Board of Directors (chief operating decision makers) assesses performance of the Company with no further review at a disaggregated level.

The Company operates in one segment be Exploration and Evaluation of Minerals in Tasmania, Australia. Thus, segmented disclosures are not required nor will any disaggregated level of revenue or expenditure be informative.

In previous reporting periods, the reportable segments disclosed were based on aggregating operating segments where the segments were considered to have similar economic characteristics and were also similar with respect to the following:

• the products sold/and or services provided by the segment;

• the manufacturing or production processes.

36

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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19. Operating Segments (continued)

This resulted in the following segments being recognised in prior periods:

Tasmanian Operations – Mining

The Tasmanian Operations – Mining segment produces ore from its Tasmanian mining operations, containing zinc, lead, copper, silver and gold.

Tasmanian Operations – Processing

The Tasmanian Operations – Processing segment includes the Hellyer Plant and associated infrastructure and treats ore generated by the Group’s mining operations.

Exploration

The exploration segment covers activities related to the identification and discovery of new and additional mineral resources.

Basis of accounting for purposes of reporting by operating segments

Accounting policies adopted

Unless stated otherwise, all amounts reported to the Board of Directors with respect to operating segments are determined in accordance with the accounting policies that are consistent to those disclosed in Note 1.

Inter-segment transactions

Inter-segment loans receivable and payable were recognised at the consideration to be received / paid and are eliminated.

Segment assets

Where an asset was used across multiple segments, the asset was allocated to the segment that has greatest influence over the asset economic value. In the majority of instances, segment assets are clearly identifiable on the basis of their nature and physical location.

Segment liabilities

Liabilities were allocated to segments where there is a direct nexus between the incurrence of the liability and the operations of the segment. Borrowings and tax liabilities were generally considered to relate to the Company as a whole and are not allocated. Segment liabilities include trade and other payables and certain direct borrowings.

Unallocated items

The following items of revenue, expense and assets were not allocated to operating segments as they were not considered part of the core operations of any segment:

• corporate costs;

• interest revenue and expense;

• share-based payments;

• derivatives;

• income tax expense; and

• deferred tax assets (except for those relating to the closure provision for the Hellyer Mill).

(a) Geographical Region

The Company operates within one geographical region in Australia.

(b) Major Customers

There were no external customers in the 2014 financial year.

37

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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19.	Operating Segments (continued)
	Operating Segments	Tasmanian	Tasmanian	Exploration	Total
		Operations –	Operations –
	2013	Mining	Processing
		$	$	$	$
	Revenue
	Sales to external customers	(3,204,370)	-	-	(3,204,370)
	Total segment revenue	(3,204,370)	-	-	(3,204,370)
	Depreciation and amortisation	-	-	-	-
	Reportable segment profit/(loss) before
	income tax	(527,967)	(473,223)	-	(1,001,190)
	Reportable segment assets	715,499	-	3,066,801	3,782,300
	Additions to non-current assets:
	Capitalised exploration and evaluation	-	-	16,801	16,801
	Reportable segment liabilities	694,242	-	-	694,242
	Reconciliation of reportable segment revenues, profit or loss,		and assets		2013
					$
	Revenues
	Total revenue for reportable segments			(3,204,370)
	Unallocated amounts:
	Other revenue				369,304
	Interest revenue				162,048
	Consolidated revenue			(2,673,018)
	Profit or loss
	Total profit/(loss) before income tax for reportable	segments		(1,001,190)
	Unallocated amounts:
	Other profit/(loss)			(7,148,832)
	Other corporate expenses				(946,903)
	Net gain/(loss) on derivative financial instruments				(94,412)
	Share-based payments				(302,697)
	Write off of project evaluation expenditure				-
	Consolidated profit/(loss) before income tax			(12,167,052)
	Assets
	Total assets for reportable segments				3,782,300
	Unallocated amounts:
	Cash and cash equivalents				2,399,554
	Trade and other receivables				290,910
	Plant and equipment				223,104
	Other assets				31,825
	Deferred tax assets				-
	Total assets				6,727,693
	Liabilities
	Total liabilities for reportable segments				694,242
	Unallocated amounts:
	Trade and other payables				221,750
	Other liabilities				125,856
	Total liabilities				1,041,848

38

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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20. Cash Flow Information

(a) Reconciliation of cash flows from operations with loss after income tax

Operating (loss) after income tax Non-cash flows: Depreciation & amortisation Issue of shares Gain on sale of fixed assets Exploration expensed Share-based payments expense Impairment charges Change in operating assets and liabilities net of the effects of business combination acquisition: Decrease / (Increase) in trade and other receivables Decrease / (Increase) in non-current receivables Decrease / (increase) on other assets (Decrease) / increase in income taxes payable (Decrease) / increase in trade and other payables (Decrease) / increase in provisions Net cash used in operating activities

2014 $ 2013 $ (2,087,478) (12,167,052) 134,836 193,159 16,999 - 33,619 215,864 292,335 - - 302,697 - 2,500,000 14,464 8,920,664 145,000 - 3,197 194,338 (46,516) - (158,529) (7,605,005) (37,193) (68,422)

(1,689,266) (7,513,757)

21. Contingencies

Contingent Liability

At the end of the financial period the Company had no contingent liabilities.

Contingent Asset

On 16 October 2012, the Company commenced legal proceedings against LionGold Corp Ltd (“LionGold”) in respect of its allegations that LionGold breached and repudiated a Share Sale Agreement dated 5 July 2012 between the parties for the sale of the Hellyer Mill Operations Pty Ltd (“HMO”). As the sale of HMO has since occurred in February 2013 for a total of $11m, this has reduced the damages that the Company can recover from LionGold.

The Company is continuing to pursue this action. The matter has been set for hearing in the Commercial Causes list in Western Australia. An order has been made for the parties to seek resolution through mediation, which is in the process of being scheduled.

39

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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22. Share-based Payments

The following share-based payment arrangements existed at 30 June 2014.

(i) Bass Metals Ltd Employee Share Loan Scheme

The Bass Metals Ltd Employee Share Loan Scheme (“Scheme”) was approved by shareholders at an annual general meeting held on 30 November 2010. The directors of the Company may in their absolute discretion make offers of shares and, on behalf of the Company, make corresponding loans to an eligible employee of the Company to which the board has resolved that the Employee Share Loan Scheme shall for the time being apply.

Shares may not be issued to a director (or associate) except where the relevant shareholder approval is provided pursuant to the Corporations Act 2001 and ASX Listing Rules. The board may, subject to any approvals of shareholders of the Company required by law, and at intervals determined by the board, invite any eligible employee to participate in the Employee Share Loan Scheme.

Participation is optional and subject to the Rules of the Scheme. Offers made under the Scheme are not renounceable. Shares offered under the Scheme are offered with regard to the market value of the Company’s shares where the market value of a share subscribed for or acquired under the Scheme is determined by the weighted average price at which the shares are traded on the ASX in the one week period up to and including the date of offer to that Share, or if there were no transactions on the Exchange in relation to the Shares during the relevant one week period (i) the last price at which an offer was made on the ASX in that period or (ii) if (i) does not apply, the arm’s length value assessed by an independent registered company auditor or otherwise calculated in a manner approved by the Commissioner of Taxation.

(ii) Bass Metals Ltd Employee Performance Incentive Plan

The Bass Metals Ltd Employee Performance Incentive Plan (“Plan”) was approved by shareholders at an annual general meeting held on 30 November 2010. The directors of the Company administer the Employee Performance Incentive Plan and in their absolute discretion determine to whom the securities will be offered, the number to be offered and any performance criteria in relation to the options or performance rights issued under the Plan.

Options or performance rights may not be issued to a director (or associate) except where the relevant shareholder approval is provided pursuant to the Corporations Act 2001 and ASX Listing Rules.

No consideration is payable by an eligible person for a grant of an option or a performance right, unless the board decides otherwise. Subject to the rules of the Plan and to ASX Listing Rules, the Company (acting through the board) may offer options or performance rights to any eligible person at such times and on such terms as the board considers appropriate. Options and performance rights issued under the Plan may be exercised or vest at any time during the period commencing on the issue date and ending no later than five years from the date of issue. Options or performance rights which have vested and have been issued under the Plan will automatically lapse in three months from the date of departure or such longer period as the board determines in the event that an eligible person either resigns voluntarily from employment with the Company or is dismissed in certain circumstances.

Options or performance rights issued under this Plan carry no dividend or voting rights.

On vesting of performance rights, shares will automatically be issued to the eligible person subject to compliance with the Company’s Policy for Trading in Company Securities and the insider trading provisions of the Corporations Act 2001. Unless otherwise provided in the invitation to receive performance rights, no amount shall be payable by the eligible person on the automatic exercise of performance rights.

(iii) Total Unlisted Options

Total Unlisted Options
Outstanding at the beginning of the year Granted Forfeited Exercised Outstanding at the end of the year Exercisable at the end of the year	2014 2013 Number of Options Weighted Average Exercise Price $ Number of Options	Weighted Average Exercise Price$
	122,192,678 0.350 189,622,678 - - 30,200,000 (91,992,678) 0.18 (97,630,000) (15,200,000) 0.006 -	0.349 0.009 0.330 -
	15,000,000 0.013 122,192,678	0.350
	15,000,000 0.013 122,192,678	0.350

40

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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22. Share-based Payments (continued)

Set out below is a summary of options granted under the Employee Share Option Plan.

Outstanding at the beginning of the year (exercise price 25 cents, expiring 1 September 2013) Forfeited and cancelled Outstanding at the end of the year Outstanding at the beginning of the year (exercise price 25 cents, expiring 1 September 2013) Forfeited and cancelled Outstanding at the end of the year Outstanding at the beginning of the year (exercise price 35 cents, expiring 1 September 2013) Forfeited and cancelled Outstanding at the end of the year Outstanding at the beginning of the year (exercise price 50 cents, expiring 1 September 2013) Forfeited Outstanding at the end of the year Outstanding at the beginning of the year (exercise price 43.5 cents, expiring 31 January 2015) Forfeited Outstanding at the end of the year Outstanding at the beginning of the year (exercise price 61 cents, expiring 31 January 2015) Forfeited Outstanding at the end of the year Outstanding at the beginning of the year (exercise price 88 cents, expiring 31 January 2015) Forfeited Outstanding at the end of the year Outstanding at the beginning of the year (exercise price 26 cents, expiring 27 August 2015) Forfeited Outstanding at the end of the year Outstanding at the beginning of the year (exercise price 36.5 cents, expiring 27 August 2015) Forfeited Outstanding at the end of the year Outstanding at the beginning of the year (exercise price 52.5 cents, expiring 27 August 2015) Forfeited Outstanding at the end of the year	2014 Number of Options 2013 Number of Options
	730,000 730,000 (730,000) -
	- 730,000
	200,000 200,000 (200,000) -
	- 200,000
	200,000 200,000 (200,000) -
	- 200,000
	200,000 200,000 (200,000)
	- 200,000
	75,000 100,000 (75,000) (25,000)
	- 75,000
	75,000 100,000 (75,000) (25,000)
	- 75,000
	75,000 100,000 (75,000) (25,000)
	- 75,000
	100,000 200,000 (100,000) (100,000)
	- 100,000
	100,000 200,000 (100,000) (100,000)
	- 100,000
	100,000 200,000 (100,000) (100,000)
	- 100,000

41

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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23. Events Subsequent To Reporting Date

No material events occurred subsequent to the 30 June 2014 year-end.

24. Related Party Transactions

Transactions between related parties are as follows:

(a) Key Management Personnel

• (i) Resource Investment Capital Advisors Pty Ltd, an entity related to Mr C I McGown, was paid $24,885 (2013: $104,469) for Director Fees and financial consulting fees and was reimbursed at cost for expenditure made on behalf of the Company.

• (ii) Karton Investments Pty Ltd and Metals Finance Limited, an entity related to Mr P A Treasure, was paid $53,650 (Karton Investments Pty Ltd) (2013: $51,000 (Metals Finance Limited) and was reimbursed at cost for expenditure made on behalf of the Company.

Additional disclosures relating to the remuneration and shareholdings of key management personnel are set out in the Remuneration Report .

25. Financial Risk Management

(a) Financial Risk Management Policies

The Company’s financial instruments consist of at call and short term deposits with banks, accounts receivable and payable, borrowings, leases and derivatives.

Derivatives were used prior to 30 June 2013 by the Company for hedging purposes. During the previous financial year these instruments included short dated Australian dollar (AUD) denominated lead, zinc and silver forward sales. The Company did not speculate in the trading of derivative instruments.

(ii) Financial Risk Exposures and Management

The main risks the Company is exposed to through its financial instruments and operations are interest rate risk, foreign currency risk, liquidity risk, credit risk and price risk.

Interest rate risk

Short term borrowings interest rate risk is mitigated as 100% of the debt is at a fixed rate.

Foreign currency risk

The Company was exposed to fluctuations in foreign currencies arising from the sale of ore and purchase of goods and services in currencies other than the Company’s functional currency.

Liquidity risk

The Company manages liquidity risk by monitoring forecast cash flows and investing in financial instruments which under normal market conditions are readily converted to cash.

Credit risk

The maximum exposure to credit risk at reporting date to recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the Statement of Financial Position and notes to the financial statements.

There are no amounts of collateral held as security at 30 June 2014.

Credit risk is managed on a Company basis and reviewed regularly by the Company. It arises from exposures to customers as well as through certain derivative financial instruments and deposits with financial institutions.

42

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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25. Financial Risk Management (continued)

The Company monitors credit risk by actively assessing liquidity of counter parties:

• Only banks and financial institutions with a high rating are utilised for derivative financial instruments; and

• All potential customers are assessed for credit worthiness taking into account their size, market position and financial standing.

The credit risk for counterparties included in trade and other receivables and financial assets at 30 June 2012 are detailed below:

Trade and other receivables Trade receivables – counterparties not rated1 Other receivables – counterparties not rated2	2014 $ 2013 $ 93,889 108,510 753,057 897,900
	846,946 1,006,410

Note 1: Bass Metals Ltd has trade receivables with Ivy Resources Ltd $93,889 (2013: $108,510). Note 2: Other receivables exclude prepayments, as detailed in Note 8.

(b) Financial Instruments

( i) Financial instrument composition and maturity analysis

The tables below reflect the undiscounted contractual settlement terms for financial instruments of a fixed period of maturity, as well as management’s expectations of the settlement period for all other financial instrument. As such, the amounts may not reconcile to the Statement of Financial Position.

Consolidated

Fixed Interest Rate Maturing

Consolidated		Fixed Interest Rate Maturing
30 June 2013 Financial Assets: Cash & cash equivalents Trade and other receivables Total Financial Assets Financial Liabilities: Trade and other payables Total Financial Liabilities	Weighted Average Effective Interest Rate	Floating Interest Rate Within 1 Year 1 to 5 Years Non- interest bearing	Total
	2.24% 4.10%	$ $ $ $ 2,399,554 - - - - - 815,980 190,430	$ 2,399,554 1,006,410
		2,399,554 - 815,980 190,430	3,405,964
		- - - 221,749	221,749
		- - - 221,749	221,749

43

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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25. Financial Risk Management (continued)

Parent	Fixed Interest Rate Maturing
30 June 2014 Weighted Average Effective Interest Rate	Floating Interest Rate Within 1 Year 1 to 5 Years
		Non- interest bearing
			Total
	$ $ $	$	$
Financial Assets:
Cash & cash equivalents 0.94%	507,843 - -	-	507,843
Trade and other receivables 3.24%	- 76,903 670,500	99,543	846,946
Total Financial Assets	507,843 76,903 670,500	99,543	1,354,789
Financial Liabilities:
Trade and other payables	- - -	105,368	105,368
Total Financial Liabilities	- - -	105,368	105,368

The above weighted average effective interest rates are as at 30 June 2013.

Trade and other receivables are expected to be received as follows:

Less than 6 months 6 months to 1 year 1 to 5 years	2014 $ 2013 $ 176,446 190,430 - - 670,500 815,980
	846,946 1,006,410

There are no balances within trade and other receivables that contain assets that have been impaired and are past due. The Company’s debt from Ivy Resources Ltd makes up the majority of trade and other receivables and is expected to be received in less than six months. It is expected these balances will be received when due.

Trade and other payables are expected to be paid as follows:

Less than 6 months	2014 $ 2013 $ 105,368 221,749
	105,368 221,749

(iii) Fair Values

The fair values of the Company’s at call and short term deposits with banks, accounts receivable and payable, borrowings, leases and derivatives are all in line with the carrying values.

No financial assets and financial liabilities are readily traded on organised markets in standardised form other than derivative financial instruments.

Aggregate fair values and carrying amounts of financial assets and financial liabilities at reporting date are as follows:

44

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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25. Financial Risk Management (continued)

Financial Assets Cash and cash equivalents Trade and other receivables Derivative financial instruments	2014 2013 Carrying Amount Carrying Amount $ $ 507,843 2,399,554 846,946 1,006,410 - -
	1,354,789 3,405,964

The fair values of financial assets are comparable to the carrying amount.

Financial Liabilities At amortised cost: Trade and other payables Borrowings Derivative financial instruments	2014 2013 Carrying Amount Carrying Amount $ $ 105,368 221,749 - - - -
	105,368 221,749

The fair values of financial liabilities are comparable to the carrying amount.

The financial instruments recognised at fair value in the Statement of Financial Position have been analysed and classified using a fair value hierarchy reflecting the significance of the inputs used in making the measurements. The fair value hierarchy consists of the following levels:

• Quoted prices in active markets for identical assets and liabilities (Level 1);

• Inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly (as prices) or indirectly (derived from prices) (Level 2); and

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

(iv)

Sensitivity Analysis

Interest Rate Risk, Foreign Currency Risk and Price Risk

The Company has performed a sensitivity analysis relating to its exposure to interest rate risk, foreign currency risk and price risk at reporting date. This sensitivity analysis demonstrates the effect on the current year results and equity which could result from a change in these risks.

Interest Rate Sensitivity Analysis

At 30 June 2014, the effect on profit and equity as a result of changes in the interest rate in relation to financial assets with all other variables remaining constant would be as follows:

assets with all other variables remaining constant would be as follows:
	2014	2013
	$	$
Change in profit
Increase in interest rate by 1% (100 bps)	13,548	22,998
Decrease in interest rate by 1% (100 bps)	(13,548)	(22,998)
Change in equity
Increase in interest rate by 1% (100 bps)	13,548	22,998
Decrease in interest rate by 1% (100 bps)	(13,548)	(22,998)

45

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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25. Financial Risk Management (continued)

At 30 June 2014, the effect on profit and equity as a result of changes in the interest rate in relation to financial liabilities with all other variables remaining constant would be as follows:

	2014	2013
	$	$
Change in profit
Increase in interest rate by 1% (100 bps)	(1,054)	(18,800)
Decrease in interest rate by 1% (100 bps)	1,054	18,800
Change in equity
Increase in interest rate by 1% (100 bps)	(1,054)	(18,800)
Decrease in interest rate by 1% (100 bps)	1,054	18,800

Foreign Currency Risk Sensitivity Analysis

At 30 June 2014, the effect on profit and equity as a result of changes in the value of the Australian dollar to the US dollar, with all other variables remaining constant is as follows:

	2014	2013
	$	$
Change in profit
Increase in AUD/USD by 5%	(13,245)		-
Decrease in AUD/USD by 5%	13,245		-
Change in equity
Increase of AUD/USD by 5%	(13,245)		-
Decrease in AUD/USD by 5%	13,245		-

26. Key Management Personnel

The totals of remuneration paid to key management personnel of the Company during the year are as follows:

Short-term employee benefits (salary and leave) Short-term employee benefits (performance bonus) Post-employment benefits Share-based payments Termination benefits	2014 $ 2013 $ 449,775 691,910 - - 31,345 27,257 - - 139,633 107,490
	620,753 826,657

27. Remuneration of Auditors

Amounts received or due and receivable by Grant Thornton Audit Pty Ltd for: Audit and review of the financial report Taxation and consulting services	2014 $ 2013 $ 29,000 43,837 - -
	29,000 43,837

46

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Level 1

10 Kings Park Road West Perth WA 6005

Correspondence to: PO Box 570 West Perth WA 6872

T +61 8 9480 2000 F +61 8 9322 7787 E info.wa@au.gt.com W www.grantthornton.com.au

Independent Auditor’s Report To the Members of Bass Metals Ltd

Report on the financial report

We have audited the accompanying financial report of Bass Metals Ltd (the “Company”), which comprises the statement of financial position as at 30 June 2014, the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of the Company.

Directors’ responsibility for the financial report

The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001. The Directors’ responsibility also includes such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. The Directors also state, in the notes to the financial report, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, the financial statements comply with International Financial Reporting Standards.

Auditor’s responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require us to comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

Grant Thornton Audit Pty Ltd ACN 130 913 594

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

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.

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An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence

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

Auditor’s opinion

In our opinion:

• a the financial report of Bass Metals Ltd is in accordance with the Corporations Act 2001, including:

• i giving a true and fair view of the Company’s financial position as at 30 June 2014 and of its performance for the year ended on that date; and

• ii complying with Australian Accounting Standards and the Corporations Regulations 2001; and

• b the financial report also complies with International Financial Reporting Standards as disclosed in the notes to the financial statements.

Emphasis of matter

Without qualifying our opinion, we draw attention to Note 1 in the financial report which indicates that the Company incurred a net loss of $2,087,478 during the year ended 30 June 2014 and, as of that date, the Company’s cash outflows from operating equates to $1,689,266. These conditions, along with other matters as set forth in Note 1, indicate the existence of a material uncertainty which may cast significant doubt about the Company’s ability to continue as a going concern and therefore, the Company may be unable to realise its assets and discharge its liabilities in the normal course of business, and at the amounts stated in the financial report.

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Report on the remuneration report

We have audited the remuneration report included in pages 5 to 11 of the directors’ report for the year ended 30 June 2014. The Directors of the Company are responsible for the preparation and presentation of the remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditor’s opinion on the remuneration report

In our opinion, the remuneration report of Bass Metals Ltd for the year ended 30 June 2014, complies with section 300A of the Corporations Act 2001.

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GRANT THORNTON AUDIT PTY LTD Chartered Accountants

==> picture [114 x 50] intentionally omitted <==

P W Warr Partner - Audit & Assurance

Perth, 30 September 2014

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Level 1

10 Kings Park Road West Perth WA 6005

Correspondence to: PO Box 570 West Perth WA 6872

T +61 8 9480 2000 F +61 8 9322 7787 E info.wa@au.gt.com W www.grantthornton.com.au

Auditor’s Independence Declaration To the Directors of Bass Metals Ltd

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Bass Metals Ltd for the year ended 30 June 2014, I declare that, to the best of my knowledge and belief, there have been:

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

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

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GRANT THORNTON AUDIT PTY LTD Chartered Accountants

==> picture [114 x 50] intentionally omitted <==

P W Warr Partner - Audit & Assurance

Perth, 30 September 2014

Grant Thornton Audit Pty Ltd ACN 130 913 594

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

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.

ANNUAL FINANCIAL ACCOUNTS For the year ended 30 June 2014

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6. DIRECTORS DECLARATION

1. In the opinion of the Directors of Bass Metals Ltd (“Company”):

2. a. The financial statements and notes as set out on pages 25 to 84 are in accordance with the Corporations Act 2001, including:

3. i. Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2014 and of its performance, for the financial year ended on that date; and

4. ii. Complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001;

5. iii. Complying with International Financial Reporting Standards as disclosed in Note 1.

6. b. The remuneration disclosures that are contained in the Remuneration Report in the Directors’ Report designated as audited comply with the Corporations Act 2001; and

7. c. There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

8. The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Managing Director and Chief Financial Officer for the financial year ended 30 June 2014.

Signed in accordance with a resolution of the Directors of the Company.

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RA Anthon Chairman

Brisbane, Queensland 30 September 2014

51