GREENWING RESOURCES LTD — Interim / Quarterly Report 2014

Mar 10, 2014

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ABN 31 109 933 995

HALF-YEAR REPORT For the period ended 31 December 2013

HALF-YEAR REPORT For the financial period ended 31 December 2013

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TABLE OF CONTENTS

Corporate	Directory	3
Directors’	Report	4
Review of	Operations	4
1.	Sustainability	5
2.	Operations	5
3.	Exploration	6
Financial Statements
	Statement of Profit or Loss and Other Comprehensive Income	8
	Statement of Financial Position	9
	Statement of Changes in Equity	10
	Statement of Cash Flows	11
	Notes to the Financial Statements	12
Directors’	Declaration	22
Auditor’s Independence Declaration		23
Independent Review Report to Members		24

2

HALF-YEAR REPORT For the financial period ended 31 December 2013

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CORPORATE DIRECTORY

REGISTERED OFFICE

Suite 7, 186 Hay Street Subiaco Western Australia 6008

PO Box 8107 Subiaco East Western Australia 6008

Telephone: (08) 6315 1300 Facsimile: (08) 9481 2846 Website: www.bassmetals.com.au Email: admin@bassmetals.com.au

LEGAL ADVISORS

Ashurst Lawyers Level 32, 2 The Esplanade Perth WA 6000

Page Seager Lawyers Level 2, 179 Murray Street Hobart TAS 7000

SHARE REGISTRY

Computershare Investor Services Pty Ltd Level 2, 45 St Georges Terrace Perth WA 6000

Telephone: 1300 55 70 10

AUDITORS

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

STOCK EXCHANGE LISTINGS

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

3

HALF-YEAR REPORT For the financial period ended 31 December 2013

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DIRECTORS REPORT

Your Directors submit the interim financial report of Bass Metals Ltd (“the Company” or “Bass”) and its controlled entities (“the Consolidated Group”) for the half-year ended 31 December 2013.

Directors

The following were Directors of the Company during the reporting period and until the date of this report:

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

Mr Gavin Solomon - Independent Non-Executive Director – resigned 11 February 2014

Mr Craig Ian McGown – Independent Non-Executive Chairman – ceased as a Director on 4 October 2013

Mr Michael Benjamin Rosenstreich – Managing Director – ceased as a Director on 4 October 2013

Mr Barry James Kevin Sullivan – Non-Executive Director – ceased as a Director on 4 October 2013

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

Consolidated Entities

Hellyer Mill Operations Pty Ltd (“HMO”) was a wholly owned subsidiary of Bass during the half-year ended 31 December 2012 but was sold to an independent third party on 23 February, 2013. For the half-year ended 31 December 2013, Bass had no subsidiaries.

REVIEW OF OPERATIONS

In the six months to 31 December, 2013 the Company focussed on the environmental rehabilitation of the Settlement Dam at the Que River mine site as well as further developing the geological knowledge of Bass’ tenements. Bass has targeted priority areas within their tenement portfolio and has committed funding to leverage off the initial multi-element soil geochemistry analysis conducted in the second half of 2013. The Company also embarked on various business development initiatives with a focus on possible operations in Turkey. The Board has subsequently determined that the Turkey initiative was not currently viable and would not pursue it further.

Operational Results

The total loss for the period after tax is $1,543,953 (2012: $9,866,533) with the main components comprising: Other administration charges (such as legal expenses) of $567,522; care and maintenance costs of $239,038 and employee expenses (including final settlement with previous managing director) of $245,074.

1. CORPORATE ACTIVITIES

During the period, the Company held an Extraordinary General Meeting on 4 October 2013 as a result of a requisition received from its major shareholder, Metals Finance Ltd, for the removal of Messrs’ McGown, Rosenstreich and Sullivan as directors of the Company and to replace them with Messrs’ Anthon and Solomon as new Directors. The shareholders voted in favour of the requisition and Messrs Anthon and Solomon were appointed as Directors on 4 October 2013.

Since their appointment, the focus of the new board has been to undertake a review of the Company to address and finalise legacy issues faced by the Company. It has since progressed and approved activities that are focused on delivering value to shareholders in the short term, such as settling all outstanding obligations and payments between the previous Managing Director and the Company and to progress its ongoing litigation with LionGold, including discussions with Litigation funders. The Board has also focused on cash preservation and continues to investigate new possible opportunities and ventures.

4

HALF-YEAR REPORT For the financial period ended 31 December 2013

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1.1 FINANCIAL POSITION

Cash on hand at the end of December 2013 was $1.10 million.

Receipts Interest receipts totalled a modest $0.02 million for the period, with some further modest receipts of $0.01 million for sales of scrap metal and redundant equipment.

Debt: the Company’s debt at the end of December 2013 comprised unsecured creditors of $0.11 million.

1.2 COMMERCIAL

The Board of Bass advised shareholders that, based on Senior Counsel’s advice, a fully successful claim against LionGold could achieve recovery of circa A$4.5M (plus costs), the Board continues to:

• Address the matter of a litigation funding arrangement with a litigation funder; and

• Push to fast track the litigation in the Commercial and Managed Cases List (WA) which the Board is advised is a faster and simpler manner of progressing the litigation, hearing and outcome.

• The Board of Bass are committed to further developing the geological knowledge of Bass’ tenements. Bass has targeted priority areas within their tenement portfolio and has committed an additional $75,000 of funding to leverage off the initial multi-element soil geochemistry analysis conducted in the second half of 2013. Bass has prepared an achievable ‘program of works’ to advance this exploration activity, with work to commence in January 2014.

• The exploration work will initially focus on the Bulgobac River, Mt Charter and Mt Block tenements. The majority of the allocated costs will be in the collection and analysis of over 650 samples scheduled to be recovered. In addition, Bass will also begin sampling at Sock Creek to investigate the potential of a mineralised system underlying the hanging wall basalts.

1.3 CAPITAL STRUCTURE

During the period the Company:

• Issued 15,200,000 shares to RMB Australia Holdings Ltd (RMB) as a result of an exercise of options notice received by the Company. The options were issued to RMB pursuant to the terms of the Company’s Corporate Loan facility with RMB and approved by shareholders at a General Meeting held on 17 August 2012. The terms of the options were an exercise price of $0.006 per option and an expiry date of 18 December 2015;

• Issued 855,858 shares to Orefind Pty Ltd in lieu of a cash payment of $10,000 for geological consulting services consistent with the terms of a Technical Services Agreement dated 28 March 2013, in which the consultants requested the option to be paid in Bass shares for work completed. The issue price was calculated at an appropriate commercial VWAP;

• Issued 599,101 shares to Mineral Mapping Pty Ltd in lieu of cash payment of $7,000 for geological consulting services consistent with the terms of a Technical Services Agreement dated 28 March 2013, in which the consultants requested the option to be paid in Bass shares for work completed. The issue price was calculated at an appropriate commercial VWAP; and

• Cancelled 1,705,000 unlisted employee options pursuant to the terms of the Bass employee share option schemes as the employee option holders had left the Company. Note 1,330,000 of these options expired during the reporting period.

As at 31 December, 2013, the Company had 326,105,104 fully paid ordinary shares, 90,137,678 quoted options and 15,150,000 unquoted options on issue.

2. TASMANIAN SITE ACTIVITIES

2.1 SAFETY

There were no lost time injuries (LTI) on the Company’s operations during the half year to 31 December 2013 and the site has been LTI free for almost 4 years.

2.2 ENVIRONMENT

There were no material environmental incidents during the period on any Bass managed tenements. The Company is operating the Hellyer and Que River Mine Leases in accordance with respective Care and Maintenance Plans agreed with the Tasmanian EPA. Key activities comprise remediation of areas with acid mine drainage potential, lime dosing of acid mine runoff to precipitate any metals in solution and to contain and treat any contaminated water within designated areas prior to discharge.

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HALF-YEAR REPORT For the financial period ended 31 December 2013

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2.3 EXPLORATION

Bass has retained its entire highly prospective tenement package but due to cash constraints has not undertaken any substantive exploration work during the period. The Board of Bass are committed to further developing the geological knowledge of Bass’ tenements. Bass has targeted priority areas within our tenement portfolio and has committed an additional $75,000 of funding to leverage off the initial multi-element soil geochemistry analysis conducted during the second half of 2013. Bass has prepared an achievable ‘program of works to advance this exploration activity, with work to commence in January 2014.

The exploration work will initially focus on the Bulgobac River, Mt Charter and Mt Block tenements. The majority of the allocated costs will be in the collection and analysis of over 650 samples scheduled to be recovered. In addition, Bass will also begin sampling at Sock Creek to investigate the potential of a mineralised system underlying the hanging wall basalts.

Figure 1: Bass’ current tenement holdings and Joint Venture interests.

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Note: The data presented in the Endowment Table above refers to historic production and published Mineral Resources as reported from Tasmanian Government Dept public database (MRT). This information should not be construed as compiled Mineral Resources but as an indication of the highly mineralised nature of the region.

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HALF-YEAR REPORT For the financial period ended 31 December 2013

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2.4 COMPETENT PERSONS STATEMENTS

The information in this report that relates to exploration results and Mineral Resource estimates is based on information reviewed by Mr Tony Treasure who is a Director of Bass and a Member of the Australasian Institute of Mining and Metallurgy. Mr Treasure has sufficient experience which is relevant to the style of mineralisation and type of deposit and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code)”. Mr Treasure consents to the inclusion in the report of the matters based on this information in the form and context in which it appears.”

3. Subsequent Events

There are no other matters or circumstances not otherwise dealt with in the financial report that has significantly affected or may affect the Company, since the end of the reporting period to the date of this report.

Auditor’s Independence Declaration

A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act 2001 is set out on page 23.

Signed in accordance with a resolution of the Directors:

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Rick. Anthon Non-Executive Chairman

West Perth, Western Australia 11 March 2014

7

HALF-YEAR REPORT

For the financial period ended 31 December 2013

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STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2013

Note Sales revenue 3 Final sales adjustments 3 Cost of sales 4 Gross loss Other income 3 Other expenses 4 Share-based payment expenses 4 Finance costs 4 Loss before income tax Income tax benefit Loss after income tax from continuing operations Loss for the period from discontinuing operations 2 Loss for the period Other comprehensive loss, net of income tax Cash flow hedge taken to equity Total other comprehensive profit/(loss) Total comprehensive loss for the period Loss attributed to: Members of the parent entity Total comprehensive income attributed to: Members of the parent entity Earnings per share Basic and diluted earnings per share from continuing operations (cents) Basic and diluted earnings per share from discontinued operations (cents)	Half-year ended Parent 31 Dec 2013 $ Consolidated 31 Dec 2012 $ - 1,573,421 - (4,777,791) - (152,413)
	- (3,356,783) 37,013 468,977 (1,577,095) (3,012,704) - (299,080) (3,871) (416,963)
	(1,543,953) (6,616,553) - 30,758
	(1,543,953) (6,585,795)
	- (3,280,738) (1,543,953) (9,866,533) - -
	- -
	(1,543,953) (9,866,533)
	(1,543,953) (9,866,533)
	(1,543,953) (9,866,533)
	(0.49) (2.18) - (1.09)

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

8

HALF-YEAR REPORT For the financial period ended 31 December 2013

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STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2013

Note CURRENT ASSETS Cash & cash equivalents 6 Trade & other receivables Other assets Total Current Assets NON-CURRENT ASSETS Trade & other receivables Plant & equipment Capitalised exploration & evaluation expenditure 11 Total Non-Current Assets TOTAL ASSETS CURRENT LIABILITIES Trade & other payables Provisions Total Current Liabilities NON-CURRENT LIABILITIES Provisions Total Non-Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 5 Reserves Accumulated losses TOTAL EQUITY	31 Dec 2013 $ 30 June 2013 $ 1,101,599 2,399,554 83,186 190,910 19,736 31,824
	1,204,521 2,622,288
	715,500 815,500 133,475 223,104 3,066,801 3,066,801
	3,915,776 4,105,405
	5,120,297 6,727,693
	107,602 221,749 68,360 79,341
	175,962 301,090
	694,243 740,758
	694,243 740,758
	870,205 1,041,848
	4,250,092 5,685,845
	61,782,248 61,674,048 1,322,511 1,924,410 (58,854,667) (57,912,613)
	4,250,092 5,685,845

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

9

HALF-YEAR REPORT For the financial period ended 31 December 2013

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STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2013

Balance at 1 July 2012 Comprehensive income/(loss) for the period Transactions with owners, recorded directly in equity Shares issued during the period Transfer on expiry and cancellation of options Share based payments Balance at 31 December 2012 Balance at 1 July 2013 Comprehensive Income/(loss) for the period Transactions with owners, recorded directly in equity Shares issued during the period Transfer on expiry and cancellation of options Share based payments Balance at 31 December 2013	Issued Capital $ (Accumulated Losses) $ Option Reserve $ Hedge Reserve $ Total Equity $
	61,524,048 (50,787,839) 6,813,992 - 17,550,201
	- (9,866,533) - - (9,866,533) - 5,042,278 (5,042,278) - - 150,000 - 149,080 - 299,080
	61,674,048 (55,612,094) 1,920,794 - 7,982,748
	61,674,048 (57,912,613) 1,924,410 - 5,685,845
	- (1,543,953) - - (9,866,533) 108,200 - 601,899 (601,899) - - - - - - -
	61,782,248 (58,854,667) 1,322,511 - 4,250,092

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

10

HALF-YEAR REPORT For the financial period ended 31 December 2013

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STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2013

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 Cash flows from investing activities Proceeds from sale of plant & equipment Payments for exploration & evaluation expenditure Proceeds from/(payments for) derivative financial instruments Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares Proceeds from borrowings Repayments of borrowings Proceeds from other financing activities Net cash provided by financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period 6	Half-year ended Parent 31 Dec 2013 $ Consolidated 31 Dec 2012 $ 47,542 4,051,494 (1,472,630) (5,799,052) - 30,758 18,933 60,433 - (270,449)
	(1,406,154) (1,926,816) - 40,322 - (63,978) - 602,375
	- 578,719 108,200 - - - - (1,376,881) - 200,000
	(108,200) (1,176,881) (1,297,955) (2,524,978) 2,399,554 3,671,949
	1,101,599 1,146,971

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

11

HALF-YEAR REPORT For the financial period ended 31 December 2013

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NOTES TO THE FINANCIAL STATEMENTS

1. Summary of Accounting Policies

(a) Basis of Preparation

These general purpose financial statements for the interim half-year reporting period ended 31 December 2013 have been prepared in accordance with requirements of the Corporations Act 2001 and Australian Accounting Standards including AASB 134: Interim Financial Reporting . Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards.

This interim financial report is intended to provide users with an update on the latest annual financial statements of Bass Metals Ltd, “the Company”, and its controlled entities (“the Group”). As such, it does not contain information that represents relatively insignificant changes occurring during the half-year within the Group. It is therefore recommended that this financial report be read in conjunction with the annual financial statements of the Group for the year ended 30 June 2013, together with any public announcements made during the half-year. As noted in the 30 June 2013 Audited Financial Statements, the company sold its only subsidiary in the previous reporting period. Accordingly for the purposes of this Half-Year Report, it is referred to as the Company.

(b) Adoption of New and Revised Accounting Standards

In the half-year ended 31 December 2013, the Company has reviewed all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that are relevant to its operations and effective for annual reporting periods beginning on or after 1 January 2013.

The new standards issued that are mandatory are:

• AASB 10 Consolidated Financial Statements;

• AASB 11 Joint Arrangements;

• AASB 13 Fair Value Measurement; and

• AASB 119 Employee Benefits (September 2011).

It has been determined by the Company that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and therefore no change is necessary to the Group’s accounting policies.

The Company has revised all new Standards and Interpretations that have been issued but are not effective for the halfyear ended 31 December 2013. As a result of this review the Directors have determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change is necessary to Company accounting policies.

(c) Profit or Loss from Discontinued Operations

A discontinued operation is a component of the entity that either has been disposed of, or is classified as held for sale, and; (a) represents a separate major line of business or geographical area of operations; (b) is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or (c) is a subsidiary acquired exclusively with a view to resale.

Profit or loss from discontinued operations, including prior period components or profit or loss, is presented in a single amount in the statement of Profit or loss and Other Comprehensive Income. This amount, which comprises the post-tax profit or loss of discontinued operations and the post-tax gain or loss resulting from the measurement and disposal of assets classified as held for sale. Refer to Note 2 for further information.

(d) Critical Accounting Estimates and Judgements

When preparing this half-year report, Management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses.

The judgements, estimates and assumptions applied in the half-year report, including key sources of estimation uncertainty were the same applied as those applied in the Company’s last annual financial statements for the year ended 30 June 2013.

12

HALF-YEAR REPORT For the financial period ended 31 December 2013

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NOTES TO THE FINANCIAL STATEMENTS

1. Summary of Accounting Policies (cont)

(e) Going Concern

The interim financial report for the half year ended 31 December 2013 has 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 period, the entity incurred a loss after tax of $1,543,953 (2012: $9,866,533). Net cash outflows from operations during the period were $1,406,154 (2012: $1,926,816) and at reporting date current assets exceeded current liabilities by $1,028,559 (2012: $4,693,311).

The directors of the Company consider the basis of going concern appropriate for the following reasons:

New Initiatives

The Company is actively looking for new initiatives and have announced in its December 2013 quarterly report that it is committed to further developing the geological knowledge of Bass’ tenements. Bass has targeted priority areas within their tenement portfolio and has committed an additional $75k of funding to leverage off the initial multi-element soil geochemistry analysis conducted in the second half of 2013. Bass has prepared an achievable ‘program of works’ to advance this exploration activity, with work to commence in January 2014. The exploration work will initially focus on the Bulgobac River, Mt Charter and Mt Block tenements. The majority of the allocated costs will be in the collection and analysis of over 650 samples scheduled to be recovered. In addition, Bass will also begin sampling at Sock Creek to investigate the potential of a mineralised system underlying the hanging wall basalts.

In addition to the above, the Company is also reviewing the following opportunities:

• Recovering the residual value in the Fossey underground operation:

• The Company’s Fossey underground mine ceased operations in April 2012. Approximately 400kt of mineralised ore is accessible from the underground operation. Bass is reviewing the merits of reopening the Fossey underground operation to extract economic mineralised ore zones.

• Sale of equity in exploration assets :

In order to accelerate the exploration activity on the Company’s portfolio of exploration assets, Bass is considering reducing the level of equity in certain exploration tenements. Tenements such as Lake Margaret cover areas that have a high level of geological structural alteration, are along strike of existing mining operations and have the potential of hosting large mineralised deposits.

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 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.

13

HALF-YEAR REPORT For the financial period ended 31 December 2013

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NOTES TO THE FINANCIAL STATEMENTS

2. Assets and Disposal Groups Classified as Held for Sale

• (a) In the prior period, 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 31 December 2012 Half Year Report.

The loss for the financial year of the disposal company is summarised as follows:

Sundry income Operating costs Depreciation and amortisation Other expenses Impairment charges Loss for the period Revenue (a) Sales revenue Concentrate sales – Fossey Sales adjustment on final assay results1 Total sales revenue (b) Other income Interest received Foreign currency gain/(loss) Gain on sale of fixed assets Other fees2 Other gain Total other income	31 Dec 2013 $ 31 Dec 2012 $ - 12,855 - (340,637) - - - (271,123) - (2,681,833)
	- (3,280,738)
	31 Dec 2013 $ 31 Dec 2012 $ - 1,573,421 - (4,777,791)
	- (3,204,370)
	18,933 60,433 10,686 (3,802) - 38,707 - 200,000 7,394 173,639
	37,013 468,977

3. Revenue

1Concentrate Sales

Sales adjustments on final invoicing of ($4,777,791) has arisen as per 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 2012 period, Ivy Resource Pty Ltd paid the Company a $200,000 non-refundable fee for the right to due diligence on the Company’s asset held for sale.

14

HALF-YEAR REPORT For the financial period ended 31 December 2013

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NOTES TO THE FINANCIAL STATEMENTS

4. Expenses

penses
(a) Cost of sales Production costs Royalties adjustments Treatment charge adjustments on final assay results Total cost of sales (b) Other expenses Employee benefits expense Contracting & consulting expense Operating lease expense Other administration expense Depreciation – plant & equipment Capitalised exploration & evaluation expenditure written off Hellyer operating infrastructure – care & maintenance Fossey mine closure management Net (gain)/loss on derivative financial instruments Total other expenses (c) Share-based payments Share options expense Shares issued at fair value (refer note 5) (d) Finance costs Interest charges Finance costs Total finance costs Total expenses	31 Dec 2013 $ 31 Dec 2012 $ - 430,961 - (138,686) - (139,860)
	- 152,415 245,074 779,463 247,890 112,974 - 29,585 567,522 997,116 89,629 101,379 187,942 285 239,038 372,881 - 524,607 - 94,414
	1,577,095 3,012,704 - 149,080 - 150,000
	- 299,080 - 406,271 3,871 10,692
	3,871 416,963
	1,580,966 3,881,162

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HALF-YEAR REPORT For the financial period ended 31 December 2013

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NOTES TO THE FINANCIAL STATEMENTS

5. Movements in Issued Capital

ovements in Issued Capital
At the beginning of the financial period Issued during the half-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 Balance at the end of the financial period	31 Dec 2013 Number of Shares $ 30 June 2013 Number of Shares $ 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 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

6. Cash and Cash Equivalents

sh and Cash Equivalents
Cash at bank and in hand	31 Dec 2013 $ 30 Jun 2013 $ 1,101,599 2,399,554
	1,101,599 2,399,554

7. Operating Segments

Segment information

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

Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have similar economic characteristics and are also similar with respect to the following:

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

• the manufacturing or production processes.

Tasmanian Operations – Mining

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

16

HALF-YEAR REPORT For the financial period ended 31 December 2013

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NOTES TO THE FINANCIAL STATEMENTS

7. Operating Segments (cont)

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.

In January 2013, the Company announced an asset sale transaction that, on completion, would enable the Company to clear its debts, relaunch exploration and undertake new acquisition assessments as well as allowing it to continue to pursue its litigation for damages against LionGold Corporation.

Bass Metals entered into a binding Heads of Agreement to sell its wholly owned subsidiary, Hellyer Mill Operations Pty Ltd (HMO) to Ivy Resources Pty Ltd (Ivy or Ivy Resources), a private resource development company for an acquisition price is $11,000,000. Settlement of the transaction occurred on Saturday 23 February 2013. Accordingly there is no longer any Processing operations in the Company at 31 December 2013

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 accounting policies that are consistent to those disclosed in Note 1.

Inter-segment transactions

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

Segment assets

Where an asset is used across multiple segments, the asset is 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 are 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 are generally considered to relate to the Group 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 are not allocated to operating segments as they are 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).

17

HALF-YEAR REPORT For the financial period ended 31 December 2013

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NOTES TO THE FINANCIAL STATEMENTS

7. Operating Segments (cont)

Operating Segments Half year ended 31 December 2013 Tasmanian Operations – Mining Tasmanian Operations – Processing $ $ Revenue Sales to external customers - - Total segment revenue - - Depreciation and amortisation - - Reportable segment profit/(loss) before income tax - - Reportable segment assets - - Additions to non-current assets: Plant and equipment - - Mine properties - - Capitalised exploration and evaluation - - Reportable segment liabilities - - Reconciliation of reportable segment revenues, profit or loss, and assets Revenues Total revenue for reportable segments Unallocated amounts: Other revenue Interest revenue Total revenue	Tasmanian Operations – Mining Tasmanian Operations – Processing $ $ - -	Exploration $ -	Total $ -
	- -	-	-
	- -	-	-
	- -	(187,942)	(187,942)
	- -	3,066,801	3,066,801
	- - - - - -	- - -	- - -
	- -	-	-
		31 December 2013 $ - 18,080 18,933 37,013

18

HALF-YEAR REPORT For the financial period ended 31 December 2013

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NOTES TO THE FINANCIAL STATEMENTS

7. Operating Segments (cont)

Profit or loss Total profit/(loss) before income tax for reportable segments Unallocated amounts: Other corporate expenses Share-based payments Finance costs Consolidated profit/(loss) before income tax Reconciliation of reportable segment assets and liabilities Assets Total assets for reportable segments Unallocated amounts: Cash and cash equivalents Trade and other receivables Plant and equipment Other assets Total assets at 31 December 2013 Liabilities Total liabilities for reportable segments Unallocated amounts: Trade and other payables Borrowings Other Liabilities Total liabilities at 31 December 2013	31 December 2013 $ (187,942) (1,389,153) - (3,871)
	(1,543,953)
	3,066,801 1,101,599 798,686 133,475 19,736
	5,120,297
	- 107,602 - 762,603
	870,205

19

HALF-YEAR REPORT For the financial period ended 31 December 2013

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NOTES TO THE FINANCIAL STATEMENTS

7. Operating Segments (cont)

Operating Segments Half year ended 31 December 2012 Tasmanian Operations – Mining Tasmanian Operations – Processing $ $ Revenue Sales to external customers 1,573,421 - Final sales adjustment (4,777,791) - Total segment revenue (3,204,370) - Depreciation and amortisation - - Reportable segment profit/(loss) before income tax (2,887,806) - Reconciliation of reportable segment revenues and profit or loss Revenues Total revenue for reportable segments Unallocated amounts: Other revenue Interest revenue Other fee Gain on sale of fixed assets Consolidated revenue Profit or loss Total profit/(loss) before income tax for reportable segments Unallocated amounts: Other corporate expenses Share-based payments Finance costs Consolidated profit/(loss) before income tax	Tasmanian Operations – Mining Tasmanian Operations – Processing $ $ 1,573,421 - (4,777,791) -	Exploration $ - -	Total $ 1,573,421 (4,777,791)
	(3,204,370) -	-	(3,204,370)
	- -	-	-
	(2,887,806) -	-	(2,887,806)
		31 December 2012 $ (3,204,370) 169,837 60,433 200,000 38,707 (2,735,393) (2,887,806) (3,012,704) (299,080) (416,963) (6,616,553)

(c) Revenue by geographical region

The Company (2012: Group) operates within one geographical region in Australia.

(b) Major Customers

In 2012 the Group supplied two external customers in the mining segment who account for 99% of external revenue. There were no external customers in the 2013 financial year and for the period under review.

20

HALF-YEAR REPORT For the financial period ended 31 December 2013

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NOTES TO THE FINANCIAL STATEMENTS

8. Contingencies

Contingent Liabilities

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

Contingent Assets

There has been no change to the status of the contingent asset to that which was disclosed in the 30 June 2013 annual report.

9. Subsequent Events

There are no other matters or circumstances not otherwise dealt with in the financial report that has significantly affected or may affect the Company, since the end of the reporting period to the date of this report.

10. Share Based Payments

Outstanding as at 30 June 2013 Granted during the period Forfeited and cancelled Exercised Outstanding at 31 December 2013	2013 Number of Options 31,325,000 - (975,000) (15,200,000)
	15,150,000

No options were issued during the half-year.

11. 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 period Capitalised expenditure for the period Written off expenditure Balance at the end of the period	Parent Consolidated 31 Dec 2013 $ 30 June 2013 $ 3,066,801 3,050,000
	187,942 16,801 (187,942) -
	3,066,801 3,066,801

12. Capital and Leasing Commitments

There has been no significant change to capital and leasing commitments disclosed in the annual report at 30 June 2013.

21

HALF-YEAR REPORT For the financial period ended 31 December 2013

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DIRECTORS’ DECLARATION

In the opinion of the Directors:

1. The financial statements and notes set out on pages 8 to 21 are in accordance with the Corporations Act 2001 including:

2. (a) giving a true and fair view of the financial position of the Company as at 31 December 2013 and of its performance, as represented by the results of its operations and cash flows for the half-year ended on that date; and

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

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

Dated at Perth, Western Australia this 11th day of March 2014.

Signed in accordance with a resolution of the directors:

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Rick Anthon

22

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Level 1 10 Kings Park Road West Perth WA 6005

Correspondence to: PO Box 570 West Perth WA 6872

Auditor’s Independence Declaration

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

To The Directors of Bass Metals Limited

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the review of Bass Metals Limited for the half-year ended 31 December 2013, 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 review; and

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

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GRANT THORNTON AUDIT PTY LTD Chartered Accountants

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P W Warr Partner - Audit & Assurance

Perth, 11 March 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.

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Level 1 10 Kings Park Road West Perth WA 6005

Correspondence to: PO Box 570 West Perth WA 6872

Independent Auditor’s Review Report To the Members of Bass Metals Limited

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

We have reviewed the accompanying half-year financial report of Bass Metals Limited (“Company”), which comprises the statement of financial position as at 31 December 2013, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, notes comprising a statement or description of accounting policies, other explanatory information and the directors’ declaration.

Directors’ responsibility for the half-year financial report

The directors of Bass Metals Limited are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such controls as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with the Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the Bass Metals Limited financial position as at 31 December 2013 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Bass Metals Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

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

Independence

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

Conclusion

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

• a giving a true and fair view of the Company’s financial position as at 31 December 2013 and of its performance for the half-year ended on that date; and

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

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 $1,543,953 during the period ended 31 December 2013 and during the period, the Company’s net cash outflows from operations were $1,406,154. 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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GRANT THORNTON AUDIT PTY LTD Chartered Accountants

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P W Warr Partner - Audit & Assurance

Perth, 11 March 2014