GREENWING RESOURCES LTD — Interim / Quarterly Report 2018

Feb 27, 2018

HALF-YEAR REPORT For the period ended 31 December 2017

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ABN 31 109 933 995
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Australia’s premier graphite producer

Half-Year Report For the period ended

31 December 2017

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HALF-YEAR REPORT For the period ended 31 December 2017

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Table of Contents
CORPORATE DIRECTORY	3
DIRECTORS’ REPORT	4
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME	8
CONSOLIDATED STATEMENT OF FINANCIAL POSITION	9
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	10
CONSOLIDATED STATEMENT OF CASH FLOWS	11
NOTES TO THE FINANCIAL STATEMENTS	12
INDEPENDENT AUDITORS REVIEW TO THE MEMBERS OF BASS METALS LTD	24
AUDITOR’S INDEPENDENCE DECLARATION	26
DIRECTORS’ DECLARATION	27

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HALF-YEAR REPORT For the period ended 31 December 2017

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CORPORATE DIRECTORY

DIRECTORS

Mr Richard Stacy Anthon - Non-Executive Chairman Mr Jeffrey Marvin – Non-Executive Director Mr Peter Wright – Executive Director

COMPANY SECRETARY

Mr David Round

CHIEF EXECUTIVE OFFICER

Mr Tim McManus

REGISTERED OFFICE

2/45 Richardson Street West Perth, WA, 6005

GPO Box 1048 Subiaco, Western Australia 6904

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

LEGAL ADVISORS

HFW Australia Level 15, Brookfield Place Tower 2, 123 St Georges Terrace Perth WA 6000, Australia

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 43, Central Park 152 - 158 St Georges Terrace Perth WA 6000

STOCK EXCHANGE LISTINGS

ASX Ltd (Code: BSM and BSMO)

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HALF-YEAR REPORT For the period ended 31 December 2017

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DIRECTORS’ REPORT

The Directors of Bass Metals Ltd (“the Company” or “Bass”) present their Report together with the financial statements of the Consolidated Entity, being Bass Metals Ltd (“the Company” or “Bass”), it’s Controlled Entities (“the Group”) for the half-year ended 31 December 2017 and the independent auditors report thereon.

Directors

The following persons were Directors of the Company during or since the end of the financial half-year:

Mr Richard Anthon - Non-Executive Chairman Mr Jeffrey Marvin – Non-Executive Director Mr Peter Wright – Executive Director

Consolidated Entities

For the half-year ended 31 December 2017 and the comparative half year, the Company has three subsidiaries, Graphmada Mauritius (registered in Mauritius), Graphmada SARL (registered in Madagascar) and Limada SARL (registered in Madagascar).

Review of Operations

Overview

The Group’s primary activities during the reporting period were:

• Implementation and Completion of the Stage 1 Operational Optimisation Program for Graphmada, focusing on raising the quality and volume of saleable product, to subsequently deliver a consistently higher-value product;

• Commencement of a substantial drill program at the Company’s licenses in Madagascar;

• Completion of terms to acquire the potentially highly prospective Lithium Project, Millie’s Reward in Madagascar with plans developed for site review and extensive drill program;

• Extensive ongoing development, training and improvement to site operations;

• In accordance with the Company’s Growth Strategy, completion of an offtake agreement to sell a significant proportion of the Company’s production in 2018 and beyond;

• Extensive engagement continued with a range of parties whom have expressed strong demand for the Company’s future production of concentrate;

• Implementation of the Company’s plans for capital raising and growth.

The full implementation of the Operational Optimisation Program, previously announced, is planned to be completed in the second half of 2018, for a subsequent ramp up in production to nameplate capacity of 6,000 tonnes per annum.

The Company is also currently undertaking an Expansion Project and a range of other tests and independent assessments currently in process. Upon the completion of drilling and the receipt of results and other test work, an assessment will be made on the timing of a proposed second Processing Plant which has the capacity to increase production to greater than 20,000 tonnes per annum.

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HALF-YEAR REPORT For the period ended 31 December 2017

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DIRECTORS’ REPORT (continued)

Community Engagement Program

The Group through its subsidiaries has implemented a Community Engagement Program called Graphmada Care. The program concentrates on the following principals of action:

• Employment : First priority is to hire and train local people, who spend their salaries in the local community.

• Purchasing : Prioritise sourcing equipment and supplies from local providers, creating economic advantages to the local community and indirect employment opportunities.

• Education : Provided materials and transport for the construction of a new school and initiated a school engagement program, encouraging children to attend with subsidised supplies.

• Infrastructure : school, building, road and bridge repair across the region.

• Health : Established a Primary Health Centre with a resident doctor and supplies to handle medical emergencies and primary diseases and also provide basic nutritional, health and sanitation training to the community. We have also commissioned water wells to provide quality drinking water for near-by villages.

Corporate Activities

TASMANIAN ASSETS : QUE RIVER AND HELLYER PROJECTS

On 30 April 2017, the Group announced that it had signed a conditional Terms Sheet whereby it shall sell all of its Tasmanian Assets to the UK listed group, NQ Minerals Plc (“NQ”).

Under the terms of the agreement, NQ is to conduct due diligence over an extended period, with the assistance of the Group, and then, upon successful completion, sign a formal sales and purchase agreement.

Under the term of the conditional Terms Sheet, the Group shall derive a net smelter royalty (“NSR”) of 1% on any future sales from the Tenements for a period of 20 years from completion of the signed formal sales and purchase agreement and also receive a refund of bonds and cash previously pledged as part of the Company’s asset exposure.

At the date of this report, NQ has continued to advance to completion of its due diligence and a sale and purchase agreement will potentially be executed before the end of 2017/2018.

As part of the conditional Terms Sheet, NQ and its associated entities, have met all costs associated with the management, rehabilitation and ongoing development of all Tasmanian assets including exploration and rental costs.

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HALF-YEAR REPORT For the period ended 31 December 2017

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DIRECTORS’ REPORT (continued)

Issue of convertible notes

On the 15 August 2017, the Company issued 2,073,500 unsecured convertible notes to subscribers, who were predominantly existing major shareholders, Directors and management, with a face value of $1.00 raising $2,073,500 (including costs). All the convertible notes were subsequently converted to equity by the issue of shares in the Company on the 5 December 2017.

Equity raisings

• On the 29 September 2017, the Company issued 272,727,273 shares to institutional, professional and sophisticated investors at 1.1 cents per share raising $3 million;

• On the 18 October 2017, the Company completed a 1 for 6 non-renounceable rights issue of fully paid ordinary shares in the Company by issuing 228,024,455 shares at 1.1 cents per share raising approximately $2.5 million;

• On the 20 October 2017, the Company completed the deferred placement to institutional professional, sophisticated and retail investors by issuing 45,454,545 shares at 1.1 cents per share raising $500,000;

• On the 5 December 2017, the Company issued 208,146,936 shares at an issue price of 1.1 cents per share on conversion of convertible notes to settle its obligations under the terms and conditions of the convertible note deed including all interest payable;

• On the 5 December 2017, the Company completed a further conditional placement to institutional, professional and sophisticated investors by issuing 90,909,090 shares at 1.1 cents per share raising $1 Million;

• As part of the issue of shares referred to above, 333,552,697 free attaching listed options were issued to shareholders on a 1 option for each 4 shares acquired basis. These options have an expiry date of 31 December 2018 and an exercise price of 2.5 cents per share.

Revised agreement with Stratmin Global Resources Plc

As part of the revised agreement for acquiring Graphmada, the Company paid a further instalment of $300,000 during the period. The Company completed its obligations to pay Stratmin Global Resources Plc (“Stratmin”) by making a final payment to Stratmin of $100,000 on 14 February 2018.

The Company has now met all payment purchase agreement obligations with Stratmin.

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HALF-YEAR REPORT For the period ended 31 December 2017

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DIRECTORS’ REPORT (continued)

Dividends

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

Result for the Financial Half-Year

The loss from ordinary activities after income tax expense for the Group was $2,570,027 (2016: $5,163,154 loss).

Events Subsequent to Reporting Date

Up to and including the date of this report, the Company had received $236,700 from holders of unlisted options with an exercise price of 1.5 cents per share. Of those funds received, the Company has so far issued 6,000,000 ordinary shares worth $90,000. Upon final instruction, the remaining options will be formally exercised and listed ordinary shares issued to the option holders.

As at the Reporting Date, the Company owed a balance of $200,000 to Stratmin as part of the Company’s revised purchase agreement with Stratmin. Following discussions, Stratmin agreed to accept $100,000 as full and final payment of the balance due as part of the revised purchase agreement. This payment was made on 14 February 2018.

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 review of the half year report for the period ended 31 December 2017. 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.

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Signed in accordance with a resolution of Directors.

RA Anthon Chairman Brisbane, Queensland 28 February 2018

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HALF-YEAR REPORT For the period ended 31 December 2017

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CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2017

Note Sale of concentrate Cost of sales Gross loss Other income Impairment of Non-Current exploration and evaluation asset held for sale 8 Impairment of receivable Administration expenses Finance costs Loss before income tax from continuing operations Income tax (expense)/benefit Loss for the period from continuing operations Loss after tax from discontinued operations Loss for the period Other comprehensive income Items that may be reclassified subsequently to profit or loss Exchange differences on translating foreign operations Changes in financial assets at fair value through other comprehensive income Total comprehensive loss for the period, net of tax Loss attributed to: Continuing operations Discontinued operations Total comprehensive loss attributed to: Equity holders of the parent entity Earnings per share Basic loss per share from operations (cents) 2	31 December 2017 $ 31 December 2016 $ 1,439 129,683 (1,243,109) (1,681,074)
	(1,241,670) (1,551,391) 55,239 325,837 - (1,123,164) - (1,000,000) (1,250,678) (1,660,186) (110,263) (5,093)
	(2,547,372) (5,013,997) - -
	(2,547,372) (5,013,997) (22,655) (149,157)
	(2,570,027) (5,163,154) 58,979 24,506 - (84,850)
	(2,511,048) (5,223,498)
	(2,488,393) (5,074,341) (22,655) (149,157)
	(2,511,048) (5,223,498)
	(0.15) (0.73)

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

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HALF-YEAR REPORT For the period ended 31 December 2017

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2017

Note CURRENT ASSETS Cash and cash equivalents Restricted cash Trade and other receivables 3 Prepayments Inventories 4 Total Current Assets NON-CURRENT ASSETS Trade and other receivables 3 Plant and equipment 5 Exploration and evaluation assets 6 Mine properties 7 Total Non-Current Assets TOTAL ASSETS CURRENT LIABILITIES Trade and other payables 9 Borrowings 10 Deferred consideration payable 11 Total Current Liabilities NON-CURRENT LIABILITIES Provisions 12 Total Non-Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Share capital 13 Reserves Retained profits TOTAL EQUITY	31 December 2017 $ 30 June 2017 $ 3,236,240 933,822 - 25,000 380,937 325,676 5,639 42,697 828,633 653,775
	4,451,449 1,980,970
	680,500 680,500 4,559,086 1,985,348 697,775 508,523 5,467,515 5,473,669
	11,404,876 8,648,040
	15,856,325 10,629,010
	563,035 606,033 - 642,500 200,000 500,000
	763,035 1,748,533
	1,091,739 1,097,892
	1,091,739 1,097,892
	1,854,774 2,846,425
	14,001,551 7,782,585
	82,949,252 74,219,238 1,344,452 1,285,473 (70,292,153) (67,722,126)
	14,001,551 7,782,585

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

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HALF-YEAR REPORT For the period ended 31 December 2017

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2017

	Share	Retained	Foreign	Option		AFS	Total Equity
	Capital	Profits/	Currency	Reserve		Financial
		(Accumulated	Translation			Asset
		Losses)	Reserve			Reserve
	$	$	$	$		$	$
Balance at 1 July 2017	74,219,238	(67,722,126)	135,123	1,150,350		-	7,782,585
Loss for the period	-	(2,570,027)	-	-		-	(2,570,027)
Other comprehensive income	-	-	58,979	-		-	58,979
Transactions with owners, recorded directly
in equity
Shares issued during the period	9,300,084	-	-		-	-	9,300,084
Cost of shares issued forplacement	(570,070)	-	-		-	-	(570,070)
Balance at 31 December 2017	82,949,252	(70,292,153)	194,102	1,150,350		-	14,001,551

	Share Capital Retained Profits/ (Accumulated Losses) Foreign Currency Translation Reserve Option Reserve AFS Financial Asset Reserve Total Equity $ $ $ $ $ $
Balance at 1 July 2016 Loss for the period Other comprehensive income Transactions with owners, recorded directly in equity Shares issued during the period Share placement to Stratmin - acquisition of Graphmada Share based payments Cost of shares issued for placement Revaluation of equity securities in listed company Balance at 31 December 2016	62,913,634 (57,818,171) - - 84,850 5,180,313
	- (5,163,154) - - - (5,163,154) - - 24,506 - - 24,506 10,135,575 - - - - 10,135,575 1,800,000 - - - - 1,800,000 - - - 489,978 - 489,978 (629,971) - - - - (629,971) - - - - (84,850) (84,850)
	74,219,238 (62,981,325) 24,506 489,978 - 11,752,397

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

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HALF-YEAR REPORT For the period ended 31 December 2017

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CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2017

Cash flows from operating activities Receipts from customers Payments to suppliers and employees Net cash used in operating activities Cash flows from investing activities Proceeds from sale of assets classified as held for sale Purchase of property, plant and equipment Investment in exploration and evaluation assets Interest received Payment for deferred acquisition Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares Transaction costs on issue of shares Proceeds from issue of convertible notes Proceeds from loan funds Repayment of loan funds Interest paid Net cash from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the period Restricted cash Cash and cash equivalents at the end of the period	31 December 2017 31 December 2016
	$ $
	40,238 118,348
	(2,485,791) (3,428,177)
	(2,445,553) (3,309,829)
	- 731,631
	(2,683,643) (528,246)
	(200,222) -
	2,239 3,073
	(300,000) (2,213,991)
	(3,181,626) (2,007,533)
	6,928,807 8,825,849
	(427,210) (220,481)
	1,428,000 -
	- 938,520
	(25,000) (28,520)
	- (5,092)
	7,904,597 9,510,276
	2,277,418 4,192,914
	933,822 167,527
	25,000 (910,000)
	3,236,240 3,450,441

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

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HALF-YEAR REPORT For the period ended 31 December 2017

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1. NOTES TO THE FINANCIAL STATEMENTS

(a) Basis of Preparation

These condensed interim financial statements of the Group are for the six months ended 31 December 2017 and are prepared in Australian Dollars (AUD), which is the functional currency of the Parent Company. These general purpose interim financial statements 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 the Group. As such, it does not contain information that represents relatively insignificant changes occurring during the halfyear 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 2017 and any public announcements made during the halfyear by the Group in accordance with continuous disclosure requirements arising under the Australian Securities Exchange Listing Rules and the Corporations Act 2001.

The interim financial statements have been approved and authorised for issue by the Board of Directors on 28 February 2018.

(b) Significant Accounting Policies

The interim financial statements have been prepared in accordance with the same accounting policies adopted in the Group’s last annual financial statements for the year ended 30 June 2017.

The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these interim financial statements.

(c) 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 as those applied in the Company’s last annual financial statements for the year ended 30 June 2017.

(d) Significant Events and Transactions

The Company has extended the exclusivity period for the divestment of its Tasmanian Assets through to May 2018.

During the period, the Company had finalised the acquisition of the potentially highly prospective Lithium Project, Millie’s Reward, in Madagascar.

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HALF-YEAR REPORT For the period ended 31 December 2017

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(e) Segment Information

Management currently identifies two service lines as the Group’s operating segments and all other activities are reported within the segment other. These operating segments are monitored by the Group’s chief operating decision maker and strategic decisions are made on the basis of adjusted segment operating results.

Segment information for the reporting period is as follows:

Six months to 31 December 2017 Revenue External customers Interest income Other revenue Inter- segment Segment revenues Segment operating profit/(loss) Segment assets	Graphite Mining	Exploration - Lithium	Other Total	Other Total
	2017	2017	2017	2017
	$	$	$	$
	1,439	-	-	1,439
	-	-	2,239	2,239
	48,000	-	5,000	53,000
	-	-	-	-
	49,439	-	7,239	56,678
	(1,193,668)	-	(1,353,704)	(2,547,372)
	11,748,672	192,930	3,914,723	15,856,325

No segment liabilities are disclosed because there is no measure of segment liabilities regularly reported to the chief operating decision maker.

Six months to 31 December 2016 Revenue External customers Interest income Other revenue1 Inter- segment Segment revenues Segment operating profit/(loss) Segment assets	Graphite Mining Other Total 2016 2016 2016 $ $ $
	- 129,683 129,683 - 3,073 3,073 1,244 321,520 322,764 139,195 (139,195) -
	130,927 324,593 455,520
	(1,545,727) (3,468,270) (5,013,997)
	8,974,314 4,388,291 13,362,605

Note 1: Corporate segment revenue consists of gain on the sale of listed shares of $321,520

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HALF-YEAR REPORT For the period ended 31 December 2017

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The total presented for the Group’s operating segments reconcile to the key financial figures as presented in its financial statements as follows:

Loss Total reportable segment operating loss Discontinued operations Loss for the period Assets Total reportable segment assets Non-current exploration and evaluation asset held for sale Group assets	Six (6) months to 31 December 2017 Six (6) months to 31 December 2016 $ $
	(2,547,372) (5,013,997) (22,655) (149,157)
	(2,570,027) (5,163,154)
	31 December 2017 31 December 2016 $ $
	15,856,325 13,362,605 - 2,080,500
	15,856,325 15,443,105

The Group’s revenues from external customers and its non-current assets are divided into the following geographical areas:

Madagascar Mauritius Australia USA Total	Revenue	Non-current assets Revenue Non-current assets 31 December 2017 Six (6) months to 31 December 2016 31 December 2016 $ $ $
	Six (6) months to 31 December 2017
	$
	1,439	7,974,916 - 7,595,066 2,705,483 - 315,506 724,477 - 14,538 - 129,683 -
	-
	-
	1,439	11,404,876 129,683 7,925,110

Revenues from external customers in the Group’s domicile, Australia, as well as its major markets have been identified on the basis of the customer’s geographical location.

During 2017, $1,439 (2016: $129,683) or 100% of the Group’s revenues depended on a single customer in the graphite mining segment.

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HALF-YEAR REPORT For the period ended 31 December 2017

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(f) Going Concern

The interim financial report for the half year ended 31 December 2017 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 achieved a loss after tax of $2,570,027 (2016 loss: $5,163,154). Net cash operating cash outflows were $2,445,553 (2016 outflow: $3,309,829).

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 sufficient additional capital in the future; and

• its ability to achieve a financial return from its investment in Graphmada Mauritius.

These conditions give rise to material uncertainty over the 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 Directors recognise that the above factors represent a material uncertainty as to 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.

During the reporting period the company raised $8,730,014 (refer to share capital note 13) from sophisticated and other investors and this funding has provided sufficient resources for the Company to complete, in the near future, its Stage 1 Optimisation Program and recommence mining operations.

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.

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HALF-YEAR REPORT For the period ended 31 December 2017

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2. Earnings Per Share

(Basic and diluted Earnings Per Share) Loss for the period Weighted average number of ordinary shares used in the calculation of basic earnings per share Basic and diluted loss per share (cents)	Six (6) months to 31 December 2017 $ Six (6) months to 31 December 2016 $ (2,570,027) (5,163,154) 1,691,092,536 704,401,030
	(0.15) (0.73)

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.

3. Trade and Other Receivables

Current Trade receivables VAT receivable Other receivables Non-current Other security deposits1	31 December 2017 $ 30 June 2017 $ - 42,155 237,491 233,190 143,446 50,331
	380,937 325,676
	680,500 680,500
	680,500 680,500

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

4. Inventories

At cost: Equipment spares and consumables Ore stockpiles At Net Realisable Value: Graphite in circuit Graphite concentrate	31 December 2017 $ 30 June 2017 $ 644,349 465,688 7,832 7,953 37,349 37,927 139,103 142,207
	828,633 653,775

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HALF-YEAR REPORT For the period ended 31 December 2017

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5. Plant & Equipment

The following tables show the movements in property, plant and equipment:

2017 Gross carrying amount Balance 1 July 2017 Additions Reclassification at cost to inventory Reclassification at cost Disposal Balance 31 December 2017 Depreciation and impairment Balance 1 July 2017 Depreciation Disposal Balance 31 December 2017 Carrying amount 31 December 2017	Plant & equipment	Motor Vehicles	Capital work inprogress	Roads	Total
	$	$	$	$	$
	1,640,374	558,720	502,678	147,190	2,848,962
	111,742	-	2,866,424	-	2,978,166
	-	-	(294,523)	-	(294,523)
	1,142,269	-	(1,142,269)	-	-
	(1,394)	-	-	-	(1,394)
	2,892,991	558,720	1,932,310	147,190	5,531,211
	(426,421)	(382,977)	-	(54,216)	(863,614)
	(81,414)	(19,988)	-	(8,298)	(109,700)
	1,189	-	-	-	1,189
	(506,646)	(402,965)	-	(62,514)	(972,125)
	2,386,345	155,755	1,932,310	84,676	4,559,086

2016 Gross carrying amount Balance 1 July 2016 Additions Acquisition through business combination Reclassification at cost to inventory Reclassification at cost Disposal Balance 31 December 2016 Depreciation and impairment Balance 1 July 2016 Acquisition through business combination Depreciation Disposal Balance 31 December 2016 Carrying amount 31 December 2016	Plant & equipment Motor Vehicles Capital work in progress Roads Total $ $ $ $ $
	111,461 50,563 - - 162,024 107,819 7,477 412,950 - 528,246 1,806,315 500,680 80,995 147,190 2,535,180 - - (7,765) - (7,765) 75,025 - (75,025) - - (37,243) - - - (37,243)
	2,063,377 558,720 411,155 147,190 3,180,442
	(94,189) (47,250) - - (141,439) (359,271) (277,228) - (38,551) (675,050) (80,104) (34,825) - (7,146) (122,075) 1,621 - - - 1,621
	(531,943) (359,303) - (45,697) (936,943)
	1,531,434 199,417 411,155 101,493 2,243,499

All depreciation and impairment charges are included within depreciation, amortisation and impairment of non-financial assets. There were no impairment losses recognised during the current or prior reporting periods.

There were no material contractual commitments to acquire property, plant and equipment at 31 December 2017.

Property, plant and equipment pledged as security for liabilities

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

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HALF-YEAR REPORT For the period ended 31 December 2017

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6. Exploration and Evaluation Assets

Exploration drilling - Mahefedok Graphite Deposit, Madagascar Exploration drilling - Andapa Graphite Deposit, Madagascar Lithium mineralisation exploration permits in the Sahatany region in Madagascar	31 December 2017 $ 30 June 2017 $ 487,740 495,292 17,105 - 192,930 13,231
	697,775 508,523

7. Mine Properties

Development asset – Graphmada1 Rehabilitation asset – Graphmada2	31 December 2017 $ 30 June 2017 $ 5,070,019 5,070,019 397,496 403,650
	5,467,515 5,473,669

Note 1: Goodwill arising on acquisition of Graphmada.

Note 2: Rehabilitation costs expected to be incurred upon closure of the Graphmada mine in Madagascar.

8. Non-Current exploration and evaluation asset held for sale

Interests in Tasmanian Tenements

On 30 April 2017, the Group announced that it had signed a conditional Terms Sheet whereby it shall sell all of its Tasmanian Assets to the UK listed group, NQ Minerals Plc (“NQ”).

Under the terms of the agreement, NQ is to conduct due diligence over an extended period, with the assistance of the Group, and then, upon successful completion, sign a formal sales and purchase agreement.

Under the term of the conditional Terms Sheet, the Group shall derive a net smelter royalty (“NSR”) of 1% on any future sales from the Tenements for a period of 20 years from completion of the signed formal sales and purchase agreement and also receive a refund of bonds and cash previously pledged as part of the Company’s asset exposure.

At the date of this report, NQ has continued to advance to completion of its due diligence and a sale and purchase agreement will potentially be executed before the end of 2017/2018.

As part of the conditional Terms Sheet, NQ and its associated entities, have met all costs associated with the management, rehabilitation and ongoing development of all Tasmanian assets including exploration and rental costs.

The carrying value of the exploration assets were fully impaired as at 30 June 2017.

Opening balance Reclassification of guarantees & deposits to non-current receivable Impairment	31 December 2017 $ 30 June 2017 $ - 3,897,906 - (680,500)
	- 3,217,406 - (3,217,406)
	- -

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HALF-YEAR REPORT For the period ended 31 December 2017

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9. Trade and Other Payables

Trade and Other Payables
Current Unsecured liabilities: Trade Payables Other payables	31 December 2017 $ 30 June 2017 $ 260,229 345,310 302,806 260,723
	563,035 606,033

Other payables are recognised when the Group has identified a present obligation from the result of past events. These amounts include employee payment obligations, professional fees and statutory obligations.

Due to the short-term nature of these payables, their carrying value is assumed to approximate their fair value. Trade payables and other payables are non-interest-bearing and are normally settled on 30 to 60-day terms

10. Borrowings

Borrowings
10.1 Advances received Current Balance at the beginning of the period Funds settled upon issue of shares Short term loan from Stratmin Global Resources Plc Short term loan repaid to Stratmin Global Resources Plc Advanced funds settled upon issue of convertible notes	31 December 2017 $ 30 June 2017 $ 642,500 684,236 - (684,236) - 910,000 (25,000) (885,000) (617,500) 617,500
	- 642,500

10.2 Convertible notes Current Balance at the beginning of the period Convertible notes issued Interest entitlement on conversion Convertible notes settled upon issue of shares 11. Deferred Consideration Payable Acquisition of Graphmada -deferred cash payment consideration payable, refer also to note 17 Events Subsequent to Reporting Date 12. Provisions Non-Current Restoration and rehabilitation Tasmanian exploration assets Graphmada Provision for rehabilitation – acquisition of subsidiary Exchange rate movement	31 December 2017 $ 30 June 2017 $ - - 2,181,550 - 110,263 - (2,291,813) -
	- -
	31 December 2017 $ 30 June 2017 $ 200,000 500,000
	31 December 2017 $ 30 June 2017 $ 694,242 694,242 406,484 406,484 (8,987) (2,834)
	397,497 403,650
	1,091,739 1,097,892

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HALF-YEAR REPORT For the period ended 31 December 2017

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13. Share Capital

Shares issued and authorised are summarised as follows:

2,213,409,028 (30 June 2017: 1,368,146,729) fully paid ordinary shares

31	December 2017	30 June 2017
	$	$
	82,949,252	74,219,238

Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Group 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 movement in ordinary shares during the financial period are as follows:

Balance at the beginning of the period Issued during the period  Ordinary shares issued at $0.012 as part of placement in Sept 2016  Tranche 1 consideration shares  Conversion of loans to equity  Ordinary shares issued in lieu of fees for services  Placement to sophisticated investors in Sept 2016  Placement to sophisticated investors in Dec 2016  Capital raising costs • Ordinary shares issued at $0.011 to institutional and sophisticated investors in Sept 2017  Ordinary shares issued at $0.011 as part of non- renounceable rights issue in Oct 2017  Ordinary shares issued at $0.011 to sophisticated investors in Oct 2017  Ordinary shares issued at $0.011 on settlement of convertible notes in Dec 2017  Ordinary shares issued at $0.011 to sophisticated investors in Dec 2017  Capital raising costs Balance at the end of the period	Six (6) months to 31 December 2017 Year to 30 June 2017
	Number of Shares $ Number of Shares $
	1,368,146,729 74,219,238 460,028,181 62,913,634
	460,028,181 5,520,338
	75,000,000 1,800,000
	60,090,367 684,237
	13,000,000 156,000
	125,000,000 1,500,000
	175,000,000 2,275,000
	- (629,971)
	272,727,273 3,000,000 - -
	228,024,455 2,508,270 - -
	45,454,546 500,000 - -
	208,146,936 2,291,814 - -
	90,909,090 1,000,000 - -
	- (570,070) - -
	2,213,409,028 82,949,252 1,368,146,729 74,219,238

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HALF-YEAR REPORT For the period ended 31 December 2017

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14. Contingencies

Contingent Liabilities

No contingent liabilities exist at reporting date.

Contingent Assets

On 30 April 2017, the Group announced that it had signed a conditional Terms Sheet whereby it shall sell all of its Tasmanian Assets to the UK listed group, NQ Minerals Plc (“NQ”).

Under the terms of the agreement, NQ is to conduct due diligence over an extended period, with the assistance of the Group, and then, upon successful completion, sign a formal sales and purchase agreement.

Under the term of the conditional terms sheet, the Group shall derive a net smelter royalty (“NSR”) of 1% Net Smelter Royalty on any future sales from the Tenements for a period of 20 years from completion of the signed formal sales and purchase agreement and also receive a refund of bonds and cash previously pledged as part of the Company’s asset exposure.

At the date of this report, NQ has continued to advance to completion of its due diligence and a sale and purchase agreement will potentially be executed before the end of 2017/2018.

As part of the conditional terms sheet, NQ and its associated entities, have met all costs associated with the management, rehabilitation and ongoing development of all Tasmanian assets including exploration and rental costs.

15. Share-based Payments

The following share-based payment arrangements existed at reporting date.

(i) Bass Metals Ltd Employee Share and Option Plan (ESOP)

Outstanding at the beginning of the period Granted Forfeited and cancelled Exercised Outstanding at the end of the period Exercisable at the end of the period	31 December 2017 30 June 2017 Number of Options Weighted Average Exercise Price $ Number of Options Weighted Average Exercise Price$	31 December 2017 30 June 2017 Number of Options Weighted Average Exercise Price $ Number of Options Weighted Average Exercise Price$
	136,000,000 0.062 - - - 136,000,000 - - - - - -	- 0.062 - -
	136,000,000 0.062 136,000,000	0.062
	136,000,000 0.062 136,000,000	0.062

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HALF-YEAR REPORT For the period ended 31 December 2017

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15. Share-based Payments (continued)

(ii) Total Company Listed Options

(ii) Total Company Listed Options
Outstanding at the beginning of the period Granted Outstanding at the end of the period Exercisable at the end of the period1	31 December 2017 30 June 2017 Number of Options Weighted Average Exercise Price $ Number of Options Weighted Average Exercise Price$
	344,847,424 0.025 - 333,552,697 0.025 344,847,424	- 0.025
	678,400,121 0.025 344,847,424	0.025
	678,400,121 0.025 344,847,424	0.025

Note 1: Total Company listed options outstanding at the end of the period represents 646,519,172 (30 June 2017: 326,683,806) listed options issued under placement to investors and 31,880,949 (30 June 2017: 18,163,618) options issued to Directors

(iii) Total Company Unlisted Options

Outstanding at the beginning of the period Granted Outstanding at the end of the period Exercisable at the end of the period1	31 December 2017 30 June 2017 Number of Options Weighted Average Exercise Price $ Number of Options Weighted Average Exercise Price$	31 December 2017 30 June 2017 Number of Options Weighted Average Exercise Price $ Number of Options Weighted Average Exercise Price$
	180,384,220 0.049 33,330,000 - - 147,054,220	0.015 0.056
	180,384,220 0.049 180,384,220	0.049
	180,384,220 0.049 180,384,220	0.049

Note 1: Total unlisted options outstanding at the end of the period represents 42,284,220 options issued under placement to investors, 2,100,000 options issued to Directors as part of investor placement, 12,000,000 options ESOP issued to Directors options issued under placement to sophisticated investors on 2 September 2016, 70,000,000 ESOP options issued to Group Executives on 2 September 2016 and 54,000,000 ESOP Directors options granted on 3 May 2017.

(iv) Performance Rights

Under the ESOP, certain Directors and Group Executives may be granted a right to be issued a share in the future subject to the performance based vesting conditions being met.

The Performance Rights will require Directors and Group Executives to achieve certain Key Performance Indicators as detailed in the Annual Financial Statements of the Group for the year ended 30 June 2017.

Outstanding at the beginning of the period Granted Outstanding at the end of the period	31 December 2017 30 June 2017 Number of Performance Rights Number of Performance Rights
	62,000,000 - - 62,000,000
	62,000,000 62,000,000

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HALF-YEAR REPORT For the period ended 31 December 2017

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16. Fair Value Measurement of Financial Instruments

16.1 Fair value hierarchy

The financial instruments recognised at fair value in the statements 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 three levels:

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

• Level 2: 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); and

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

The following table shows the levels within the hierarchy of financial assets and liabilities measured at fair value on a recurring basis.

31 December 2017 Financial Assets VAT receivable Financial Liabilities Deferred consideration payable 31 December 2016 Financial Assets VAT receivable Financial Liabilities Deferred consideration payable	Level 1 Level 2 Level 3 Total $ $ $ $
	- - 237,491 237,491
	- - 200,000 200,000
	Level 1 Level 2 Level 3 Total $ $ $ $
	- - 107,826 107,826
	- - 1,685,000 1,685,000

16.2 Measurement of fair value of financial instruments

The methods and valuation techniques used for the purpose of measuring fair value are unchanged compared to the previous reporting period.

The carrying amounts of the trade and other receivables, trade and other payables, deferred consideration payable and borrowings are considered to be a reasonable approximation of their fair value.

17. Events Subsequent to Reporting Date

Up to and including the date of this report, the Company had received $236,700 from holders of unlisted options with an exercise price of 1.5 cents per share. Of those funds received, the Company has so far issued 6,000,000 ordinary shares worth $90,000. Upon final instruction, the remaining options will be formally exercised and listed ordinary shares issued to the option holders.

As at the Reporting Date, the Company owed a balance of $200,000 to Stratmin Global Resources Plc (“Stratmin”) as part of the Company’s revised purchase agreement with Stratmin. Following discussions, Stratmin agreed to accept $100,000 as full and final payment of the balance due as part of the revised purchase agreement. This payment was made on 14 February 2018.

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Level 17, 383 Kent Street Sydney NSW 2000

Correspondence to: Locked Bag Q800 QVB Post Office Sydney NSW 1230

T +61 2 8297 2400 F +61 2 9299 4445 E info.nsw@au.gt.com W www.grantthornton.com.au

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

Report on the Half Year Financial Report

Conclusion

We have reviewed the accompanying half year financial report of Bass Metals Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 31 December 2017, and the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the half year ended on that date, a description of accounting policies, other selected explanatory notes, and the directors’ declaration.

Based on our review, which is not an audit, nothing has come to our attention that causes us to believe that the half year financial report of Bass Metals Limited does not give a true and fair view of the financial position of the Group as at 31 December 2017, and of its financial performance and its cash flows for the half year ended on that date, in accordance with the Corporations Act 2001 , including complying with Accounting Standard AASB 134 Interim Financial reporting .

Directors’ Responsibility for the Half Year Financial Report

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

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half year financial report is not in accordance with the Corporations Act 2001 including giving a true and fair view of the Group’s financial position as at 31 December 2017 and its performance for the half year ended on that date, and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of 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.

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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 have complied with the independence requirements of the Corporations Act 2001.

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Grant Thornton Audit Pty Ltd Chartered Accountants

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M J Hillgrove Partner - Audit & Assurance

Perth, 28 February 2018

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Central Park, Level 43 152-158 St Georges Terrace Perth WA 6000

Correspondence to: PO Box 7757 Cloisters Square Perth WA 6850

T +61 8 9480 2000 F +61 8 9480 2050 E info.wa@au.gt.com W www.grantthornton.com.au

Auditor’s Independence Declaration 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 2017. 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 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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M J Hillgrove

Partner – Audit & Assurance

Perth, 28 February 2018

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.

26

HALF-YEAR REPORT For the period ended 31 December 2017

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DIRECTORS’ DECLARATION

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

2. a. The consolidated financial statements and notes of Bass Metals Ltd are in accordance with the Corporations Act 2001, including:

   • i. Giving a true and fair view of its financial position as at 31 December 2017 and of its performance, for the half-year ended on that date; and

   • ii. Complying with Australian Accounting Standard AASB134 Interim Financial Reporting; and

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

Signed in accordance with a resolution of the Directors.

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RA Anthon Chairman

Brisbane, Queensland 28 February 2018

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