HAWSONS IRON LTD — AGM Information 2015

Oct 18, 2015

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19 October 2015

CHAIRMAN’S LETTER TO SHAREHOLDERS

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Your vote at this AGM is vital for maintaining board stability and the

ongoing development of the Hawsons Iron Project for the benefit of all Carpentaria shareholders.

Why the Board needs your vote in this Annual General Meeting (AGM).

• Carpentaria Exploration, under its current board and management, continues to progress the world class Hawsons Iron Project towards feasibility and development.

• Your Board’s ability to continue doing so depends upon at least 75% of shareholders voting in support of the adoption of the remuneration report. At last year’s AGM Carpentaria received its ‘first strike’ as it failed to reach the 75% threshold of support.

• The structure of the Company’s share register makes avoiding a ‘second strike’ virtually impossible based on the past voting record of its major shareholder.

• The 2015 AGM agenda therefore includes item 4, a compulsory Board spill resolution, which is required in the event of a ‘second strike’. If 50% of shareholders chose to REJECT this spill motion Carpentaria will avoid the distraction and expense of yet another time consuming and costly extraordinary shareholder meeting.

• The Board strongly recommends you vote against the Board spill resolution.

Dear Shareholder,

The 2015 financial year has been one of the most challenging for exploration and mining companies in many decades, particularly for those in the iron ore business. Over the course of the past eighteen months the Board has regularly tested the strategic alternatives available to it, including that of putting the Hawsons Project on hold in order to preserve the Company’s cash until such time as the commodities cycle showed signs of recovery.

Your Board and management however formed the view that shareholders’ interests are best served by maintaining the momentum of the Company’s flagship asset, the Hawsons Iron Project joint venture. Our near term objective is to demonstrate the project can profitably produce a premium iron product that will be in demand in even the tightest of iron markets and thereby build shareholder value. Project results this year have advanced this goal and reinforced the Company’s strategic view.

At the same time we have been very mindful of the economically constrained environment in which the iron ore sector is operating. The Board has implemented a regime of prudent cost management, keeping corporate overheads as low as possible and channelling the majority of operating expenditure into Hawsons. This has included a decision by the Board to reduce its remuneration for a second time in 15 months. The Board’s current remuneration, both individually and combined, is now below the average rates (based on FY14 data) of those junior exploration companies who, like Carpentaria, are members of the Association of Mining and Exploration Companies (AMEC).

Our Commitment to the Future of Modern Steel Production

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Level 6, 345 Ann St Brisbane Queensland 4000 PO Box 10919, Adelaide Street, Brisbane Queensland 4000 Phone: + 61 7 3220 2022 Fax: + 61 7 3220 1291 info@capex.net.au www.capex.net.au

We find it, We prove it, We make it possible

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Your directors strongly believe that steel-making in many parts of the world will move increasingly towards the modern electric arc furnace process and more efficient operating of blast furnaces. As a consequence, the demand for direct reduction grade (DR) and high quality blast furnace grade pellets and pellet feed will grow dramatically in coming years. Carpentaria’s strategy is to position Hawsons to be best-placed to supply such products.

Over the past year your Company, in its role as manager of the Hawsons Iron Project joint venture, has achieved the following:

• Completed bulk testwork, demonstrating how Hawsons can produce world-leading quality iron ore pellet feed at very competitive costs, satisfying the premium end of the iron ore market and improving substantially the potential revenue and profitability of the project;

• Confirmed with Transgrid that existing electricity infrastructure can deliver Hawsons requirements with only minor network upgrades;

• Completed a supply chain prefeasibility level study, demonstrating that a 20 Mtpa export facility at Port Pirie is both technically and commercially feasible,

Attached are the notice of meeting and associated documents for this year’s Annual General Meeting of shareholders, to be held at The Christie Centre on Thursday 19 November 2015 .

I urge you to read these documents and draw your particular attention to the fourth resolution in the notice.

Under the Corporations Act, such a Board spill resolution must be put to shareholders if the Board receives what is known as a “second strike”. This happens if the remuneration report is not approved twice in a row. The Board spill resolution calls for an extraordinary meeting of shareholders within ninety days at which time the board positions (other than the Managing Director’s) are voted on. This resolution will only be put to a vote in the event that the first resolution (approval of the remuneration report) does not receive the required 75% approval.

Your Board is urging you to vote in favour of adopting the Remuneration Report and vote against the Board spill resolution. A how to vote according to director recommendations is attached.

I look forward to meeting with as many of you as possible at the AGM.

Yours sincerely

Dr Neil Williams Chairman

IF YOU HAVE ANY QUESTIONS ON THE AGM OR HOW TO VOTE, PLEASE CALL THE CARPENTARIA SHAREHOLDER INFORMATION LINE ON 1300 560 339 (OR FROM OUTSIDE OF AUSTRALIA +61 2 8011 0354)

Please note that you are able to lodge your proxy votes online. To do so, go to the Link Market Services website home page www.linkmarketservices.com.au , then the Investor

Centre and follow the prompts. This process is also shown on the attached proxy form. Please note also that if you are going to vote online, the prefix of your SRN/HIN may be the letter “I”, not the numeral “1”.

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Level 6, 345 Ann St Brisbane Queensland 4000 PO Box 10919, Adelaide Street, Brisbane Queensland 4000 Phone: + 61 7 3220 2022 Fax: + 61 7 3220 1291 info@capex.net.au www.capex.net.au

We find it, We prove it, We make it possible

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CARPENTARIA EXPLORATION LIMITED ANNUAL GENERAL MEETING 19 November 2015

The Board of Carpentaria Exploration Limited RECOMMENDS THAT YOU VOTE AS SET OUT BELOW

Noting that for Resolution 1 each Director has a personal interest in their own remuneration from Carpentaria as described in the remuneration report; and

Noting that Messrs Cai and Cholakos abstain from making any recommendation to the resolution that relates to their own re-election

HOW TO VOTE

Resolution 1: Adoption of the Remuneration Report

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X
FOR AGAINST ABSTAIN
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Resolution 2: Re-election of Bin Cai as a Director

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X
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Resolution 3: Re-election of Paul Cholakos as a Director

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X
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Resolution 4: Holding a spill meeting

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X
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PLEASE ENSURE IF YOU ARE VOTING THAT YOU SIGN AND DATE YOUR COMPLETED PROXY FORM OR GO ON-LINE AS PER PROCEDURE AN REVERSE OF PROXY FORM SHAREHOLDER INFORMATION LINE 1300 560 339

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ACN 095 117 981
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LODGE YOUR VOTE ONLINE  www.linkmarketservices.com.au BY MAIL  Carpentaria Exploration Limited C/- Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 Australia  BY FAX 02 9287 0309  BY HAND Link Market Services Limited 1A Homebush Bay Drive, Rhodes NSW 2138  ALL ENQUIRIES TO Telephone: 1300 554 474

X99999999999

X99999999999

PROXY FORM

I/We being a member(s) of Carpentaria Exploration Limited and entitled to attend and vote hereby appoint:

APPOINT A PROXY

the Chairman of the OR if you are NOT appointing the Chairman of the Meeting as your proxy, please write the name of the person or Meeting (mark box) body corporate you are appointing as your proxy

or failing the person or body corporate named, or if no person or body corporate is named, the Chairman of the Meeting, as my/our proxy to act on my/our behalf (including to vote in accordance with the following directions or, if no directions have been given and to the extent permitted by the law, as the proxy sees fit) at the Annual General Meeting of the Company to be held at 11:00am on Thursday, 19 November 2015 at The Mayflower Room, Christies Building, 320 Adelaide Street, Brisbane Queensland 4000 (the Meeting ) and at any postponement or adjournment of the Meeting.

Important for Resolution 1: If the Chairman of the Meeting is your proxy, either by appointment or by default, and you have not indicated your voting intention below, you expressly authorise the Chairman of the Meeting to exercise the proxy in respect of Resolution 1, even though the Resolution is connected directly or indirectly with the remuneration of a member of the Company’s Key Management Personnel ( KMP ). The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business except for the last item of business where the Chairman of the Meeting intends to vote undirected proxies AGAINST the resolution.

VOTING DIRECTIONS

Proxies will only be valid and accepted by the Company if they are signed and received no later than 48 hours before the Meeting. Please read the voting instructions overleaf before marking any boxes with an T

Resolutions For Against Abstain * 1 Adoption of the Remuneration Report 2 Re-election of Bin Cai as a director

• 3 Re-election of Paul Cholakos as a director

4 Holding a spill meeting

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 * If you mark the Abstain box for a particular Item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

SIGNATURE OF SHAREHOLDERS – THIS MUST BE COMPLETED

Shareholder 1 (Individual) Joint Shareholder 2 (Individual) Joint Shareholder 3 (Individual) Sole Director and Sole Company Secretary Director/Company Secretary (Delete one) Director

This form should be signed by the shareholder. If a joint holding, either shareholder may sign. If signed by the shareholder’s attorney, the power of attorney must have been previously noted by the registry or a certified copy attached to this form. If executed by a company, the form must be executed in accordance with the company’s constitution and the Corporations Act 2001 (Cth).

CAP PRX501C

HOW TO COMPLETE THIS SHAREHOLDER PROXY FORM

YOUR NAME AND ADDRESS

This is your name and address as it appears on the Company’s share register. If this information is incorrect, please make the correction on the form. Shareholders sponsored by a broker should advise their broker of any changes. Please note: you cannot change ownership of your shares using this form.

APPOINTMENT OF PROXY

If you wish to appoint the Chairman of the Meeting as your proxy, mark the box in Step 1. If you wish to appoint someone other than the Chairman of the Meeting as your proxy, please write the name of that individual or body corporate in Step 1. A proxy need not be a shareholder of the Company.

DEFAULT TO CHAIRMAN OF THE MEETING

Any directed proxies that are not voted on a poll at the Meeting will default to the Chairman of the Meeting, who is required to vote those proxies as directed. Any undirected proxies that default to the Chairman of the Meeting will be voted according to the instructions set out in this Proxy Form, including where the Resolution is connected directly or indirectly with the remuneration of KMP.

VOTES ON ITEMS OF BUSINESS – PROXY APPOINTMENT

You may direct your proxy how to vote by placing a mark in one of the boxes opposite each item of business. All your shares will be voted in accordance with such a direction unless you indicate only a portion of voting rights are to be voted on any item by inserting the percentage or number of shares you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on the items of business, your proxy may vote as he or she chooses. If you mark more than one box on an item your vote on that item will be invalid.

APPOINTMENT OF A SECOND PROXY

You are entitled to appoint up to two persons as proxies to attend the Meeting and vote on a poll. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by telephoning the Company’s share registry or you may copy this form and return them both together.

LODGEMENT OF A PROXY FORM

This Proxy Form (and any Power of Attorney under which it is signed) must be received at an address given below by 11:00am on Tuesday, 17 November 2015, being not later than 48 hours before the commencement of the Meeting. Any Proxy Form received after that time will not be valid for the scheduled Meeting.

Proxy Forms may be lodged using the reply paid envelope or:

ONLINE 

www.linkmarketservices.com.au

Login to the Link website using the holding details as shown on the Proxy Form. Select ‘Voting’ and follow the prompts to lodge your vote. To use the online lodgement facility, shareholders will need their “Holder Identifier” (Securityholder Reference Number (SRN) or Holder Identification Number (HIN) as shown on the front of the Proxy Form).

BY MAIL



Carpentaria Exploration Limited C/- Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 Australia

 BY FAX

• +61 2 9287 0309

 BY HAND

delivering it to Link Market Services Limited* 1A Homebush Bay Drive Rhodes NSW 2138

• During business hours (Monday to Friday, 9:00am–5:00pm)

To appoint a second proxy you must:

• (a) on each of the first Proxy Form and the second Proxy Form state the percentage of your voting rights or number of shares applicable to that form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded; and

• (b) return both forms together.

SIGNING INSTRUCTIONS

You must sign this form as follows in the spaces provided:

Individual: where the holding is in one name, the holder must sign. Joint Holding: where the holding is in more than one name, either shareholder may sign.

Power of Attorney: to sign under Power of Attorney, you must lodge the Power of Attorney with the registry. If you have not previously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001 ) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please indicate the office held by signing in the appropriate place.

CORPORATE REPRESENTATIVES

If a representative of the corporation is to attend the Meeting the appropriate “Certificate of Appointment of Corporate Representative” should be produced prior to admission in accordance with the Notice of Meeting. A form of the certificate may be obtained from the Company’s share registry or online at www.linkmarketservices.com.au.

IF YOU WOULD LIKE TO ATTEND AND VOTE AT THE ANNUAL GENERAL MEETING, PLEASE BRING THIS FORM WITH YOU. THIS WILL ASSIST IN REGISTERING YOUR ATTENDANCE.

Carpentaria Exploration Limited A.C.N. 095 117 981

NOTICE OF ANNUAL GENERAL MEETING

AND

EXPLANATORY STATEMENT TO SHAREHOLDERS

FOR THE ANNUAL GENERAL MEETING OF SHAREHOLDERS TO BE HELD ON 19 November 2015 at The Mayflower Room, Christies Building, 320 Adelaide Street, Brisbane Queensland at 11.00am (Brisbane time)

You are encouraged to attend the meeting but, if you cannot, you are requested to complete and return the enclosed Proxy Form without delay (and no later than 48 hours before the meeting) to Link Market Services Limited at Locked Mail Bag A14, Sydney South New South Wales 1235, Australia, or by facsimile on facsimile number +61 2 9287 0309.

NOTICE IS HEREBY GIVEN that the Annual General Meeting of the or members of CARPENTARIA EXPLORATION LIMITED ( “Carpentaria” “the Company” ) will be held on the date and at the location and time specified below:

DATE:

Thursday, 19 November 2015

LOCATION: The Mayflower Room, Christies Building, 320 Adelaide Street, Brisbane Queensland 4000

TIME: 11.00am (Brisbane time)

BUSINESS: The business to be transacted at the Annual General Meeting is the proposal of the Resolutions set out below.

CARPENTARIA EXPLORATION LIMITED

A.C.N. 095 117 981

NOTICE OF MEETING

TIME AND PLACE OF MEETING AND HOW TO VOTE

VENUE

The Annual General Meeting of Shareholders of Carpentaria Exploration Limited will be held at The Mayflower Room, Christies Building, 320 Adelaide Street, Brisbane Queensland 4000 on Thursday, 19 November 2015 at 11.00am (Brisbane time).

YOUR VOTE IS IMPORTANT

The business of the Annual General Meeting affects your shareholding and your vote is important.

VOTING IN PERSON

Shareholders may attend the Annual General Meeting on the date and at the place set out above and vote in person.

VOTING BY PROXY

Please note that:

• a. a Shareholder entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy;

• b. a proxy need not be a member of the Company;

• c. a Shareholder may appoint a body corporate or an individual as its proxy;

• d. a body corporate appointed as a Shareholder’s proxy may appoint an individual as its representative to exercise any of the powers that the body may exercise as the Shareholder’s proxy; and

• e. a Shareholder entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise, but where the proportion or number is not specified, each proxy may exercise half of the total votes.

The enclosed Proxy Form provides further details on voting entitlement, appointing proxies and lodging Proxy Forms. If a Shareholder appoints a body corporate as its proxy and the body corporate wishes to appoint an individual as its representative, the body corporate should provide that person with a certificate or letter executed in accordance with the Corporations Act authorising him or her to act as that company’s representative. The authority may be sent to the Company or its share registry in advance of the Annual General Meeting or handed in at the Annual General Meeting when registering as a corporate representative.

To vote by proxy, please complete and sign the Proxy Form enclosed and either:

• a. deliver the Proxy Form by post to Link Market Services Limited at Locked Mail Bag A14, Sydney South New South Wales 1235, Australia; or

• b. fax the form to Link Market Services Limited on facsimile number +61 2 9287 0309,

so that it is received not later than 11.00am (Brisbane time) on 17 November 2015 . Proxy Forms received later than this time will be invalid.

CARPENTARIA EXPLORATION LIMITED

A.C.N. 095 117 981

NOTICE OF MEETING

NOTICE OF ANNUAL GENERAL MEETING

Notice is given that the Annual General Meeting of Shareholders of Carpentaria Exploration Limited will be held at 11.00am (Brisbane time) on Thursday, 19 November 2015 at The Mayflower Room, Christies Building, 320 Adelaide Street, Brisbane Queensland 4000.

The Explanatory Statement to this Notice of Meeting provides additional information on matters to be considered at the Annual General Meeting and a glossary of defined terms not defined in full in this Notice. The Explanatory Statement and the enclosed Proxy Form form part of this Notice of Meeting.

The Directors have determined pursuant to Regulation 7.11.37 and 7.11.38 of the Corporations Regulations that the persons eligible to vote at the Annual General Meeting are those who are registered shareholders of the Company at 4.00pm (Brisbane time) on Tuesday, 17 November 2015 . Accordingly, transactions registered after that time will be disregarded in determining entitlements to attend and vote at the Annual General Meeting.

Terms and abbreviations used in this Notice of Meeting and Explanatory Statement are defined in the Glossary.

AGENDA

Financial Statements and Directors’ Report

The financial statements, Directors’ Report and Auditor’s Report for the year ended 30 June 2015 are to be tabled.

RESOLUTIONS

1. Adoption of Remuneration Report (Non-binding)

To consider and, if thought fit, to pass, with or without amendment, the following as an Ordinary Resolution :

" That for the purposes of section 250R(2) of the Corporations Act and for all other purposes the remuneration report for the Company for the year ended 30 June 2015 be adopted. "

The vote on this resolution is advisory only and does not bind the directors or the Company.

Voting Prohibition: In accordance with section 250(R) of the Corporations Act, a vote on this Resolution 1 must not be cast (in any capacity) by or on behalf of a member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report, or a Closely Related Party of such a member.

However, a person described above may cast a vote on this Resolution if the vote is not cast on behalf of a person who is excluded from voting on Resolution 1 (as set out above), and either:

• (a) the person does so as a proxy appointed by writing that specifies how the proxy is to vote on Resolution 1; or

• (b) the person is the Chairman and the appointment of the Chairman as proxy:

• (i) does not specify the way the proxy is to vote on Resolution 1; and

• (ii) expressly authorises the Chairman to exercise the proxy even if Resolution 1 is connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

The Chairman intends to vote all available proxies IN FAVOUR of Resolution 1.

2. Re-election of Bin Cai as a director

To consider and, if thought fit, to pass, with or without amendment, the following as an Ordinary Resolution

"That Mr Bin Cai, who retires by rotation in accordance with clause 3.6 of the Constitution, and, being eligible, offers himself for election, be re-elected as a director of the Company."

CARPENTARIA EXPLORATION LIMITED

A.C.N. 095 117 981

NOTICE OF MEETING

The Chairman intends to vote all available proxies IN FAVOUR of Resolution 2.

3. Re-election of Paul Cholakos as a director

To consider and, if thought fit, to pass, with or without amendment, the following as an Ordinary Resolution

"That Mr Paul Cholakos, who retires by rotation in accordance with clause 3.6 of the Constitution, and, being eligible, offers himself for election, be re-elected as a director of the Company."

The Chairman intends to vote all available proxies IN FAVOUR of Resolution 3.

Conditional business

4. Holding a spill meeting

To consider and, if thought fit, to pass the following ordinary resolution:

"That, subject to and conditional on at least 25% of the votes cast on Resolution 1 being cast against the adoption of the remuneration report:

• (a) A meeting of the Company's members be held within 90 days of the date of the 2015 Annual General Meeting, ( the spill meeting);

• (b) All the Company's directors who:

• (i) were directors of the Company when the resolution to approve the directors' report for the year ended 30 June 2015 was passed; and

• (ii) are not a managing director of the Company who may, in accordance with the ASX Listing Rules, continue to hold office indefinitely without being re-elected to the office,

cease to hold office immediately before the end of the spill meeting; and

• (iii) resolutions to appoint persons to offices that will be vacated immediately before the end of the spill meeting be put to the vote at the spill meeting."

Voting Prohibition: In accordance with section 250(R) of the Corporations Act, a vote on this Resolution 4 must not be cast (in any capacity) by or on behalf of a member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report, or a Closely Related Party of such a member.

However, a person described above may cast a vote on this Resolution if the vote is not cast on behalf of a person who is excluded from voting on Resolution 4 (as set out above), and either:

• (a) the person does so as a proxy appointed by writing that specifies how the proxy is to vote on Resolution 4; or

• (b) the person is the Chairman and the appointment of the Chairman as proxy:

• (i) does not specify the way the proxy is to vote on Resolution 4; and

• (ii) expressly authorises the Chairman to exercise the proxy even if Resolution 4 is connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

PLEASE NOTE:

The Chairman intends to vote all available proxies AGAINST Resolution 4.

CARPENTARIA EXPLORATION LIMITED A.C.N. 095 117 981

NOTICE OF MEETING

An explanation of the proposed Resolutions 1 to 4 is set out in the Explanatory Statement, which forms part of this Notice of Meeting.

BY ORDER OF THE BOARD

Bob Hair Company Secretary DATED 19 October 2015

CARPENTARIA EXPLORATION LIMITED

A.C.N. 095 117 981

NOTICE OF MEETING

EXPLANATORY STATEMENT TO SHAREHOLDERS

INTRODUCTION

This Explanatory Statement has been prepared for the information of Shareholders of Carpentaria in connection with Resolutions to be considered at the Annual General Meeting to be held at The Mayflower Room, Christies Building, 320 Adelaide Street, Brisbane Queensland 4000 on Thursday, 19 November 2015 at 11.00am (Brisbane time).

This Explanatory Statement should be read in conjunction with the accompanying Notice of Annual General Meeting. Please refer to this Explanatory Statement for the glossary of terms.

The purpose of this Explanatory Statement is to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions set out in the Notice of Meeting.

FINANCIAL STATEMENTS AND DIRECTORS’ REPORT

The Corporations Act requires the reports of the Directors and of the auditor of the Company and the annual financial report, including the financial statements, to be put before the Meeting. The Corporations Act does not require a vote of Shareholders at the Meeting on the reports or statements. However, Shareholders will be given an opportunity to raise questions on the reports and statements for the year ended 30 June 2015 at the Meeting.

RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT

The Remuneration Report is set out in the Directors’ Report in the Company’s 2015 Annual Report. The Remuneration Report sets out the Company’s remuneration arrangements for the Directors and senior management of the Company.

Section 249L(2) of the Corporations Act requires the Company to inform Shareholders that a Resolution on the Remuneration Report will be put at the Meeting. Section 250R(2) of the Corporations Act requires that the Resolution that the Remuneration Report be adopted must be put to the vote. Resolution 1 seeks this approval.

However, in accordance with section 250R(3) of the Corporations Act, Shareholders should note that Resolution 1 is an “advisory only” Resolution which does not bind the Directors or the Company. If Resolution 1 is not passed, the Directors will not be required to alter any of the arrangements in the Remuneration Report. However, the Board recognises that the Shareholder vote on Resolution 1 is an indication of Shareholder sentiment and will have regard to the outcome of the vote and any discussion when setting the remuneration practices of the Company.

Following consideration of the Remuneration Report, the Chairman, in accordance with section 250SA of the Corporations Act, must give Shareholders a reasonable opportunity to ask questions about, or make comments on, the Remuneration Report.

A voting exclusion statement and restriction where proxy is member of Key Management Personnel

In accordance with the Corporations Act, a vote on Resolution 1 must not be cast (in any capacity) by or on behalf of a member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report, or a Closely Related Party of such a member.

However, a person described above may cast a vote on Resolution 1 as a proxy if the vote is not cast on behalf of any Key Management Personnel or a Closely Related Party of such a member and either:

CARPENTARIA EXPLORATION LIMITED

A.C.N. 095 117 981

NOTICE OF MEETING

• (a) the person is appointed by writing that specifies how the proxy is to vote on the proposed resolution; or

• (b) the person is the Chairman and the appointment of the Chairman as proxy:

• (i) does not specify the way the proxy is to vote on the resolution; and

• (ii) expressly authorises the Chairman to exercise the proxy even if the resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

If you appoint as your proxy any other director of the Company, any other of its Key Management Personnel or a Closely Related Party of such a member and you do not direct that person to vote, that person will not vote your proxy on that item of business.

Noting that each Director has a personal interest in their own remuneration from Carpentaria as described in the Remuneration Report, the Directors unanimously recommend that you vote IN FAVOUR of Resolution 1.

The Chairman intends to vote all available proxies IN FAVOUR of Resolution 1.

RESOLUTION 2 AND 3 – RE-ELECTION OF DIRECTORS

Clause 3.6 of the Constitution provides that at the annual general meeting one-third of the directors for the time being, or, if their number is not three nor a multiple of three, then the number nearest one-third, must retire from office. (Clause 3.6 of the Constitution also provides that this does not apply to the Managing Director). Accordingly, Resolutions 2 and 3 seek the re-election of the directors who retire by rotation in accordance with the Constitution, Mr Bin Cai and Mr Paul Cholakos respectively.

In the event that Resolutions 2 and 3 are passed, the Board will consist of Neil Williams (Chairman and non-executive director), Quentin Hill (Managing Director), Bin Cai (non-executive director) and Paul Cholakos (non-executive director).

A profile of each of Bin Cai and Paul Cholakos is provided below.

Mr Bin Cai

Non-Executive director

Appointed a Non-Executive Director in May 2011, Bin is Managing Director of Conglin International Investment Group Pty Ltd, a major shareholder of Carpentaria. With 21 years of experience in resources investment, Bin and the Conglin Group have an outstanding record of successful strategic investments in emerging Australian resources companies. The Conglin Group has longstanding partnerships with major steel producers in China, having developed a successful coking coal and iron ore trading business in the Asian economic powerhouse.

Bin is currently a Director of the ASX listed Orion Metals Limited (ASX:ORM appointed July 2012), and Alternate Director for ASX listed Northern Minerals Limited (ASX:NTU appointed August 2013). Otherwise, he has not been a director of a listed company in the last three years.

Mr Paul Cholakos

Non-Executive director

Paul has over 31 years of resources industry experience, successfully managing complex development projects for leading oil and gas and diversified mining companies. He holds Master of Business Administration and Bachelor of Engineering degrees. Paul currently serves as Executive General Manager, Technical Services of major Australian oil and gas company Oil Search Limited (ASX:OSH).

He is also Chairman of the Carpentaria Remuneration Committee and a Committee Member of the Audit Committee.

CARPENTARIA EXPLORATION LIMITED A.C.N. 095 117 981

NOTICE OF MEETING

Paul has not been a director of any other listed company in the last three years.

The Directors (other than Messrs Cai and Cholakos who abstain from making any recommendation in relation to the resolution that relates to their own re-election) recommend that Shareholders vote IN FAVOUR of Resolutions 2 and 3.

The Chairman intends to vote all available proxies IN FAVOUR of Resolutions 2 and 3.

Conditional Resolution

RESOLUTION 4 - HOLDING A SPILL MEETING

Note that Resolution 4 is a conditional resolution. Even if it is passed, it will only become effective if at least 25% of the votes cast on Resolution 1 are against the adoption of the 2015 remuneration report.

At last year's Annual General Meeting, more than 25% of the votes cast on the resolution to adopt the 2014 remuneration report were cast against it. If at least 25% of the votes cast on resolution 1 are against adopting the remuneration report at this year's Annual General Meeting, Resolution 4 will be put to the meeting and voted on as required by section 250V of the Company's Act 2001 ( spill resolution ).

The spill resolution is considered to be an ordinary resolution.

Members should note that if a spill resolution is passed:

• (a) the Company is required to convene a general meeting of its members to be held within 90 days of the date of the 2015 Annual General Meeting (the spill meeting ); and

• (b) with the exception of the Managing Director of the Company, all of the Company's directors who were the directors of the Company when the resolution to approve the remuneration report for the year ended 30 June 2015 was passed (relevant directors) will cease to hold office immediately before the end of the spill meeting.

Each relevant director is eligible, but not required, to seek re-election as a director of the Company at the spill meeting.

Holding a spill meeting would cause significant disruption to the running of the Company as a result of management distraction, the cost and time involved in organising such a meeting and the diversion of resources.

A voting exclusion statement and restriction where proxy is member of Key Management Personnel

In accordance with the Corporations Act, a vote on Resolution 4 must not be cast (in any capacity) by or on behalf of a member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report, or a Closely Related Party of such a member.

However, a person described above may cast a vote on Resolution 4 as a proxy if the vote is not cast on behalf of any Key Management Personnel or a Closely Related Party of such a member and either:

• (c) the person is appointed by writing that specifies how the proxy is to vote on the proposed resolution; or

• (d) the person is the Chairman and the appointment of the Chairman as proxy:

• (i) does not specify the way the proxy is to vote on the resolution; and

• (ii) expressly authorises the Chairman to exercise the proxy even if the resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

CARPENTARIA EXPLORATION LIMITED

A.C.N. 095 117 981

NOTICE OF MEETING

If you appoint as your proxy any other director of the Company, any other of its Key Management Personnel or a Closely Related Party of such a member and you do not direct that person to vote, that person will not vote your proxy on that item of business.

The Directors unanimously recommend that you vote AGAINST Resolution 4.

The Chairman intends to vote available proxies given to him AGAINST Resolution 4.

GLOSSARY

Annual General Meeting
or Meeting	means the Annual General Meeting of Shareholders to be held at The Mayflower
	Room, Christies Building, 320 Adelaide Street, Brisbane Queensland 4000 on
	Thursday, 19 November 2015 at 11.00am (Brisbane time).
Annual Report	means the Director’s Report, the Financial Statements and the Auditor’s Report in
	respect to the financial year ended 30 June 2015.
ASX	means Australian Securities Exchange.
ASX Listing Rules	means the official listing rules of ASX.
Board	means the current board of directors of the Company.
Chairman	means the person appointed to chair the meeting of the Company convened by this
	Notice.
Closely Related Party	has the meaning given in the Corporations Act and includes close family members
	and companies the Key Management Personnel controls.
Company or Carpentaria	means Carpentaria Exploration Limited A.C.N. 095 117 981.
Constitution	means the current constitution of the Company as at the date of this Meeting.
Corporations Act	means the_Corporations Act 2001_(Cth).
Corporations Regulations	means the_Corporations Regulations 2001_(Cth).
Directors	means the current directors of the Company.
Explanatory Statement	means the explanatory statement accompanying the Notice of Meeting.
Key Management Personnel	has the meaning given in the accounting standards and broadly means any person
	having authority and responsibility for planning, directing and controlling the
	activities of the Company, directly or indirectly, including any Director (whether
	executive or otherwise) of the Company.
Notice of Meeting or Notice	means this notice of Annual General Meeting including the Explanatory Statement.
Ordinary Resolution	means a Resolution to be passed by a simple majority of Shareholders entitled to
	vote on the Resolution (in person, by proxy, by attorney or, in the case of a
	corporate Shareholder, by a corporate representative).
Proxy Form	means, for Shareholders, the proxy form enclosed with this Notice.

CARPENTARIA EXPLORATION LIMITED

A.C.N. 095 117 981

NOTICE OF MEETING

Remuneration Report means the remuneration report of the Company for year ended 30 June 2015 contained in the Director’s Report. Resolution means a resolution set out in the Notice of Meeting. Share means an ordinary share in the Company. Shareholder means a holder of Shares in the Company. Special Resolution means a Resolution to be passed by at least 75% of the votes cast by Shareholders entitled to vote on the Resolution (in person, by proxy, by attorney or, in the case of a corporate Shareholder, by a corporate representative).

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ANNUAL FINANCIAL REPORT

FOR THE YEAR ENDED 30 JUNE 2015

Annual Financial Report 30 June 2015

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CORPORATE DIRECTORY

Board of Directors

Quentin Hill Managing Director Bin Cai Non-Executive Director Paul Cholakos Non-Executive Director Bob Hair Non-Executive Director Dr Neil Williams Non-Executive Director

Company Secretary

Chris Powell

Registered Office

Level 6 345 Ann Street Brisbane Qld 4000

Solicitors

HWL Ebsworth Level 23, Riverside Centre, 123 Eagle Street Brisbane Qld 4000

PO Box 10919 Adelaide Street Brisbane QLD 4000

Telephone: +61 7 3220 2022 Facsimile : +61 7 3220 1291 Email: info@capex.net.au Website: www.carpentariaex.com.au

Auditors

BDO Audit Pty Ltd Level 10, 12 Creek Street Brisbane QLD 4000

Telephone: 07 3237 5999 Fax: 07 3221 9227 Website: www.bdo.com.au

Share Registry

Link Market Services Limited Level 19 324 Queen Street Brisbane QLD 4000 Telephone: 1300 554 474 Facsimile: 02 9287 0303 Website: www.linkmarketservices.com.au

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Annual Financial Report 30 June 2015

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DIRECTORS' REPORT

Your directors present their report on Carpentaria Exploration Limited for the year ended 30 June 2015.

DIRECTORS

The names and details of the Directors of Carpentaria Exploration Limited (Carpentaria) in office at the date of this report or at any time during the financial year are:

Name	Position	Period of directorship
Dr Neil Williams	Non-Executive Chairman	Appointed 1 January 2012
Quentin Hill	Managing Director	Appointed 1 September 2013
Robert William Hair	Non-Executive Director	Appointed August 2007
Bin Cai	Non-Executive Director	Appointed May 2011
Paul Cholakos	Non-Executive Director	Appointed 2 April 2012
Stuart Nicholas Sheard	Former Executive Chairman	Appointed March 2007. Resigned as Executive
	and Non-Executive	Chairman, and appointed as Non-executive director
	Chairman	on 1 September 2013. Resigned from the Board on 1
		July 2014.

Dr Neil Williams PSM BSc Hons (ANU) PhD (Yale) FTSE FAICD FAIM Non-Executive Chairman

Dr Williams has had a distinguished career spanning all aspects of mineral exploration, both in Australia and internationally, including serving for 15 years as the Chief Executive Officer of the Australian government’s geoscience agency, Geoscience Australia, and as Chief Geologist - Exploration for MIM. Dr Williams has won numerous Australian and international awards in his field. He has also had a distinguished academic career, currently serving as an Honorary Professorial Fellow at the University of Wollongong. In early 2014 he was awarded the Haddon Forrester King Medal from the Australian Academy of Science for his geo-scientific contributions to the discovery, evaluation and exploitation of mineral deposits. Dr Williams was a member of the Board of Australian Marine Science & Technology Ltd for 15 years and was Chairman of the Board for 13 of those years. He was also a member for 7 years of the Snowy Mountains Council that had oversight of the running of the Snowy Mountains Hydro-electric Authority and served as Chairman of the Council for the last 5 of those years.

Dr Williams was appointed Chairman on 1 July 2014. He is also a Committee Member of the Carpentaria Audit Committee and the Remuneration Committee.

Dr Williams has not been a director of any other listed company in the last three years.

Quentin Hill Bachelor of Science (Geology) Managing Director

Quentin is a geologist with over 19 years’ experience in exploration and development in Australia. He has wide ranging commodity experience including gold, iron ore, coal and base metals. Quentin was Carpentaria’s Senior Geologist when the Company listed and was integral in the discovery of the 1.4Bt Hawsons Iron Project, where he also managed the successful resource drilling.

Prior to his 8 years with Carpentaria, Quentin held technical positions with major miners, including seven years with Delta Gold, and with Vale’s coal division. He also held a senior role in the Queensland Government, where he implemented several exploration funding initiatives.

He is a member of the Australian Institute of Geoscientists and the Society of Economic Geologists.

Mr Hill has not been a director of any other listed company in the last three years.

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Bob Hair BA (Hons) Non-Executive Director

Bob is by background a lawyer (having been admitted as a barrister in Queensland in 1983) with over 26 years of experience in the resources sector. He was previously an in-house lawyer, director of subsidiary companies and Commercial Manager and General Manager in the MIM group in Australia, Asia, Europe, North America, South America, and GM Commercial for the ASX-listed Highlands Pacific Limited. Since that time he has worked for and consulted to various listed and unlisted companies in the resources industry.

Until February 2014 Bob was Managing Director of the ASX, JSE and AIM-listed Ferrum Crescent Limited (ASX,JSE,AIM:FCR), appointed July 2011). He resigned as a director of that company on 29 April 2014. Otherwise, he has not been a director of a listed company in the last three years. He is the Chairman of the Carpentaria Audit Committee and a member of the Carpentaria Remuneration Committee.

Bin Cai

Non-Executive Director

Appointed a Non-Executive Director in May 2011, Bin is Managing Director of Conglin International Investment Group Pty Ltd, a major shareholder of Carpentaria. With 21 years of experience in resources investment, Bin and the Conglin Group have an outstanding record of successful strategic investments in emerging Australian resources companies.

The Conglin Group has longstanding partnerships with major steel producers in China, having developed a successful coking coal and iron ore trading business in the Asian economic powerhouse.

Bin is currently a Director of the ASX listed Orion Metals Limited (ASX:ORM appointed July 2012), and Alternate Director for ASX listed Northern Minerals Limited (ASX:NTU appointed August 2013). Otherwise, he has not been a director of a listed company in the last three years.

Paul Cholakos Bachelor of Engineering (Mining), MBA Non-Executive Director

Paul has over 31 years of resources industry experience, successfully managing complex development projects for leading oil and gas and diversified mining companies. He holds Master of Business Administration and Bachelor of Engineering degrees. Paul currently serves as Executive General Manager, Technical Services of major Australian oil and gas company Oil Search Limited (ASX:OSH).

He is also Chairman of the Carpentaria Remuneration Committee and a Committee Member of the Audit Committee.

Paul has not been a director of any other listed company in the last three years.

Interests in the shares and options of the Company

As at the date of this report, the interests of the Directors in the shares and options of Carpentaria Exploration Limited are shown in the table below:

		Non-Recourse
	Ordinary	Employee
**Director **	Shares	Shares	Options
Quentin Hill	668,064	1,500,000	-
Bob Hair	50,000	1,500,000	-
Bin Cai	10,479,0001	-	500,000
Neil Williams	-	-	500,000
Paul Cholakos	-	-	500,000

1 Held by Australian Conglin International Investment Group Pty Ltd of which Mr Bin Cai is managing director.

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SENIOR MANAGEMENT

The names and details of the Company’s key personnel during the financial year and until the date of this report are as follows.

Doug Brewster

Exploration Manager

Effective 4 July 2014 Doug Brewster left the Company’s employ.

Chris Powell

Company Secretary

Chris as one of the founders of Carpentaria has, along with the 8 years in the resources industry, over 36 years of experience across a number of industries in similar roles. He has a wealth of administration and financial knowledge gathered through employment in senior management roles in New Zealand and Australia. Chris holds a Diploma of Management and is a member of the Australian Institute of Management (FAIM).

Effective 30 September 2015 Chris Powell left the Company’s employ.

CORPORATE INFORMATION

Corporate Structure

Carpentaria is a company limited by shares and incorporated and domiciled in Australia. Its shares are publicly traded on the Australian Securities Exchange (ASX). Carpentaria has prepared a consolidated financial report encompassing the entities that it controlled during the financial year.

NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES

The principal activity of the Consolidated Entity during the course of the financial year was mineral exploration.

Following listing on ASX on 17 November 2007, the Consolidated Entity has continued exploration activity on its projects in Queensland, New South Wales and South Australia.

There was no significant change in the nature of the activity of the Consolidated Entity during the year.

CURRENCY

The financial report is presented in Australian dollars and amounts are rounded to the nearest dollar.

OPERATING RESULTS

Commentary and Comparison with Prior Year

For the year ended 30 June 2015, the loss for the Consolidated Entity after providing for income tax was $2,847,740 (2014: $6,276,466):

Excluding the impact of project impairments, government grants and the gain on sale of exploration interests, all of which are not recurring in nature or comparable, the loss for the 2015 financial year is $759,827 less than the adjusted pre-tax loss of 2014.

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	Annual Financial Report 30 June 2015
	2015 2014 $ $
	Loss after income tax (2,847,740) (6,276,466) Adjustments for non-recurring or not comparable items Impairment of exploration expenditure 1,195,130 6,815,430 Gain on sale of interest in exploration and evaluation assets - (2,315,860) Government grants – R&D tax concession (488,985) (1,123,986)
	Adjusted loss after income tax expense (2,141,595) (2,900,882) This improvement is attributable to: $ Decrease in loss of value of GUF shares 53,903 Reductions in rental, administrative and employee costs 770,922 Decrease in depreciation 58,038 Increase in business development expenses (194,561) Decreaseinother items 70,985 759,287

The large decrease in administrative and employment costs was attributable to a reduction in head count and across the board cost savings

Increase in business development expenses is attributable to the Company focusing heavily in promoting the Hawsons Iron Project to potential financiers, investors and partners.

Cash Position

The Consolidated Entity’s cash position decreased from year end 2014 by $2,048,858.

Business Strategies and Prospects For Future Financial Years

The company expects to co fund the development of the Hawsons Iron Project (HIP) with its Joint Venture partner easing the financial burden. The work programs for the next twelve months are well within existing available funds and are targeted to add certainty to various aspects of the project and align all aspects of the project to the same level of certainty. This program will provide the platform for attracting further investment in the project to advance the feasibility study and increase company value.

The company has sharpened its focus towards the Hawsons Iron Project since regaining management of the project in June 2012. This has meant a shift away from exploration. In line with this a reduction in overheads and staff has allowed the company to maintain a strong financial position. A review of options for the remaining existing exploration licences other than Hawsons is underway.

The company will continue to monitor commodity markets and review its strategy periodically and adjust it as required.

This strategy should result in the Consolidated Entity maintaining a strong financial position in future years.

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REVIEW OF FINANCIAL POSITION

Capital structure

At 30 June 2015 the Company had 123,887,777 (including 9,100,000 non-recourse employee shares and 2,100,000 treasury shares) shares and 1,500,000 options on issue.

Treasury policy

The Board controls the funds, which are handled on a day to day basis by the Company Secretary.

Liquidity and funding

Cash includes cash on hand and at call and term deposits with banks readily convertible to cash and is used in the cash management function on a day to day basis.

Dividends

No dividends were paid during the financial year ended 30 June 2015 (2014: nil) and no dividend is recommended for the current year.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

There was no matter or circumstance during the financial year that has significantly affected the state of affairs of the Group.

REVIEW OF OPERATIONS

During the period Carpentaria Exploration Ltd. (CAP) maintained its focus on development of the Hawsons Iron Project achieving significant results and milestones. The Company is manager of the joint venture with Pure Metals and work this period advanced the project to a point of readiness for a bankable feasibility study.

Carpentaria has earned an additional 2.1% share of the HIP due to non-participation of the joint venture partner following the completion of the annual programme and budget. The project share is now nominally Carpentaria 62.1%, Pure Metals 37.9%.

During the period a total of fifteen (15) exploration tenements not relevant to the Hawsons Iron Project have been allowed to expire or have been cancelled. Management continues to seek divestment of its prospective Lachlan Fold Belt gold portfolio in New South Wales. Refer Events After Balance Sheet Date below for detail of terms sheets signed after year end in relation to these tenements.

Hawsons Iron Project (HIP) Development Summary

The most significant results over the past twelve months were from an eight tonne pilot scale metallurgical test work program. The results demonstrated that the unique Hawsons material can produce a rare quality concentrate of over 70% Fe without complex and expensive processing.

The certainty of product quality provided by these results have allowed Carpentaria to begin a product marketing phase and the Company believes, based on initial market feedback, that the super grade results will provide access to markets and significant price premiums that will underpin the projects potential returns.

Other significant milestones included the successful completion of power and port studies that confirmed earlier cost assumptions, improved the project cost targets and reduced the risk profile of the project.

A network capability study confirmed that the existing electricity infrastructure can deliver the required power for the project with only limited upgrades.

The results of a prefeasibility level supply chain study utilising export at Port Pirie, carried out in partnership with Flinders Ports, confirmed earlier project assumptions and allowed a reduction of port cost targets.

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In other project work seasonal surveys for the environmental impact statement (EIS) were completed over the proposed mining lease area and other specialist studies continued as part of the EIS. Discussions with the NSW Office of Water confirmed the Company’s view that the required water allocation is possible under existing regulations.

Corporate

During the period the company implemented a program of relinquishment and divestment of its non Hawsons exploration portfolio. This resulted in a significant personnel restructure and reduction in costs. The company continues to focus on administrative cost reductions and balanced project development in order to protect and promote the value of the Hawsons Iron Project.

Competent Person Statement: The information in this report that relates to Exploration Results is based on information compiled by Mr Quentin Hill, who is a Fellow of the Australian Institute of Geoscientists and is a Registered Professional Geoscientist -Mineral Exploration and Geophysics. Mr Hill is a full time employee of Carpentaria Exploration Limited and Mr Hill has sufficient expertise which is relevant to the style of mineralisation and type of deposit under consideration 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’. Mr Hill consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

ENVIRONMENTAL REGULATION AND PERFORMANCE

The Company’s operations are subject to environmental regulations in relation to its exploration activities. The directors are not aware of any significant breaches during the period covered by this report.

MEETINGS OF DIRECTORS

The following table sets out the number of meetings of the Company’s directors and of the Audit and the Remuneration Committees held during the year ended 30 June 2015 and the number of meetings attended by each director.

Nick Sheard Bob Hair Bin Cai Neil Williams Paul Cholakos	Directors’ Meetings Audit Remuneration
	Attended Eligible to Attend Attended Eligible to Attend Attended Eligible to Attend 3 3 - - - - 3 3 2 2 1 1 1 3 - - - - 3 3 1 2 1 1 3 3 - 2 1 1

INDEMNIFICATION OF OFFICERS OR AUDITOR

Each of the directors and the secretary of the Company has entered into a Deed with the Company whereby the Company has provided certain contractual rights of access to books and records of the Company and certain indemnification to those directors and secretary.

The Company has insured all of the directors of Carpentaria Exploration Limited. The contract of insurance prohibits the disclosure of the nature of the liabilities covered and amount of the premium paid. The Corporations Act 2001 does not require disclosure of the information in these circumstances.

During the financial year, the Company paid insurance premiums to insure the Directors and Officers of the Company against certain risks associated with their activities as officers of the Company. The terms of that policy prohibit disclosure of the nature of liability covered, the limit of such liability and the premium paid.

The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of entities in the Group, and any other payments arising from liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving a wrongful act by the officers. It is not possible to apportion the premium between amounts relating to the insurance against legal costs and those relating to other liabilities. The company has not indemnified the auditor.

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PROCEEDINGS ON BEHALF OF THE COMPANY

No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purposes of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the year.

SHARE OPTIONS

As at the date of this report there was a total of 1,500,000 ordinary shares of Carpentaria Exploration Limited under options:

Number of Options	Exercise Price	Vesting Date	Expiry Date
1,500,000	$0.440	30 November 2012	29 November 2015

No option holder has any right under the options to participate in any other share issue of the Company or any other entity.

Details of options issued, exercised and expired during the financial year are set out below:

	Movements
Expiry Date Exercise Price	1 July 2014 Issued Exercised Expired 30 June 2015
15 December 2014 $0.290 29 November 2015 $0.440	2,600,000 - - (2,600,000) - 1,500,000 - - - 1,500,000
	4,100,000 - - (2,600,000) 1,500,000

No ordinary shares of Carpentaria Exploration Limited were issued during the year on exercise of options granted.

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REMUNERATION REPORT - AUDITED

This report outlines the remuneration arrangements in place for the directors and key management personnel of Carpentaria Exploration Limited (the Company).

Remuneration Policy

The performance of the Company depends upon the quality of its directors and executives. To prosper, the Company must attract, motivate and retain highly skilled directors and executives.

The Remuneration Committee of the Board of Directors is responsible for determining and reviewing compensation arrangements for the directors and the executive team. The Remuneration Committee assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality board and executive team. Such officers are given the opportunity to receive their base emolument in a variety of forms including cash, equity and fringe benefits. It is intended that the manner of payments chosen will be optimal for the recipient without creating undue cost for the Company. Further details on the remuneration of directors and executives are set out in this Remuneration Report.

The Company aims to reward the executive directors and key management personnel with a level and mix of remuneration commensurate with their position and responsibilities within the Company. The Board’s policy is to align director and executive objectives with shareholder and business objectives by providing a fixed remuneration component and offering long-term incentives.

In accordance with best practice corporate governance, the structure of non-executive director and executive director and key management personnel remuneration is separate and distinct except that non-executive directors, as well as executives, participate in incentives involving the issue to them of securities in the Company.

Non-Executive Director Remuneration

The Board seeks to set aggregate remuneration at a level which provides the Company with the ability to attract and retain directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.

The Company’s specific policy for determining the nature and amount of emoluments of board members of the Company is as follows:

In accordance with the Constitution, the existing shareholders of the Company have determined in general meeting the maximum non-executive director remuneration to be $220,000 per annum. This limit excludes the value of equity instruments provided to non-executive directors.

The directors have resolved that each non-executive director is entitled to receive fees of $30,000 per annum (plus superannuation) and the Chairman of Directors is entitled to receive $50,000 per annum (plus superannuation). Payments of fees will be in addition to any payments to directors in any employment capacity. Subsequent to year end the fees payable to the Chairman have been further reduced to $45,000 per annum and the fees payable to the nonexecutive directors have been reduced to $25,000 per annum. A director will not be entitled to receive directors’ fees if he or she is employed by the Company in a full-time executive capacity.

A director may also be paid fees or other amounts as the directors determine if a director performs special duties or otherwise performs services outside the scope of the ordinary duties of a director. A director may also be reimbursed for out of pocket expenses incurred as a result of their directorship or any special duties.

The remuneration of non-executive directors for the year ended 30 June 2015 is detailed in Table 1 of this Remuneration Report.

Executive Directors and Key Management Personnel Remuneration

The Company aims to reward the executive directors and key management personnel with a level and mix of remuneration commensurate with their position and responsibilities within the Company and so as to:

• reward executives for Company and individual performance against targets set by reference to appropriate benchmarks;

• align the interests of executives with those of shareholders;

• link reward with the strategic goals and performance of the Company; and

• ensure total remuneration is competitive by market standards.

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REMUNERATION REPORT (continued)

The remuneration of the Executive Director and key management personnel for the period ended 30 June 2015 is detailed in Tables 1 and 2 and details of options issued are set out in Table 4.

Employment Contracts

Agreement with Managing Director

Effective 1 September 2013, Mr Quentin Hill was appointed as Managing Director of the Company under the following terms and conditions:

• agreement updated and currently extended to 31 August 2015;

• annual salary of $230,000 plus statutory superannuation payments and reimbursement of all reasonable business expenses;

• entitled to participate in a performance bonus on terms determined by the Board from time to time;

• entitled to receive such shares and/or options to acquire shares on terms and conditions (including price) as determined by the Board in its absolute discretion from time to time;

• provision for three months' notice for termination; (being $60,000, based on the fixed component of remuneration) and

• standard terms relating to leave, confidentiality, conflicts of interest and representations and warranties.

Agreement with Company Secretary

On 1 June 2007, the Company and Mr Chris Powell entered into an agreement containing the terms and conditions under which the services of Company Secretary are provided to the Company. The agreement came into effect upon the Company’s listing on the Australian Securities Exchange, which occurred on 14 November 2007.

The agreement:

• agreement updated and currently extended to 31 August 2015;

• involves the payment to Mr. Powell of an annual salary of $160,000 plus statutory superannuation payments and reimbursement of all reasonable business expenses;

• has provision for three months' notice for termination; and

• otherwise contains standard terms relating to leave, confidentiality, conflicts of interest and representations and warranties.

Effective 30 September 2015 Chris Powell left the company.

Agreement with Exploration Manager

On 9 August 2007, the Company and Mr Doug Brewster entered into an agreement containing the terms and conditions under which the services of Exploration Manager are provided to the Company. The agreement came into effect upon the Company’s listing on the Australian Securities Exchange, which occurred on 14 November 2007.

The agreement:

• extended to 30 September 2014

• annual salary of $212,125 plus statutory superannuation and reimbursement of all reasonable business expenses;

• three months' notice for termination. The Company may terminate this employment agreement by providing three months’ written notice and providing payment in lieu of the notice period; and

• otherwise contained standard terms relating to confidentiality, conflicts of interest and representations and warranties.

Effective 4 July 2014 Doug Brewster left the Company

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Details of Directors and Key Management Personnel

Directors

Name	Position	Detail
Dr Neil Williams	Non-Executive Chairman	Appointed 1 January 2012
Quentin Hill	Managing Director	Appointed 1 September 2013
Robert William Hair	Non-Executive Director	Appointed August 2007
Bin Cai	Non-Executive Director	Appointed May 2011
Paul Cholakos	Non-Executive Director	Appointed 2 April 2012
Stuart Nicholas Sheard	Former Executive and Non-	Appointed March 2007. Resigned as Executive
	Executive Chairman	Chairman, and appointed as Non-executive
		director on 1 September 2013. Resigned from the
		Board on 1 July 2014.

Key Management Personnel

Name	Position	Detail
Doug Brewster1	Exploration Manager	Commenced 9 August 2007
Quentin Hill	Principal Geologist New Business/ Project Development Manager	Classified as key management from 1 July 2013 until his appointment as Managing Director on 1 September 2013
Chris Powell2	Company Secretary	Commenced 1 June 2007

1 Mr Brewster left the Company effective 4 July 2014 2

Mr Powell left the Company effective 30 September 2015

Key management personnel are those directly accountable and responsible for the operational management and strategic direction of the Company and the consolidated entity.

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Annual Financial Report 30 June 2015

REMUNERATION REPORT (continued)

Table 1: Director Remuneration

Table 1: Director	Remuneration
2015	Short Term Post- Employm ent Long- term benefits Share-based Payments Salary & Fees Cash Bonus Non- cash benefits Superan nuation Annual & Long service leave Options/ NRE shares Total Performance Related % % consisting equity
$ Directors Nick Sheard1 Quentin Hill Robert Hair Bin Cai Neil Williams Paul Cholakos	$ $ $ $ $ $ - - - - - - - - - 232,500 - - 22,088 - - 254,588 - - 32,500 - - 3,088 - - 35,588 - - 32,500 - - 3,088 - - 35,588 - - 52,500 - - 4,986 - - 57,486 - - 32,500 - - 3,088 - - 35,588 - - 382,500 - - 36,338 - - 418,838

(1) Resigned on 1 July 2014.

2014	Short Term Post- Employm ent Long- term benefits Share-based Payments Salary & Fees Cash Bonus Non- cash benefits Superan nuation Annual & Long service leave Options/ NRE shares Total Performance Related % % consisting of NRE shares
$ Directors Nick Sheard1 Quentin Hill2 Robert Hair Bin Cai Neil Williams Paul Cholakos	$ $ $ $ $ $ 166,144 - - 14,628 - - 180,772 - - 205,103 - - 20,823 - - 225,926 - - 40,000 - - 3,600 - - 43,600 - - 40,000 - - 3,600 - - 43,600 - - 40,000 - - 3,600 - - 43,600 - - 40,000 - - 3,600 - - 43,600 - - 531,247 - - 49,851 - - 581,098

(1) Mr Sheard retired from his Executive Chairman role on 1 September 2013 and remained as Non-Executive Chairman until his resignation on 1 July 2014.

(2) Mr Hill was appointed Managing Director on 1 September 2013.

Table 2: Remuneration of key management personnel

2015	Short Term Post-Employment Long- term benefits Share-based Payments Salary & Fees Cash Bonus Non- cash benefits Superan nuation Termination payments Annual & Long service leave Options/ NRE shares Total Performance Related %
$ $ $ $ $ $ $ $ Key Management Personnel Doug Brewster1 - - - - 80,642 59,318 - 139,960 - Chris Powell 162,446 - - 15,256 - - - 177,702 - 162,446 - - 15,256 80,642 59,318 - 317,662

(1) Mr Brewster left the Company effective 4 July 2014

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Annual Financial Report 30 June 2015

REMUNERATION REPORT (continued)

2014

Short Term Post- Employ ment Long- term benefits Share-based Payments (1) Salary & Fees Cash Bonus Non- cash benefits Superan nuation Annual & Long service leave Options/ NRE shares Total Performance Related % % consisting of options

$ $ $ $ $ $ $ Key Management Personnel Doug Brewster3 213,553 - - 21,604 - 46,500 281,657 - 16.51% Quentin Hill2 34,167 - - 3,160 - 46,500 83,827 - 55.47% Chris Powell 161,938 - - 16,829 - 46,500 225,267 - 20.64% 409,658 - - 41,593 - 139,500 590,751 (1) The value of equity instruments granted in the year is the fair value of the options and employee share plan calculated at grant date using a Black-Scholes option-pricing model. The value of instruments granted is treated as an expense is the proportionate cost incurred in the current year in accordance with AASB2 Share Based Payments. (2) Mr Hill was appointed Managing Director on 1 September 2013. (3) Mr Brewster left the Company effective 4 July 2014 Shares issued on exercise of remuneration options No ordinary shares of Carpentaria Exploration Limited were issued during the year on exercise of options granted. Equity instruments issued as part of remuneration Equity instruments are issued to directors and executives as part of their remuneration. The equity instruments are not issued solely on performance criteria, but are also issued to all directors and executives of Carpentaria Exploration Limited to increase executive retention and goal congruence between executives, directors and shareholders. Table 3: Director/Key Management Personnel shareholdings (number of shares, including NRE shares) 2015 Opening Balance Granted as remuneration On Exercise of Options Net Change Other Closing Balance Directors Nick Sheard2 4,003,125 - - (4,003,125) - Quentin Hill 2,168,064 - - - 2,168,064 Bob Hair 1,550,000 - - - 1,550,000 Bin Cai1 10,479,000 - - - 10,479,000 Neil Williams - - - - - Paul Cholakos - - - - - Key Management Personnel Doug Brewster3 2,020,000 - - (2,020,000) - Chris Powell 1,140,000 - - - 1,140,000 Total 21,360,189 - - (6,023,125) 15,337,064

1 Held by Australian Conglin International Investment Group Pty Ltd of which Mr Bin Cai is managing director.

2 Mr Sheard resigned on 1 July 2014.

3 Mr Brewster left the Company effective 4 July 2014. 4 Mr Powell left the Company effective 30 September 2015

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Annual Financial Report 30 June 2015

REMUNERATION REPORT (continued)

Table 4: Director/Key Management Personnel option holdings (number of options)

2015	Opening Balance	Granted as **remuneration **	Options Exercised	Net Change Other 3	Closing Balance	Vested and exercisable
Directors
Nick Sheard1	-	-	-	-	-	-
Quentin Hill	300,000	-	-	(300,000)	-	-
Bob Hair	-	-	-	-	-	-
Bin Cai	500,000	-	-	-	500,000	500,000
Neil Williams	500,000	-	-	-	500,000	500,000
Paul Cholakos	500,000	-	-	-	500,000	500,000
Key Management Personnel
Doug Brewster2	300,000	-	-	(300,000)	-	-
Chris Powell	300,000	-	-	(300,000)	-	-
Total	2,400,000	-	-	(900,000)	1,500,000	1,500,000

1 Mr Sheard resigned on 1 July 2014.

2 Mr Brewster left the Company effective 4 July 2014.

3 Options expired during the year

Other transactions with key management personnel

There were no other transactions with key management personnel during the year.

Relationship between remuneration and Company performance

The factors that are considered to affect shareholder return during the last 5 years are summarised below:

	2015	2014	2013	2012	2011
Measures	$	$	$	$	$
Share price at end of financial year	0.027	0.064	0.205	0.350	0.310
Market capitalisation at end of financial year ($M)	3.34	7.93	22.14	36.81	32.47
Profit/(loss) for the financial year	(2,847,740)	(6,726,466)	(1,821,480)	197,017	(3,407,685)
Cash spend on exploration programs	(1,098,993)	2,191,721	3,622,822	3,768,081	1,398,629
Director and Key Management Personnel remuneration	736,500	1,171,849	1,253,305	1,074,214	2,095,828

Given that the remuneration is commercially reasonable, the link between remuneration, Company performance and shareholder wealth generation is tenuous, particularly in the exploration and development stage of a minerals company. Share prices are subject to the influence of international metal prices and market sentiment towards the sector, and increases or decreases may occur independently of executive performance or remuneration.

The Company may issue options to provide an incentive for key management personnel which, it is believed, is in line with industry standards and practice and is also believed to align the interests of key management personnel with those of the Company’s shareholders.

No remuneration consultants were used in the 2015 financial year.

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REMUNERATION REPORT (continued)

Voting on the remuneration report at the company’s last Annual General Meeting

At the last AGM, some shareholders expressed the view that the company’s long-term incentive scheme did not appear to be effective in improving long-term shareholder returns. As a consequence, 53% of the votes cast at that meeting rejected the adoption of the remuneration report.

The company has recently announced further Board and management changes in order to reduce costs. From 1 October 2015:

• Mr Chris Powell will cease to be Company Secretary

• Mr Robert Hair is resigning from the Board and will take up the position of Company Secretary

• Non-Executive Director remuneration for each individual is being reduced by $5,000 p.a. to $25,000 p.a.

• The Chairman of the Board remuneration is being reduced by $5,000 p.a. to $45,000 p.a.

• The Managing Director base remuneration is being reduced by $10,000 p.a. to $220,000 p.a.

The changes provide a streamlined and cost effective Board and Management structure that is best placed to preserve and promote company value during this period of challenging market conditions.

The cost reductions are additional to changes made 12 months ago whereby the Board size was reduced by one and Board remuneration for all positions was reduced by $10,000 p.a.

End of Remuneration Report

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NON-AUDIT SERVICES

The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor's expertise and experience with the Company and/or the Group are important. Details of the amounts paid or payable to the auditor (BDO Audit Pty Ltd and its associated entities) for non-audit services provided during the year are set out below.

The Board of Directors has considered the position and, in accordance with advice received from the Audit Committee, is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

• all non-audit services have been reviewed by the audit committee to ensure they do not impact the impartiality and objectivity of the auditor

• none of the services undermines the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants.

During the year, the following fees were paid or payable for non-audit services provided by the auditor of the parent entity, its related practices and non-related audit firms:

Taxation services $30,048

AUDITOR’S INDEPENDENCE DECLARATION

The attached Auditor’s Independence Declaration forms part of the Directors’ Report.

CORPORATE GOVERNANCE

In recognising the need for the highest standards of corporate behaviour and accountability, the directors of the Company support and have adhered to the principles of corporate governance. The Company’s corporate governance statement is contained in another section of this report.

EVENTS AFTER BALANCE SHEET DATE

On 1 September 2015, the company signed conditional Terms Sheets with Faraday Resources Pty Ltd concerning the Barellan (EL 7896) and Combaning (EL 6901) projects. Under the agreement Faraday Resources Pty Ltd has the right to earn a 90% interest in the projects based on the following key terms:

• Faraday to spend $200,000 within one year (or other time frame as agreed) to earn 90% interest in EL 6901 and EL 7896;

• Minimum expenditure of $100,000 within 6 months of agreement;

• Following the earn-in period, Carpentaria will have the option to contribute to expenditure or convert to a Net Smelter Royalty of 1%;

• Faraday has been granted three months exclusivity to complete the transaction;

• The Terms Sheet is conditional on Faraday raising funding and the parties completing a commercial agreement within three months.

There have been no other events since 30 June 2015 that impact upon the financial report.

Signed in accordance with a resolution of the Board of Directors

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Q S Hill Director Dated this 30th day of September 2015

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Annual Financial Report 30 June 2015

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Tel: +61 7 3237 5999 Level 10, 12 Creek St Fax: +61 7 3221 9227 Brisbane QLD 4000 www.bdo.com.au GPO Box 457 Brisbane QLD 4001 Australia

DECLARATION OF INDEPENDENCE BY K L COLYER TO THE DIRECTORS OF CARPENTARIA EXPLORATION LIMITED

As lead auditor of Carpentaria Exploration Limited for the year ended 30 June 2015, I declare that, to the best of my knowledge and belief, there have been:

1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

2. No contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Carpentaria Exploration Limited and the entities it controlled during the period.

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K L Colyer Director

BDO Audit Pty Ltd

Brisbane, 30 September 2015

BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.

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CORPORATE GOVERNANCE STATEMENT

The Board of Directors of Carpentaria Exploration Limited (Carpentaria) aims to achieve appropriate standards of corporate governance and has established corporate governance policies and procedures, where practicable, consistent with the ASX Corporate Governance Council’s ‘Corporate Governance Principles and Recommendation – 3rd Edition’ (ASX Principles or Recommendation), which were published on 27 March 2014.

In ensuring appropriate standard of ethical behaviour and accountability, the Board has included in its corporate governance policies those matters contained in the ASX Recommendations where applicable. However, the Board also recognises that full adoption of the above ASX Recommendations may not be practical nor provide the optimal result given the particular circumstances and structure of the Company. The Board is, nevertheless, committed to ensuring that appropriate Corporate Governance practices are in place for the proper direction and management of the Company. This statement outlines the main Corporate Governance practices of the Company disclosed under the ASX Recommendations, including those that comply with best practice and which unless otherwise stated, were in place during the whole of the period to the date of this statement.

Principle 1

Lay solid foundations for management and oversight

1.1 Roles and Responsibilities of the Board – followed

The Board is governed by the Corporations Act 2001, its formal constitution and, after listing, by the ASX Listing Rules. The Board’s primary role is to set policy regarding the affairs of the Company for the protection and enhancement of long-term Shareholder value.

The Board takes responsibility for the overall corporate governance of the Company including its strategic direction, management goal setting and monitoring, internal control, risk management and financial reporting.

1.2 Director appointment – followed

Carpentaria considers the character, experience and skillset as well as interests and associations of potential candidates for appointment to the Board and will conduct appropriate checks to verify the suitability of the candidate, prior to their election. Carpentaria has appropriate procedures in place to ensure that material information relevant to a decision to elect or re-elect a director, is disclosed in the notice of meeting provided to shareholders. During the period, Carpentaria did not appoint any new directors.

1.3 Written agreements of appointment – followed

The roles and responsibilities of Directors have been formalised in letters of appointment which each Director has entered in to. The letters of appointment specify the term of appointment, time commitment envisaged, expectations in relation to committee work or any other special duties attaching to the position, reporting lines, remuneration arrangements, disclosure obligations in relation to personal interests, confidentiality obligations, and insurance and indemnity entitlements.

Contract details of senior executives who are KMP are summarised in the Remuneration Report in the Company’s Annual Report.

1.4 Company Secretary – followed

The Company Secretary is accountable to the Board through the Chairman on all matters to do with the proper functioning of the Board. All directors have access to the Company Secretary.

The appointment or removal of the Company Secretary is a matter for the Board. Details of the Company Secretary’s experience and qualifications are set out in the Annual Report.

1.5 Diversity policy – not followed

The Company is committed to creating a diverse working environment and culture.

However, given the size of the Company and scale of its operations, the Board is of the view that a written diversity policy with measurable objectives for achieving gender diversity is not required at this time. Further as the Company has not established measureable objectives for achieving gender diversity, the Company has not reported on progress towards achieving them.

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1.6 Board Reviews – not followed

The Audit, Governance and Remuneration Committee meets at least annually and the recommendations are made in line with the Company’s present circumstances and goals to ensure maximum shareholder benefits from the attraction and retention of a high quality Board and senior management team.

The Board recognises that as a result of the Company’s size the assessment of the Board’s overall performance and its own succession plan is conducted on an informal basis. Whilst this is at variance with the ASX Recommendations, the Directors consider that at the date of this report an appropriate and adequate process for the evaluation of Directors is in place. A more formal process of Board assessment will be considered in the future as the Company develops.

1.7 Management Reviews – followed

The Board evaluates the performance of the Managing Director and Company Secretary on a regular basis and encourages continuing professional development. A review was conducted in association with the annual audit.

Principle 2

Structure Board to add value

2.1 Nomination committee – followed

The Company does not have a Nominations Committee.

The Company’s constitution specifies the number of directors must be at least three. The Board may at any time appoint a director to fill a casual vacancy. Directors appointed by the Board are subject to election by shareholders at the following annual general meeting and thereafter directors (other than the Managing Director) are subject to re-election at least every three years. The tenure for executive directors is linked to their holding of executive office.

The Board is of the opinion that the current structure of the Board is appropriate given the size and nature of the Company. The Board considers that all Directors bring an independent judgement to bear on Board decisions and that the Board’s expertise and experience adds considerable value to the Company.

2.2 Board skills matrix – followed

The Company does not have a Board skills matrix.

The Board Charter provides that the Board will regularly review the appropriate mix of skills and expertise to facilitate successful strategic direction.

In appointing new members to the Board, consideration is given to the ability of the appointee to contribute to the ongoing effectiveness of the Board, to exercise sound business judgment, to commit the necessary time to fulfil the requirements of the role effectively and to contribute to the development of the strategic direction of the Company.

The Company provides details of each Director, such as their skills, experience and expertise relevant to their position in the Directors’ Report in the Annual Report and also provides these details on its website.

2.3 Independent Directors – followed

The composition of the Board consists of five directors three of whom were, including the Chairman, nonexecutives. Messrs Williams, Hair and Cholakos are Independent Directors. The names of the directors of the Company and terms in office at the date of this Statement together with their skills, experience, expertise and financial interests in the Company are set out in the Directors’ Report section of the Annual Report.

The non-executive directors are considered to be independent.

The Company has no relationships with any of the independent directors which the company believes would compromise the independence of these directors.

2.4 Composition of the Board – followed

The Board comprises individuals with a range of knowledge, skills and expertise that are appropriate to its activities and objectives.

The composition of the Board is five directors, three of whom were, including the Chairman, non-executives. Dr William’s role as Chairman of the Board is separate from those of the Managing Director, Mr Hill, who is responsible for the day to day management of the Company.

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The Company’s constitution specifies the number of Directors must be at least three. The Board may at any time appoint a Director to fill a casual vacancy. Directors appointed by the Board are subject to election by Shareholders at the following annual general meeting and thereafter Directors (other than the Managing Director) are subject to re-election at least every three years. The tenure for executive Directors is linked to their holding of executive office.

2.5 The Chairman – followed

The Chairman is an Independent Director. The role of Chairman of the Board is separate from that of the Managing Director who is responsible for the day to day management of the Company and is in compliance with the ASX Recommendation that these roles not be exercised by the same individual.

2.6 Board induction and professional development – followed

An induction process including appointment letters exists to promote early, active and relevant involvement of new members of the Board. All Carpentaria directors are encouraged to further their knowledge through ongoing professional development through professional industry, governance and government bodies.

Principle 3

Act ethically and responsibly

3.1 Code of conduct – followed

The Company aims for a high standard of corporate governance and ethical conduct by Directors and employees. All directors have signed deeds with the Company which require them to comply with all the obligations of a director under the Corporations Act 2001. Directors are required to disclose to the Board any material contract in which they may have an interest. In accordance with Section 195 of the Corporations Act 2001, a director having a material personal interest in any matter to be dealt with by the Board, will not be present when that matter is considered by the Board and will not vote on that matter, subject to the discretion of the Board.

All Directors are required to provide the Company with details of all securities registered in the Director’s name or an entity in which the director has a relevant interest.

Directors, officers and employees are not permitted to trade in securities of the Company at any time whilst in possession of price sensitive information not readily available to the market. The Corporations Act also prohibits the acquisition and disposal of securities where a person possesses information that is not generally available and which may reasonably be expected to have a material effect on the price of the securities if the information was generally available.

Principle 4

Safeguard integrity in financial reporting

4.1 Audit committee – followed

Carpentaria had an Audit Committee during the year. Notwithstanding the Listing Rule requirement, an Audit and Remuneration Committee has been established to oversee corporate governance, internal controls, ethical standards, financial reporting, and external accounting and compliance procedures.

During the financial year the Audit, Committee consisted of two Independent Board directors, Messrs Williams and Hair, and is chaired by Mr Hair.

The Committee meets at least twice yearly and reports to the Board. The Managing Director, Company Secretary and external auditor may, by invitation, attend meetings at the discretion of the Committee.

4.2 CEO and CFO financial statements declaration – followed

The Chief Executive Officer and Chief Financial Officer are required to provide written declarations under s295A of the Corporations Act that, in their opinion, the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true an fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively. Both the Managing Director and Chief Financial Officer provide said assurances at the time the s295A declarations are provided to the Board.

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4.3 External Auditor attendance at AGM – followed

The external auditor of the Company is invited to the Annual General Meeting of shareholders and is available to answer any questions concerning the conduct, preparation and content of the auditor’s report. Pursuant to section 249K of the Corporations Act 2001 the external auditor is provided with a copy of the notice of meeting and related communications received by shareholders.

Principle 5

Making timely and balanced disclosure

5.1 Continuous disclosure policy – not followed

The Board aims to ensure that shareholders are informed of all major developments affecting the Company’s state of affairs. In accordance with the ASXCGC best practice recommendations, information is communicated to Shareholders as follows:

• the annual financial report which includes relevant information about the operations of the Company during the year, changes in the state of affairs of the entity and details of future developments, in addition to the other disclosures required by the Corporations Act;

• the half yearly financial report lodged with the ASX and ASIC and sent to all Shareholders who request it;

• notifications relating to any proposed major changes in the Company which may impact on share ownership rights that are submitted to a vote of Shareholders;

• notices of all meetings of Shareholders;

• publicly released documents including full text of notices of meetings and explanatory material made available on the Company’s website; and

• disclosure of the Company’s corporate governance practices and communications strategy on this Company’s website.

Due to the size of the Company and the stage of life of the entity as a publicly listed junior exploration company, the Board does not believe a formal policy for continuous disclosure is required.

Principle 6

Respect the rights of shareholders

6.1 Information on website – followed

The Company operates under the continuous disclosure requirements of the ASX Listing Rules and aims to ensure that all information which may be expected to affect the value of the Company’s securities or influence investment decisions is released to the market in order that all investors have equal and timely access to material information concerning the Company. The information is made publicly available on the Company’s website following release to the ASX.

6.2 Investor relations program – not followed

Due to the size of the Company, the Board does not believe that a documented or formalised investor program is required. The Company actively engages with investors at the Annual General Meeting and responds to enquiries made from time to time.

6.3 Security holder participation at meetings – followed

The Board encourages full participation of shareholders at the Annual General Meeting to ensure a high level of accountability and identification with the Company’s strategy and goals. Important issues are presented to the shareholders as single resolutions.

6.4 Facilitate security holder communications – followed

The Company provides its investors the option to receive communications from and send communications to the Company and the share registry electronically.

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Principle 7

Recognise and manage risks

7.1 Risk committee – not followed

The Board recognises that there are inherent risks associated with the Company’s operations including mineral exploration and mining, environmental, title, native title, legal and other operational risks. The Board endeavours to mitigate such risks by continually reviewing the activities of the Company in order to identify key business and operational risks and ensuring that they are appropriately assessed and managed.

The Board believes that given the size of the Company and the stage of the entity’s life as a publicly listed junior exploration company and the current Board structure, the establishment of a risk committee in line with ASX Recommendation 7.1 cannot be justified by the perceived benefits of doing so.

7.2 Risk assessment and management – followed

The Board with the assistance of the Audit, Governance and Remuneration Committee conducts a formal review of the risk profile of the Company annually and monitors risk informally throughout the year. A review was conducted in association with the annual audit.

7.3 Internal Audit function – not followed

The Company does not have an internal audit function and does not believe that the size and nature of the Company warrants establishment of said function at this time.

7.4 Economic, environmental and social risks – not followed

The Board recognises that there are inherent risks associated with the Company’s operations including mineral exploration and mining, environmental, heritage and native title, legal and other operational risks. The Board endeavours to mitigate such risks by continually reviewing the activities of the Company in order to identify key business and operational risks and ensuring that they are appropriately assessed and managed. No formal report in relation to the Company’s management of its material business risks is presented to the Board.

Principle 8

Remunerate fairly and responsibly

8.1 Remuneration committee – followed

The Company has established a Remuneration Committee. The Committee monitors the composition of the Board and reviews the compensation of the Company’s Executive Directors and senior management with the overall objective of motivating and appropriately rewarding performance. The Committee makes recommendations to the Board who are ultimately responsible for the Company’s remuneration policy.

During the financial year the Committee consisted of two Independent Directors, Messrs Cholakos, Hair and Williams. Mr Cholakos acted as Chairman of this committee. Details of the number of and attendance at Committee meetings can be found in the Directors’ Report of the Annual Report. The Board believes that given the size of the Company that the cost of establishing a formal remuneration and nomination committee charter cannot be justified by the perceived benefits of doing so. In addition, the Company does meet the ASX recommendation for a membership of three for this Committee.

8.2 Executive and Non-executive remuneration policy – followed

In view of the current size of the Board remuneration matters will be monitored by the entire Board having regard to industry practices and laws.

The Company’s Constitution specifies that the total amount of remuneration of non-executive Directors shall be fixed from time to time by a general meeting. Directors may apportion any amount up to this maximum amount amongst the non-executive Directors as they determine. Directors are also entitled to be paid reasonable traveling, accommodation and other expenses incurred in performing their duties as Directors.

The remuneration of the Managing Director is determined by the Board as part of the terms and conditions of his employment which are subject to review from time to time. The remuneration of employees is determined by the Managing Director subject to the approval of the Board.

8.3 Equity-based remuneration scheme – not followed

The Company does not have an equity-based remuneration scheme.

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Consolidated Statement of Comprehensive Income For the year ended 30 June 2015

Note 2015 2014 Restated1 $ $	Note 2015 2014 Restated1 $ $
Revenue 2 132,021 177,174 Other income 2 568,838 1,126,986 Gain on sale of interest in exploration and evaluation assets 2 - 2,315,860 Fair value loss on financial assets at fair value through profit or loss (58,568) (112,471) Employment benefit expenses (1,032,554) (1,647,956) Depreciation and amortisation expense (33,827) (91,865) Finance costs (353) (4,942) Impairment of exploration expenditure 13 (1,195,130) (6,815,430) Rental and other lease expenses (138,957) (174,348) Legal expenses (82,727) (117,423) Project generation and business development expenses (579,722) (385,161) Administration expenses (426,761) (546,890)
Loss before income tax (2,847,740) (6,276,466) Income tax expense/(benefit) 3 - -
Loss after income tax expense (2,847,740) (6,276,466) Other comprehensive income - -
Total comprehensive income (2,847,740)	(6,276,466)
Cents Cents
Loss per share Basic and diluted loss per share 5 (2.5) (5.9)

1 See Note 1(s) for details regarding the restatement as a result of a voluntary change in accounting policy

The Statement of Comprehensive Income should be read in conjunction with the Notes to the Financial Statements.

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Consolidated Balance Sheet
As at 30 June 2015
	Note	2015	2014 Restated1	1 July 2013 Restated1
		$	$
CURRENT ASSETS
Cash and cash equivalents	7	2,226,711	4,275,569	4,136,905
Trade and other receivables	8	1,066,115	1,147,852	227,768
Financial assets at fair value through profit or loss	9	53,558	112,126	224,597
Other current assets	10	349,912	353,708	334,178
TOTAL CURRENT ASSETS		3,696,296	5,889,255	4,923,448
NON-CURRENT ASSETS
Plant and equipment	11	30,076	79,384	157,221
Exploration and evaluation assets	13	1,273,489	2,368,774	8,637,377
Intangible assets	12	-	1,309	31,936
TOTAL NON-CURRENT ASSETS		1,303,565	2,449,467	8,826,534
TOTAL ASSETS		4,999,861	8,338,722	13,749,982
CURRENT LIABILITIES
Trade and other payables	14	138,852	598,017	1,696,178
Borrowings	15	-	7,279	98,419
Provisions	16	81,594	132,401	170,902
TOTAL CURRENT LIABILITIES		220,446	737,697	1,965,499
NON-CURRENT LIABILITIES
Borrowings	15	-	8,483	15,762
TOTAL NON-CURRENT LIABILITIES		-	8,483
TOTAL LIABILITIES		220,446	746,180	1,981,261
NET ASSETS		4,779,415	7,592,542	11,768,721
EQUITY
Share capital	17	20,007,093	19,972,480	18,225,593
Share based payment reserve	18	1,947,113	2,140,433	1,787,033
Accumulated losses		(17,174,791)	(14,520,371)	(8,243,905)
TOTAL EQUITY		4,779,415	7,592,542	11,768,721

1 See Note 1(s) for details regarding the restatement as a result of a voluntary change in accounting policy

The Balance Sheet should be read in conjunction with the Notes to the Financial Statements.

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Consolidated Statement of Changes in Equity For the year ended 30 June 2015

Consolidated Entity	Share Capital	Reserves	Accumulated	Total
			Losses
Restated	$	$	$	$
Balance at 1 July 2013	18,225,593	1,787,033	(5,417,574)	14,595,052
Change in accounting policy (refer note 1 (s))	-	-	(2,826,331)	(2,826,331)
Restated balance as at 1 July 2013	18,225,593	1,787,033	(8,243,905)	11,768,721
Transactions with owners in
their capacity as owners
Issue of share capital	1,931,454	-	-	1,931,454
Share issue costs	(184,567)		-	(184,567)
Share-basedpayment expense	-	353,400	-	353,400
	1,746,887	353,400	-	2,100,287
Comprehensive income
Loss after income tax	-	-	(6,276,466)	(6,276,466)
Other comprehensive income	-	-	-	-
Total comprehensive income	-	-	(6,276,466)	(6,276,466)
Balance at 30 June 2014	19,972,480	2,140,433	(14,520,371)	7,592,542
Balance at 1 July 2014	19,972,480	2,140,433	(14,520,371)	7,592,542
Transactions with owners in
their capacity as owners
Transfer of expired options	-	(193,320)	193,320	-
Issue of share capital	34,613	-	-	34,613
	34,613	(193,320)	193,320	34,613
Comprehensive income
Loss after income tax	-	-	(2,847,740)	(2,847,740)
Other comprehensive income	-	-	-	-
Total comprehensive income	-	-	(2,847,740)	(2,847,740)
Balance at 30 June 2015	20,007,093	1,947,113	(17,174,791)	4,779,415

The Statement of Changes in Equity should be read in conjunction with the Notes to the Financial Statements.

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Annual Financial Report 30 June 2015	Annual Financial Report 30 June 2015
Consolidated Cash Flow Statement For the year ended 30 June 2015 Note 2015 2014 $ $
CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees (2,295,736) (2,852,925) Interest received 146,551 177,825 Interestpaid (353) (4,942)
Net cash used in operating activities 19 (2,149,538) (2,680,042) CASH FLOWS FROM INVESTING ACTIVITIES Payments for property, plant & equipment - (5,878) Proceeds from the sale of property, plant & equipment 10,000 10,964 Proceeds received for exploration and evaluation assets 37,500 3,356,875 Payments for exploration and evaluation assets (1,098,993) (2,191,721) Governmentgrants in relation to exploration assets 1,133,322 -
Net cash provided by investing activities 81,829 1,170,240 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares 34,613 1,931,452 Costs associated with the issue of shares - (184,567) Repayment of finance leases (15,762) (98,419)
Net cash provided by financing activities 18,851 1,648,466 Net increase/(decrease) in cash and cash equivalents (2,048,858) 138,664
Cash and cash equivalents at the beginning of the financial year 4,275,569 4,136,905
Cash and cash equivalents at the end of the financial year 7 2,226,711	4,275,569

The Cash Flow Statement should be read in conjunction with the Notes to the Financial Statements.

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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Introduction

This financial report covers the Consolidated Entity of Carpentaria Exploration Limited (the “Company”) and its controlled entities (together referred to as the “Consolidated Entity”). Carpentaria Exploration Limited is a listed public company, incorporated and domiciled in Australia.

The following is a summary of the material accounting policies adopted by the Consolidated Entity in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.

Operations and principal activities

The principal activity of the Consolidated Entity is mineral exploration.

Currency

The financial report is presented in Australian dollars, rounded to the nearest dollar, which is the functional currency of the Parent.

Authorisation of financial report

The financial report was authorised for issue on 30 September 2015.

Basis of preparation

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001 . The consolidated entity is a for-profit entity for the purpose of preparing the financial statements

Compliance with IFRS

The consolidated financial statements of the Carpentaria Exploration Limited group also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

Historical cost convention

The financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

Critical accounting estimates and judgements

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies.

The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on historical experiences and the best available current information on current trends and economic data, obtained both externally and within the Consolidated Entity.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision effects only that period or in the period and future periods if the revision affects both current and future periods. There were no key adjustments during the year which required estimates and/or judgements.

– Key judgements exploration & evaluation assets

The Consolidated Entity performs regular reviews on each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. These reviews are based on detailed surveys and analysis of drilling results performed to balance date.

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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Accounting policies

(a) Principles of Consolidation

Subsidiaries are all entities (including structured entities) over which the Consolidated Entity has control. The Consolidated Entity controls an entity when the Consolidated Entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Consolidated Entity. They are deconsolidated from the date that control ceases.

The acquisition method of accounting is used to account for business combinations by the Consolidated Entity.

Intercompany transactions, balances and unrealised gains on transactions between Consolidated Entity companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Consolidated Entity.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of comprehensive income, statement of changes in equity and balance sheet respectively.

Business combinations

Business combinations occur where an acquirer obtains control over one or more businesses.

A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The business combination will be accounted for from the date that control is attained, whereby the fair value of the identifiable assets acquired and liabilities (including contingent liabilities) assumed is recognised (subject to certain limited exemptions).

When measuring the consideration transferred in the business combination, any asset or liability resulting from a contingent consideration arrangement is also included. Subsequent to initial recognition, contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability is remeasured each reporting period to fair value, recognising any change to fair value in profit or loss, unless the change in value can be identified as existing at acquisition date.

All transaction costs incurred in relation to the business combination are expensed to the statement of comprehensive income. The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.

(b) Income Tax

The income tax expense (income) for the year comprises current income tax expense (income) and deferred tax expense (income).

Current income tax expense charged to profit or loss is the tax payable on taxable income. Current tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.

Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well unused tax losses.

Current and deferred income tax expense (income) is charged or credited outside profit or loss when the tax relates to items that are recognised outside profit or loss.

Except for business combinations, no deferred income tax is recognised from the initial recognition of an asset or liability, where there is no effect on accounting or taxable profit or loss.

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled and their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.

Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.

Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.

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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(b) Income Tax (continued)

Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where: (a) a legally enforceable right of set-off exists; and (b) the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

The charge for current income tax expense is based on the profit/(loss) for the year adjusted for any non-assessable or disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted by the balance date.

Deferred tax is accounted for using the balance sheet method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, (except for a business combination) where there is no effect on accounting or taxable profit or loss.

(c) Plant and Equipment

Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses.

Plant and equipment are measured on the cost basis and therefore carried at cost less accumulated depreciation and any accumulated impairment. In the event the carrying amount of plant and equipment is greater than the estimated recoverable amount, the carrying amount is written down immediately to the estimated recoverable amount and impairment losses are recognised either in profit or loss or as a revaluation decrease if the impairment losses relate to a revalued asset. A formal assessment of recoverable amount is made when impairment indicators are present (refer to Note 1(g) for details of impairment policy).

The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

The cost of fixed assets constructed within the Consolidated Entity includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future benefits associated with the item will flow to the Consolidated Entity and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred.

Depreciation

The depreciable amount of all fixed assets is depreciated on a straight-line basis over the asset’s useful life to the Consolidated Entity commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. The depreciation rates used for each class of asset is:

Class of Fixed Asset Plant and equipment Plant and equipment under lease	Depreciation Rate
	20% 12.5%

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of comprehensive income. When revalued assets are sold, amounts included in the revaluation surplus relating to that asset are transferred to retained earnings.

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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(d) Exploration and Evaluation Assets

Exploration and evaluation assets incurred are capitalised in respect of each identifiable area of interest. These costs are only capitalised to the extent that they are expected to be recovered through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.

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

When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to capitalise costs in relation to that area of interest.

Costs of site restoration are provided over the life of the project from when exploration commences and are included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and building structures, waste removal, and rehabilitation of the site in accordance with local laws and regulations and clauses of the permits. Such costs have been determined using estimates of future costs, current legal requirements and technology on an undiscounted basis.

Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation. Accordingly the costs have been determined on the basis that the restoration will be completed within one year of abandoning the site.

(e) Leases

Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that is transferred to entities in the Consolidated Entity, are classified as finance leases.

Finance leases are capitalised by recognising an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period. Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease term.

Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are recognised as expenses on a straight-line basis over the lease term.

Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the lease term.

(f) Financial Instruments

Recognition and initial measurement

Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the Consolidated Entity commits itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted).

Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified “at fair value through profit or loss”, in which case transaction costs are expensed to profit or loss immediately.

Classification and subsequent measurement

Financial instruments are subsequently measured at fair value, amortised cost using the effective interest rate method, or cost.

Amortised cost is the amount at which the financial asset or financial liability is measured at initial recognition less principal repayments and any reduction for impairment, and adjusted for any cumulative amortisation of the difference between that initial amount and the maturity amount calculated using the effective interest method.

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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(f) Financial Instruments (continued)

Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models.

The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense item in profit or loss.

(i) Financial assets at fair value through profit or loss

Financial assets are classified at “fair value through profit or loss” when they are held for trading for the purpose of shortterm profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss.

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost. Loans and receivables are included in current assets, where they are expected to mature within 12 months after the end of the reporting period.

(iii) Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the Consolidated Entity’s intention to hold these investments to maturity. They are subsequently measured at amortised cost.

Held-to-maturity investments are included in non-current assets where they are expected to mature more than 12 months after the end of the reporting period. All other investments are classified as current assets.

(iv) Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are either not suitable to be classified into other categories of financial assets due to their nature, or they are designated as such by management. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments.

They are subsequently measured at fair value with changes in such fair value (ie gains or losses) recognised in other comprehensive income (except for impairment losses). When the financial asset is derecognised, the cumulative gain or loss pertaining to that asset previously recognised in other comprehensive income is reclassified into profit or loss.

Available-for-sale financial assets are included in non-current assets where they are expected to be sold more than 12 months after the end of the reporting period. All other financial assets are classified as current assets.

(v) Financial liabilities

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost.

Impairment

At the end of each reporting period, the Consolidated Entity assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a significant or prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised in profit or loss. Also, any cumulative decline in fair value previously recognised in other comprehensive income is reclassified to profit or loss at this point.

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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(f) Financial Instruments (continued)

Financial guarantees

Where material, financial guarantees issued that require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due are recognised as a financial liability at fair value on initial recognition.

The guarantee is subsequently measured at the higher of the best estimate of the obligation and the amount initially recognised less, when appropriate, cumulative amortisation in accordance with AASB 118: Revenue. Where the entity gives guarantees in exchange for a fee, revenue is recognised under AASB 118.

The fair value of financial guarantee contracts has been assessed using a probability-weighted discounted cash flow approach. The probability has been based on:

• the likelihood of the guaranteed party defaulting in a year period;

• the proportion of the exposure that is not expected to be recovered due to the guaranteed party defaulting; and

• the maximum loss exposed if the guaranteed party were to default.

Derecognition

Financial assets are derecognised where the contractual rights to receipt of cash flows expire or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are discharged, cancelled or expired. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.

(g) Impairment of Assets

At the end of each reporting period, the Consolidated Entity assesses whether there is any indication that an asset may be impaired. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, to the asset’s carrying amount. Any excess of the asset’s carrying amount over its recoverable amount is recognised immediately in profit or loss, unless the asset is carried at a revalued amount in accordance with another Standard (e.g. in accordance with the revaluation model in AASB 116). Any impairment loss of a revalued asset is treated as a revaluation decrease in accordance with that other Standard.

Where it is not possible to estimate the recoverable amount of an individual asset, the Consolidated Entity estimates the recoverable amount of the cash-generating unit to which the asset belongs.

(h) Employee Benefits

Provision is made for the Consolidated Entity’s liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be settled within 1 year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits expected to be settled later than 1 year have been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wages increases and the probability that the employee may satisfy vesting requirements. Those cash flows are discounted using market yields on commercial bonds with terms to maturity that match the expected timing of cash flows.

- Equity settled compensation

Share-based payments to employees are measured at the fair value of the instruments issued and amortised over the vesting periods. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The corresponding amount is recorded to the option reserve. The fair value of options is determined using the Black-Scholes pricing model. The volatility input in the pricing model is determined by the historical volatility of the Company’s share price over a similar period to the exercise period. The number of shares and options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognised for services received as consideration for the equity instruments granted is based on the number of equity instruments that eventually vest.

(i) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits available on demand with banks, other short-term highly liquid investments with original maturities of 3 months or less, and bank overdrafts. Bank overdrafts are reported within short-term borrowings in current liabilities in the statement of financial position.

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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(j) Revenue and Other Income

Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts and volume rebates allowed. When the inflow of consideration is deferred, it is treated as the provision of financing and is discounted at a rate of interest that is generally accepted in the market for similar arrangements. The difference between the amount initially recognised and the amount ultimately received is interest revenue.

Interest revenue is recognised using the effective interest rate method.

(k) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included with other receivables or payables in the statement of financial position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to, the ATO are presented as operating cash flows included in receipts from customers or payments to suppliers.

(l) Share Capital

Issued and paid up capital is recognised at the fair value of the consideration received by the Consolidated Entity. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.

The Company has issued shares to employees and directors under the Company’s employee share plan. The shares have been issued in return for an interest free loan from the Consolidated Entity whereby the Consolidated Entity only has recourse to the shares. This issue of shares has been valued as an option grant in accordance with AASB2 “Share Based Payments. The shares are disclosed in the financial statements as non-recourse employee shares (NRE Shares).

(m) Earnings per Share

The Consolidated Entity presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period, excluding NRE shares. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares.

(n) Comparative Figures

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

(o) Parent Entity Financial Information

The financial information for the parent entity, Carpentaria Exploration Limited, disclosed in note 26 has been prepared on the same basis as the consolidated financial statements, except as set out below.

(i) Investments in subsidiaries, associates and joint venture entities

Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the financial statements of Carpentaria Exploration Limited. Dividends received from associates are recognised in the parent entity’s profit or loss, rather than being deducted from the carrying amount of these investments.

(p) New Accounting Standards and Interpretations

The Consolidated Entity adopted all new Accounting Standards and Interpretations effective for the year ended 30 June 2015. There were no material impacts on the financial statements of the Consolidated Entity as a result of adopting these standards.

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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(q) New Standards and Interpretations Not Yet Adopted

Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2015 reporting periods. The Consolidated Entity has decided against early adoption of these standards. The Consolidated Entity's assessment of the impact of these new standards and interpretations is set out below:

AASB 9 Financial Instruments

This standard and its consequential amendments are currently applicable to annual reporting periods beginning on or after 1 January 2018. This standard introduces new classification and measurement models for financial assets, using a single approach to determine whether a financial asset is measured at amortised cost or fair value. To be classified and measured at amortised cost, assets must satisfy the business model test for managing the financial assets and have certain contractual cash flow characteristics. All other financial instrument assets are to be classified and measured at fair value. This standard allows an irrevocable election on initial recognition to present gains and losses on equity instruments (that are not held-for-trading) in other comprehensive income, with dividends as a return on these investments being recognised in profit or loss. In addition, those equity instruments measured at fair value through other comprehensive income would no longer have to apply any impairment requirements nor would there be any 'recycling' of gains or losses through profit or loss on disposal. The accounting for financial liabilities continues to be classified and measured in accordance with AASB 139, with one exception, being that the portion of a change of fair value relating to the entity's own credit risk is to be presented in other comprehensive income unless it would create an accounting mismatch. The Consolidated Entity has not yet evaluated the impact adoption of this standard will have.

(r) Going Concern

As at 30 June 2015 the Consolidated Entity had cash reserves of $2,226,711, net current assets of $3,475,850 and net assets of $4,779,415.

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

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

• the successful exploration and subsequent exploitation of the Consolidated Entity’s tenements.

These conditions give rise to material uncertainty which may cast significant doubt over the Consolidated Entity’s ability to continue as a going concern.

The directors believe that the going concern basis of preparation is appropriate due to the following reasons:

• To date the Consolidated Entity has funded its activities through issuance of equity securities, and it is expected that the Consolidated Entity will be able to fund its future activities through further issuances of equity securities; and

• The directors believe there is sufficient cash available for the Consolidated Entity to continue operating based on the company’s cash flow forecast.

Should the Consolidated Entity be unable to continue as a going concern, it may be required to realise its assets and extinguish its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial statements.

This financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts or classification of liabilities and appropriate disclosures that may be necessary should the Consolidated Entity be unable to continue as a going concern.

(s) Change in Accounting Policy for Refundable R&D Incentives

The Company previously accounted for refundable R&D tax incentives as an income tax benefit. The entity has determined that these incentives are more akin to government grants because they are not conditional upon earning taxable income. The Company has therefore made a voluntary change in accounting policy during the reporting period. Refundable tax incentives are now accounted for as government grants under AASB 120 Accounting for Government Grants and Disclosure of Government Assistance because the directors consider this policy to provide more relevant information to meet the economic decision-making needs of users, and to make the financial statements more reliable.

The impact of these changes in the Company’s accounting policy on individual line items in the prior year financial statements can be summarised as follows:

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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(s) Change in Accounting Policy for Refundable R&D Incentives

Impact on Statement of Comprehensive Income – 30 June 2014

Previously Reported Adjustment Restated 2014 2014 2014 $ $ $	Previously Reported Adjustment Restated 2014 2014 2014 $ $ $
Other Income 3,824 1,123,162 1,126,986 Gain on sale of interest in exploration and evaluation assets (Note 2) - 2,315,860 2,315,860
Loss before income tax expense (9,715,488) 3,439,022 (6,276,466) Research and development income tax refund 1,123,162 (1,123,162) -
Loss after income tax expense (8,592,326) 2,315,860 (6,276,466) Other comprehensive income - - -
Total comprehensive income (8,592,326)	2,315,860 (6,276,466)
Cents Cents Cents
Loss per share Basic and diluted loss per share (8.0) 2.1 (5.9) Impact on Balance Sheet – 30 June 2014 Previously Reported Adjustment Restated 2014 2014 2014 $ $ $
Exploration and evaluation assets 2,879,245 (510,471) 2,368,774 TOTAL ASSETS 8,849,193 (510,471) 8,338,722
NET ASSETS 8,103,013	(510,471) 7,592,542
Retained Earnings (14,009,900) (510,471) (14,520,371) Net Assets
TOTAL EQUITY 8,103,013	(510,471) 7,592,542

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Impact on Balance Sheet – 1 July 2013

Previously Reported Adjustment Restated 2013 2013 2013 $ $ $	Previously Reported Adjustment Restated 2013 2013 2013 $ $ $
Exploration and evaluation assets 11,463,708 (2,826,331) 8,637,377 TOTAL ASSETS 16,576,313 (2,826,331) 13,749,982
NET ASSETS 14,595,052	(2,826,331) 11,768,721
Retained Earnings (5,417,574) (2,826,331) (8,243,905) Net Assets
TOTAL EQUITY 14,595,052	(2,826,331) 11,768,721

(t) Government grants

Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the group will comply with all attached conditions.

Government grants relating to costs are deferred and recognised in the profit or loss over the period necessary to match them with the costs that they are intended to compensate.

Government grants relating to exploration and evaluation assets that have been capitalised are recognised by deducting the grant received from the carrying amount of the exploration and evaluation asset recognised on the balance sheet.

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	Annual	Financial Report
		30 June 2015
	2015	2014 Restated
	$	$
NOTE 2 REVENUE & OTHER INCOME
Revenue
Bank interest	132,021	177,174
Other Income
Government grants2	488,985	1,123,162
Management fees	79,853	3,824
	568,838	1,126,986
Gain on sale of interest in exploration and evaluation assets1	-	2,315,860

1 During the 2014 financial year CAP disposed of 40% of its interest in the Hawson’s project for $3,976,875. The value of capitalised costs as at the date of disposal was $1,661,015 after the adjustments made on the change in accounting policy detailed in Note 1 (s) resulting in a gain on disposal of $2,315,860.

2 Research and development grants of $1,017,653 (2014: $1,123,162) were recognised during the year. Refer Notes 1(s) and 13 for details of the recognition of these amounts against capitalised exploration and evaluation costs and as other income. There are no unfulfilled conditions or other contingencies attaching to these grants. The group did not benefit directly from any other forms of government assistance.

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Annual Financial Report 30 June 2015

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2014 2015 Restated $ $

NOTE 3 INCOME TAX 2015 Restated $ $ A reconciliation of income tax expense (benefit) applicable to accounting loss before income tax at the statutory income tax rate to income tax expense (benefit) recognised for the years ended 30 June 2015 and 2014 is as follows:

Accountingloss before income tax	(2,847,740)	(6,276,466)
Tax at the Australian tax rate of 30% (2014: 30%)	(854,322)	(1,882,940)
Non-deductible expenses	510	2,115
Other	-	-
Share Based Payments	-	106,020
Accounting expenditure subject to R&D tax concession	(170,651)	-
Other	(158,600)	(322,295)
Deferred tax assets not bought to account	1,183,063	2,097,100
Income tax	-	-
Recognised deferred tax assets
Unused tax losses	-	7,350
Deductible temporary differences	382,047	707,641
	382,047	714,991
Recognised deferred tax liabilities
Assessable temporary differences	382,047	714,991
	382,047	714,991
Net deferred tax recognised	-	-
Unrecognised temporary differences and tax losses
Unused tax losses and temporary differences for which no deferred tax assethas been recognised	3,904,954	3,383,252

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

	2015	2014
	$	$
NOTE 4 AUDITORS’ REMUNERATION
Amounts received or due and receivable by the Auditors for:
- auditing and reviewing the financial reports – BDO Audit Pty Ltd	42,000	49,950
Non audit services:
- Taxation services – BDO(QLD)PtyLtd	30,048	30,439
	72,048	80,389

Page 39 of 59

	Annual	Financial Report
		30 June 2015
NOTE 5 EARNINGS PER SHARE	2015	2014 Restated
	$	$
Earnings used to calculate basic and dilutive EPS	(2,847,740)	(6,276,466)
	2015	2014
	#	#
Weighted average number of ordinary shares outstanding during the year	112,203,367	107,111,774
Adjustments for calculation of diluted earningsper share - options	-	-
Weighted average number of ordinary shares and potential ordinary shares used as the denominator incalculating diluted earnings pershare	112,203,367	107,111,774

Options, including in-substance options related to NRE shares, could potentially dilute basic earnings per share in the future but were not included in the calculation of diluted earnings per share for 2015 or 2014 as they were anti-dilutive.

NOTE 6 DIVIDENDS & FRANKING CREDITS

There were no dividends paid or recommended during the financial year. There are no franking credits available to the shareholders of the Company.

	2015	2014
	$	$
NOTE 7 CASH & CASH EQUIVALENTS
Cash on hand and at bank	423,793	264,515
Cash on deposit	1,802,918	4,011,054
	2,226,711	4,275,569
NOTE 8 TRADE & OTHER RECEIVABLES
Other receivables	48,462	10,160
Interest receivables	-	14,530
Governmentgrant receivable	1,017,653	1,123,162
	1,066,115	1,147,852
NOTE 9 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
Shares in Guilford Coal Limited	53,558	112,126
NOTE 10 OTHER CURRENT ASSETS
Prepayments	8,773	12,569
Bonds and deposits	341,139	341,139
	349,912	353,708

Page 40 of 59

		Annual Financial Report	Annual Financial Report
			30 June 2015
		2015	2014
		$	$
NOTE 11 PLANT & EQUIPMENT
Plant and equipment
At cost		289,259	130,582
Accumulated depreciation		(259,183)	(114,750)
		30,076	15,832
Plant and equipment under lease
At cost		-	189,930
Accumulated depreciation		-	(126,378)
		-	63,552
Total plant and equipment		30,076	79,384
Movements in carrying amounts
	Plant and equipment	Plant and equipment under lease	Total
	$	$	$
Balance at 1 July 2013	30,708	126,513	157,221
Additions	5,880	-	5,880
Disposals	-	(22,479)	(22,479)
Depreciation expense	(20,756)	(40,482)	(61,238)
Balance at 30 June 2014	15,832	63,552	79,384
Balance at 1 July 2014	15,832	63,552	79,384
Additions	-	-	-
Disposals	-	(16,790)	(16,790)
Transfers	25,730	(25,730)	-
Depreciation expense	(11,486)	(21,032)	(32,518)
Balance at 30 June 2015	30,076	-	30,076

Leased assets held under hire purchase are pledged as security for the related finance lease liabilities.

	2015	2014
	$	$
NOTE 12 INTANGIBLE ASSETS
Software – at cost	95,224	7,759
Software – at cost (under lease)	-	87,465
Accumulated amortisation	(95,224)	(93,915)
	-	1,309
Movements
Opening balance	1,309	31,936
Amortisation	(1,309)	(30,627)
Closing balance	-	1,309

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	Annual	Financial Report
		30 June 2015
NOTE 13 EXPLORATION AND EVALUATION ASSETS	2015	2014 Restated
	$	$
Opening balance	2,368,774	8,637,377
Net current year expenditure	666,013	2,207,842
Disposals	(37,500)	(1,661,015)
Government grants relating to exploration	(528,668)	-
Impairment of exploration expenditure	(1,195,130)	(6,815,430)
	1,273,489	2,368,774

Recoverability of the carrying amount of exploration and evaluation assets is dependent on the successful development and commercial exploitation of areas of interest, and the sale of minerals or the sale of the respective areas of interest.

Impairment of exploration expenditure in 2014 and 2015 relates to write down of a number of exploration projects. As previously announced to the market, the Board announced that it plans to focus Company resources on the development of its flagship asset, the Hawsons Iron Project. As a result the Company no longer intends to continue exploration activities on projects that are no longer considered to be core projects and the costs associated with these have been impaired.

2015	2014
$	$

NOTE 14 TRADE & OTHER PAYABLES

Other payables and accrued expenses	138,852	598,017
NOTE 15 BORROWINGS
Current
Finance leases	-	7,279
Non-Current
Finance leases	-	8,483

The above facilities represent the only finance facilities available to the Consolidated Entity. There are no unused facilities at balance date (2014: Nil).

The finance leases were secured over the individual assets that the leases related to.

	2015	2014
	$	$
NOTE 16 PROVISIONS
Employee benefits	81,594	132,401

Page 42 of 59

			Annual	Financial Report
				30 June 2015
			2015	2014
			$	$
NOTE 17 SHARE CAPITAL
Fully paid ordinary shares			20,007,093	19,972,480
Ordinary Shares
	2015	2014	2015	2014
	$	$	#	#
At the beginning of the year	19,972,480	18,225,593	111,752,277	99,291,301
Share placement1	-	1,335,399	-	8,615,470
Rights Issue2	-	539,556	-	3,481,006
Transfer from treasury shares3	34,613	56,499	935,500	364,500
Share issue costs	-	(184,567)	-	-
At reporting date	20,007,093	19,972,480	112,687,777	111,752,277
Non-recourse employee shares (NRE)
At the beginning of the year	-	-	11,200,000	7,400,000
NRE shares issued4	-	-	-	3,800,000
Transfer to treasury shares	-	-	(2,100,000)	-
At reporting date	-	-	9,100,000	11,200,000
Treasury shares
At the beginning of the year	-	-	935,500	1,300,000
Transfer to ordinary shares3	-	-	(935,500)	(364,500)
Transfer from NRE shares	-	-	2,100,000	-
At reporting date	-	-	2,100,000	935,500
Total Ordinary, NRE and Treasury Shares	20,007,093	19,972,480	123,887,777	123,887,777

1 2014: 8,615,470 ordinary fully paid shares issued at $0.155 each.

2 2014: 3,481,006 ordinary fully paid shares issued at $0.155 each.

3 2015: 935,500 treasury shares were sold at $0.037 each.

4 2014: 3,800,000 NRE shares issued to staff with a calculated value of $0.093 per NRE share. This resulted in the recognition of a share based payment expense of $353,400.

Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares held. At shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands. Ordinary shares have no par value and the company does not have a limited amount of authorised capital.

Non-recourse employee (NRE) shares participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares held. At shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands. NRE shares will not qualify for participation in any dividend reinvestment plan of the Company until the loan amount in respect of those shares has been repaid. The Company has a lien over the NRE shares in respect of which the loan amount is outstanding. The Company is entitled to sell any unpaid NRE shares in accordance with the CAP share plan. Refer to Note 20 for further details.

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NOTE 17 SHARE CAPITAL (continued)

Options

	Movements
Expiry Date Exercise Price	1 July 2014 Issued Exercised Expired 30 June 2015
15 December 2014 $0.290 29 November 2015 $0.440	2,600,000 - - (2,600,000) - 1,500,000 - - - 1,500,000
	4,100,000 - - (2,600,000) 1,500,000
	2015 2014 $ $
NOTE 18 RESERVES Share based payment reserve	1,947,113 2,140,433
Share based payment reserve movements during the year Opening balance 2,140,433 1,787,033 Share based payments - 353,400 Transfer to share capital - - Transfer to accumulated losses (expired options) (193,320) -
Closing balance 1,947,113 2,140,433

Share based payment reserve

The share based payments reserve is used to record the value of share based payments provided to directors, employees and contractors as part of their remuneration.

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Annual Financial Report
30 June 2015
2015 2014 Restated
$ $

NOTE 19 CASH FLOW INFORMATION

Reconciliation of profit/ (loss) after income tax to net cash outflow from operating activities

Loss after income tax	(2,847,740)	(6,276,466)
Depreciation and amortisation	33,827	91,865
Non‑cash employee benefits expense – share‑based payments	-	353,400
Impairment of exploration expenditure	1,195,130	6,815,430
Loss on sale of property, plant and equipment	6,790	11,512
Fair value loss on financial assets at fair value through profit or loss	58,568	112,471
Gain on sale of interest in exploration and evaluation assets	-	(2,315,860)
Change in operating assets and liabilities
(Increase)/decrease in receivables	14,530	203,078
(Increase)/decrease in other receivables	(537,447)	(1,123,162)
(Increase)/decrease in other assets	3,796	(19,530)
(Decrease)/increase in trade payables and accruals	(26,185)	(494,279)
(Decrease)/increase inprovisions	(50,807)	(38,501)
Net cash outflow from operating activities	(2,149,538)	(2,680,042)

Non-cash transactions investing & financing activities

2015: Nil. 2014: Nil

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NOTE 20 SHARE BASED PAYMENTS

- Equity based instruments Options

The establishment of the CAP Employee Option Plan was approved by shareholders at the 2006 annual general meeting. The Employee Option Plan is designed to provide long-term incentives for senior managers and above (including executive directors) to deliver long-term shareholder returns.

The Company has granted options over ordinary shares to directors, employees and consultants as part of their remuneration packages. The options were granted for nil consideration and are not quoted on the ASX. Options granted under the plan carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary share.

Information with respect to the number of options granted is as follows:

2015

2015
Tranche GrantDate ExpiryDate Exercise Price	Balance at start ofyear Granted inyear Exercised inyear Lapsed during year Balance at end ofyear Vested and exercisable at end of year
14 16 Dec 2011 15 Dec 2014 $0.290 15 30 Nov 2012 29 Nov 2015 $0.440 Weighted average exercise price 2014 Tranche GrantDate ExpiryDate Exercise Price	2,600,000 - - (2,600,000) - - 1,500,000 - - - 1,500,000 1,500,000
	4,100,000 - - (2,600,000) 1,500,000 1,500,000
	0.34 - - 0.29 0.44 0.44
	Balance at start ofyear Granted inyear Exercised inyear Lapsed during year Balance at end ofyear Vested and exercisable at end of year
14 16 Dec 2011 15 Dec 2014 $0.290 15 30 Nov 2012 29 Nov 2015 $0.440 Weighted average exercise price	2,600,000 - - - - 2,600,000 1,500,000 - - - - 1,500,000
	4,100,000 - - - - 4,100,000
	0.34 - - - - 0.34

The weighted average remaining contractual life of share options outstanding at the end of the period was 0.41 years. (2014: 0.81 years).

Fair value of options granted

The assessed fair value at the date of grant of options issued is determined using a Black-Scholes option pricing model that takes into account the exercise price, the underlying share price at the time of issue, the term of the option, the underlying share’s expected volatility, expected dividends and the risk free interest rate for the expected life of the instrument.

The value of the options was calculated by using the Black-Scholes pricing model applying the inputs shown below:

	Tranches issued in 2013
Inputs into pricing model	15
Grant date Vesting date Exercise price Share price at grant date Life of the options Underlying share price volatility Expected dividends Risk free interest rate Fair value per option	30 November 2012 30 November 2012 $0.440 $0.21 3 years 80% Nil 3.25% 0.0747

The expected price volatility is based on the historic volatility (based on the remaining life of the options), adjusted for any expected changes to future volatility due to publicly available information.

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NOTE 20 SHARE BASED PAYMENTS

Equity based instruments – Director and Employee Shares with Non-Recourse Loans

The Company has issued ordinary shares to Directors and employees pursuant to the CAP Employee Share Plan. The shares have been issued in return for an interest free loan from the Consolidated Entity whereby the Consolidated Entity only has recourse to the shares. This issue of shares has been treated as an option grant in accordance with AASB2 “Share Based Payments”. In line with AASB2 “Share Based Payments”, the related expense for the shares is recorded from the date that agreement with the employee is met.

Information with respect to the number of director and employee shares with non-recourse loans granted is as follows:

2015

2015
Tranche Grant Date Escrow Date Exercise Price	Balance at start of year Granted in year Exercised inyear Lapsed/ transferred during year Balance at end ofyear Exercisable at end ofyear
Director 1 31 May 2011 31 May 2012 $0.48 Director 2 31 May 2011 31 May 2013 $0.48 Employee 1 1 March 2011 2 March 2013 $0.60 Employee 2 5 July 2013 5 July 2013 $0.30 Weighted average exercise price	1,500,000 - - - 1,500,000 1,500,000 1,500,000 - - - 1,500,000 1,500,000 4,400,000 - - (1,100,000) 3,300,000 3,300,000 3,800,000 - - (1,000,000) 2,800,000 2,800,000
	11,200,000 - - (2,100,000) 9,100,000 9,100,000
	0.47 - - 0.46 0.47 0.47

2014

2014
Tranche Grant Date Escrow Date Exercise Price	Balance at start of year Granted in year Exercised inyear Lapsed/ transferred during year Balance at end ofyear Exercisable at end ofyear
Director 1 31 May 2011 31 May 2012 $0.48 Director 2 31 May 2011 31 May 2013 $0.48 Employee 1 1 March 2011 2 March 2013 $0.60 Employee 2 5 July 2013 5 July 2013 $0.30 Weighted average exercise price	1,500,000 - - - 1,500,000 1,500,000 1,500,000 - - - 1,500,000 1,500,000 4,400,000 - - - 4,400,000 4,400,000 - 3,800,000 - - 3,800,000 3,800,000
	7,400,000 3,800,000 - - 11,200,000 11,200,000
	0.58 0.35 - - 0.48 0.47

The value of the Director and Employee Shares with Non-Recourse Loans was calculated by using the Black-Scholes pricing model applying the inputs shown below:

Inputs into pricing model	Director 1	Director 2	Employee 1	Employee 2
Grant date Vesting date Exercise price Share price at grant date Life of the options Underlying share price volatility Expected dividends Risk free interest rate	31 May 2011 31 May 2011 $0.48 $0.51 1 year 54% Nil 4.68%	31 May 2011 31 May 2011 $0.48 $0.51 2 years 54% Nil 4.68%	1 March 2011 1 March 2011 $0.60 $0.66 2 years 54% Nil 4.68%	5 July 2013 5 July 2013 $0.30 $0.19 3 years 88% Nil 2.82%

- Expenses arising from share based payment transactions

Total expenses arising from share-based payment transactions recognised during the period as part of employee benefit expense were as follows:

	2015	2014
	$	$
Shares issued under employee share scheme	-	353,400
	-	353,400

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NOTE 21 RELATED PARTY and KEY MANAGEMENT PERSONNEL

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

Key management personnel compensation

Key management personnel comprise directors and other persons having authority and responsibility for planning, directing and controlling the activities of the Consolidated Entity.

	2015	2014
Summary	$	$
Short-term employee benefits	544,946	940,905
Post-employment benefits	191,554	91,444
Share-basedpayments	-	139,500
	736,500	1,171,849

Detailed remuneration disclosures are provided in the remuneration report on pages 10 to 16.

Amounts Owed to Key Management Personnel and Other Related Parties

There were no amounts payable to Directors, key management personnel or other related parties at 30 June 2015 (2014: nil).

Transactions with Related Parties

There were no other transactions between the Consolidated Entity and its related parties during the year (2014: nil).

NOTE 22 FINANCIAL RISK MANAGEMENT

The Consolidated Entity's financial instruments consist mainly of deposits with banks and accounts receivable and payable and investments in listed securities.

There have been no substantive changes in the Consolidated Entity's exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note.

The Board is responsible for managing the Consolidated Entity’s identification and control of financial risks and for evaluating treasury management strategies in the context of the most recent economic conditions and forecasts.

The main risks arising from the Consolidated Entity’s financial instruments are interest rate risk, credit risk, liquidity risk and price risk. The Consolidated Entity uses different methods to measure and manage different types of risks to which it is exposed. These include monitoring levels of exposure to interest rate risk and assessments of market forecasts for interest rate prices. Ageing analyses and monitoring of specific credit allowances are undertaken to manage credit risk. Liquidity risk is monitored through the development of future rolling cash flow forecasts.

(a) Credit Risk

Credit risk is the risk that the other party to a financial instrument will fail to discharge their obligation resulting in the Consolidated Entity incurring a financial loss. This usually occurs when debtors fail to settle their obligations owing to the Consolidated Entity.

The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the balance sheet and notes to the financial statements. There is no collateral held as security at 30 June 2015.

Credit risk is reviewed regularly by the Board. It arises from exposure to customers as well as through deposits with financial institutions. With the receivable balance almost exclusively relating to funds due from the Australian Tax Office, the Consolidated Entity does not have any material credit risk exposure.

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NOTE 22 FINANCIAL RISK MANAGEMENT (continued)

Maximum exposure to credit risk

	2015	2014
	$	$
Non-trade receivables	48,462	24,690
Cash and cash equivalents	2,226,711	4,275,569
	2,275,173	4,300,259
Ageing of receivables
Not past due	48,462	24,690
Past due 0-90 days	-	-
Past due >90 days	-	-
Impaired	-	-
	48,462	24,690

Credit risk - Cash and cash equivalents

The credit quality of financial assets that are neither past due nor impaired is considered strong. The counterparty to these financial assets is Commonwealth Bank and Westpac, large financial institutions with strong credit ratings.

(b) Liquidity risk

Liquidity risk is the risk that the Consolidated Entity may encounter difficulties raising funds to meet financial obligations as they fall due.

Liquidity risk is reviewed regularly by the Board. The Consolidated Entity manages liquidity risk by monitoring forecast cash flows and ensuring that adequate cash resources are maintained.

The table below reflects the contractual maturity financial liabilities. Cash flows for financial liabilities without fixed amount or timing are based on the conditions existing at 30 June 2015. The amounts disclosed represent undiscounted cash flows.

The remaining contractual maturities of the financial liabilities are:

	2015 2014 $ $
	Less than one year Trade and other payables 138,852 598,017 Finance leases - 8,156 One to five years Finance leases - 8,835
	138,852 615,008

Terms and conditions relating to the above financial instruments:

• Trade creditors are unsecured, non-interest bearing and are normally settled on 30 day terms

• Other creditors are unsecured and non-interest bearing

• Due to the short term nature of the current payables the carrying value is assumed to approximate their fair value.

• Finance leases were secured by way of fixed charge over the leased assets. The finance leases were subject to an interest rate of 7.03%.

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NOTE 22 FINANCIAL RISK MANAGEMENT (continued)

(c) Market Risk

Market risk arises from the use of interest bearing, tradable and foreign currency financial instruments. It is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in interest rates (interest rate risk), foreign exchange rates (currency risk) or other market factors (other price risk).

Interest rate risk

Interest rate risk is managed by constant monitoring of interest rates. The Consolidated Entity's interest rate exposure is limited to its variable rate cash and cash equivalents assets.

Interest rates over the 12 month period were analysed and a sensitivity determined to show the effect on profit and equity after tax if the interest rates at reporting date had been 100 basis points higher or lower, with all other variables held constant. This level of sensitivity was considered reasonable given the current level of both short-term and long-term Australian interest rates. The following sensitivity analysis is based on the interest rate risk exposures in existence at the balance sheet date.

At 30 June 2015, if interest rates had moved, as illustrated in the table below, with all other variables held constant, post tax profit and equity would have been affected as follows:

Judgements of reasonably possible movements: +1.00% (100 basis points) -1.00% (100 basis points)	Post Tax Profit Higher/(Lower) Equity Higher/(Lower) 2015 $ 2014 $ 2015 $ 2014 $
	4,238 2,645 4,238 2,645 (4,238) (2,645) (4,238) (2,645)

Price risk

The Consolidated Entity’s exposure to securities in the current period arose from an investment in one listed company, Guilford Coal Ltd. The Consolidated Entity actively monitors the underlying investment in the context of its overall strategic and financial objectives.

At 30 June 2015, the Consolidated Entity had the following exposure to price risk:

	2015	2014
	$	$
Shares in Guilford Coal Limited	53,558	112,126

At 30 June 2015, if the market prices had moved, as illustrated in the table below, with all other variables held constant, post tax profit and equity would have been affected as follows:

Judgements of reasonably possible movements: + 25% - 25%	Post Tax Profit Higher/(Lower) Equity Higher/(Lower) 2015 $ 2014 $ 2015 $ 2014 $
	13,390 28,031 13,390 28,031 (13,390) (28,031) (13,390) (28,031)

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NOTE 22 FINANCIAL RISK MANAGEMENT (continued)

AASB 13 Fair Value Measurement requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:

• (i) quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)

• (ii) inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (level 2), and

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

Level 1 Investments: Quoted prices (unadjusted) in active markets for identical assets

For the year ended 30 June 2015 the value of the listed shares was based on the closing price of Guilford Coal Ltd’s securities as quoted on the ASX on 30 June 2015. Total realised and unrealised losses for the period included in profit and loss that relate to financial assets held at fair value through profit or loss at the end of the reporting period were $58,568 (2014: $112,471).

(d) Capital Risk Management

Management controls the capital of the Consolidated Entity in order to provide capital growth to shareholders and ensure the Consolidated Entity can fund its operations and continue as a going concern. The Consolidated Entity’s capital includes ordinary share capital. Further detail on share capital can be found in Note 17. There are no externally imposed capital requirements. Management effectively manages the Consolidated Entity’s capital by assessing the Consolidated Entity’s financial risks and adjusting its capital structure in response to changes in these risks and the market. These responses include the management share issues.

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

(e) Fair Values

The fair values of financial assets and liabilities approximate their carrying value. Except for shares in Guildford Coal Limited, no financial assets or liabilities are readily traded on organised markets in standardised form.

NOTE 23 SEGMENT REPORTING

Reportable Segments

The Consolidated Entity has identified its operating segment based on internal reports that are reviewed and used by the executive team in assessing performance and determining the allocation of resources. The Consolidated Entity does not yet have any products or services from which it derives an income.

Accordingly, management currently identifies the Consolidated Entity as having only one reportable segment, being exploration for minerals in Australia. The financial results from this segment are equivalent to the financial statements of the consolidated entity. There have been no changes in the operating segments during the year.

All assets are located in Australia.

Page 51 of 59

	Annual	Financial Report
		30 June 2015
	2015	2014
	$	$
NOTE 24 COMMITMENTS
Operating leases
Minimum lease payments:
Payable within one year	118,885	123,933
Payable within oneyear and fiveyears	19,690	18,205
Total contracted at balance date	138,575	142,138

The Consolidated Entity leases various offices and office equipment under non-cancellable operating leases expiring within one to three years. The leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the leases are renegotiated.

Finance leases
Future minimum lease payments:
Payable within one year	-	8,156
Payable between oneyear and fiveyears	-	8,835
	-	16,991
Less future interestpayments	-	(1,229)
	-	15,762
Present value of minimum lease payments:
Current (Note 15)	-	7,279
Non-Current(Note 15)	-	8,483
	-	15,762

Future exploration

The Consolidated Entity has certain obligations to expend minimum amounts on exploration in tenement areas. These obligations may be varied from time to time and are expected to be fulfilled in the normal course of operations of the Consolidated Entity.

Exploration obligations to be undertaken:
Payable within one year	435,771	285,947
Payable between oneyear and fiveyears	1,059,654	2,838,442
	1,495,425	3,124,389

To keep tenements in good standing, work programs should meet certain minimum expenditure requirements. If the minimum expenditure requirements are not met, the Company has the option to negotiate new terms or relinquish the tenements or to meet expenditure requirements by joint venture or farm in agreements.

NOTE 25 CONTINGENT LIABILITIES AND CONTINGENT ASSETS

There are no contingent liabilities or contingent assets at 30 June 2015 that require disclosure in the financial report.

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Annual Financial Report 30 June 2015

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NOTE 26 PARENT ENTITY INFORMATION

The Parent Entity of the Consolidated Entity is Carpentaria Exploration Limited.

	2015 $	2014 Restated $
Parent Entity Financial Information Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Net assets Issued capital Share based payment reserve Accumulated losses Total equity Loss after income tax Other comprehensive income Total comprehensive income	3,301,599 1,698,262 4,999,861 220,446 - 220,446 4,779,415 20,007,093 1,947,113 (17,174,791) 4,779,415 (2,807,740) - (2,807,740)	5,849,255 2,449,467
		8,298,722
		737,697 8,483
		746,180
		7,552,542
		19,972,480 2,140,433 (14,560,371)
		7,552,542
		(5,701,228) -
		(5,701,228)

Controlled Entities of the Parent Entity

Willyama Prospecting Pty Ltd	Percentage Owned 2015 2014 % %
	100% 100%

Commitments, Contingencies and Guarantees of the Parent Entity

The committed expenditure for future periods of the Parent Entity is the same as those for the Consolidated Entity. Refer to Note 24 for details.

The Parent Entity has no contingent assets, contingent liabilities or guarantees at balance date.

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Annual Financial Report 30 June 2015

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NOTE 27 EVENTS AFTER BALANCE SHEET DATE

On 1 September 2015, the company signed conditional Terms Sheets with Faraday Resources Pty Ltd concerning the Barellan (EL 7896) and Combaning (EL 6901) projects. Under the agreement Faraday Resources Pty Ltd has the right to earn a 90% interest in the projects based on the following key terms:

• Faraday to spend $200,000 within one year (or other time frame as agreed) to earn 90% interest in EL 6901 and EL 7896;

• Minimum expenditure of $100,000 within 6 months of agreement;

• Following the earn-in period, Carpentaria will have the option to contribute to expenditure or convert to a Net Smelter Royalty of 1%;

• Faraday has been granted three months exclusivity to complete the transaction;

• The Terms Sheet is conditional on Faraday raising funding and the parties completing a commercial agreement within three months.

There have been no other events since 30 June 2015 that impact upon the financial report.

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Annual Financial Report 30 June 2015

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DIRECTORS' DECLARATION

The directors of the company declare that:

1. The financial statements, comprising the statement of comprehensive income, balance sheet, cash flow statement, statement of changes in equity, accompanying notes, are in accordance with the Corporations Act 2001 and:

2. a. comply with Accounting Standards and the Corporations Regulations 2001 ; and

3. b. give a true and fair view of the consolidated entity’s financial position as at 30 June 2015 and of its performance for the year ended on that date.

4. The Company has included in the notes to the financial statements an explicit and unreserved statement of compliance with International Financial Reporting Standards.

5. In the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

6. The remuneration disclosures included in pages 10 to 16 of the directors’ report (as part of audited Remuneration Report), for the year ended 30 June 2015, comply with section 300A of the Corporations Act 2001.

7. The directors have been given the declarations by the chief executive officer and chief financial officer required by section 295A.

This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the directors by:

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Q S Hill Director

Brisbane 30 September 2015

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Tel: +61 7 3237 5999 Level 10, 12 Creek St Fax: +61 7 3221 9227 Brisbane QLD 4000 www.bdo.com.au GPO Box 457 Brisbane QLD 4001 Australia

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INDEPENDENT AUDITOR’S REPORT

To the members of Carpentaria Exploration Limited

Report on the Financial Report

We have audited the accompanying financial report of Carpentaria Exploration Limited, which comprises the consolidated balance sheet as at 30 June 2015, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated cash flow statement for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements , that the financial statements comply with International Financial Reporting Standards .

Auditor’s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

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

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001 ,

BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.

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which has been given to the directors of Carpentaria Exploration Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.

Opinion

In our opinion:

• (a) the financial report of Carpentaria Exploration Limited is in accordance with the Corporations Act 2001 , including:

• (i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015 and of its performance for the year ended on that date; and

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

• (b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.

Emphasis of matter

Without modifying our opinion, we draw attention to Note 1 in the financial report, which indicates that the ability of the consolidated entity to continue as a going concern is dependent upon the future successful raising of necessary funding through equity, successful exploration and subsequent exploitation of the consolidated entity’s tenements, and/or sale of non-core assets. These conditions, along with other matters as set out in Note 1, indicate the existence of a material uncertainty that may cast significant doubt about the consolidated entity’s ability to continue as a going concern and therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business.

Report on the Remuneration Report

We have audited the Remuneration Report included in pages 10 to 16 of the directors’ report for the year ended 30 June 2015. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Opinion

In our opinion, the Remuneration Report of Carpentaria Exploration Limited for the year ended 30 June 2015 complies with section 300A of the Corporations Act 2001 .

BDO Audit Pty Ltd

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K L Colyer Director

Brisbane, 30 September 2015

BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.

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ADDITIONAL STOCK EXCHANGE INFORMATION

DISTRIBUTION OF NUMBER OF HOLDERS OF EQUITY SECURITIES AS AT 28 SEPTEMBER 2015

	Ordinary shares fully paid
Number of Securities Held	No. of holders
1 to 1,000	167
1,001 to 5,000	474
5,001 to 10,000	322
10,001 to 100,000	775
100,001 and over	133
	1,871
Number of shareholders holding less than a marketable parcel of shares	1,168

Number of shareholders holding less than a marketable parcel of shares

TWENTY LARGEST HOLDERS OF EACH QUOTED SECURITY

Rank	Name	Balance	% Held
1	SILVERGATE CAPITAL PTY LTD	17,990,800	14.52
2	AUSTRALIA CONGLIN INTERNATIONAL INVESTMENT GROUP PTY LTD	10,479,000	8.46
3	CARPENTARIA EXPLORATION LTD	5,700,000	4.60
4	NEFCO NOMINEES PTY LTD	3,833,428	3.09
5	SYDNEY EQUITIES PTY LTD	3,550,000	2.87
6	MR CONGLIN YUE	3,100,000	2.50
7	SILVERGATE CAPITAL PTY LTD	2,953,706	2.38
8	MR STUART NICHOLAS SHEARD	2,503,125	2.02
9	MS YING JIN	2,270,130	1.83
10	BNP PARIBAS NOMS PTY LTD	1,977,469	1.60
11	QUENTIN HILL	1,706,814	1.38
12	MR CRAIG ASTILL	1,661,308	1.34
13	BEST EXPAND INVESTMENTS LIMITED	1,550,735	1.25
14	HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED	1,534,780	1.24
15	CHRISTOPHER JOHN BYNON-POWELL & VICTORIA ANNE BYNON-POWELL	1,500,000	1.21
16	CAMCOVE PTY LTD	1,500,000	1.21
17	FORSYTH BARR CUSTODIANS LTD	1,197,427	0.97
18	MR JOHN HUEY	1,000,000	0.81
19	MR TECK MING LOO & MRS SHINKO LOO	909,476	0.73
20	KENMA INVESTMENT ADVISORS PTY LIMITED	750,000	0.61

VOTING RIGHTS

All ordinary shares carry one vote per share without restriction.

SUBSTANTIAL SHAREHOLDERS

Substantial shareholders as shown in substantial shareholder notices received by the Company at 28 September 2015 are:

**Name of Shareholder **	Ordinary Shares
AUSTRALIA CONGLIN INTERNATIONAL INVESTMENT GROUP PTY LTD	10,479,000
SILVERGATE CAPITAL PTY LTD	20,944,506

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INTERESTS IN MINING TENEMENTS

Exploration Permits for Minerals. All tenements are held by Carpentaria Exploration Limited as the principal and sole holder with 100% unencumbered share, apart from those marked accordingly in the table below:

Licence Number	Licence Number	Notes	Name	Original Grant Date	Expiry Date	Sub Blocks	Area Km2	%
EL	6901	4	Combaning	08-10-07	08-10-15	154	435.8	100%
EL	6936	1	Euriowie	07-11-07	07-11-15	16	46.9	100%
EL	6979	2, 3	Redan	11-12-07	11-12-16	62	179.8	60%
EL	7208	3,4	Burta	22-09-08	22-09-15	100	289.7	60%
EL	7504	3	Little Peak	08-04-10	08-04-16	14	40.6	60%
EL	7829		Yanco Glen	02-09-11	02-09-16	50	146.2	100%
EL	7896		Barellan	06-02-12	06-02-16	100	283.4	100%
EL	8082		Tooloom	01-05-13	01-05-16	100	297.4	100%
EL	8095	4	Advene	28-05-13	28-05-15	100	287.1	100%
EL	8189		GrongGrong	29-10-13	29-10-16	148	418.7	100%
EL	4395		South Dam	10-12-09	09-12-16	30	86	100%
Licence Total 11				874 2511.6

1 100 % Willyama Prospecting Pty Ltd (wholly owned subsidiary of Carpentaria)

2 1.5% NSR royalty to Perilya Broken Hill Pty Ltd.

3 JV farm-out; Pure Metals Pty Ltd

4 Under Renewal Process

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