IRON BEAR RESOURCES LTD - Annual Report 2017

CAPE LAMBERT RESOURCES LIMITED

ABN 71 095 047 920

AND ITS CONTROLLED ENTITIES

Annual Report For the Year Ended 30 June 2017

==> picture [229 x 67] intentionally omitted <==

ANNUAL REPORT 2017

==> picture [160 x 48] intentionally omitted <==

Corporate Directory	1
Principal Activities and Review of Operations	2
Directors' Report	7
Auditor’s Independence Declaration	21
Corporate Governance Statement	22
Consolidated Statement of Comprehensive Income	23
Consolidated Statement of Financial Position	24
Consolidated Statement of Changes in Equity	25
Consolidated Statement of Cash Flows	27
Notes to the Consolidated Financial Statements	28
Directors' Declaration	68
Independent Auditor’s Report	69
Additional Stock Exchange Information	74

ANNUAL REPORT 2017

CORPORATE DIRECTORY

==> picture [160 x 48] intentionally omitted <==

Directors

Mr Tony Sage - Executive Chairman Mr Tim Turner - Non-Executive Director Mr Jason Brewer - Non-Executive Director

Company Secretary Ms Melissa Chapman

Stock Exchange Listing Australian Securities Exchange ASX code: CFE

Website

www.capelam.com.au

Country of Incorporation Australia

Registered Address

32 Harrogate Street West Leederville, WA 6007 Australia Tel: +61 8 9380 9555

Bankers

National Australia Bank 100 St George’s Terrace Perth, WA 6000

Auditors

Ernst & Young 11 Mounts Bay Road Perth, WA 6000 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436

Share Registry Computershare Investor Services Pty Limited Level 11 172 St Georges Terrace Perth, WA 6000 AUSTRALIA Tel: 1300 85 05 05 (Australia) +61 3 9415 4000 (Overseas)

ANNUAL REPORT 2017

PRINCIPAL ACTIVITIES AND REVIEW OF OPERATIONS

==> picture [160 x 48] intentionally omitted <==

Marampa Project

The Marampa Iron Ore Project ( Marampa ) is a brownfields hematite iron ore project at the development and permitting stage, and is located 90 km northeast of Freetown in Sierra Leone, West Africa ( Figure 1 ).

Marampa comprises one mining licence (ML05/2014) comprising 97.40km[2] and one granted exploration licence (EL46A/2011 – 145.86km[2] ). The licences are held by Marampa Iron Ore (SL) Limited, indirectly a wholly owned subsidiary of the Company. Marampa has access to a stockpiling and ship loading facility located at Pepel Port via a 73km railway operated by African Railway and Port Services (SL) Limited (ARPS).

==> picture [471 x 445] intentionally omitted <==

Figure 1: Regional Map showing the Company's Assets in Sierra Leone

The Marampa Project currently remains under care and maintenance.

ANNUAL REPORT 2017

PRINCIPAL ACTIVITIES AND REVIEW OF OPERATIONS

==> picture [160 x 48] intentionally omitted <==

Kukuna Project

The Kukuna Project ( Kukuna ) is located 120 km northeast of Freetown in the northwest of Sierra Leone and comprises one exploration licence covering 68km[2] (refer Figure 1 ). The licence area is located approximately 70km due north of Marampa.

The Kukuna Project remains under care and maintenance.

Cote D’Ivoire Project

Metals Exploration Cote D’Ivoire SA is a wholly owned subsidiary of the Company and was granted three tenements in the highly prospective Birimian Gold Belt of Cote D’Ivoire. The tenements are named Boundiali North (EL285 – 400 km[2] ), Katiola (EL284 – 400 km[2] ) and Bouake (EL286 – 400 km[2] ) for a total land position of 1,200km[2] ( Licences ).

The Company announced in March 2016 that it had sold the Cote D’Ivoire Licences to a subsidiary of Newcrest Mining Limited ( Newcrest ) for a consideration of US$332,500 plus a 1% net smelter return royalty on gold produced from the Licences capped at US$1million ( Sale ). The Sale was subject to Newcrest receiving approval from the Minister of Mines for the transfer of the Licences, which first required the renewal of the Licences.

The renewal of the Licences was completed in March 2017, but as at year end, the transfer of the Licences had not been completed, but is expected to occur in the near future.

- Kipushi and Kasombo Copper Cobalt Projects (JV with Paragon Mining SARL)

The Kipushi Cobalt-Copper Tailings Project consists of a tailings dam located on PE 12347 and the Kipushi Processing Plant located adjacent mining licence PE481 ( Kipushi Project ), while the Kasombo Copper-Cobalt Project consists of 3 mineralised areas of approximately 600Ha (Kasombo 5, 6 and 7) located within mining licences PE 481 and PE4886 ( Kasombo Project ), refer Figure 2 and Figure 3 . Both projects are located approximately 25km from Lubumbashi, the second largest city in the Democratic Republic of Congo ( DRC) . The Company has a 50/50 joint venture agreement with Paragon Mining SARL ( Paragon ) to develop the projects.

==> picture [432 x 293] intentionally omitted <==

Figure 2: Location of DRC and Zambian Copper-Cobalt Projects

ANNUAL REPORT 2017

==> picture [160 x 48] intentionally omitted <==

PRINCIPAL ACTIVITIES AND REVIEW OF OPERATIONS

==> picture [379 x 244] intentionally omitted <==

Figure 3: Location of the Kipushi Project, Kasombo Project and Kipushi Processing Plant

Kipushi Project

The Kipushi tailings dam is located approximately 8km from the Kipushi Processing Plant and extends for over 1.2km in length and over 400m in width. The tailings have a maximum depth of approximately 12m in the centre of the tailings dam and 5m at the boundaries of the tailings dam, with average depths of approximately 8m. Assaying of samples collected from the tailings dam returned Cobalt grades ranging from 0.35% to 0.46% and Copper grades ranging from 0.89% to 1.18% (refer ASX announcement dated 29 March 2017).

The Company reported that it was undertaking metallurgical testwork on the Kipushi tailings at the laboratory of Mintek in South Africa. This test work programme was primarily aimed at a) characterisation of the tailings material by mineralogical and chemical analyses b) production of a bulk copper/cobalt flotation concentrate grading initially 1012% copper and greater than 2% cobalt; and c) preliminary scoping work on leaching and gravity concentration as potential alternative or supplemental processing routes. Mintek completed the characterization and preliminary flotation testwork that achieved the target concentrate grades but at copper and cobalt recoveries lower than anticipated. Insufficient sample was available to enable Mintek to complete optimisation of flotation test work, so further sample was collected from the Kipushi tailings dam late in the June 2017 quarter and dispatched to Mintek. Due to the lack of timely progress on the optimization testwork however, it was ultimately decided late July 2017 to end the work at Mintek and dispatch the remaining sample to the laboratory of Axis House in Cape Town, South Africa.

Axis House is a major supplier and distributor of chemicals to the mining industry and have fully equipped laboratories, with milling, flotation, sedimentation, leaching and analytical equipment, that enables it to accurately benchmark alternate reagent suites against each other to optimise process recoveries. Axis House had previously conducted testing on the Kipushi tailings for Paragon in 2016. The initial testwork carried out by Axis House confirmed that a saleable concentrate of approximately 10% Copper and 2% Cobalt with recoveries of 57% and 50% respectively could be achieved. Further testwork is planned to further optimise the process to obtain concentrate grades of above 2% Co and 12 % Cu at maximum recovery.

Kasombo Project

Kasombo is part of the Kasombo Complex, a series of copper-cobalt rich deposits that have been extensively explored by Gecamines and developed and mined by various international companies in joint venture with the State owned mining company La Générale des Carrières et des Mines ( Gecamines ). The Company’s technical consultants were able to undertake handheld XRF sampling of artisanal open pit workings and exposed cobalt mineralisation at the Kasombo

ANNUAL REPORT 2017

==> picture [160 x 48] intentionally omitted <==

PRINCIPAL ACTIVITIES AND REVIEW OF OPERATIONS

area from surface and to depths of 30m. The results of the XRF sampling were consistent with and confirmed the previously reported mined copper and cobalt grades by Gecamines and Forrest International Group of between 2.7% to 3.7% copper and 3.5% to 5.3% cobalt. Extreme high grade rock samples from Kasombo 7 returned a handheld XRF grades of up to 38% Co (refer ASX announcement dated 22 August 2017).

Independent consultants SRK Consulting ( SRK ) were engaged and commenced a detailed review and analyses of the historical exploration work completed by Gécamines at the Kasombo area, as well as undertaking a geological mapping exercise. A tender process also commenced for a first phase RC drilling programme targeting the areas of known mineralisation at Kasombo.

Kitwe Tailings Project

In May 2017, the Company announced that it has executed a binding terms sheet to conditionally acquire 70% of the shares in Zambian entity Australian Mining Company Zambia Limited ( AMCZL ), which is the holder of exploration licence No 21853-HQ-SEL ( Licence) . The Licence covers an historic cobalt-copper rich tailings dump located approximately 3km on the outskirts of Kitwe in Zambia (refer Figure 3 and Figure 4 ). Assays of seven samples collected from the tailings dam returned Cobalt grades in the range of 0.20% to 0.43% and Copper grades ranging from 0.43% to 0.93% (refer ASX announcement dated 22 May 2017).

==> picture [335 x 226] intentionally omitted <==

Figure 4: Location of the Kitwe Cobalt-Copper Tailings Project

The Company is in the process of finalising the share sale agreement with AMCZL in order to complete the transaction.

Wee MacGregor Project

Mining International Pty Ltd ( Mining International ) is a fully owned subsidiary of Cape Lambert. The Company holds tenure to 4 mining leases and 4 granted exploration permits for minerals (EPM’s) at the Wee MacGregor Project located 40 km southeast of Mt Isa in Queensland (refer Figure 5 ). The total granted land package covers an area of approximately 124km[2] .

The tenements are located within in the Eastern Fold Belt of the Mt Isa inlier. The eastern-most tenements are located in the Mary Kathleen Zone/Wonga Sub-province. The western group of tenements are located in the Kalkadoon Leichhardt Belt. These areas are prospective for a variety of deposit types, most notably structurally controlled epigenetic copper and gold deposits.

ANNUAL REPORT 2017

==> picture [160 x 48] intentionally omitted <==

PRINCIPAL ACTIVITIES AND REVIEW OF OPERATIONS

==> picture [283 x 409] intentionally omitted <==

Figure 5 : Wee MacGregor Project Location and Geology

The Wee MacGregor tenements can be classed as brownfields exploration as several copper occurrences and historical workings occur within the tenement boundaries. The largest of these is the Rosebud Mine within ML2773, which has recorded historical production of 20,000t of ore at 7.0% Cu. In addition, there are numerous under-explored geochemical and geophysical anomalies defined by previous explorers.

In its March 2017 quarterly report, the Company announced that Argosy Minerals Limited (ASX: AGY) (Argosy) had withdrawn from the Farm-in agreement for its granted mining licences ML2504, ML2773 and ML90098 and that it had entered in to a new Farm-in agreement with Cobalt X Pty Ltd (Cobalt X) and that Cobalt X was in the process of being acquired by Cohiba Minerals Limited (Cohiba). In July 2017 Cohiba announced that it had completed the acquisition of all the shares in Cobalt X and that it would target high grade mineralisation at Wee McGregor.

During the September 16 quarter, the Company executed a Farm-in agreement with Firebird Pty Ltd for the Lady Ethleen project (ML2771).

Mining International finalised its discussions with the native title holder and executed a Cultural Heritage Management Agreement for mining lease ML2771. Mining International also finalised and executed a Cultural Heritage Management Agreement for the Wee MacGregor tenements.

ANNUAL REPORT 2017

DIRECTORS’ REPORT

==> picture [161 x 48] intentionally omitted <==

Your Directors submit the financial report of Cape Lambert Resources Limited ( Cape Lambert or the Company ) and its controlled entities (collectively referred to as the Group ) for the year ended 30 June 2017.

DIRECTORS

In order to comply with the provisions of the Corporations Act 2001 , the directors report as follows:

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

Tony Sage Tim Turner Jason Brewer

Tony Sage	Executive Chairman
Qualifications	B.Com, FCPA, CA, FTIA
Experience	Mr Sage has in excess of 30 years’ experience in the fields of corporate advisory
	services, funds management and capital raising. Mr Sage is based in Western Australia
	and has been involved in the management and financing of listed mining and
	exploration companies for the last 20 years.
	Mr Sage has operated in Argentina, Brazil, Peru, Romania, Russia, Sierra Leone,
	Guinea, Cote d’Ivoire, Congo, South Africa, Indonesia, China and Australia. Mr Sage is
	currently Chairman of ASX-listed Australian companies, Cape Lambert Resources Ltd
	(which was AIM Company of the year in 2008), Cauldron Energy Ltd, European Lithium
	Limited and Fe Ltd. Mr Sage is also a Non-Executive Director of National Stock
	Exchange of Australia (“NSX”) listed International Petroleum Ltd.
	Mr Sage is also the sole owner of A League football club Perth Glory that plays in the
	National competition in Australia.
Directorships of listed	Global Strategic Metals Limited¹ June 2012 to August 2014
companies held within the	Cauldron Energy Limited June 2009 to Present
last 3 years	Fe Limited August 2009 to Present
	International Petroleum Limited² January 2006 to Present
	Kupang Resources Limited³ September 2010 to August 2015
	European Lithium Limited September 2016 to Present
	Caeneus Minerals Limited December 2010 to 18 January 2016
	¹Company was delisted August 2014
	²Listed on the National Stock Exchange of Australia
	³Company was delisted August 2015
Interest in Shares &	Fully Paid Ordinary Shares 72,766,681
Options at the date of this
report

ANNUAL REPORT 2017

DIRECTORS’ REPORT

==> picture [161 x 48] intentionally omitted <==

Tim Turner	Non-Executive Director
Qualifications	B.Bus, FCPA, FTIA, Registered Company Auditor
Experience	As senior partner with Accounting firm, Hewitt Turner & Gelevitis, Mr Turner is the
	partner in charge of audit assurance. From superannuation funds, not for profit
	entities, large proprietary companies, to public companies, Mr Turner is the audit sign
	off partner. He also has in excess of 25 years’ experience in general business
	consultancy and advisory services to the corporate and business community.
	Mr Turner has a Bachelor of Business Degree, is a Registered Company Auditor and
	Approved Superannuation Fund Auditor with ASIC, a Fellow of CPA Australia and a
	Chartered Tax Advisor.
Directorships of listed	International Petroleum Limited1 January 2006 to Present
companies held within the	African Petroleum Corporation Limited² November 2007 to Present
last 3 years	Legacy Iron Ore Limited July 2008 to Present
	¹Company listed on the National Stock Exchange of Australia
	²Company delisted from the National Stock Exchange of Australia December 2015
	to list on the Oslo Stock Exchange
Interest in Shares &	Fully Paid Ordinary Shares 1,523,000
Options at the date of this
report
Jason Brewer	Non-Executive Director
Qualifications	M.Eng (ARSM) Hons
Experience	Mr Brewer has over 20 years' international experience in the natural resources sector
	and in investment banking. He is a mining engineer with a Master's degree in mining
	engineering with honours from the Royal School of Mines, London. He has experience
	in a variety of commodities having worked in underground and opencast mining
	operations in the UK, Australia, Canada and South Africa, In addition he has worked
	for major global investment banks including Dresdner Kleinwort Benson, NM
	Rothschild & Sons (Australia) Limited and Investec Bank (Australia) Limited in London,
	Sydney and Perth where he had particular responsibility for structuring and arranging
	corporate and project funding facilities for mining companies operating in Asia and
	Africa.
Directorships of listed	Black Mountain Resources Limited February 2012 to Present
companies held within the	International Goldfields Limited December 2015 to September 2016
last 3 years	Kupang Resources Limited1 September 2010 to August 2015
	Global Strategic Metals Limited2 December 2013 to August 2014
	1Company was delisted August 2015
	2Company was delisted August 2014
Interest in Shares &	Fully Paid Ordinary Shares None
Options at the date of this
report

ANNUAL REPORT 2017

DIRECTORS’ REPORT

==> picture [161 x 48] intentionally omitted <==

COMPANY SECRETARY

Ms Chapman is a certified practising accountant with over 15 years of experience in the mining industry. She has worked extensively in Australia and the United Kingdom. Ms Chapman has a Bachelor of Accounting from Murdoch University and has been a member of CPA Australia since 2000. Melissa has completed a Graduate Diploma of Corporate Governance with the Governance Institute of Australia, and the company directors course with the Australian Institute of Company Directors.

DIVIDEND AND RETURN OF CAPITAL

No dividend was declared or paid during the current or prior year.

REVIEW OF RESULTS AND OPERATIONS

Principal Activity

The principal activity of the Group during the year was mineral investment, exploration and evaluation.

There were no significant changes in the nature of the principal activity during the year.

Review of Operations

A summary of the most significant transactions during the year ended 30 June 2017 is set out below:

Listing of European Lithium Ltd

During the year, European Lithium Ltd (ASX: EUR) ( Euro Lithium ), a company Cape Lambert owns a 14.53% interest in, listed on the Australian Securities Exchange by way of reverse takeover. Following the listing, Euro Lithium announced a resource upgrade at it’s 100% owned Wolfsberg lithium project which is located in Carinthia, 270 kilometers south of Vienna, Austria.

Execution of new chairman consultancy agreement

On 26 August 2016, the Company entered into a new consultancy agreement with Okewood Pty Ltd (Okewood) to provide the services of Chairman of Cape Lambert.

Unlisted options issued to Gulf Energy

On 15 December 2016, the Company issued 23,500,000 unlisted options at $0.05 each expiring on 31 December 2018 to Gulf Energy International Limited ( Gulf Energy ). These options were issued in accordance with the underwriting agreement executed between the Company and Gulf Energy in January 2016.

Sale of Mayoko Royalty

On 13 February 2017, the Company announced that it had sold its 100% owned royalty, in the form of a deferred consideration deed, in the Mayoko iron ore project for A$1,000,000 cash, subject to the formality of the new owners signing off the transaction.

Cobalt Mining and Tailings Processing Operations - DRC

On 21 February 2017, the Company announced that it has entered into a binding heads of agreement with Congolese company, Paragon Mining SARL to form a 50/50 joint venture to develop the Kipushi Cobalt copper tailings project, the Kasombo copper-cobalt projects and operate the Kipushi processing plant in the Democratic Republic of Congo ( DRC ).

ANNUAL REPORT 2017

DIRECTORS’ REPORT

==> picture [161 x 48] intentionally omitted <==

The Company agreed to pay the following consideration to its DRC based advisors and lawyers, Pelesa and Associates, who facilitated the origination, structuring and management of the proposed acquisition, and the Vendors:

a) US$50,000 payable on execution of the binding heads of agreement;
b) US$100,000 and the issuance of 90,000,000 fully paid ordinary shares in the Company, within five business days of the Company executing the JV Agreement ( Kipushi Consideration Shares );
c) US$150,000 and the issuance of 50,000,000 fully paid ordinary shares in the Company, within five business days of the Company achieving first production at any of the projects; and
d) the Company granting a 1.00% royalty on all of the Company’s attributable revenue from the projects to Pelesa and Associates.

On 12 May 2017, the Company held a general meeting to approve the issue of 90,000,000 shares (being the Kipushi Consideration Shares) upon signing the JV Agreement and proceeded to issue these shares on 7 June 2017.

On 17 May 2017, the Company announced that it had executed the JV Agreement with Paragon. The incorporation of the new joint venture company “Soludo-Lambert Mining SAS” is currently being processed by the Company’s lawyers, which is planned to be completed in September 2017, where after the key licenses and permits will be transferred to it.

Assignment of Kasombo Project to Fe Limited

Refer to subsequent event note for details regarding the Company’s agreement to assign the rights and obligations to the Kasombo Copper-Cobalt Project (Kasombo Project), as announced 13 July 2017.

Kitwe Tailings Project – Zambia

On 22 May 2017, the Company announced that it had executed a binding terms sheet to conditionally acquire 70% of the shares in Zambian entity Australian Mining Company Zambia Limited ( Seller or AMCZL ), which is the holder of exploration licence No 21853-HQ-SEL ( Licence or Kitwe Project ) ( Acquisition ). The Licence covers an historic cobaltcopper rich tailings dump located near Kitwe in Zambia.

The Kitwe Project is located approximately 3km from the outskirts of Kitwe, in the Copperbelt region of Zambia. Kitwe is the second largest city, in terms of size and population, in Zambia and is one of the most developed commercial and industrial areas in the nation, alongside Ndola and Lusaka. The Copperbelt is centred around the towns of Ndola, Kitwe, Chingola, Luanshya and Mufulira – a string of towns on Zambia's northern border with the Democratic Republic of Congo.

Under the terms of the Binding Terms Sheet, Cape Lambert paid US$25,000 on execution of the Terms Sheet. On executing the Terms Sheet, Cape Lambert will have 6 months to decide whether it wishes to exercise an option to expend US$500,000 within 6 months from the date of exercising the option ( Option ).

If Cape Lambert does not exercise the Option, or fails to spend the US$500,000 within the 6 months option period, then the 70% shareholding will be returned to the Seller.

Should Cape Lambert satisfy the requirements of the Option, then the Seller will also be entitled to Milestone Payments as follows:

a) US$50,000 upon AMCZL receiving environmental approvals in the respect of the Project b) US$50,000 upon AMCZL being granted a mining licence in respect of the Project; c) US$50,000 upon AMCZL receiving an export licence.

Upon completion of the Acquisition Cape Lambert will be responsible for managing and funding the development of the Project, with the Seller having a “Free Carry” until a “Decision to Mine” at the Project.

The Acquisition was subject to Cape Lambert completing due diligence on AMCZL and the Project, which it completed by 6 June 2017 (refer ASX announcement dated 6 June 2017) and the execution of a share sale agreement, to be

ANNUAL REPORT 2017

DIRECTORS’ REPORT

==> picture [161 x 48] intentionally omitted <==

completed by 31 May 2017, or as extended by agreement of the parties. The execution of the share sale agreement has been extended as agreed between the parties.

Offtake and Funding Negotiations

On 22 June 2017, the Company announced that it had appointed UK-based strategic advisor Metals Risk Management Limited to assist it with finalising its concentrate offtake and funding arrangements for its copper-cobalt projects. Metals Risk Management Limited is a specialist risk advisory company providing independent guidance on price risk management, including concentrate offtake agreements and sales and commodity linked funding structures.

Timis Mining Corporation Bridging Finance

The Company provided Bridging finance of US$8 million to Timis Mining which was repayable to the Company in October 2015 and incurs interest of 3 month US LIBOR (London interbank offered rate) + 6%. The principal and interest was due to be repaid to Cape Lambert in one payment on 21 October 2015 and could be extended by the parties on mutually agreed terms.

In May 2017, the Company announced that it had commenced legal action against Gerald Metals, Timis Mining Corporation, Frank Timis and others (jointly the Defendants ) in the High Court of Sierra Leone seeking damages and injunctions against the Defendants (refer ASX announcement dated 15 May 2017), with an interim injunction subsequently granted (refer ASX announcement dated 19 May 2017).

Refer to subsequent event note for an update regarding these legal proceedings.

Placement

During the year, the Company completed a placement of 22,333,333 ordinary fully paid shares at $0.03 each to raise $670,000 ( Placement ).

Shares issued

During the year, the Company issued the following:

90,000,000 fully paid ordinary shares issued on 7 June 2017, being the Kipushi Consideration Shares; and
22,333,333 fully paid ordinary shares issued on 28 June 2017 pursuant to the Placement.

Options issued

During the year, the Company issued 23,500,000 unlisted options exercisable at $0.05 each expiring on 31 December 2018, being the options issued to Gulf Energy.

Options lapsed

During the year 7,675,000 unlisted options exercisable at $0.088 each expired on 18 December 2016.

The board intends to continue to follow its strategy of acquiring and investing in undervalued and/or distressed mineral assets and companies ( Projects ) and improve the value of these Projects, through a hands on approach to management, exploration, evaluation and development and retaining a long-term exposure to these Projects through a production royalty and/or equity interest. Cape Lambert aims to deliver shareholder value by adding value to these undeveloped Projects. If Projects are converted into cash, the Company intends to follow a policy of distributing surplus cash to Shareholders.

RESULTS

The Group made a loss after income tax for the year ended 30 June 2017 of $10,945,226 (2016: loss of $30,799,674).

ANNUAL REPORT 2017

DIRECTORS’ REPORT

==> picture [161 x 48] intentionally omitted <==

CHANGES IN STATE OF AFFAIRS

During the financial year there was no significant change in the state of affairs of the Group other than those referred to in the Review of Operations.

EVENTS SUBSEQUENT TO BALANCE DATE

Assignment of Kasombo Project to Fe Limited

On 13 July 2017, the Company announced that it had executed a binding term sheet ( Terms Sheet ) with Fe Limited ( FEL ) whereby Cape Lambert will assign to FEL 100% of the rights and obligations to the Kasombo Copper-Cobalt Project ( Kasombo Project ) ( Kasombo Transaction ) in the DRC. Cape Lambert’s rights to the Kasombo Project were established in the 50/50 joint venture agreement with Paragon (detailed above).

In consideration for Cape Lambert assigning its rights in the Kasombo Project to FEL, FEL has agreed to:

issue 25,000,000 fully paid ordinary shares in FEL at a deemed issue price of $0.0256 (determined as the volume weighted average closing price of FEL shares as quoted on ASX over the last five trading days immediately preceding the execution of the Terms Sheet) to Cape Lambert ( Consideration Shares ); and
payment of $50,000 on execution of the Terms Sheet and payment of $75,000 on the date which is three months after the settlement date of the Kasombo Transaction to Cape Lambert (together, the Cash Reimbursement ); and
issue 10,000,000 fully paid ordinary shares in FEL at a deemed issue price of $0.0256 to the facilitator of the Kasombo Transaction ( Facilitator Shares ).

Settlement of the Kasombo Transaction is conditional upon:

FEL receiving shareholder approval in relation to the Kasombo Transaction including approval to issue:
the Consideration Shares to Cape Lambert (in accordance with Item 7 of Section 611 of the Corporations Act if required); and
the Facilitator Shares;
completion of the Kasombo transfer to the JV Company in accordance with the terms of the JV Agreement;
execution by the relevant parties of a formal agreement to more fully document the Kasombo Transaction; and
receipt of consent from all relevant parties in respect of the Kasombo Transaction,

with each of the above conditions to be completed on or before 30 September 2017 unless otherwise waived or extended by Cape Lambert and FEL.

During the period to settlement of the Kasombo Transaction, Cape Lambert will continue with its obligations under the JV Agreement for conducting the exploration works at the Kasombo Project, with all expenses incurred reimbursed to Cape Lambert by FEL within 7 days of settlement via FEL’s payment of the Cash Reimbursement (subject to adjustment to reflect actual reimbursable expenses).

Update on Proceedings at High Court of Sierra Leone

In relation to the Timis Mining Corporation Bridging Finance, subsequent to the year end, the Company announced that the High Court of Sierra Leone issued a Court Order in relation to the Notice of Motion lodged by the Plaintiff, which ordered the Parties to proceed to Arbitration if desired, refused the 4[th] Defendant’s application for a stay of proceedings and maintained the interlocutory injunction against the 1[st] , 2[nd] and 3[rd] Defendants that prevents liquidating the 4[th] Defendant’s company, pending the hearing and determination of the matter (refer ASX announcement dated 7 July 2017).

The Company is presently in discussions with the Defendants in regards to proceeding to Arbitration.

ANNUAL REPORT 2017

DIRECTORS’ REPORT

==> picture [161 x 48] intentionally omitted <==

There have been no other events subsequent to 30 June 2017 up to the date of this report that would materially affect the operations of the Group or its state of affairs which have not otherwise been disclosed in this financial report.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

The board intends to continue to follow its strategy of acquiring and investing in undervalued assets and adding value through a hands on approach to management, exploration and evaluation.

ENVIRONMENTAL REGULATION AND PERFORMANCE

The Group is aware of its environmental obligations with regards to its exploration activities and ensures that it complies with all regulations when carrying out any exploration work. There have been no significant known breaches of the Groups environmental regulations to which it is subject.

INDEMNIFICATION OF OFFICERS

In accordance with the Company’s constitution, except as may be prohibited by the Corporations Act 2001 , every officer or agent of the Company shall be indemnified out of the property of the Company against any liability incurred by him in his capacity as officer or agent of the Company or any related corporation in respect of any act or omission whatsoever and howsoever occurring or in defending any proceedings, whether civil or criminal.

During the financial year, the Company has paid insurance premiums in respect of directors’ and officers’ liability insurance. The insurance premiums relate to:

Costs and expenses incurred by the relevant officers in defending legal proceedings, whether civil or criminal and whatever their outcome; and
Other liabilities that may arise from their position, with the exception of conduct involving wilful breach of duty or improper use of information to gain a personal advantage.

In accordance with a confidentiality clause under the insurance policy, the amount of the premium paid to insurers has not been disclosed. This is permitted under section 300(9) of the Corporations Act 2001 .

INDEMNIFICATION OF AUDITORS

To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to indemnify Ernst & Young during or since the financial year.

DIRECTORS’ MEETINGS

The following table sets out the number of directors’ meetings (including meetings of committees of directors) held during the financial year and the number of meetings attended by each director (while they were a director or committee member).

	Board of Directors	Board of Directors	Audit	Committee	Remuneration	Committee
Directors	Eligible to	Attended	Eligible to	Attended	Eligible to	Attended
	Attend		Attend		Attend
Tony Sage	8	8	-	-	-	-
Tim Turner	8	8	1	1	1	1
Jason Brewer	8	8	1	1	1	1

REMUNERATION REPORT (AUDITED)

This remuneration report for the year ended 30 June 2017 outlines the remuneration arrangements of the Company and the Group in accordance with the requirements of the Corporations Act 2001 and its regulations. The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001.

ANNUAL REPORT 2017

DIRECTORS’ REPORT

==> picture [161 x 48] intentionally omitted <==

Remuneration Policy for Directors and Other Key Management Personnel

The remuneration report details the remuneration arrangements for key management personnel ( KMP ) who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Group, directly or indirectly, including any director (whether executive or otherwise) of the Company.

Details of Directors and Other Key Management Personnel

Directors

T Sage – Executive Chairman T Turner – Non-Executive Director

J Brewer - Non-Executive Director

Other Key Management Personnel

J Hamilton – Manager Project Development

M Chapman – Chief Financial Officer and Company Secretary

Principles used to determine the nature and amount of remuneration

The remuneration policy of the Company has been designed to align director objectives with shareholder and business objectives by providing a fixed remuneration component which is assessed on an annual basis in line with market rates. The Board of the Company believes the remuneration policy to be appropriate and effective in its ability to attract and retain appropriately skilled directors to run and manage the Company.

The Board’s policy for determining the nature and amount of remuneration for Board members and other key management personnel is as follows:

The remuneration policy, setting the terms and conditions for the executive directors and other senior staff members, was developed by the Executive Chairman and approved by the Board after benchmarking against the market.

All executives receive a base salary (which is based on factors such as length of service and experience).

The Group is an exploration entity, and therefore speculative in terms of performance. Consistent with attracting and retaining talented individuals, directors and senior executives are paid market rates associated with individuals in similar positions within the same industry. The Board endorses the use of incentive and bonus payments for directors and senior executives.

Options and performance incentives may also be issued as the Group invests in projects which are subsequently successfully monetised, and key performance indicators such as profits and growth can then be used as measurements for assessing Board performance.

Shares awarded to directors and executives are valued as the difference between the market price of those shares and the amount paid by the director or executive. Options are valued using the Black-Scholes option pricing model.

The Board’s policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment and responsibilities. The Executive Chairman determines payments to the non-executive directors and reviews their remuneration annually, based on market practice, duties and accountability. The maximum aggregate amount of fees that can be paid to non-executive directors as approved at the 2009 Annual General Meeting is $750,000. Any modifications to this amount is subject to approval by shareholders at the Company’s Annual General Meeting. To align directors’ interests with shareholder interests, the directors are encouraged to hold shares in the Company.

ANNUAL REPORT 2017

DIRECTORS’ REPORT

==> picture [161 x 48] intentionally omitted <==

Company Performance, Shareholder Wealth and Directors’ and Executives’ Remuneration

The remuneration policy aims to increase goal congruence between shareholders and directors via the issue of options to directors to encourage the alignment of personal and shareholder interests. During the financial year, the Company’s share price traded between a low of $0.012 and a high of $0.042. The price volatility is a concern to the Board but is not considered abnormal for medium sized exploration entities and in the context of volatile global equity markets. In order to keep all investors fully informed and minimise market fluctuations, the Board is determined to maintain promotional activity amongst the investment community so as to increase awareness of the Company and to stabilise the Company’s share price in line with a consistent and stable financial position and base value of assets.

Closing Share Price 30 June Profit/(loss) for the year attributable to members of Cape Lambert Resources Limited Basic EPS	2013 2014 2015 2016 2017
	$0.10 $0.077 $0.026 $0.019 $0.029 ($143,911,775) ($24,152,240) ($178,909,136) ($30,470,607) ($10,781,531) ($0.2093) ($0.036) ($0.2852) ($0.0469) ($0.0148)

Details of Remuneration

Remuneration packages contain the key elements incorporated in the Company’s Remuneration Policy as detailed above. The following table discloses the remuneration of the directors and key management personnel of the Company:

% of Total Remuneration

	Short
	Term		Long	Share
	Benefits	Post-	term	Based			At Risk	At Risk
	Cash	employ	benefit	Payments			Short	Long Term
	Salary &	ment	Leave	– Equity			Term	Incentive
	Fees	benefits		Options5	Total	Fixed	Incentive	(Options)
	$	$		$	$	%	%	%
30 June 2017
Directors
T Sage	700,000	-	-	(52,906)	647,094	100%	0%	0%
T Turner	60,000	-	-	(21,163)	38,837	100%	0%	0%
J Brewer	48,000	-	-	(21,163)	26,837	100%	0%	0%
Other Key Management
Personnel
J Hamilton	185,250	-	-	(20,898)	164,352	100%	0%	0%
M Chapman3	168,783	23,275	20,336	(17,415)	194,979	100%	0%	0%
Total	1,162,033	23,275	20,336	(133,545)	1,072,099	100%	0%	0%
30 June 2016
Directors
T Sage	700,000	-	-	30,232	730,232	96%	0%	4%
T Turner	60,000	-	-	12,093	72,093	83%	0%	17%
R Levin1	20,000	-	-	19,560	39,560	51%	0%	49%
J Brewer	48,000	-	-	12,093	60,093	80%	0%	20%
Other Key Management
Personnel
J Hamilton	167,250	-	-	14,303	181,553	92%	0%	8%
T Boucher2	52,800	-	-	(6,595)	46,205	100%	0%	0%
M Chapman4	221,644	23,750	19,230	11,919	276,543	96%	0%	4%
Total	1,269,694	23,750	19,230	93,605	1,406,279	93%	0%	7%

ANNUAL REPORT 2017

DIRECTORS’ REPORT

==> picture [161 x 48] intentionally omitted <==

For executives who were appointed or resigned during the year, the remuneration reflected above is that from date of appointment or to date of resignation.

Notes

1 Mr R Levin retired effective 26 November 2015.

2 The consultancy contract between the Company and Mr T Boucher was terminated 30 September 2015.

3 A portion of Ms M Chapman’s salary was recharged to related entity European Lithium Limited and unrelated entities MCS Services Limited and Latin Resources Limited.

4 A portion of Ms M Chapman’s salary was recharged to unrelated entities Latin Resources Limited and MCS Services Limited during the year for accounting, company secretarial and directorship fees. Long term leave balance represents accrued annual leave.

5 Share options issued to directors and key management personnel during the year ended 30 June 2015 were issued for no consideration with vesting subject to the following performance hurdles being met:

Divestment (wholly or partially) of Marampa (whether by joint venture, sale or IPO); OR
Sale of Mayoko royalty; OR
Sale of any major asset by an associate company in the portfolio of companies managed by CFE.

The share options issued were approved by the Company’s shareholders at the Annual General Meeting of the Company’s shareholders held on 27 November 2014. The director share options were valued using the Black Scholes option valuation method at $0.0457 at the grant date of 27 November 2014. The key management personnel share options were valued using the Black Scholes option valuation method at $0.039 on the date of issue on 27 November 2014. The amount payable upon exercise of each share option is $0.088 and the share options expired on 18 December 2016 without vesting. The share based payment amount detailed in this table represents the portion of the total value of options recognised as a share based payment expense in the relevant year or the amount reversed as a result of the options not vesting.

Additional disclosures relating to options and shares

Options awarded, vested and lapsed

There were no share options granted to executives as remuneration during the years ended 30 June 2017 and 30 June 2016.

The table below discloses the number of those prior year granted options that vested or lapsed during the current year ended 30 June 2017. Shares options do not carry any voting or dividend rights and can be exercised once the vesting conditions have been met until their expiry date.

	Year	Options	Award date	Fair value	Vesting	Exercise	Expiry date	No. lapsed
	granted	awarded		per	date	price		during the
		No.		options at				current year
				award
				date
Directors
T Sage	2015	1,500,000	27 Nov 2014	$0.0457	Note 1	$0.088	18 Dec 2016	(1,500,000)
T Turner	2015	600,000	27 Nov 2014	$0.0457	Note 1	$0.088	18 Dec 2016	(600,000)
R Levin	2015	600,000	27 Nov 2014	$0.0457	Note 1	$0.088	18 Dec 2016	(600,000)
J Brewer	2015	600,000	27 Nov 2014	$0.0457	Note 1	$0.088	18 Dec 2016	(600,000)
Other Key Management		Personnel
J Hamilton	2015	600,000	27 Nov 2014	$0.039	Note 1	$0.088	18 Dec 2016	(600,000)
M Chapman	2015	500,000	27 Nov 2014	$0.039	Note 1	$0.088	18 Dec 2016	(500,000)

Note 1

Vesting conditions:

The share options issued to directors and key management personnel during the year ended 30 June 2015 were issued for no consideration with vesting subject to the following performance hurdles being met:

Divestment (wholly or partially) of Marampa (whether by joint venture, sale or IPO); or

ANNUAL REPORT 2017

DIRECTORS’ REPORT

==> picture [161 x 48] intentionally omitted <==

Sale of Mayoko royalty; or
Sale of any major asset by an associate company in the portfolio of companies managed by CFE.

The share options issued were approved by the Company’s shareholders at the Annual General Meeting of the Company’s shareholders held on 27 November 2014.

Option holdings of directors and key management personnel

			Lapsed	Exercised	Other			Vested and
	Balance	Granted as	during the	during the			Balance	exercisable
	1-Jul-16	remuneration	year	year			30-Jun-17	30-Jun-17
	No.	No.	No.	No.	No.		No.	No.
Directors
T Sage	1,500,000	-	(1,500,000)	-		-	-	-
T Turner	600,000	-	(600,000)	-		-	-	-
J Brewer	600,000	-	(600,000)	-		-	-	-
Other Key Management Personnel
J Hamilton	600,000	-	(600,000)	-		-	-	-
M Chapman	500,000	-	(500,000)	-		-	-	-
	3,800,000	-	(3,800,000)	-		-	-	-

There were no shares issued on the exercise of options during the year.

Share holdings of directors and key management personnel

Details of fully paid ordinary shares of Cape Lambert Resources Limited held by directors and key management personnel are set out below:

		Share based	Received on				Off
	Balance	payment	exercise of	On market	On market		market	Balance
	1-Jul-16	received	options	purchases	sales		purchase	30-Jun-17
	No.	No.	No.	No.	No.		No.	No.
Directors
T Sage	72,766,681	-	-	-		-	5,000,000	77,766,681
T Turner	1,523,000	-	-	-		-	-	1,523,000
J Brewer	-	-	-	-		-	-	-
Other Key Management Personnel
J Hamilton	-	-	-	-		-	-	-
M Chapman	900,000	-	-	-		-	-	900,000
	75,189,681	-	-	-		-	5,000,000	80,189,681

Other transactions with director related entities

Director related entities: Perth Fashion Festival Pty Ltd Perth Fashion Festival Pty Ltd Perth Glory Football Club Perth Glory Football Club Okewood Pty Ltd Okewood Pty Ltd	Sales to related parties Purchases from related parties Consulting feespaid Amounts owed by related parties Amounts owed to related parties
	2017 - 7,758 - - - 2016 - 7,887 - - - 2017 - 56,700 - - - 2016 - 54,473 - 2,587 - 2017 - 568,020 700,000 4,054 - 2016 - 575,470 700,000 - -

ANNUAL REPORT 2017

DIRECTORS’ REPORT

==> picture [161 x 48] intentionally omitted <==

Perth Fashion Festival Pty Ltd, Okewood Pty Ltd and Okewood Pty Ltd trading as Perth Glory Football Club are entities controlled by Tony Sage. During the year ended 30 June 2017 a total amount of $56,700 (30 June 2016: $54,473) was paid to Okewood Pty Ltd for a corporate box and events of the Perth Glory Football Club. During the year ended 30 June 2017 a total amount of $7,758 (30 June 2016: $7,887) was paid to Perth Fashion Festival Pty Ltd for events held by the Perth Fashion Festival.

Office lease agreement with Okewood Pty Ltd

On 1 April 2012 the Company entered into a lease agreement with Okewood Pty Ltd, a company owned by Tony Sage, for the lease of 32 Harrogate Street, West Leederville WA 6007, as varied by a deed of variation dated 22 June 2015 ( Lease Agreement ). The term of the Lease Agreement is 1 April 2012 to 31 March 2020 with an option to extend. The lease is based on an area of 1,148m² at a rent of $459,200 (excluding GST) per annum, subject to an annual CPI increase, with variable outgoings and parking charged separately at market rates. The Company has entered into a series of sublease agreements whereby the Company is entitled to receive rental income. The above minimum lease payments have not been adjusted for any sub-lease rental income payments.

Service Agreements

Executive Director

On 26 September 2013, the Company entered into a consultancy contract with the Executive Chairman, Tony Sage for a period of 3 years from 28 August 2013. Pursuant to the terms of the contract, Mr Sage is paid an annual fee of $700,000 per annum (plus GST) for performing the role as Executive Chairman of the Company with the specific responsibility for all negotiations and strategic networking to facilitate the acquisition and disposal of assets of the Company. Under that contract, Mr Sage is not entitled to any set long or short term bonus or incentive. For the avoidance of doubt, there is no fixed formula under which any incentives or bonuses are payable by the Company to Mr Sage. During the term of the contact, the Remuneration Committee may consider incentive plans and bonus structures that will be focussed on the Executive Chairman achieving performance hurdles based on a material increase in the net market capitalisation of the Company and returns to shareholders of the Company, such as dividends. The contract may be terminated by either party, without cause, providing 3 months’ notice (or payment in lieu).

Upon expiry of the Executive Chairman contract on 28 August 2016, the Company has entered into a new 3 year consultancy contract. The key terms of the new contract are consistent with those of the existing one with the exception of the inclusion of an incentive structure of 10-20%, subject to Remuneration Committee approval, which is dependent on the achievement of all key performance milestones detailed in the consultancy contract.

Non-Executive Directors

The engagement conditions of non-executive director Tim Turner were approved by the Board on 30 November 2007. A fee of $60,000 per annum plus GST was subsequently approved by the Board on 28 August 2009.

The engagement conditions of non-executive director Jason Brewer were approved by the Board on commencement of engagement on 31 December 2013 with a fee of $48,000 plus GST per annum.

Other Key Management Personnel

The engagement conditions of contractor J Hamilton were approved by the Board on commencement of his engagement in April 2006. A subsequent review was undertaken and a fee of $1,500 per day plus GST was approved.

M Chapman was appointed as Company Secretary effective 31 January 2014 and a total remuneration package of $250,000 plus statutory superannuation per annum was agreed. A portion of Ms M Chapman’s salary has been recharged to related party European Lithium Limited and unrelated entities Latin Resources Limited and MCS Services Limited during the year.

ANNUAL REPORT 2017

DIRECTORS’ REPORT

==> picture [161 x 48] intentionally omitted <==

2016 Annual General Meeting

The Company received 66.19% of ‘yes’ votes and 33.97% ‘no’ votes on its remuneration report for the year ending 30 June 2017.

In accordance with the Corporations Act, if at least 25% of the votes cast are voted against adoption of the remuneration report at two consecutive annual general meetings, the Company will be required to put to shareholders a resolution proposing the calling of a general meeting to consider the appointment of directors of the Company ( Spill Resolution ) at the second annual general meeting. If more than 50% of the votes cast are in favour of the Spill Resolution, the Company must convene a further general meeting (Spill Meeting ) within 90 days of the second annual general meeting.

At the Company’s 2015 and 2016 Annual General Meeting, the votes cast against the remuneration report considered at the Annual General Meeting were more than 25%, constituting a first and second strike. Consequently, at the 2016 Annual General Meeting the Company put a Spill Resolution to shareholders. At the Company’s 2016 AGM, the Company received 65.07% ‘no’ votes against the Spill Resolution therefore a Spill Meeting was not required to be convened.

Proceedings on Behalf of the Company

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

Non Audit Services

The Board of Directors is satisfied that the provision of any non-audit services by the Company’s auditors is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 because:

All non-audit services are reviewed and approved by the Board of Directors prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and
The nature of the services provided is reviewed to ensure that they do not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.

During the current year $30,268 was paid or payable (2016: $59,123) to the auditor or its related practices for any nonaudit services.

Share Options

Share Options Granted to Directors and Employees and Consultants

During the financial year, there were nil share options granted to directors, employees and consultants (30 June 2016: Nil). A total of 3,800,000 (30 June 2016: 1,750,000) of such options were forfeited or lapsed during the current year and nil (30 June 2016: nil) were forfeited or lapsed subsequent to balance date.

Share Options on Issue at Year End

Unissued ordinary shares of Cape Lambert under option at the date of this report are as follows:

Date optionsgranted	Expiry date	Issueprice of shares	Number under option
14 December 2016	31 December 2018	$0.05	23,500,000

No option holder has any right under the options to participate in any other share issue of the Company or any other entity. No shares were issued during the current year as a result of the exercise of options.

ANNUAL REPORT 2017

DIRECTORS’ REPORT

==> picture [161 x 48] intentionally omitted <==

Since 30 June 2017, nil share options have been exercised for total consideration of nil. No amounts are unpaid on any of the shares.

AUDITOR’S INDEPENDENCE DECLARATION

The auditor’s independence declaration under section 307C of the Corporations Act 2001 is set out on page 21 for the year ended 30 June 2017.

This report is signed in accordance with a resolution of the Board of Directors.

Tony Sage Director

Dated this 30 September 2017

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

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

==> picture [61 x 72] intentionally omitted <==

Auditor’s Independence Declaration to the Directors of Cape Lambert Resources Limited

As lead auditor for the audit of Cape Lambert Resources Limited for the financial year ended 30 June 2017, I declare to the best of my knowledge and belief, there have been:

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

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

This declaration is in respect of Cape Lambert Resources Limited and the entities it controlled during the financial year.

==> picture [151 x 51] intentionally omitted <==

Ernst & Young

==> picture [132 x 46] intentionally omitted <==

G H Meyerowitz Partner 30 September 2017

GHM:JT:CAPELAMBERT:010

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

ANNUAL REPORT 2017

==> picture [160 x 48] intentionally omitted <==

CORPORATE GOVERNANCE STATEMENT

In March 2014, the ASX Corporate Governance Council released a third edition of the ASX Corporate Governance Council’s Principles and Recommendations ( ASX Principles ).

The Company’s Corporate Governance Statement for the year ended 30 June 2017 (which reports against these ASX Principles) may be accessed from the Company’s website at www.capelam.com.au.

ANNUAL REPORT 2017

==> picture [160 x 48] intentionally omitted <==

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2017

Note Revenue 3(a) Other income 3(b) Share based payments Directors remuneration and employee benefits expenses Consulting and professional services Occupancy expenses 3(d) Compliance and regulatory expenses Travel and accommodation Depreciation and amortisation expense 3(c) Gain on fair value of financial assets through profit and loss 3(f) Finance expenses Other expenses 3(e) Loss on sale of shares Impairment on fixed assets 10 Impairment of receivable Write off office security bond Impairment of loans 7 Impairment of VAT receivable Reversal/(Impairment) of interest receivable Impairment of capitalised exploration 12 De-recognition of capitalised exploration 12 Reversal/(Impairment) of investment in associate 13(e) Reversal/(Impairment) of investment Share of net losses of associates accounted for using the equity method 13(b) Gain on dilution of interest in associate Profit/(loss) before income tax Income tax (expense)/benefit 4 Net loss for the year Other comprehensive income/(expenditure) net of tax Items that may be reclassified subsequently to profit and loss Foreign exchange differences arising on translation of foreign operations Share of reserves of associates accounted for using the equity method Fair value gain/(loss) on available for sale financial assets Total comprehensive loss for the year Loss for the year attributable to: Members of Cape Lambert Resources Ltd Non-controlling interests Total comprehensive loss for the year attributable to: Members of Cape Lambert Resources Ltd Non-controlling interests Loss per share attributable to members of Cape Lambert Resources Ltd: Basic loss per share (cents per share) 19 Diluted loss per share (cents per share) 19	2017 2016 $ $
	678,328 879,205 659,974 977,908 266,775 (166,587) (1,847,419) (1,510,483) (1,232,790) (934,258) (1,096,276) (1,266,875) (212,982) (190,287) (250,203) (203,119) (257,991) (615,856) 153,391 324,621 (2,050) - (750,730) (704,409) - (20,865) (35,932) (742,378) (354,317) (174,386) (20,573) - (159,250) (19,184) - (39,253) (107,881) 71,971 - (3,295,324) (2,837,518) (19,116,791) 2,652,243 (3,427,549) (30,000) - (2,555,741) (625,774) 1,623,455 -
	(5,717,487) (30,799,674) (5,227,739) -
	(10,945,226) (30,799,674)
	193,399 914,783 131,460 164,843 (1,750) 1,750
	(10,622,117) (29,718,299)
	(10,781,531) (30,470,607) (163,695) (329,067)
	(10,945,226) (30,799,674)
	(10,458,422) (29,389,232) (163,695) (329,067)
	(10,622,117) (29,718,299)
	(1.48) (4.69) (1.48) (4.69)

The above consolidated Statement of Comprehensive Income should be read in

conjunction with the accompanying notes.

ANNUAL REPORT 2017

==> picture [160 x 48] intentionally omitted <==

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2017

Note CURRENT ASSETS Cash and cash equivalents 26(a) Restricted cash and cash equivalents 9 Trade and other receivables 7 TOTAL CURRENT ASSETS NON-CURRENT ASSETS Other financial assets 8 Investments accounted for using equity method 13 Restricted cash 9 Plant and equipment 10 Deferred expenses 11 Exploration and evaluation expenditure 12 TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables 14 Application funds 9(b) Provisions 15 Provision for income tax 4 TOTAL CURRENT LIABILITIES NON CURRENT LIABILITIES Provisions 15 TOTAL NON CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS/(NET LIABILITIES) EQUITY Issued capital 16 Reserves 17 Accumulated losses 18 Parent interests Non-controlling interest TOTAL EQUITY/(DEFICIENCY)	2017 2016 $ $
	1,110,287 5,614,871 104,617 1,001,470 788,077 1,264,580
	2,002,981 7,880,921
	1,208,188 1,519,276 3,417,907 1,371,805 81,833 81,833 131,033 389,333 2,715,801 - 33,551 -
	7,588,313 3,362,247

	9,591,294 11,243,168
	6,608,125 5,278,247 60,000 968,131 334,841 558,916 5,227,739 -
	12,230,705 6,805,294
	- 4,454
	- 4,454

	12,230,705 6,809,748

	(2,639,411) 4,433,420
	196,771,578 193,581,578 23,320,641 23,054,799 (222,948,696) (212,167,165)
	(2,856,477) 4,469,212
	217,066 (35,792)
	(2,639,411) 4,433,420

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

ANNUAL REPORT 2017

==> picture [160 x 48] intentionally omitted <==

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2017

Note Balance at 1 July 2016 Loss for the year Other comprehensive income Share of reserves of associates 17 Forex (gain) / loss on translation of foreign operations 17 Fair value gain on available for sale financial assets Total comprehensive income/(loss) for the year Transactions with owners in their capacity as owners Placement of shares (net of costs) 16 Share based payments expense Increase in non-controlling interest Transactions with equity holders in their capacity as owners Balance at 30 June 2017	Issued Capital Accumulated Losses Share Based Payment Reserve Available for Sale Reserve Foreign Currency Translation Reserve Equity Reserve Parent Equity Interest Total Non- controllin g interest Total $ $ $ $ $ $ $ $ $
	193,581,578 (212,167,165) 2,434,680 1,750 22,007,507 (1,389,138) 4,469,212 (35,792) 4,433,420 - (10,781,531) - - - - (10,781,531) (163,695) (10,945,226) - - - - 131,460 - 131,460 - 131,460 - - - - 193,399 - 193,399 - 193,399 - - - (1,750) - - (1,750) - (1,750)
	- (10,781,531) - (1,750) 324,859 - (10,458,422) (163,695) (10,622,117)
	3,190,000 - - - - - 3,190,000 - 3,190,000 - - (266,775) - - - (266,775) - (266,775) - - - - - 209,508 209,508 416,553 626,061
	3,190,000 - (266,775) - - 209,508 3,132,733 416,553 3,549,286

	196,771,578 (222,948,696) 2,167,905 - 22,332,366 (1,179,630) (2,856,477) 217,066 (2,639,411)

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

ANNUAL REPORT 2017

==> picture [160 x 48] intentionally omitted <==

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2017

Note Balance at 1 July 2015 Loss for the year Other comprehensive income Foreign exchange differences arising on translation of foreign operations 17 Share of associate’s reserves 17 Fair value gain on available for sale financial assets Total comprehensive income/(loss) for the year Transactions with owners in their capacity as owners Placement of shares (net of costs) 16 Share based payments expense Increase in non-controlling interest Transactions with equity holders in their capacity as owners Balance at 30 June 2016	Issued Capital Accumulated Losses Share Based Payment Reserve Available for Sale Reserve Foreign Currency Translation Reserve Equity Reserve Parent Equity Interest Total Non- controlling interest Total $ $ $ $ $ $ $ $ $
	189,786,328 (181,696,558) 2,079,450 - 21,116,525 (1,603,919) 29,681,826 76,596 29,758,422 - (30,470,607) - - - - (30,470,607) (329,067) (30,799,674) - - - - 914,783 - 914,783 - 914,783 - - 188,643 - (23,801) - 164,842 - 164,842 - - - 1,750 - - 1,750 - 1,750
	- (30,470,607) 188,643 1,750 890,982 - (29,389,232) (329,067) (29,718,299)
	3,795,250 - - - - - 3,795,250 - 3,795,250 - - 166,587 - - - 166,587 - 166,587 - - - - - 214,781 214,781 216,679 431,460
	3,795,250 - 166,587 - - 214,781 4,176,618 216,679 4,393,297

	193,581,578 (212,167,165) 2,434,680 1,750 22,007,507 (1,389,138) 4,469,212 (35,792) 4,433,420

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

ANNUAL REPORT 2017

==> picture [160 x 48] intentionally omitted <==

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2017

Note CASHFLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees (inclusive of GST) Interest received Net cash used in operating activities 26(b) CASHFLOWS FROM INVESTING ACTIVITIES Payment for acquiring interests in associated entities 13(b) Payments for other investments Payments for exploration and evaluation Deferred expenses Proceeds on sale of exploration project Purchase of property, plant and equipment 10 Receipt/(payment) in respect of convertible loan notes 7(b) Loans to other entities 7(b) Repayment of loans received 7(b) Purchase of equity investments in listed entities 8 Proceeds from sale of equity investments Proceeds from sale of property, plant and equipment Net cash from/(used in) investing activities CASHFLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares, net of costs 16 Proceeds from share issue of subsidiary Proceeds from issuing loan note Net cash from/(used in) financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of period Foreign exchange gain Cash and cash equivalents at end of period 26(a)	2017 2016 $ $
	(3,263,674) (4,719,529) 34,378 98,269
	(3,229,296) (4,621,260)
	(194,687) (14,089) (36,437) - (2,904,040) (4,644,768) (98,233) - - 1,003,821 - 457 - 156,750 - (50,000) - 200,000 (100,000) (30,000) 683,067 201,270 42,540 139,773
	(2,607,790) (3,036,786)
	670,000 3,795,250 662,500 - - 431,460
	1,332,500 4,226,710
	(4,504,586) (3,431,336) 5,614,871 9,033,714 2 12,493
	1,110,287 5,614,871

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

ANNUAL REPORT 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

==> picture [160 x 48] intentionally omitted <==

1. CORPORATE INFORMATION

The consolidated financial statements of Cape Lambert Resources Limited and its subsidiaries (collectively, the Group ) for the year ended 30 June 2017 were authorised for issue in accordance with a resolution of the directors on 30 September 2017.

Cape Lambert Resources Limited (the Company or the Parent ) is a for profit company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Stock Exchange.

The nature and operations and principal activities of the Group are described in the directors’ report.

Information of the Group’s structure is provided in Note 23. Information on other related party relationships is provided in Note 25.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation

The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards including Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001 . The financial report has been prepared on the basis of historical cost, except for the revaluation of certain financial instruments. Cost is based on the fair values of the consideration given in exchange for assets.

The financial report is presented in Australian dollars.

The Group is a for-profit public listed company, incorporated and domiciled in Australia.

(b) Going concern

The consolidated financial statements of Cape Lambert have been prepared on a going concern basis which contemplates the continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.

At 30 June 2017 the Group had cash and cash equivalents of $1,110,287 (30 June 2016: $5,614,871), a net current liability position of $10,227,724 (30 June 2016: net current assets of $1,075,627) and net deficiency of assets of $2,639,411 (30 June 2016: net assets of $4,433,420).

The ability of the Group to fulfil its proposed activities in the next 12 months will depend on the realisation of certain of the Group’s assets, the ability to secure other sources of funding, including share placements, offtake financing arrangements, and the successful outcome of the ongoing settlement negotiations with the Australian Taxation Office as disclosed in Note 4 to the financial statements. At the date of this report, the directors are satisfied there are reasonable grounds to believe that the Group will be able to continue its planned operations and the Group will be able to meet its obligations as and when they fall due because the directors are confident that the Group will be able to realise certain of its assets and/or seek alternative sources of funding as outlined above.

Should the Group not achieve the matters set out above, there is uncertainty whether the Group would continue as a going concern and therefore whether it would realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report. The consolidated financial statements do not include any adjustment relating to the recoverability or classification of recorded asset amounts or to the amounts or classification of liabilities that might be necessary should the Group not be able to continue as a going concern.

ANNUAL REPORT 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

==> picture [160 x 48] intentionally omitted <==

(c) Compliance with IFRS

The financial report complies with Australian Accounting Standards and International Financial Reporting Standards ( IFRS ) as issued by the International Accounting Standards Board ( IASB ).

Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.

(d) Changes in accounting policy, disclosures, standards and interpretations

Changes in accounting policies on initial application of Accounting Standards

The accounting policies adopted are consistent with those of the previous financial year. From 1 July 2016, the Group has adopted all the standards and interpretations mandatory for annual periods effective from 1 July 2016. Adoption of these standards and interpretations did not have any effect on the statements of financial position or performance of the Group. The Group has not elected to early adopt any new standards or amendments.

The following relevant standards and interpretations have been applied for the first time for the year ended 30 June 2017:

Reference	Title
AASB 2014-3	Amendments to Australian Accounting Standards – Accounting for Acquisitions of Interests in Joint Operations The amendments require an entity acquiring an interest in a joint operation, in which the activity of the joint operation constitutes a business, to apply, to the extent of its share, all of the principles in AASB 3_Business Combinations_and other Australian Accounting Standards that do not conflict with the requirements of AASB 11_Joint Arrangements_.
AASB 2014-4	Amendments to Australian Accounting Standards – Clarification of Acceptable Methods of Depreciation and Amortisation The amendments clarify the principle in AASB 116_Property, Plant and Equipment_and AASB 138 _Intangible Assets_that revenue reflects a pattern of economic benefits that are generated from operating a business (of which the asset is part) rather than the economic benefits that are consumed through use of the asset. As a result, the ratio of revenue generated to total revenue expected to be generated cannot be used to depreciate property, plant and equipment and may only be used in very limited circumstances to amortise intangible assets.
AASB 2015-1	Amendments to Australian Accounting Standards – Annual Improvements to Australian Accounting Standards 2012–2014 Cycle The amendments clarify certain requirements in: ►AASB 5 Non-current Assets Held for Sale and Discontinued Operations – Changes in methods of disposal ►AASB 7 Financial Instruments: Disclosures - servicing contracts; applicability of the amendments to AASB 7 to condensed interim financial statements ►AASB 119 Employee Benefits - regional market issue regarding discount rate ►AASB 134 Interim Financial Reporting - disclosure of information ‘elsewhere in the interim financial report’
AASB 2015-2	Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 101 This Standard amends AASB 101_Presentation of Financial Statements_to clarify existing presentation and disclosure requirements and to ensure entities are able to use judgement when applying the

ANNUAL REPORT 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

==> picture [160 x 48] intentionally omitted <==

Reference	Title
	Standard in determining what information to disclose, where and in what order information is presented in their financial statements. For example, the amendments make clear that materiality applies to the whole of financial statements and that the inclusion of immaterial information can inhibit the usefulness of financial disclosures.

New accounting standards and interpretations issued but not yet effective

The following standards and interpretations have been issued by the AASB but are not yet effective for the period ended 30 June 2017:

Reference	Title	Summary	Application	Application
			date of	date for CFE*
			standard*
AASB 2016-1	Amendments to Australian Accounting Standards – Recognition of Deferred Tax Assets for Unrealised Losses	This Standard makes amendments to AASB 112 _Income Taxes_to clarify the accounting for deferred tax assets for unrealised losses on debt instruments measured at fair value.	1 January 2017	1 July 2017
AASB 2016-2	Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 107	The amendments to AASB 107_Statement of Cash_ _Flows_are part of the IASB’s Disclosure Initiative and help users of financial statements better understand changes in an entity’s debt. The amendments require entities to provide disclosures about changes in their liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes (such as foreign exchange gains or losses).	1 January 2017	1 July 2017
AASB 2017-2	Amendments to Australian Accounting Standards – Further Annual Improvements 2014-2016 Cycle	This Standard clarifies the scope of AASB 12_Disclosure_ of Interests in Other Entities_by specifying that the disclosure requirements apply to an entity’s interests in other entities that are classified as held for sale or discontinued operations in accordance with AASB 5 _Non-current Assets Held for Sale and Discontinued Operations.	1 January 2017	1 July 2017
AASB 9	Financial Instruments	AASB 9 replaces AASB 139_Financial Instruments: _Recognition and Measurement. Except for certain trade receivables, an entity initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Debt instruments are subsequently measured at fair value through profit or loss (FVTPL), amortised cost, or fair value through other comprehensive income (FVOCI), on the basis of their contractual cash flows and the business model under which the debt instruments are held.	1 January 2018	1 July 2018

ANNUAL REPORT 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

==> picture [160 x 48] intentionally omitted <==

Reference	Title	Summary	Application date of standard*	Application date for CFE*
		There is a fair value option (FVO) that allows financial assets on initial recognition to be designated as FVTPL if that eliminates or significantly reduces an accounting mismatch. Equity instruments are generally measured at FVTPL. However, entities have an irrevocable option on an instrument-by-instrument basis to present changes in the fair value of non-trading instruments in other comprehensive income (OCI) without subsequent reclassification to profit or loss. For financial liabilities designated as FVTPL using the FVO, the amount of change in the fair value of such financial liabilities that is attributable to changes in credit risk must be presented in OCI. The remainder of the change in fair value is presented in profit or loss, unless presentation in OCI of the fair value change in respect of the liability’s credit risk would create or enlarge an accounting mismatch in profit or loss. All other AASB 139 classification and measurement requirements for financial liabilities have been carried forward into AASB 9, including the embedded derivative separation rules and the criteria for using the FVO. The incurred credit loss model in AASB 139 has been replaced with an expected credit loss model in AASB 9. The requirements for hedge accounting have been amended to more closely align hedge accounting with risk management, establish a more principle-based approach to hedge accounting and address inconsistencies in the hedge accounting model in AASB 139.
AASB 15	Revenue from Contracts with Customers	The AASB has issued a new standard for the recognition of revenue. This will replace AASB 118 which covers revenue arising from the sale of goods and the rendering of services and AASB 111 which covers construction contracts. The new standard is based on the principle that revenue is recognised when control of a good or service transfers to a customer. The standard permits either a full retrospective or a modified retrospective approach for the adoption.	1 January 2018	1 July 2018

ANNUAL REPORT 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

==> picture [160 x 48] intentionally omitted <==

Reference	Title	Summary	Application	Application date for CFE*
			date of
			standard*
		The Group is in the process of assessing the impact of the new standard.
AASB 16 (issued February 2016)	Leases	AASB 16 eliminates the operating and finance lease classifications for lessees currently accounted for under AASB 117 Leases. It instead requires an entity to bring most leases into its statement of financial position in a similar way to how existing finance leases are treated under AASB 117. An entity will be required to recognise a lease liability and a right of use asset in its statement of financial position for most leases. There are some optional exemptions for leases with a period of 12 months or less and for low value leases. Lessor accounting remains largely unchanged from AASB 117.	1 January 2019	1 July 2019
AASB 2014-10	Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture	The amendments clarify that a full gain or loss is recognised when a transfer to an associate or joint venture involves a business as defined in AASB 3 Business Combinations. Any gain or loss resulting from the sale or contribution of assets that does not constitute a business, however, is recognised only to the extent of unrelated investors’ interests in the associate or joint venture. AASB 2015-10 defers the mandatory effective date (application date) of AASB 2014-10 so that the amendments are required to be applied for annual reporting periods beginning on or after 1 January 2018**** instead of 1 January 2016.	1 January 2018	1 July 2018
AASB 2016-5	Amendments to Australian Accounting Standards – Classification and Measurement of Share-based Payment Transactions	This Standard amends AASB 2_Share-based Payment_, clarifying how to account for certain types of share- based payment transactions. The amendments provide requirements on the accounting for: • The effects of vesting and non-vesting conditions on the measurement of cash-settled share-based payments • Share-based payment transactions with a net settlement feature for withholding tax obligations • A modification to the terms and conditions of a share-based payment that changes the classification of the transaction from cash-settled to equity-settled.	1 January 2018	1 July 2018
Interpretation 23	Uncertainty over Income Tax Treatments	The Interpretation clarifies the application of the recognition and measurement criteria in AASB 12 _Income Taxes_when there is uncertainty over income tax treatments. The Interpretation specifically addresses the following:	1 January 2019	1 July 2019

ANNUAL REPORT 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

==> picture [160 x 48] intentionally omitted <==

Reference	Title	Summary	Application date of standard*	Application date for CFE*
		• Whether an entity considers uncertain tax treatments separately • The assumptions an entity makes about the examination of tax treatments by taxation authorities • How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates • How an entity considers changes in facts and circumstances.

* Designates the beginning of the applicable annual reporting period unless otherwise stated.

The Group is in the process of determining the impact of the above on its financial statements. The Group has not elected to early adopt any new Standards or Interpretations.

(e) Basis of consolidation

The consolidated financial statements comprise the financial statements of Cape Lambert Resources Limited ( Cape Lambert ) and its subsidiaries as at 30 June 2017 (the Group ).

Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:

Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);
Exposure, or rights, to variable returns from its involvement with the investee; and
The ability to use its power over the investee to affect its returns.

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

The contractual arrangement with the other vote holders of the investee
Rights arising from other contractual arrangements
The Group’s voting rights and potential voting rights

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the statement of comprehensive income from the date the Group gains control until the date the Group ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it:

De-recognises the assets (including goodwill) and liabilities of the subsidiary
De-recognises the carrying amount of any non-controlling interests

ANNUAL REPORT 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

==> picture [160 x 48] intentionally omitted <==

De-recognises the cumulative translation differences recorded in equity
Recognises the fair value of the consideration received
Recognises the fair value of any investment retained
Recognises any surplus or deficit in profit or loss
Reclassifies the parent’s share of components previously recognised in OCI to profit or loss or retained earnings, as appropriate, as would be required if the Group had directly disposed of the related assets or liabilities

Business combinations are accounted for using the acquisition method.

(f) Associates

Associates are entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting, after initially being recognised at cost. The Group’s investment in associates includes goodwill (net of any accumulated impairment loss) identified on acquisition.

The Group’s share of its associates’ post-acquisition profits or losses is recognised in the consolidated statement of comprehensive income, and its share of post-acquisition movements in reserves is recognised in statement of comprehensive income and reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Dividends receivable from associates reduce the carrying amount of the investment.

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

(g) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the statement of financial position. Restricted cash relates to term deposits held with various financial institutions as security for bank guarantees.

(h) Trade receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. Trade receivables are generally due for settlement within 30 days. They are presented as current assets unless collection is not expected for more than 12 months after the reporting date.

Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off by reducing the carrying amount directly. An allowance account (provision for impairment of trade receivables) is used when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is impaired. The amount of the impairment allowance is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial.

The amount of the impairment loss is recognised in profit or loss. When a trade receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against other expenses in profit or loss.

ANNUAL REPORT 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

==> picture [160 x 48] intentionally omitted <==

(i) Property, Plant and Equipment

Plant and equipment is stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value as at the date of acquisition.

Depreciation is provided on plant and equipment. Depreciation is calculated on a straight line basis so as to write off the net cost or other revalued amount of each asset over its expected useful life to its estimated residual value. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period.

The following estimated useful lives are used in the calculation of depreciation:

Office equipment	3 years
Plant and equipment	3 years
Motor vehicles	3 years
Furniture and fittings	5 years
Leasehold improvements	over the period of the lease

(j) Financial Assets

Investments are recognised and derecognised on trade date where purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs.

Other financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or loss’, ‘held-to-maturity’ investments, ‘available-for-sale’ financial assets, and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. The Group has the following financial assets:

Financial Assets at Fair Value through Profit or Loss

Certain shares and options held for trading have been classified as financial assets at fair value through profit or loss. Financial assets held for trading purposes are stated at fair value, with any resultant gain or loss recognised in profit or loss. The fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market bid prices at the close of business on the reporting date. Assets in this category are classified as current assets if they are expected to be realised within 12 months otherwise they are classified as non-current assets.

Loans and Receivables

Trade receivables, loans, and other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are recorded at amortised cost less impairment. Impairment is determined by review of the nature and recoverability of the loan or receivable with reference to its terms of repayments and capacity of the debtor entity to repay the debt. If the recoverable amount of a receivable is estimated to be less than its carrying amount, the carrying amount of receivable is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately. They are included in current assets, other than those with maturities greater than 12 months from reporting date which are classified as non-current assets.

Available for sale financial assets

Available for sale financial assets are those non-derivative financial assets, principally equity securities, that are designated as available for sale or are not classified as ‘at fair value through profit or loss’, ‘held-to-maturity’ investments or ‘loans and receivables’. Available for sale financial assets are measured at fair value, or cost where fair value is unable to be reliably measured, until the investment is disposed of or determined to be impaired, at which time

ANNUAL REPORT 2017

==> picture [160 x 48] intentionally omitted <==

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

the gain or loss on disposal or the impairment is recognised in the profit or loss. They are included in non-current assets unless management intends to dispose of the investment within 12 months.

In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of a security below its cost is considered as an indicator that the securities are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss - is reclassified from equity and recognised in profit or loss as a reclassification adjustment. Impairment losses recognised in profit or loss on equity instruments classified as available-for-sale are not reversed through profit or loss.

(k) Debt and Equity Instruments Issued by the Group

Debt and equity instruments

Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the contractual arrangement.

Interest and dividends

Interest and dividends are classified as expenses or as distributions of profit consistent with the statement of financial position classification of the related debt or equity instruments or component parts of compound instruments.

(l) Foreign Currency

Foreign currency transactions and balances

All foreign currency transactions occurring during the financial year are recognised at the exchange rate in effect at the date of the transaction. Foreign currency monetary items at reporting date are translated at the exchange rate existing at reporting date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined.

Exchange differences are recognised in the profit or loss in the period in which they arise except those exchange differences which relate to assets under construction for future productive use which are included in the cost of those assets where they are regarded as an adjustment to interest costs on foreign currency borrowings.

Functional and presentation currency

Items included in the financial statements of each of the companies within the Group are measured using the currency of the primary economic environment in which they operate (the functional currency). The consolidated financial statements are presented in Australian dollars, which is Cape Lambert’s functional and presentation currency.

Group companies

The results and financial position of all the group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

a. assets and liabilities for each Statement of Financial Position presented are translated at the closing rate at the date of that Statement of Financial Position;
b. income and expenses for each statement of profit or loss and other comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions), and
c. all resulting exchange differences are recognised in other comprehensive income.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities are recognised in other comprehensive income. When a foreign operation is sold, a proportionate share of such exchange differences is reclassified to profit or loss, as part of the gain or loss on sale where applicable.

ANNUAL REPORT 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

==> picture [160 x 48] intentionally omitted <==

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entities and translated at the closing rate.

(m) Trade and other payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.

(n) Employee Benefits

Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave when it is probable that settlement will be required and they are capable of being measured reliably.

Provisions made in respect of employee benefits expected to be wholly settled within 12 months are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.

Provisions made in respect of employee benefits which are not expected to be wholly settled within 12 months are measured as the present value of the estimated future cash outflows to be made by the Group in respect of services provided by employees up to the reporting date.

The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date.

Refer also to note 2(s) for accounting policy regarding share based payments.

(o) Provisions

Provisions are recognised when the Group has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cashflows estimated to settle the present obligation, its carrying amount is the present value of those cashflows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that recovery will be received and the amount of the receivable can be measured reliably.

Costs of site restoration are provided over the life of the facility 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 clauses of the mining permits. Such costs have been determined using estimates of future costs, current legal requirements and technology.

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.

(p) Impairment of non-current assets

Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its

ANNUAL REPORT 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

==> picture [160 x 48] intentionally omitted <==

recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

(q) Income Tax

Current Tax

Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit or tax loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by reporting date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).

Deferred Tax

Deferred tax is accounted for using the comprehensive balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax base of those items.

In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be available against which deductible temporary differences or unused tax losses and tax offsets can be utilised. However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which affects neither taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences arising from goodwill.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, branches, associates and joint ventures except where the Group is able to control the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with these investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Company/Group intends to settle its current tax assets and liabilities on a net basis. The Group has implemented the tax consolidation legislation. As a consequence, these entities are taxed as a single entity and the deferred tax assets and liabilities of these entities are set off in the consolidated financial statements.

Current and deferred tax for the period

Current and deferred tax is recognised as an expense or income in the statement of profit or loss and other comprehensive income except when it relates to items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity.

(r) Revenue recognition

Revenue is recognised to the extent that it is probable that economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable.

ANNUAL REPORT 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

==> picture [160 x 48] intentionally omitted <==

Interest Revenue

Interest revenue is recognised using the effective interest rate method.

(s) Share-based Payments

Equity-settled share-based payments are measured at fair value at the date of grant. Fair value is measured by use of the Black-Scholes option pricing model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability and exercise restrictions.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest.

For cash-settled share-based payments, a liability equal to the portion of the goods or services received is recognised at the current fair value determined at each reporting date.

(t) Exploration and Evaluation Expenditure

Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest where right of tenure is current and active and significant operations are continuing in the area of interest. Costs associated with these identifiable areas of interests are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.

Accumulated costs in relation to an abandoned area are written off in full in the statement of profit or loss and other comprehensive income 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 carry forward costs in relation to that area of interest.

(u) Earnings per Share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Group, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interests and other financing costs associated with dilutive potential ordinary shares and the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.

(v) Business Combinations

The acquisition method of accounting is used to account for all business combinations. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition date fair values of the assets transferred by the acquirer, the liabilities incurred by the acquirer to the former owners of the acquiree and the equity issued by the acquirer, and the amount of any non controlling interest in the acquiree. For each business combination, the acquirer measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Costs directly attributable to the acquisition are expensed.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured at fair value as at the acquisition date through profit or loss.

ANNUAL REPORT 2017

==> picture [160 x 48] intentionally omitted <==

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any non controlling shareholders’ interest. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the Group's share of the fair value of the identifiable net assets acquired, the difference is recognised directly in the statement of profit or loss and other comprehensive income, but only after a reassessment of the identification and measurement of the net assets acquired.

Any contingent consideration to be transferred by the acquiree is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability will be recognised in accordance with AASB 139 either in profit or loss or in other comprehensive income. If the contingent consideration is classified as equity, it shall not be remeasured.

(w) Leases

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Group as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the statement of profit or loss and other comprehensive income on a straight line basis over the period of the lease.

(x) Contributed equity

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

(y) Parent entity financial information

The financial information for the parent entity, Cape Lambert Resources Limited, disclosed in note 27 has been prepared on the same basis as the consolidated financial statements, except as set out below:

Investments in subsidiaries and associates

Investments in subsidiaries and associates are accounted for at cost in the financial statements of Cape Lambert Resources Limited. Dividends received from associates are recognised in the parent entity’s statement of profit or loss and other comprehensive income, rather than being deducted from the carrying amount of these investments.

Tax consolidation legislation

Cape Lambert Resources Limited and the controlled entities in the tax consolidated group account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a stand-alone taxpayer in its own right.

In addition to its own current and deferred tax amounts, Cape Lambert Resources Limited also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the tax consolidated group.

The entities have entered into a tax funding agreement under which the wholly-owned entities fully compensate Cape Lambert Resources Limited for any current tax payables assumed and are compensated by Cape Lambert Resources Limited for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to Cape Lambert Resources Limited under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in the wholly-owned entities’ financial statements.

The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment of interim funding amounts to assist with its obligation to pay tax instalments.

ANNUAL REPORT 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

==> picture [160 x 48] intentionally omitted <==

Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as current amounts receivable from or payable to other entities in the group.

Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement are recognised as a contribution to (or distribution from) wholly-owned tax consolidated entities.

(aa) Dividends

Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the financial year but not distributed as balance date.

(ab) Critical Judgements in Applying the Group’s Accounting Policies

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Exploration and Evaluation

The Group’s accounting policy for exploration and evaluation is set out at note 2(t). The application of this policy necessarily requires management to make certain estimates and assumptions as to future events and circumstances, in particular, the assessment of whether economic quantities of reserves may be determined. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised expenditure, it is determined that recovery of the expenditure by future exploitation or sale is unlikely, then the relevant capitalised amount is written off in the statement of profit or loss and other comprehensive income.

Income taxes

The Group is subject to income taxes in Australia and jurisdictions where it has foreign operations.

Significant judgement is required in determining the worldwide provision for income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Group estimates its tax liabilities based on the Group’s understanding of the tax laws in the relevant jurisdictions. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made.

The Group recognises deferred tax assets relating to carried forward tax losses to the extent there are sufficient taxable temporary differences (deferred tax liabilities) relating to the same taxation authority against which the unused tax losses can be utilised. However, utilisation of the tax losses also depends on the ability of the entity to satisfy certain tests at the time the losses are recouped.

Impairment

The Group assesses impairment at each reporting date by evaluating conditions specific to the Group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amounts of the assets are determined.

As at 30 June 2017, management have recognised impairment losses in respect of those assets which had a carrying value which exceeded their recoverable amounts.

ANNUAL REPORT 2017

==> picture [160 x 48] intentionally omitted <==

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

3. PROFIT/(LOSS) FROM OPERATIONS (a) Revenue Interest income Rental revenue (b) Other income Unrealised foreign currency exchange gain/(loss) Foreign currency exchange gain/(loss) Gain on sale of financial assets Gain on sale of fixed assets Gain on sale of tenements Gain on sale of interest in Central African Resources Limited Other income (c) Depreciation and amortisation expense Depreciation of plant and equipment Amortisation of leasehold improvements 10 (d) Occupancy expenses Rental expense relating to operating leases - minimum lease payments Other occupancy expenses Provision for end of lease obligations Movement in provision for onerous lease contracts (e) Other expenses Administration expenses Exploration expenditure expensed/(reversed) Other expenses (f) Gain / (loss) on fair value of financial assets through profit and loss Gain / (loss) fair value of financial assets (shares in listed entities) through profit and loss 8(a) 4. INCOME TAXES Major components of income tax expense for the year are: Income statement Current income Current income tax charge / (benefit) Income tax (benefit) / expense reported in income statement Statement of changes in equity Income tax expense reported in equity	2017 2016 $ $
	87,666 308,923 590,662 570,282
	678,328 879,205
	(19,065) (8,998) (12,537) 52,773 - 50,684 95,570 140,425 138,783 50,000 - 547,278 457,223 145,746
	659,974 977,908
	(100,181) (322,106) (157,810) (293,750)
	(257,991) (615,856)
	(891,509) (958,741) (550,622) (538,320) (125,805) - 471,660 230,186
	(1,096,276) (1,266,875)
	(530,454) (490,477) (212,155) 16,860 (8,121) (230,792)
	(750,730) (704,409)
	153,391 324,621
	153,391 324,621
	2017 2016 $ $ 5,227,739 - 5,227,739 - - -

ANNUAL REPORT 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

==> picture [160 x 48] intentionally omitted <==

The Company is currently the subject of an audit by the Commissioner of Taxation ( Commissioner ) regarding various taxation matters, covering the 2011 - 2015 income years ( Audit Matters ). The key issue in dispute is the tax treatment of the disposal of certain assets.

The Company is currently in advanced discussions with the Commissioner, in an effort to reach a negotiated settlement of the Audit Matters. The Company made a without prejudice proposal to the Commissioner, pursuant to which the Company would pay $770k to fully and finally settle the Audit Matters ( The Company's Settlement Offer ). The Commissioner rejected this offer and countered with a without prejudice settlement proposal ( Commissioner's Settlement Offer ) of approximately $5.3m.

As at 29 September 2017, the Company has been invited by the Commissioner to provide its "best and final response" to the Commissioner's Settlement Offer. The Company will make this offer to the Commissioner by Thursday, 5 October 2017 and expects to receive a response from the Commissioner the following day. The offer made by the Company may impact the amount of carry forward tax losses.

The Company notes that in the unlikely event it is unable to reach a negotiated settlement agreement with the Commissioner, it believes it has various legal mechanisms by which it could seek to prevent the Commissioner from issuing an amended assessment. However, if those legal mechanisms are ultimately unsuccessful it is possible that the Commissioner may issue amended assessments totalling approximately $18m, excluding penalties. In the event amended assessments are issued, the Company would vigorously defend its position, which will include lodging an objection in relation to the amended assessments.

Reconciliation

A reconciliation of income tax expense / (benefit) applicable to accounting profit / (loss) before income tax at the statutory income tax rate to income tax expense / (benefit) at the Company’s effective income tax rate for the year is as follows:

Accounting profit / (loss) before income tax Income tax benefit at the statutory income tax rate of 30% (2016: 30%) Adjusted for: Non-deductible expenses Share based payments Deferred tax assets and tax losses not recognised Share of losses of associates Impairment of loans and interest receivables Impairment/de-recognition of exploration assets Impairment loss on associates Forgiveness of intercompany loans Capitalised exploration Adjustments in respect of current and deferred tax of previous year Other Commissioner’s Settlement Offer (as detailed above) Income tax expense / (benefit) reported in income statement	2017 2016 $ $
	(5,717,487) (30,799,674) (1,715,246) (9,239,902) 25,057 83,884 (80,032) 49,976 2,398,901 927,960 279,686 187,732 - (4,060) 521,125 6,723,635 (795,673) 1,028,265 (203,532) - (300,037) - - 425,055 (130,249) (182,544) 5,227,739 -
	5,227,739 -

Accounting profit / (loss) before income tax
Income tax benefit at the statutory income tax rate of 30% (2016: 30%)
Adjusted for:
Non-deductible expenses
Share based payments
Deferred tax assets and tax losses not recognised
Share of losses of associates
Impairment of loans and interest receivables
Impairment/de-recognition of exploration assets
Impairment loss on associates
Forgiveness of intercompany loans
Capitalised exploration
Adjustments in respect of current and deferred tax of previous year
Other
Commissioner’s Settlement Offer (as detailed above)
Income tax expense / (benefit) reported in income statement

2017
2016
$
$

(5,717,487)
(30,799,674)
(1,715,246)
(9,239,902)
25,057
83,884
(80,032)
49,976
2,398,901
927,960
279,686
187,732
-
(4,060)
521,125
6,723,635
(795,673)
1,028,265
(203,532)
-
(300,037)
-
-
425,055
(130,249)
(182,544)
5,227,739
-

5,227,739
-

ANNUAL REPORT 2017

==> picture [160 x 48] intentionally omitted <==

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Recognised deferred tax assets and liabilities

The deferred tax liability balance comprises temporary differences attributable to:

he deferred tax liability balance comprises temporary differences attributable to:
	2017	2016
	$	$
The deferred tax liability balance comprises temporary differences attributable to:
Accrued income	746,235	427,515
Capitalised expenditure	458,407	-
Unrealised foreign exchange gains / losses	(681,483)	(672,648)
Financial assets	(807,637)	(252,310)
Bad debts	106,295	-
Costs deductible over five years	(3,549)	-
Deferred tax liability	(181,732)	(497,443)
The deferred tax asset balance comprises temporary differences attributable to:
Accrued expenses and provisions	181,732	497,443
Deferred tax asset	181,732	497,443

Net deferred tax asset /(liability)	-	-

Movement in temporary differences during the current year

Consolidated Accrued expenses and provisions Financial assets Capitalised exploration expenditure Unrealised foreign exchange gains / losses Other Net deferred tax asset / (liability) Movement in temporary differences during the prior year	Balance 1 July 2016 Recognised in Income Balance 30 June 2017 $ $ $
	427,515 318,720 746,235 (252,310) (555,327) (807,637) - 458,407 458,407 (672,648) (8,835) (681,483) - 102,746 102,746
	(497,443) 315,711 (181,732)

Consolidated Accrued expenses and provisions Financial assets Capitalised exploration expenditure Unrealised foreign exchange gains / losses Net deferred tax asset / (liability) Unrecognised deferred tax assets Deferred tax assets have not been recognised in respect of Tax losses @ 30%	Balance 1 July 2015 Recognised in Income Balance 30 June 2016 $ $ $	Balance 1 July 2015 Recognised in Income Balance 30 June 2016 $ $ $
	(446,721) 874,236 427,515 (252,310) - (252,310) (86,520) 86,520 - (806,780) 134,132 (672,648)
	(1,592,331) 1,094,888 (497,443)
	2017 2016 $ $ the following items: 197,029,801 61,667,892 59,108,940 18,500,368	2017 2016 $ $
		59,108,940 18,500,368

The tax losses do not expire under current 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 Group can utilise the benefits. These unrecognised deferred tax assets may materially change depending on the outcome of the Commissioners Settlement Offer.

ANNUAL REPORT 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

==> picture [160 x 48] intentionally omitted <==

5. SHARE-BASED PAYMENT ARRANGEMENTS

(a) Shares

Share-based payments granted during the current year

The company issued 90,000,000 shares during the year as part of the Kipushi consideration shares. The shares were valued based on the Company’s share price of $0.028 at the grant date. These shares were approved at a general meeting on 12 May 2017 and were issued on 7 June 2017. Refer to note 16 for detailed movements in the Company’s issued capital.

(b) Options

Options granted during the current year

There were nil options granted during the year.

Options outstanding at balance date

There were nil options outstanding at 30 June 2017 (2016: 7,675,000).

Reconciliation of options on issue

The following reconciles the outstanding share options granted, exercised and lapsed during the financial year:

		2017		2016
	Number of	Weighted Average	Number of	Weighted Average
	Options	Exercise Price	Options	Exercise Price
		$		$
Balance at beginning of the financial year	7,675,000	0.088	9,425,000	0.091
Granted during the financial year (i)	-	-	-	-
Exercised during the financial year	-	-	-	-
Lapsed during the financial year (ii)	(7,675,000)	0.088	(500,000)	0.15
Forfeited during the financial year (iii)	-	-	(1,250,000)	0.088
Balance at end of the financial year	-	-	7,675,000	0.088
Exercisable at end of the financial year	-	-	-	-

(i) During the current and previous year, there were no share options issued.

(ii) During the current year, 7,675,000 (30 June 2016: 500,000) share options lapsed at a weighted average exercise price of $0.088.

(iii) During the current year, nil shares options were forfeited (30 June 2016: 1,250,000).

Rights attaching to options

The Employee Incentive Scheme, approved by the shareholders in December 2000, entitles each option holder to one share exercisable any time up to or on the expiry date at the stated exercise price; does not confer the right to a change in exercise price; subject to the Corporations Act 2001 , the ASX Listing Rules and the Company’s Constitution are freely transferable; the shares, upon exercise of the options, will rank pari passu with the Company’s then issued shares; will be applied for quotation; the Option Holder can participate in a pro rata issue to the holders of the underlying securities in the Company if the Options are exercised before the record date of an entitlement; in the event of any reconstruction of the issued capital of the Company, all rights of the option holder will be changed to the extent necessary to comply with the Listing Rules applying to the reconstruction of capital, at the time of the reconstruction.

ANNUAL REPORT 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

==> picture [160 x 48] intentionally omitted <==

6. REMUNERATION OF AUDITORS

The auditor of Cape Lambert Resources Limited is Ernst & Young Australia.

*Amounts received or due and receivable by Ernst & Young Australia for:* An audit or review of the financial report of the entity and any other entity in the consolidated group Tax Other *Amounts received or due and receivable by related practices of Ernst &* *Young Australia for:* Tax Other *Amounts received or due and receivable by non-Ernst & Young audit firms* *for:* An audit or review of the financial report of the entity and any other entity in the consolidated group	2017 2016 $ $
	145,096 182,228 - - - -
	145,096 182,228
	4,061 15,589 26,207 43,534
	30,268 59,123
	17,488 12,226
	17,488 12,226

7. TRADE AND OTHER RECEIVABLES

Note Trade and other receivables – current Trade debtors GST recoverable and other debtors Prepayments Interest receivable Deferred consideration receivable (a) Loans receivable (b) Allowance for doubtful debts	2017 2016 $ $
	3,899,953 3,537,472 52,527 93,458 151,043 369,379 80,000 146,150 2,500,000 2,500,000 370,000 529,250 (6,265,446) (5,911,129)
	788,077 1,264,580

(a) Deferred consideration receivable payable on the achievement of a production milestone. This receivable has been previously provided for in full.

(b) Current loans receivable at balance date are made up as follows:

Loan of $200,000 and US$150,000 (i) Convertible loan note of $250,250 (ii) Loan of $370,000 (ii) Loan of USD$8,000,000 (iv) Carrying value of loans Impairment of receivables Current carrying value at amortised cost at balance date	Interest rate	Carrying value of loans 2017 2016 $ $
	10.0% 15.0% 10.0% Libor + 6%	419,184 419,184 159,250 159,250 370,000 370,000 10,447,200 10,447,200
		11,395,634 11,395,634 (11,025,634) (10,866,384)
		370,000 529,250

ANNUAL REPORT 2017

==> picture [160 x 48] intentionally omitted <==

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Movements: Opening balance Payment on subscription to/(receipts from) convertible loan notes Loans advanced/interest accrued Repayment of loans Conversion of convertible loan notes Impairment of loans receivable Foreign exchange movements Current carrying value at amortised cost at balance date	2017 2016 $ $
	529,250 1,589,694 - (156,750) - 115,750 - (200,000) - (810,500) (159,250) (19,184) - 10,240
	370,000 529,250

(i) In May 2014 the Company advanced a short term loan of $200,000 to International Goldfields Limited (ASX: IGS). Interest is payable at 10% per annum and repayment was due on 30 June 2015. In May 2015, the Company advanced a further short term loan of US$150,000 to IGS. In part consideration for the loan agreement, the Company will receive an arrangement fee of US$10,000 and default interest on overdue amounts is payable at 10% per annum. The loans were due for repayment on 18 May 2015. The loans have been previously provided for in full.
(ii) In August 2014, the Company entered into a converting loan agreement with Kiwanda Mines (NA) LLC for $250,250. The loans were due for repayment or conversion on 12 August 2015. During the year ended 30 June 2016, the Company received cash of $91,000 for the partial redemption of the convertible note. The balance of the loan receivable has been provided for in full.
(iii) In November 2014, the Company advanced a loan of $320,000 to Allegra Capital Pty Ltd ( Allegra ). Interest is payable at 10% per annum and repayment is due on or before 25 May 2016. In May 2016, a deed of variation was entered into extending the repayment date to 31 October 2016. In May 2016, the Company advanced a further short term loan of $50,000 to Allegra. Interest is payable at 10% per annum and the loan was due for repayment on 31 October 2016. The loan has been repaid in full subsequent to 30 June 2017.
(iv) On 22 October 2014, the Company announced that it had entered into a US$20 million funding agreement with Timis Mining ( Agreement ) to assist it with the acquisition of London Mining’s Marampa Iron Ore Mine ( Mine ) from the administrator of London Mining PLC. The Agreement was divided into two parts, being (a) US$8 million Bridging Finance loan and US$12 million for the purchase of a royalty. The bridging finance loan of US$8 million was repayable in October 2015 and incurs interest of 3 month US LIBOR (London interbank offered rate) + 6%. This loan has previously been provided for in full.

Risk Exposure

The Group’s exposure to risk is discussed in more detail in note 27. An impairment allowance of $11,025,634 in the current year (30 June 2016: $10,866,384) has been raised in relation to loans past due and objective evidence of impairment.

Movements in the impairment allowance: Opening balance at beginning of the year Impairment of loans receivable	2017 2016 $ $
	10,866,384 10,847,200 159,250 19,184
	11,025,634 10,866,384

ANNUAL REPORT 2017

==> picture [160 x 48] intentionally omitted <==

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

8. OTHER FINANCIAL ASSETS

Note Financial Assets at Fair value through Profit or Loss Shares in listed entities (a) Call options Financial Assets accounted for as Available-for-sale Shares in unlisted entities – at cost (b) Total Financial Assets (a) Movements in the carrying amount of the shares in listed entities Note Carrying value at beginning of the year Conversion of loan interest into shares Purchase of equity investments Reclassification of financial asset at fair value through profit or loss to associate Gain/(Loss) on fair value of financial assets through profit or loss 3 (f) Disposal of equity investments Exercise of call option Other (b) Movements in the carrying amount of the shares in unlisted entities Movements: Carrying value at beginning of year (cost less impairment) Impairment of investment	Note Financial Assets at Fair value through Profit or Loss Shares in listed entities (a) Call options Financial Assets accounted for as Available-for-sale Shares in unlisted entities – at cost (b) Total Financial Assets (a) Movements in the carrying amount of the shares in listed entities Note Carrying value at beginning of the year Conversion of loan interest into shares Purchase of equity investments Reclassification of financial asset at fair value through profit or loss to associate Gain/(Loss) on fair value of financial assets through profit or loss 3 (f) Disposal of equity investments Exercise of call option Other (b) Movements in the carrying amount of the shares in unlisted entities Movements: Carrying value at beginning of year (cost less impairment) Impairment of investment		2017 2016 $ $
			1,138,188 1,350,477 - 68,799
			1,138,188 1,419,276
			70,000 100,000
			70,000 100,000
			1,208,188 1,519,276
			2017 2016 $ $ 1,350,477 1,515,864 11,555 - 331,124 30,000 (231,124) (332,172) 153,391 324,621 (544,284) (189,586) 68,799 - (1,750) 1,750 1,138,188 1,350,477 2017 2016 $ $ 100,000 100,000 (30,000) - 70,000 100,000

(c) Impairment and Risk exposure

Investments in unlisted entities are classified as available for sale financial assets. Available for sale financial assets are measured at fair value, or cost where fair value cannot be reliably measured until the investment is disposed of or determined to be impaired, at which time the gain or loss on disposal or the impairment is recognised in the profit or loss. Management have recognised an impairment loss of $30,000 (30 June 2016: Nil) in relation to the unlisted investments during the year ended 30 June 2017.

The Group’s exposure to risk is discussed in note 27.

ANNUAL REPORT 2017

==> picture [160 x 48] intentionally omitted <==

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

9. RESTRICTED CASH

Current Term deposits (a) Application funds (b) Movements: Opening balance at beginning of the year Application funds received by Fe Limited Application funds refunded by Fe Limited Application funds received by Cape Lambert Security against loan Release of restricted cash in relation to office bond Exchange differences Non current Term deposits (a)	2017 2016 $ $
	44,617 33,339 60,000 968,131
	104,617 1,001,470
	1,001,470 32,754 - 1,189,109 (968,131) (220,978) 60,000 - 32,046 - (20,768) - - 585
	104,617 1,001,470
	81,833 81,833

(a) Restricted cash relates to term deposits, which are not readily accessible to the Group, held with financial institutions as security for bank guarantees issued to:
Various environmental regulatory departments in respect of the potential rehabilitation of exploration areas; and
Landlords of leased properties.
(b) As at 30 June 2017, the Company had received $60,000 in application funds from sophisticated investors pursuant to a placement offer to acquire ordinary shares in the Company at $0.03 each. Application funds received as at 30 June 2017 are included in the statement of financial position at balance date as restricted cash. A contra liability has been included in the statement of financial position at balance date.

During the year ended 30 June 2016, Fe Limited ( ASX: FEL ) ( FEL ), a subsidiary of the Group, announced that it had signed a binding conditional terms sheet to acquire 100% of Cardinal House Group Pty Ltd who is a provider of online social gaming products and real money gambling platforms. At 30 June 2016, applications for $968,131 ( Applications ) had been received under a minimum capital raising offer of $2,000,000 (up to a maximum of $2,200,000) ( Offer ) per FEL’s Prospectus dated 23 March 2016 as supplemented by the Supplementary Prospectus dated 22 June 2016. On 30 June 2016, FEL were issued a final order in respect of its Prospectus from the Australian Securities Investment Commission ( ASIC ). Application funds received as at 30 June 2016 are included in the statement of financial position at balance date as restricted cash. A contra liability has been included in the statement of financial position at balance date. During the year ended 30 June 2017, all Application funds were returned to applicants.

Risk Exposure

The Group’s exposure to risk is discussed in note 27.

ANNUAL REPORT 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

==> picture [160 x 48] intentionally omitted <==

10. PROPERTY, PLANT AND EQUIPMENT

Gross carrying amount – at cost At 1 July 2015 Additions Write down (a) (b) Exchange differences At 30 June 2016 Additions Write down (a) (b) Exchange differences At 30 June 2017 Accumulated depreciation At 1 July 2015 Depreciation expense Write down (a) (b) Exchange differences At 30 June 2016 Depreciation expense Write down (a) (b) Exchange differences At 30 June 2017 Net Book Value At 1 July 2015 Additions Write down (a) (b) Depreciation expense Exchange differences At 30 June 2016 Additions Write down (a) (b) Depreciation expense Exchange differences At 30 June 2017	Plant & Equipment Buildings Motor Vehicles Furniture & Fittings Leasehold Improvements Total $ $ $ $ $ $
	1,396,366 1,035,310 368,909 959,398 1,464,351 5,224,334 33,425 - - 140 - 33,565 (688,320) (1,003,323) (275,053) (726,674) - (2,787,804) (21,324) 35,457 13,183 9,710 - 131,551 720,147 67,535 107,039 242,574 1,464,351 2,601,646 35,425 - - 340 - 35,765 (575,179) (2,055) (97,229) (183,241) - (857,704) (50) - - - - (50)
	180,343 65,389 9,810 59,673 1,464,351 1,779,657
	(1,146,957) (251,040) (276,658) (869,019) (1,011,428) (3,555,102) (130,581) (88,417) (53,945) (49,163) (293,750) (615,856) 603,643 370,024 257,571 719,663 - 2,045,426 35,504 (30,567) 8,115 (5,308) - (86,781) (638,391) - (64,917) (203,827) (1,305,178) (2,212,313) (53,673) - (15,865) (30,642) (157,810) (257,991) 566,419 - 77,798 177,555 - 821,772) - (91) - - (1) (92)
	(125,645) (91) (2,984) (56,914) (1,462,989) (1,648,624)
	249,409 784,270 92,251 90,379 452,923 1,669,232 33,425 - - 140 - 33,565 (84,677) (633,208) (17,482) (7,011) - (742,378) (130,581) (88,417) (53,945) (49,163) (293,750) (615,856) 14,180 4,890 21,298 4,402 - 44,770
	81,756 67,535 42,122 38,747 159,173 389,333
	35,425 - - 340 - 35,765 (8,760) (2,055) (19,431) (5,686) - (35,932) (53,673) - (15,865) (30,642) (157,810) (257,991) (50) (91) - - (1) (142)
	54,697 65,389 6,826 2,759 1,362 131,033

(a) The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

(b) The impairment loss represents the write down of certain plant and equipment to the recoverable amount. An item of property, plant and equipment initially recognised is derecognised when no future economic benefits are expected from use or its disposal. Impairment of $630,579 was recognised on fixed assets associated with the Guinea exploration activities, on the basis of an arms-length transaction, which the directors believe represents fair value in an orderly transaction (level 3 in the fair value hierarchy). The sale of these assets was completed during the period.

ANNUAL REPORT 2017

==> picture [160 x 48] intentionally omitted <==

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

11. DEFERRED EXPENSES

Opening balance at beginning of the year Shares issued for the acquisition (refer note 5a) Acquisition costs	2017 2016 $ $
	- - 2,520,000 - 195,801 -
	2,715,801 -

12. EXPLORATION AND EVALUATION EXPENDITURE

Exploration and evaluation phases Movements: Carrying value at beginning of the year Exploration and evaluation expenditure capitalised during the year Exploration assets divested during the year Exploration expenditure impaired during the year (a) Exploration expenditure de-recognised during the year (a) Foreign currency gains / (losses) Total exploration and evaluation phases	2017 2016 $ $
	33,551 -
	- 15,683,601 2,871,069 6,740,613 - (456,543) - (3,295,324) (2,837,518) (19,116,791) - 444,444
	33,551 -

The value of the exploration expenditure is dependent upon:

the continuance of the rights to tenure of the areas of interest;
the results of future exploration; and
the recoupment of costs through successful development and exploitation of the areas of interest, or alternatively, by their sale.

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

(a) Impairment and de-recognition

The Company de-recognised capitalised exploration to the extent of $2,837,518 (30 June 2016: $19,116,791) on projects that are on care and maintenance and no longer met the criteria for deferral under the Group’s accounting policy as active and significant operations are not continuing at balance date.

During the previous financial year ended 30 June 2016, Cape Lambert recognised impairment losses in respect of capitalised exploration and evaluation to the extent of $3,295,324 in respect of the Group’s Cote D’Ivoire project.

ANNUAL REPORT 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

==> picture [160 x 48] intentionally omitted <==

13. INVESTMENTS IN ASSOCIATED ENTITIES

3. INVESTMENTS IN ASSOCIATED ENTITIES
Investments in associates accounted for using the equity method	2017 2016 $ $
	3,417,907 1,371,805

(a) Investment details

Cauldron Energy Limited1 Kupang Resources Limited2 Global Strategic Metals Limited European Lithium Limited3 International Goldfields Limited	Percentage held at balance date 2017 2016 % %	Year ended Year ended 2017 2016 $ $
	15.9 14.9 12.6 12.6 27.4 27.4 14.5 26.2 20.4 21.4	493,713 1,205,718 - - - - 2,924,194 - - 166,087
		3,417,907 1,371,805

1Although the Company holds less than a 20% interest in Cauldron Energy Ltd ( Cauldron ), this investment is equity accounted given the significant influence the Company has through Mr Sage’s role on the board of Cauldron and the interchange of management personnel.

2 On 28 May 2015 receivers and managers were appointed to Kupang Resources Limited ( Kupang ), and was ultimately placed into voluntary administration. Kupang was removed from the official list of the Australian Securities Exchange on 31 August 2015.

3 Although the Company holds less than a 20% interest in European Lithium Ltd ( Euro ), this investment is equity accounted given the significant influence the Company has on Euro through Mr Sage’s role on the board and the interchange of management personnel.

(b) Movements in the carrying amount of the investment in associates

b) Movements in the carrying amount of the investment in associates
Balance at beginning of period Reclassification from financial assets to associate Acquisition of shares in associates Conversion of convertible loan notes, accrued interest & other receivables Share of losses of associates recognised during the year Share of reserves of associates recognised during the year Gain on dilution of interest in associate Impairment reversal/(loss) (e)	2017 2016 $ $
	1,371,803 3,629,855 332,173 194,687 14,089 - 1,284,168 (2,555,741) (625,774) 131,460 164,843 1,623,455 - 2,652,243 (3,427,549)
	3,417,907 1,371,805

(c) Fair value of investments in listed associates

The fair value of listed associates has been determined by reference to published price quotations in an active market (level 1 in the fair value hierarchy).

Cauldron Energy Limited European Lithium Limited	2017 2016 $ $
	1,783,981 2,834,846 2,924,192 -

ANNUAL REPORT 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

==> picture [160 x 48] intentionally omitted <==

During the year European Lithium limited listed on ASX by way of reverse takeover with Paynes Find Gold Limited. Kupang was removed from the official list of the Australian Securities Exchange on 31 August 2015. Global Strategic Metals Limited was removed from the official list of the Australian Securities Exchange on 15 August 2014. The securities of IGS were suspended from official quotation on 16 March 2016.

(d) Summarised financial information

Cauldron Energy Ltd

The Group has a 15.9% interest in Cauldron Energy Limited ( CXU ), which is an ASX-listed mineral exploration company with uranium prospective tenements in Western Australia, South Australia and Argentina. The Group’s interest in CXU is accounted for using the equity method in the consolidated financial statements. The following table illustrates the summarised financial investment of the Group’s investment in CXU:

Current assets Non-current assets Current liabilities Equity Group’s carrying amount of the investment Revenue Other income Depreciation Loss before tax Income tax expense Loss for the year Total comprehensive income for the year Group’s share of profit for the year	2017 2016 $ $
	4,890,930 4,039,747 11,884 9,514,407 (627,611) (530,840)
	4,275,203 13,023,314
	493,713 1,205,718
	2017 2016 $ $
	36,682 7,375 18,188 1,233,829 (97,340) (154,476)
	(11,954,682) (3,978,324) - -
	(11,954,682 (3,978,324)
	(11,980,544) (4,126,319)
	(1,904,896) (625,774)

The associate had no contingent liabilities or capital commitments as at 30 June 2017.

European Lithium Ltd

The Group has a 14.5% interest in European Lithium Limited ( EUR ), which is an ASX-listed mineral exploration company with lithium assets in Austria. The Group’s interest in EUR is accounted for using the equity method in the consolidated financial statements. The following table illustrates the summarised financial investment of the Group’s investment in EUR:

Current assets Non-current assets Current liabilities Equity Group’s carrying amount of the investment	2017 2016 $ $
	1,079,853 426,224 21,791,323 17,101,967 (523,484) (1,009,236)
	22,347,692 16,518,955
	2,924,194 -

ANNUAL REPORT 2017

==> picture [160 x 48] intentionally omitted <==

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Revenue and other income Depreciation Loss before tax Income tax expense Loss for the year Total comprehensive income for the year Group’s share of loss for the year	2017 2016 $ $
	790,705 20,193,003 (688) (7,052)
	(8,008,363) 19,110,651 - -
	(8,008,363) 19,110,651
	(7,105,856) 18,629,024
	(1,210,109) -

The associate had no contingent liabilities or capital commitments as at 30 June 2017.

(e) Impairment assessment

The carrying amounts of the investments in associates were assessed for impairment at 30 June 2017 resulting in the reversal of previous impairment expenses of $2,652,243 (2016: loss $3,427,549). Euro was subsequently impaired by $520,218 based on the market value of the shares at 30 June 2017 (Level 1 in the fair value hierarchy).

14. TRADE AND OTHER PAYABLES

Current *Unsecured* Trade payables Other creditors and accruals Withholding tax payable	2017 2016 $ $
	483,255 252,989 3,595,033 2,498,083 2,529,837 2,527,175
	6,608,125 5,278,247

Risk Exposure

The Group’s exposure to risk is discussed in note 27.

Terms and Conditions

Terms and conditions relating to the above financial instruments:

(i) Trade creditors are non-interest bearing and are normally settled on 30 day terms.

(ii) Sundry creditors and accruals are non-interest bearing and have an average term of 30 days.

15. PROVISIONS

5. PROVISIONS
Current provisions Employee entitlements Provision for end of lease obligations Provision for obligations under onerous lease (a) Other Non-Current provisions Provision for obligations under onerous lease (a)	2017 2016 $ $
	26,858 35,188 125,805 - - 467,206 182,178 56,522
	334,841 558,916
	- 4,454
	- 4,454

(a) At 30 June 2016, provisions were recorded for obligations under onerous operating leases when the properties are not used by the Group and the net costs of exiting from the leases exceed the economic benefits expected to be received. Cape Lambert Minsec Pty Ltd ( Cape Lambert Minsec ), a wholly owned subsidiary of the Company, had a lease obligation for office premises located in Golden Square, London. The lease of these

ANNUAL REPORT 2017

==> picture [160 x 48] intentionally omitted <==

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

premises terminated on 2 July 2017. Cape Lambert Minsec sub-leased the office premises located in Golden Square, London until 2 July 2017.

16. ISSUED CAPITAL

833,019,919 fully paid ordinary shares (2016: 720,868,586)	2017 2016 $ $ 196,771,578 193,581,578

Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares held and in proportion to the amount paid up on the shares held. At shareholders meetings, each ordinary share is entitled to one vote in proportion to the paid-up amount of the share when a poll is called, otherwise each shareholder has one vote on a show of hands.

Movement in ordinary shares on issue

2017 Shares on issue at 1 July 2016 Issue of shares for cobalt acquisition (note 5) Placement Costs associated with capital issues Shares on issue at 30 June 2017 2016 Shares on issue at 1 July 2015 Placement Costs associated with capital issues Shares on issue at 30 June 2016	Ordinary fully paid shares Number $
	720,686,586 193,581,578 90,000,000 2,520,000 22,333,333 670,000 - -
	833,019,919 196,771,578
	626,686,586 189,786,328 94,000,000 3,995,000 - (199,750)
	720,686,586 193,581,578

Capital Risk Management

The Group’s objective when managing capital is to safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

Consistent with others in the industry, the Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including “borrowings” and “trade and other payables” as shown in the statement of financial position) less cash and cash equivalents. Total capital is calculated as “equity” as shown in the statement of financial position plus net debt.

Total Trade and other payables less: Cash and cash equivalents Net (cash)/debt Total equity/(deficiency) Total capital Gearing ratio	2017 2016 $ $ 6,608,125 3,227,373 (1,110,287) (5,614,871) 5,497,838 (2,387,498) (2,639,411) 4,433,420 (2,639,411) 4,096,796 0% 0%

ANNUAL REPORT 2017

==> picture [160 x 48] intentionally omitted <==

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

17. RESERVES

Foreign currency translation reserve Share based payments reserve Equity reserve Available for sale reserve Foreign currency translation reserve Balance at beginning of financial year Share of movement of associate’s foreign currency translation reserve Foreign currency exchange differences arising on translation of foreign operation Balance at end of financial year Share based payments reserve Balance at beginning of financial year Share of movement of associate’s share based payments reserve Share based payments Balance at end of financial year Equity reserve Balance at beginning of financial year Increase in non-controlling interest Balance at end of financial year Available for sale reserve Balance at beginning of financial year Fair value gain/(loss) recognised through equity Balance at end of financial year	2017 2016 $ $
	22,332,366 22,007,507 2,167,905 2,434,680 (1,179,630) (1,389,138) - 1,750
	23,320,641 23,054,799
	22,007,507 21,116,525 131,460 914,783 193,399 (23,801)
	22,332,366 22,007,507
	2,434,680 2,079,450 - 188,643 (266,775) 166,587
	2,167,905 2,434,680
	(1,389,138) (1,603,919) 209,508 214,781
	(1,179,630) (1,389,138)
	1,750 - (1,750) 1,750
	- 1,750

Nature and Purpose of Reserves

Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of financial statements of foreign subsidiaries.

Share based payments reserve

The share based payments reserve records items recognised as expenses on valuation of employee share options, and options issued to directors and consultants.

Equity reserve

The equity reserve is used to record the differences which may arise as a result of transactions with non-controlling interests that do not result in a loss of control.

Available for sale reserve

The available for sale reserve is used to record the value of fair value gains or losses in respect of available for sale investments.

ANNUAL REPORT 2017

==> picture [160 x 48] intentionally omitted <==

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

18. ACCUMULATED LOSSES Balance at beginning of financial year Loss for the year Balance at end of financial year 19. LOSS PER SHARE Basic loss per share (a) Diluted loss per share (b)	2017 2016 $ $
	(212,167,165) (181,696,558) (10,781,531) (30,470,607)
	(222,948,696) (212,167,165)
	2017 Centsper Share 2016 Centsper Share
	(1.48) (4.69) (1.48) (4.69)

(a) Basic Loss per Share The loss and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows:

Loss for the year Weighted average number of ordinary shares for the purposes of basic earnings per share	2017 $ 2016 $
	(10,781,531) (30,470,607)
	2017 Number 2016 Number
	726,787,956 650,315,001

(b) Diluted Loss per Share

The earnings and weighted average number of ordinary shares used in the calculation of diluted earnings per share are as follows:

Loss for the year Weighted average number of ordinary shares for the purposes of diluted earnings per share (c). *(c)* *Weighted average number of shares* Weighted average number of ordinary shares for the purposes of basic (loss) / earnings per share Effect of dilution: Share options	2017 $ 2016 $
	(10,781,531) (30,470,607)
	2017 Number 2016 Number 726,787,956 650,315,001
	2017 Number 2016 Number
	726,787,956 650,315,001 - - -
	726,787,956 650,315,001

There are 23,500,000 share options (30 June 2016: 7,675,000) excluded from the calculation of diluted earnings per share that could potentially dilute basic earnings per share in the future because they are anti-dilutive for the current period presented.

Since 30 June 2017 and prior to the date of release of these financial statements, nil share options (30 June 2016: nil) have been forfeited and nil share options (30 June 2016: nil) have been exercised.

ANNUAL REPORT 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

==> picture [160 x 48] intentionally omitted <==

20. OTHER UNLISTED OPTIONS

The following refers to unlisted options issued by the Company which do not constitute a share based payment.

(a) Options granted during the year

On 15 December 2016, the Company issued 23,500,000 unlisted options at $0.05 each expiring on 31 December 2018. These options were free-attaching to the shares issued to Gulf Energy International Limited ( Gulf Energy ) under the placement that closed in March 2016.

(c) Options on issue at 30 June 2017

The outstanding balance of options at 30 June 2017 (other than those granted as a share based payment) is 23,500,000 unlisted options exercisable at $0.05 expiring 31 December 2018.

21. COMMITMENTS

*Operating lease commitments* Minimum lease payments not provided for in the financial report and payable: not later than one year later than one year but not later than five years later than five years Aggregate expenditure contracted for at balance date but not provided for	2017 2016 $ $
	572,289 571,356 1,040,575 1,648,685 - -
	1,612,864 2,220,041

On 1 April 2012 the Company entered into an office premises lease agreement (as varied by a deed of variation dated 22 June 2015) terminating on 31 March 2020. The Company has entered into a series of sub-lease agreements with terms to 31 March 2020 whereby the Company is entitled to receive a total of $380,373 in rental income. In addition, rental income is received from various other companies under sub-lease arrangements with no fixed terms. The above minimum lease payments have not been adjusted for any sub-lease rental income payments.

22. CONTINGENT ASSETS AND LIABILITIES

Contingent asset for future royalties payable from the Mayoko Iron Ore Project

In March 2012, Johannesburg Stock Exchange listed Exxaro Resources Limited ( Exxaro ) completed a takeover offer for all of the shares and listed options in African Iron Limited, a company in which the Company held 126,700,000 shares, delivering $72.2 million in cash to the Company. African Iron Limited owns the Mayoko Iron Ore Project which is located in the Republic of Congo ( Mayoko Project ). As part of the takeover transaction, the Company retains a production royalty of AUD$1.00 (indexed annually to the CPI) per tonne of iron ore shipped from the Mayoko Project ( Mayoko Royalty ). On 6 February 2014, the Company released an announcement advising shareholders that Exxaro has been granted a Mining Convention for the Mayoko Project. In September 2016 Exxaro announcement the completion of the sale of the Mayoko Project to Sapro SA. On 13 February 2017, the Company released an announcement that it had sold the Mayoko Royalty for A$1,000,000 cash subject to the formality of the new owners signing off on the transaction. As at 30 June 2017, the Company has not recognised any amount for the Mayoko Royalty as a receivable.

Contingent spend on DRC Cobalt

On 21 February 2017, the Company announced that it had entered into a Binding Heads of Agreement ( Agreement ) with Congolese company, Paragon Mining SARL ( Paragon ) to form a 50/50 Joint Venture ( JV ) to develop the Kipushi Cobalt Copper Tailings Project, the Kasombo Copper-Cobalt Projects and operate the Kipushi Processing Plant in the Democratic Republic of Congo ( DRC ). In accordance with the terms of the Agreement, the Company is responsible to fund 100% of the working capital and capital costs for the Kipushi projects and Kasombo projects. On 13 July 2017, the Company announced that it had entered into a binding terms sheet to assign the rights to the Kasombo projects to FE Limited ( FEL ). In accordance with the terms of this assignment, FEL are responsible to fund 100% of the working capital and capital costs for the Kasombo project.

ANNUAL REPORT 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

==> picture [160 x 48] intentionally omitted <==

Contingent spend on Zambia project

On 22 May 2017, the Company announced that it had entered into a binding terms sheet with Australian Mining Company Zambia Limited to acquire a 70% interest in the Kitwe cobalt-copper tailings project. Under the terms of the agreement, the Company will have 6 months to decide whether it wishes to exercise an option to expend US$500,000 within 6 months from the date of exercising the option ( Option ). If the Company does not exercise the Option, or fails to spend the US$500,000 within the 6 months option period, then the 70% shareholding will be returned to the Seller.

23. SUBSIDIARIES

Name of Entity
Parent entity
Cape Lambert Resources Limited
Subsidiaries
African Minerals Exploration Pty Ltd
Aurora (Bermuda) Minerals Limited2
Aurum (Cote d’Ivoire) SA Limited2
Aurex (Bermuda) Limited2
Cape Lambert Minsec Pty Ltd
Danae Resources Pty Ltd
Dempsey Resources Bermuda Limited
Dempsey Resources Pty Ltd
Fe Limited³
Marampa Iron Ore (Bermuda) Limited
Marampa Iron Ore Limited2
Marampa Iron Ore (SL) Limited
Metals Exploration (Australia) Pty Ltd
Metals Exploration (Bermuda) Limited2
Metals Exploration (Cote D’Ivoire) SA
Metal Exploration (Mauritius) Limited
Metal Exploration (SL) Limited
Mineral Exploration (Bermuda) Limited2
Mineral Assets (Bermuda) Limited¹
Mineral Projects Pty Ltd2
Mineral Resources (Bermuda) Limited
Mineral Securities Investments (Australia) Pty Ltd
Mineral Securities Limited
Mineral Securities Operations Pty Ltd
Mineral Securities (UK) Ltd
Mining International Pty Ltd
Minsec Investments (BVI) Limited2
Multiplex Resources (Kazakhstan) Limited
Pinnacle Group Assets Limited2
Pinnacle Group Assets (SL) Limited

Ownership Interest
Country of
Incorporation
2017
%
2016
%

Australia
-
-
Australia
100%
100%
Bermuda
-
100%
Cote d’Ivoire
-
100%
Bermuda
-
100%
Australia
100%
100%
Australia
100%
100%
Bermuda
100%
100%
Australia
100%
100%
Australia
44.69%
49.78%
Bermuda
100%
100%
British Virgin Islands
-
100%
Sierra Leone
100%
100%
Australia
100%
100%
Australia
-
100%
Cote d’Ivoire
100%
100%
Mauritius
100%
100%
Sierra Leone
100%
100%
Bermuda
-
100%
Bermuda
100%
100%
Australia
-
100%
Bermuda
100%
100%
Australia
100%
100%
British Virgin Islands
-
100%
Australia
100%
100%
UK
100%
100%
Australia
100%
100%
British Virgin Islands
-
100%
United Kingdom
100%
100%
British Virgin Islands
-
100%
Sierra Leone
100%
100%

1 In the process of being liquidated 2 Company liquidated or deregistered during the year

³ The group has assessed that it has de facto control over FE Limited despite a present ownership interest below 50%

24. SEGMENT INFORMATION

AASB 8 Operating Segments requires operating segments to be identified on the basis of internal reports that are regularly reviewed by the Chief Operating Decision Maker (CODM) to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. In the case of the

ANNUAL REPORT 2017

==> picture [160 x 48] intentionally omitted <==

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Group the CODM are the executive management team and all information reported to the CODM is based on the consolidated results of the Group as one operating segment, as the Group’s activities relate to mineral exploration. Accordingly, the Group has only one reportable segment and the results are the same as the Group results.

Information by geographical region

The analysis of the location of non-current assets other than financial instruments and deferred tax assets is as follows:

Australia West Africa Revenue by geographical region Australia West Africa	2017 2016 $ $
	3,471,265 1,566,634 2,827,027 194,504
	6,298,292 1,761,138
	2017 2016 $ $
	678,314 879,107 14 98
	678,328 879,205

25. RELATED PARTY DISCLOSURES

Subsidiaries

The consolidated financial statements include the financial statements of Cape Lambert Resources Limited and the subsidiaries listed in note 23.

Ultimate parent

The ultimate Australian parent entity is Cape Lambert Resources Limited.

Transactions with related parties

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

Agreements entered into with related parties

Office lease agreement with Okewood Pty Ltd

On 1 April 2012 the Company entered into a lease agreement with Okewood Pty Ltd, a company owned by Tony Sage, for the lease of 32 Harrogate Street, West Leederville WA 6007, as varied by a deed of variation dated 22 June 2015 ( Lease Agreement ). The term of the Lease Agreement is 1 April 2012 to 31 March 2020 with an option to extend. The lease is based on an area of 1,148m² at a rent of $459,200 (excluding GST) per annum, subject to an annual CPI increase, with variable outgoings and parking charged separately at market rates. The Company has entered into a series of sublease agreements, both with related parties as outlined below and unrelated parties, whereby the Company is entitled to receive rental income. The above minimum lease payments have not been adjusted for any sub-lease rental income payments.

Sub-lease agreements for office space

The Company has fixed term sub-lease agreements with the following related entities:

International Petroleum Limited (parties agreed to terminate the lease with effect 1 October 2016)

ANNUAL REPORT 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

==> picture [160 x 48] intentionally omitted <==

Cauldron Energy Limited (lease term expiring 31 March 2020)

The lease covers the rental, outgoings and parking charges under agreements made on commercial terms and conditions at market rates. Refer to the table below which summarises the recharges.

FE Limited loan

On 28 September 2016, the Company entered into a short-term loan facility arrangement with FE Limited for $32,727 (principal loan amount) to be used towards FEL’s working capital requirements. The loan was interest-bearing at a rate of 10% per annum. The loan (including accrued interest) was repaid on 19 October 2016. Mr Sage is a director of FE Limited.

The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year.

Related entities with common directors:
African Petroleum Corporation Limited
2017
African Petroleum Corporation Limited
2016
International Petroleum Limited
2017
International Petroleum Limited
2016
Associate entities:
Global Strategic Metals Limited
2017
Global Strategic Metals Limited
2016
Cauldron Energy Limited
2017
Cauldron Energy Limited
2016
European Lithium Limited
2017
European Lithium Limited
2016
Director related entities:
Perth Fashion Festival Pty Ltd
2017
Perth Fashion Festival Pty Ltd
2016
Perth Glory Football Club
2017
Perth Glory Football Club
2016
Okewood Pty Ltd
2017
Okewood Pty Ltd
2016

Sales to
related
parties
Purchases from
relatedparties
Consulting
feespaid
Amounts
owed by
related
parties
Amounts
owed to
related
parties

-
-
-
-
-
-
-
-
19,135
-
39,265
-
-
-
-
108,123
-
-
18,683
-
116,504
-
-
159,446
-
42,942
-
-
42,942
-
219,288
-
-
4,928
-
238,422
-
-
5,515
-
161,060
-
-
49,059
-
191,154
-
-
53,237
-
-
7,758
-
-
-
-
7,887
-
-
-
-
56,700
-
-
-
-
54,473
-
2,587
-
-
568,020
700,000
4,054
-
-
575,470
700,000
-
-

Perth Fashion Festival Pty Ltd, Okewood Pty Ltd and Okewood Pty Ltd trading as Perth Glory Football Club are entities controlled by Tony Sage.

Key management personnel

The following table discloses the remuneration of the directors and key management personnel of the Company:

Short-term employee benefits Post-employment benefits Share based payments Long term employee benefits	2017 2016 $ $
	1,162,033 1,269,694 23,275 23,750 (133,545) 93,605 20,336 19,230
	1,072,099 1,406,279

ANNUAL REPORT 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

==> picture [160 x 48] intentionally omitted <==

Detailed remuneration disclosures are provided in the remuneration report.

26. NOTES TO THE CASH FLOW STATEMENT

(a) Reconciliation of Cash and Cash Equivalents

For the purposes of the cash flow statement, cash and cash equivalents includes cash on hand and in banks. Cash and cash equivalents at the end of the financial year as shown in the cash flow statement is reconciled to the related items in the balance sheet as follows:

the balance sheet as follows:
Cash and cash equivalents Cash in banks and on hand Deposits at call Cash and cash equivalents per consolidated statement of cash flows Cash and cash equivalents per consolidated statement of financial position	2017 2016 $ $
	1,110,287 5,614,871 - -
	1,110,287 5,614,871
	1,110,287 5,614,871

(b) Reconciliation of Net Profit/ (loss) to Net Cash Flows from Operating Activities

Loss from ordinary activities
Adjusted for non-cash items:
Loss/(gain) on disposal of tenement interests
Loss/(gain) on fair value of financial assets through profit & loss
Depreciation and amortisation of non-current assets
Share of losses of associates
Gain on dilution of interest in associate
Gain on sale of fixed assets
Impairment of fixed assets
Impairment of VAT receivable
Impairment of investment in associate
Provision for payroll tax
Provision for end of lease obligations
Share based payments
Exploration expenditure de-recognised during the year
Impairment of capitalised exploration
Provision for impairment of investments
Provision for impairment of loans and receivables
Provision for onerous leases
Unrealised foreign currency exchange gains
Impairment of receivable
Changes in net assets and liabilities
(Increase)/decrease in trade and other receivables
(Increase)/decrease in provisions
Increase / (decrease) in trade and other payables
Increase / (decrease) in income tax payable
Net cash used in operating activities

2017
2016
$
$

(5,717,488)
(30,799,674)
(138,783)
(597,962)
(153,391)
(324,621)
257,991
615,856
2,555,741
625,774
(1,623,455)
-
(95,570)
(140,425)
35,932
742,378
-
39,253
(2,652,243)
3,427,549
592,068
-
125,805
-
(266,775)
166,587
2,837,518
19,116,791
-
3,295,324
30,000
-
267,131
(52,787)
(471,660)
(230,186)
19,065
(24,075)
374,890
174,386
(188,349)
(447,031)
(4,858,101)
(167,178)
5,840,378
(41,219)
-
-

(3,229,296)
(4,621,260)

(c) Non-Cash Activities

No significant non-cash investing or financing transactions occurred during the year ended 30 June 2017.

ANNUAL REPORT 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

==> picture [160 x 48] intentionally omitted <==

27. FINANCIAL RISK MANAGEMENT

The Group is exposed to a variety of financial risks including market risk (currency risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to meet its financial targets whilst minimising potential adverse effects on financial performance. The Group uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and other price risks and aging analysis for credit risk. Risk management is carried out by the Board.

The Group holds the following financial instruments:

Financial assets: Cash and cash equivalents Restricted cash Trade and other receivables Other financial assets Financial liabilities: Trade and other payables Application funds	2017 2016 $ $
	1,110,287 5,614,871 186,450 1,083,303 788,077 1,264,580 1,208,188 1,519,276
	3,293,002 9,482,030
	6,608,125 5,278,247 60,000 968,131
	6,668,125 6,246,378

(a) Market Risk

(i) Foreign Currency Risk

The Group operates internationally and is exposed to foreign exchange risk arising from commercial transactions. The Group converted assets and liabilities into the functional currency where balances were denominated in a currency other than the Australian dollars.

The Group also has transactional currency exposures. Such exposure arises from sales or purchases by an operating entity in currencies other than the functional currency.

At the reporting date, the Group had the following exposure to foreign currency:

	2017	2016
	$	$
Financial assets:
Cash and cash equivalents - USD	US$1,793	US$443,961
Cash and cash equivalents - CFA	CFA9,791,675	CFA13,268,577
Cash and cash equivalents - SLL	SSL39,865,883	SSL52,727,285
Movement of 10% in the foreign currency exchange rates as at 30 June 2017 would not have a		material impact on the
consolidated loss or equity.

Managements have set up a policy to monitor and measure this risk using sensitivity analysis and cash flow forecasting.

(ii) Cash Flow Interest Rate Risk

The Group’s exposure to market interest rates relates primarily to the Group’s cash and cash equivalents. The Group is exposed to movements in market interest rates on short term deposits.

At the reporting date, the Group had the following variable rate cash and cash equivalents and restricted cash:

ANNUAL REPORT 2017

==> picture [160 x 48] intentionally omitted <==

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Financial assets: Cash and cash equivalents Restricted cash Weighted average interest rate	2017 2016 $ $
	1,110,287 5,614,871 186,450 1,083,303
	1,296,737 6,698,174
	0.95% 0.95%

Movement of 50 basis points on the interest rate (considered a reasonably possible change) would not have a material impact on the consolidated loss or equity.

(iii) Price Risk

The Group is exposed to equity securities price risk. This arises from investments held and classified on the statement of financial position as at fair value through profit or loss. The Group is not exposed to commodity price risk.

To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio which is done in accordance with the limits set by the Board of Directors.

The majority of the Group’s equity investments are publicly traded on the Australian Stock Exchange (ASX).

A movement of 10% in the fair value of financial assets at fair value through profit and loss (considered a reasonably possible change) on the Group’s post tax loss for the year and on equity would not have been material.

(b) Credit Risk

Credit risk is managed on a consolidated basis. Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract obligations that could lead to a financial loss to the Group. The Group has adopted the policy of only dealing with credit worthy counterparties and obtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss from defaults. The maximum credit risk on financial assets, excluding investments, of the Group, which have been recognised on the statement of financial position, is the carrying amount, net of any provision for doubtful debts.

The Group is exposed to credit risk as a result of subscribing to loan notes and convertible loan notes issued by listed and unlisted entities. This credit risk is managed by obtaining adequate security over the loans, generally in the form of a fixed and floating charge over the assets of the borrower. Details of the loan notes and convertible loan notes to which the Group had subscribed during the year are listed in note 7.

The Company holds 99% (2016: 99%) of its cash and cash equivalents with banks with a Moody’s credit rating on Aa2.

Financial assets: Cash and cash equivalents and restricted cash Loans and receivables Other financial assets	2017 2016 $ $
	1,296,737 6,698,174 788,077 1,264,580 1,208,188 1,519,276
	3,293,002 9,482,030

(c) Liquidity Risk

The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows in relation to its operational, investing and financing activities. At the reporting date, the Group had no financing arrangements in place. All financial liabilities are current and expected to settle within six months.

ANNUAL REPORT 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

==> picture [160 x 48] intentionally omitted <==

(d) Fair Value Estimation

The fair value of financial assets and liabilities must be estimated for recognition and measurement or for disclosure purposes. The Directors consider that the carrying amounts of financial assets and financial liabilities recorded in the financial statements approximate their fair values. The carrying values of trade and other receivables net of impairment and the carrying value of payables approximate fair values due to their short-term nature.

AASB 7 Financial Instruments: Disclosures requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:

(a) quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
(b) 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
(c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).

The following table presents the Group’s assets measured at fair value at 30 June 2017.

Financial assets Financial assets at Fair value through Profit and Loss: Shares in listed entities	Level 1 $ Level 2 $ Total $
	1,138,188 - 1,138,188
	1,138,188 - 1,138,188

The following table presents the Group’s assets measured at fair value at 30 June 2016.

Financial assets Financial assets at Fair value through Profit and Loss: Shares in listed entities	Level 1 $ Level 2 $ Total $
	1,350,477 - 1,350,477
	1,350,477 - 1,350,477

28. PARENT ENTITY FINANCIAL INFORMATION

(a) Summary financial information

The individual financial statements of the parent entity show the following aggregate amounts:

Statement of financial position Current assets Total assets Current liabilities Total liabilities Shareholders’ equity Issued capital Reserves Retained earnings Total equity /(deficit) Net profit / (loss) for the year Total comprehensive income / (loss)	2017 2016 $ $
	756,215 5,637,613 3,612,824 6,009,840 (10,640,621) (2,752,989) (61,220,725) (64,058,110) 196,771,576 193,581,578 1,711,965 1,632,860 (256,091,444) (253,262,708)
	(57,607,903) (58,048,270)
	(2,828,736) (68,543,978) (2,828,736) (68,543,978)

ANNUAL REPORT 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

==> picture [160 x 48] intentionally omitted <==

(b) Guarantees entered into by the parent entity

The parent entity has provided financial guarantees in respect of environmental performance bonds for subsidiaries during the current year amounting to nil (2016: nil).

(c) Tax Consolidation

The Company and its 100% owned controlled entities have formed a tax consolidated group. Members of the Group have entered into a tax sharing arrangement in order to allocate income tax expense to the wholly owned controlled entities on a pro-rata basis. The agreement provides for the allocation of income tax liabilities between the entities should the head entity default on its tax payment obligations. At balance date, the possibility of default is remote. The head entity of the tax consolidated group is Cape Lambert Resources Limited.

Tax Effect Accounting by Members of the Tax Consolidated Group

Members of the tax consolidated group have entered into a tax funding agreement. The tax funding agreement provides for the allocation of current taxes to members of the tax consolidated group. Deferred taxes are allocated to members of the tax consolidated group in accordance with a group allocation approach which is consistent with the principles of AASB 112 Income Taxes. The allocation of tax under the tax funding agreement is recognised as an increase/decrease in the controlled entities’ intercompany accounts with the tax consolidated group head Company, Cape Lambert Resources Limited. In this regard, the Company has assumed the benefit of tax losses from controlled entities of $2,939,312 (2016: $825,886) as of the balance date. The Company has received a payment from the controlled entities of nil (2016: nil) as of the balance date in respect of the current year tax liability for the tax consolidated group. The nature of the tax funding agreement is such that no tax consolidation contributions by or distributions to equity participants are required.

29. EVENTS SUBSEQUENT TO REPORTING DATE

Assignment of Kasombo Project to Fe Limited

In consideration for Cape Lambert assigning its rights in the Kasombo Project to FEL, FEL has agreed to:

issue 25,000,000 fully paid ordinary shares in FEL at a deemed issue price of $0.0256 (determined as the volume weighted average closing price of FEL shares as quoted on ASX over the last five trading days immediately preceding the execution of the Terms Sheet) to Cape Lambert ( Consideration Shares ); and
payment of $50,000 on execution of the Terms Sheet and payment of $75,000 on the date which is three months after the settlement date of the Kasombo Transaction to Cape Lambert (together, the Cash Reimbursement ); and
issue 10,000,000 fully paid ordinary shares in FEL at a deemed issue price of $0.0256 to the facilitator of the Kasombo Transaction ( Facilitator Shares ).

Settlement of the Kasombo Transaction is conditional upon:

FEL receiving shareholder approval in relation to the Kasombo Transaction including approval to issue:
the Consideration Shares to Cape Lambert (in accordance with Item 7 of Section 611 of the Corporations Act if required); and
the Facilitator Shares;
completion of the Kasombo transfer to the JV Company in accordance with the terms of the JV Agreement;
execution by the relevant parties of a formal agreement to more fully document the Kasombo Transaction; and
receipt of consent from all relevant parties in respect of the Kasombo Transaction,

ANNUAL REPORT 2017

==> picture [160 x 48] intentionally omitted <==

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

with each of the above conditions to be completed on or before 30 September 2017 unless otherwise waived or extended by Cape Lambert and FEL.

Update on Proceeding at High Court of Sierra Leone

In relation to the Timis Mining Corporation Bridging Finance, subsequent to the year end, the Company announced that the High Court of Sierra Leone issued a Court Order in relation to the Notice of Motion lodged by the Plaintiff, which ordered the Parties to proceed to Arbitration if desired, refused the 4th Defendant’s application for a stay of proceedings and maintained the interlocutory injunction against the 1st, 2nd and 3rd Defendants that prevents liquidating the 4th Defendant’s company, pending the hearing and determination of the matter (refer ASX announcement dated 7 July 2017).

The Company is presently in discussions with the Defendants in regards to proceeding to Arbitration.

ANNUAL REPORT 2017

DIRECTORS’ DECLARATION

==> picture [160 x 48] intentionally omitted <==

In accordance with a resolution of the directors of Cape Lambert Resources Limited, I state that:

In the opinion of the directors:
(a) the financial statements and notes of Cape Lambert Resources Limited for the financial year ended 30 June 2017 are in accordance with the Corporations Act 2001 , including:
(i) giving a true and fair view of the financial position of the Group as at 30 June 2017 and of its performance, for the period ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and
(iii) complying with International Financial Reporting Standards as disclosed in note 2(c).
(b) Subject to the matters set out in note 2(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive Officer and Chief Financial Officer for the year ended 30 June 2017.

Signed in accordance with a resolution of the Directors:

==> picture [102 x 82] intentionally omitted <==

----- Start of picture text -----

________
Tony Sage
Director
----- End of picture text -----

Perth, 30 September 2017

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

==> picture [61 x 72] intentionally omitted <==

Independent auditor's report to the Members of Cape Lambert Resources Limited

Report on the audit of the financial report

Opinion

We have audited the financial report of Cape Lambert Resources Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2017, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including a summary of significant accounting policies, and the directors declaration.

In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001 , including:

a) giving a true and fair view of the consolidated financial position of the Group as at 30 June 2017 and of its consolidated financial performance for the year ended on that date; and
b) complying with Australian Accounting Standards and the Corporations Regulations 2001 .

Basis for opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

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

Material uncertainty related to going concern

Without qualifying our opinion, we draw attention to Notes 2 and 4 in the financial report. The matter set forth in Note 4 indicates the existence of a material uncertainty in relation to the ongoing settlement negotiations with the Australian Taxation Office. This matter, together with the matters set forth in Note 2, indicates the existence of a material uncertainty that may cast significant doubt about the Group’s ability to continue as a going concern, and therefore the Group may be unable to realise its assets and discharge its liabilities in the normal course of business.

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

GHM:JT:CAPELAMBERT:011

==> picture [61 x 72] intentionally omitted <==

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For the matter below, our description of how our audit addressed the matter is provided in that context. In addition to the matter described in the Material uncertainty related to going concern section of our report, we have determined the matter described below to be the key audit matter to be communicated in our report.

We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial repor t section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial report. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial report.

1. Accounting for investments in associates

Why significant

How our audit addressed the key audit matter

The carrying value of the Group’s investments in listed associates as at 30 June 2017 totalled $3.42 million.

Judgement is involved in determining whether objective evidence of impairment exists in relation to the carrying value of the investments at period end, or whether the conditions that gave rise to previously recognised impairment losses have reversed. Accordingly, this was considered to be a key audit matter.

During the year ended 30 June 2017, the Group recognised the reversal of previously recognised impairment losses totalling $3.17 million, having determined that the conditions that gave rise to the impairment losses recorded in prior periods had reversed. Further impairment losses of $0.51 million were recognised on investments where the Group identified objective evidence of impairment at 30 June 2017.

Our audit procedures included the following:

We considered the Group’s assessment of whether any objective evidence of impairment or reversal of impairment existed as at 30 June 2017, having regard to the fair value of the Group’s shareholding in its listed associates.
We assessed the adequacy of the impairment charge or reversal calculated with reference to the difference between the equity accounted carrying amount and the fair value of the Group’s shareholdings in its listed associates.
We assessed the adequacy of the disclosure included in the financial report relating to the investments in listed associates.

Disclosures in relation to the investments in associates accounted for using the equity method, including significant judgements, are included in Note 12 to the financial report.

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

==> picture [61 x 72] intentionally omitted <==

Information other than the financial report and auditor’s report thereon

The directors are responsible for the other information. The other information comprises the information included in the Company’s 2017 Annual Report, but does not include the financial report and our auditor’s report thereon.

Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the directors 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 preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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

==> picture [61 x 72] intentionally omitted <==

Obtain an understanding of internal control relevant to the audit 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 Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated to the directors, we determine those matters that were of most significance in the audit of the financial report of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on the audit of the Remuneration Report

Opinion on the Remuneration Report

We have audited the Remuneration Report included in pages 13 to 20 of the directors' report for the year ended 30 June 2017.

In our opinion, the Remuneration Report of Cape Lambert Resources Limited for the year ended 30 June 2017, complies with section 300A of the Corporations Act 2001.

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

==> picture [61 x 72] intentionally omitted <==

Responsibilities

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.

==> picture [150 x 52] intentionally omitted <==

Ernst & Young

==> picture [132 x 46] intentionally omitted <==

G H Meyerowitz Partner Perth

30 September 2017

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

ANNUAL REPORT 2017

ADDITIONAL STOCK EXCHANGE INFORMATION

==> picture [160 x 48] intentionally omitted <==

Cape Lambert Resources Limited is a listed public company, incorporated in Australia.

The Company’s registered and principal place of business is 32 Harrogate Street, West Leederville, Western Australia 6007 Australia.

Shareholding

The distribution of members and their holdings of equity securities in the Company as at 31 August 2017 are as follows:

Categ	ory (size of holding) Total Holders Number of Units
1- 1,0 1,001 5,001 10,00 100,0 Total	00 194 82,079 - 5,000 1,013 3,170,655 - 10,000 800 6,783,920 1- 100,000 1,837 72,518,400 01 – 999,999,999 672 750,464,865 4,516 833,019,919

Equity Securities

As at 31 August 2017, there were 4,516 shareholders, holding 833,019,919 fully paid ordinary shares.

All issued ordinary shares carry one vote per share and are entitled to dividends.

The number of shareholders holding less than a marketable parcel of shares is 2,693.

Options

The Company currently has 23,500,000 unlisted options exercisable at $0.05 each on or before 31 December 2018.

Voting Rights

In accordance with the Company’s constitution, on show of hands every member present in person or by proxy or attorney or duly authorised representative had one vote. On a poll every member present in person or by proxy or attorney or duly authorised representative has one vote for every fully paid ordinary share held. Options do not carry a right to vote.

Substantial Holders

The names of the substantial shareholders who have notified the Company in accordance with section 671B of the Corporations Act are as follows:

			% held of Issued
		Number as per the	Capital at the
	Fully paid ordinary shareholders	Notice	time of Notice
1	Gulf Energy International Limited	94,000,000	11.28
2	Okewood Pty Ltd and PG Partnership	77,766,681	9.34

ANNUAL REPORT 2017

==> picture [160 x 48] intentionally omitted <==

ADDITIONAL STOCK EXCHANGE INFORMATION

Twenty Largest Shareholders

The names of the twenty largest fully paid ordinary shareholders as at 31 August 2017 are as follows:

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20	Name	Number of Fully Paid Ordinary Shares Held % held of Issued Capital
	GULF ENERGY INTERNATIONAL LIMITED OKEWOOD PTY LTD NATIONAL NOMINEES LIMITED HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED BNP PARIBAS NOMINEES PTY LTD CAULDRON ENERGY LIMITED MR STANLEY LUFUNGA M PELESA KEONG LIM PTY LIMITED MRS YVONNE EL-BAYEH CITICORP NOMINEES PTY LIMITED EK HOLDINGS GROUP PTY LTD HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2 LEADENHALL AUSTRALIA PTY LIMITED J P MORGAN NOMINEES AUSTRALIA LIMITED MR NIGEL ROBERT STRONG MR GEDEON MAKONGA NGOY PELASA WHITEY TIGER PTY LTD DALE ESTATES NO 1 PTY LTD FRED PARRISH INVESTMENTS PTY LTD GANBARU PTY LTD	94,000,000 11.28 77,516,681 9.31 35,240,154 4.23 29,728,189 3.57 25,780,662 3.09 17,416,667 2.09 16,500,000 1.98 14,804,487 1.78 13,847,203 1.66 13,387,621 1.61 10,000,000 1.20 10,000,000 1.20 10,000,000 1.20 9,396,764 1.13 9,000,000 1.08 8,500,000 1.02 6,896,600 0.83 6,500,000 0.78 5,303,535 0.64 5,269,465 0.63
		419,088,028 50.31

ANNUAL REPORT 2017

==> picture [160 x 48] intentionally omitted <==

ADDITIONAL STOCK EXCHANGE INFORMATION

Schedule of Mineral Tenements Held at 30 June 2017

Tenement	Project & Location	Interest
Marampa Project - EL 46A/2011	Lunsar - Sierra Leone	100%
Marampa Project – ML 05/2014	Lunsar - Sierra Leone	100%
Kukuna Project - EL 22/2012	Kukuna – Sierra Leone	100%
Cote D’Ivoire Projects - EL 284*	Katiola - Cote D’Ivorie	100%
Cote D’Ivoire Projects - EL 285*	Boundiali North – Cote D’Ivorie	100%
Cote D’Ivoire Projects - EL 286*	Bouake – Cote D’Ivorie	100%
EPM 17449	Wee MacGregor -Queensland	100%
EPM 17907	Wee MacGregor -Queensland	100%
EPM 17910	Wee MacGregor -Queensland	100%
EPM 25860	Wee MacGregor -Queensland	100%
ML 90098	Wee MacGregor -Queensland	100%
ML 2504	Wee MacGregor -Queensland	100%
ML 2771	Wee MacGregor -Queensland	100%
ML 2773	Wee MacGregor -Queensland	100%
21853-HQ-SEL¹	Zambia	-
PER 12347²	Kipushi – DRC	-
PE 4886²	Kasombo – DRC	-
PE 481²	Kasombo – DRC	-

Pending transfer to a subsidiary of Newcrest Mining Limited ¹ Completion of this transaction is in progress

² Completion of this transaction is in progress

AI assistant

IRON BEAR RESOURCES LTD — Annual Report 2017

65091_rns_2017-10-01_21f78716-3caf-490c-ab7b-0ae1283c7d8c.pdf

CAPE LAMBERT RESOURCES LIMITED

AND ITS CONTROLLED ENTITIES

CONTENTS

Directors

Website

Registered Address

Bankers

Auditors

Marampa Project

Kukuna Project

Cote D’Ivoire Project

- Kipushi and Kasombo Copper Cobalt Projects (JV with Paragon Mining SARL)

PRINCIPAL ACTIVITIES AND REVIEW OF OPERATIONS

Kipushi Project

Kasombo Project

PRINCIPAL ACTIVITIES AND REVIEW OF OPERATIONS

Kitwe Tailings Project

Wee MacGregor Project

PRINCIPAL ACTIVITIES AND REVIEW OF OPERATIONS

DIRECTORS

COMPANY SECRETARY

DIVIDEND AND RETURN OF CAPITAL

REVIEW OF RESULTS AND OPERATIONS

Principal Activity

Review of Operations

Listing of European Lithium Ltd

Execution of new chairman consultancy agreement

Unlisted options issued to Gulf Energy

Sale of Mayoko Royalty

Cobalt Mining and Tailings Processing Operations - DRC

Assignment of Kasombo Project to Fe Limited

Kitwe Tailings Project – Zambia

Offtake and Funding Negotiations

Timis Mining Corporation Bridging Finance

Placement

Shares issued

Options issued

Options lapsed

RESULTS

CHANGES IN STATE OF AFFAIRS

EVENTS SUBSEQUENT TO BALANCE DATE

Assignment of Kasombo Project to Fe Limited

Update on Proceedings at High Court of Sierra Leone

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

ENVIRONMENTAL REGULATION AND PERFORMANCE

INDEMNIFICATION OF OFFICERS

INDEMNIFICATION OF AUDITORS

DIRECTORS’ MEETINGS

REMUNERATION REPORT (AUDITED)

Remuneration Policy for Directors and Other Key Management Personnel

Details of Directors and Other Key Management Personnel

Directors

Other Key Management Personnel

Principles used to determine the nature and amount of remuneration

Company Performance, Shareholder Wealth and Directors’ and Executives’ Remuneration

Details of Remuneration

% of Total Remuneration

Notes

Additional disclosures relating to options and shares

Options awarded, vested and lapsed

Note 1

Vesting conditions:

Share holdings of directors and key management personnel

Office lease agreement with Okewood Pty Ltd

Service Agreements

Executive Director

Non-Executive Directors

Other Key Management Personnel

2016 Annual General Meeting

Proceedings on Behalf of the Company

Non Audit Services

Share Options

Share Options Granted to Directors and Employees and Consultants

Share Options on Issue at Year End

AUDITOR’S INDEPENDENCE DECLARATION

Auditor’s Independence Declaration to the Directors of Cape Lambert Resources Limited

CORPORATE GOVERNANCE STATEMENT

IRON BEAR RESOURCES LTD Annual Report 2017