LEGEND MINING LIMITED — Interim / Quarterly Report 2014

Sep 10, 2014

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HALF YEAR REPORT 30 JUNE 2014

ACN 060 966 145

COMPANY DIRECTORY

CONTENTS

	Page
Company Directory	1
Directors’ Report	2
Consolidated Statement of Comprehensive Income 3
Consolidated Statement of Financial Position	4
Consolidated Statement of Cash Flows	5
Consolidated Statement of Changes in Equity	6
Notes to the Financial Statements	7
Directors’ Declaration	15
Declaration of Auditor Independence	16
Independent Auditor’s Review Report	17

Directors

Michael William Atkins (Non-Executive Chairman) Mark William Wilson (Managing Director) Derek William Waterfield (Executive Director – Technical)

Company Secretary

Dennis Wilkins

Registered Office

Level 1 8 Kings Park Road PO Box 626 WEST PERTH, WA 6005

Telephone: (08) 9212 0600 Facsimile: (08) 9212 0611

Bankers

Web

www.legendmining.com.au

Email

legend@legendmining.com.au

ASX Codes

LEG – ordinary shares

National Australia Bank 1232 Hay Street WEST PERTH, WA 6005

Auditors

Ernst & Young 11 Mounts Bay Road PERTH, WA 6000

Home Exchange

Australian Securities Exchange Ltd 2 The Esplanade PERTH WA 6000

Share Registry

Advanced Share Registry Services 150 Stirling Highway NEDLANDS, WA 6009

Telephone: (08) 9389 8033 Facsimile: (08) 9389 7871

Lawyers

Hilary Macdonald Suite 23, 18 Stirling Highway NEDLANDS WA 6009

Legend Mining Limited Half-Year Report 2014

1

DIRECTORS’ REPORT

The Directors submit their report for the half-year ended 30 June 2014.

DIRECTORS

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

Michael Atkins (Chairman, Non-Executive Director)

Mark Wilson (Managing Director)

Derek Waterfield (Executive Director – Technical)

NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES

The principal activities during the period of the entities within the consolidated entity were exploration for iron ore and gold deposits.

RESULTS OF OPERATIONS

The loss of the consolidated entity for the half-year after tax and non-controlling interests was $557,218 (2013: $26,494,792), which includes an impairment charge against the group’s deferred exploration assets of $1,144,664 (2013: $25,667,889).

REVIEW OF OPERATIONS

Legend successfully progressed the sale of the Cameroon Project to a point where completion occurred after period end (refer Notes 8 and 15). The Company also acquired an interest in exploration tenements in the Fraser Range District of Western Australia and has commenced early stage exploration activities.

AUDITOR’S INDEPENDENCE

The Auditor’s Independence Declaration under S307C of the Corporations Act 2001 has been received from Ernst & Young, the Company’s auditor, and is available for review on page 16.

SIGNED in accordance with a Resolution of the Directors on behalf of the Board

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________ M Wilson Managing Director

Dated this 11 September 2014

Legend Mining Limited Half-Year Report 2014

2

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 30 JUNE 2014

Notes Finance revenue 3(a) Other income 3(b) Net gain/(loss) on revaluation of financial assets held for trading 3(e) Other expenses 3(d) Corporate expenses Impairment of deferred exploration assets Net (loss)/profit before income tax expense Income tax benefit/(expense) (Loss)/profit for the period Other comprehensive income Items that may be reclassified to profit or loss Movement in foreign currency translation reserve Items that will not be reclassified to profit or loss Non-controlling interest in foreign currency translation reserve Other comprehensive (expense)/income for the period Total comprehensive (expense)/income for the period (Loss)/profit for the period attributable to: Members of Legend Mining Limited Non-controlling interest Total comprehensive (expense)/income attributable to: Members of Legend Mining Limited Non-controlling interest (LOSS)/PROFIT PER SHARE (cents per share) Basic (loss)/profit for the period attributable to ordinary equity holders of the parent 4 Diluted (loss)/profit for the period attributable to ordinary equity holders of the parent 4	CONSOLIDATED 30 June 2014 $ 30 June 2013 $ 65,174 176,224 - 30,000 1,420,550 (445,850) (15,812) (18,260) (903,285) (900,639) (1,144,664) (25,667,889)
	(578,037) (26,826,414) 20,819 331,622
	(557,218) (26,494,792)
	(850,469) 4,294,564 (94,496) 477,173
	(944,965) 4,771,737
	(1,502,183) (21,723,055)
	(444,431) (23,928,003) (112,787) (2,566,789)
	(557,218) (26,494,792)
	(1,294,900) (19,633,439) (207,283) (2,089,616)
	(1,502,183) (21,723,055)
	(0.0226) (1.2186) (0.0226) (1.2186)

The accompanying notes form part of these financial statements

Legend Mining Limited Half-Year Report 2014

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014

Notes ASSETS Current Assets Cash and cash equivalents 6 Trade & other receivables Other financial assets 7 Assets of disposal group classified as held for sale 8 Total Current Assets Non-current Assets Other financial assets 7 Property, plant & equipment 9 Deferred exploration assets 10 Total Non-current Assets TOTAL ASSETS LIABILITIES Current Liabilities Trade & other payables 11 Provisions Total Current Liabilities Non-current Liabilities Provisions Total Non-Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Equity attributable to equity holders of the parent Contributed equity 12 Reserves Reserves attributable to disposal group classified as held for sale Accumulated losses Total parent entity interest Non-controlling interests TOTAL EQUITY	CONSOLIDATED As at 30 June 2014 $ As at 31 December 2013 $ 3,153,407 4,652,135 5,904 32,480 5,147,600 3,727,050
	8,306,911 8,411,665 12,560,938 14,076,514
	20,867,849 22,488,179
	50,000 50,000 57,127 62,624 120,126 66,979
	227,253 179,603
	21,095,102 22,667,782
	89,390 166,920 118,767 103,498
	208,157 270,418
	46,372 42,788
	46,372 42,788
	254,529 313,206
	20,840,573 22,354,576
	59,807,070 59,818,890 22,417,578 22,417,578 2,647,058 3,497,527 (63,088,449) (62,644,018)
	21,783,257 23,089,977 (942,684) (735,401)
	20,840,573 22,354,576

The accompanying notes form part of these financial statements

Legend Mining Limited Half-Year Report 2014

4

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 30 JUNE 2014

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and employees Interest received Income taxes refunded/(paid) Net cash flows used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant & equipment Payments for exploration & evaluation Payment for term deposit Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Payments for share buy-back Net cash flows used in financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of period Effects of exchange rate movements on cash and cash equivalents Cash and cash equivalents at end of period	CONSOLIDATED 30 June 2014 $ 30 June 2013 $ - 30,000 (966,596) (902,994) 78,745 126,075 22,003 (1,203,513)
	(865,848) (1,950,432)
	(10,315) (20,781) (622,251) (1,583,804) - (5,000,000)
	(632,566) (6,604,585)
	- (42,389)
	- (42,389)
	(1,498,414) (8,597,406) 4,652,135 9,958,535 (314) 79,760
	3,153,407 1,440,889

The accompanying notes form part of these financial statements

Legend Mining Limited Half-Year Report 2014

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

Consolidated At 1 January 2014 Loss for the period Other comprehensive income/(expense) Total comprehensive income/(expense) for the period Cost of issue of share capital At 30 June 2014 At 1 January 2013 Loss for the period Other comprehensive income/(expense) Total comprehensive income/(expense) for the period Share buy-back Cost of issue of share capital At 30 June 2013	Issued Capital Foreign Currency Translation Reserve Share Option Premium Reserve Accumulated Losses Non- Controlling Interests Total Equity $ $ $ $ $ $ 59,818,890 3,497,527 22,417,578 (62,644,018) (735,401) 22,354,576
	- - - (444,431) (112,787) (557,218) - (850,469) - - (94,496) (944,965)
	- (850,469) - (444,431) (207,283) (1,502,183)
	(11,820) - - - - (11,820)
	59,807,070 2,647,058 22,417,578 (63,088,449) (942,684) 20,840,573
	59,860,159 (4,519,280) 22,417,578 (27,914,463) 2,056,782 51,900,776
	- - - (23,928,003) (2,566,789) (26,494,792) - 4,294,564 - - 477,173 4,771,737
	- 4,294,564 - (23,928,003) (2,089,616) (21,723,055)
	(14,952) - - - - (14,952) (14,497) - - - - (14,497)
	59,830,710 (224,716) 22,417,578 (51,842,466) (32,834) 30,148,272

The accompanying notes form part of these financial statements

Legend Mining Limited Half-Year Report 2014

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 30 JUNE 2014

NOTE 1: CORPORATE INFORMATION

The financial report of Legend Mining Limited (the Company) for the half-year ended 30 June 2014 was authorised for issue in accordance with a resolution of the Directors on 11 September 2014.

Legend Mining Limited is a company incorporated and domiciled in Australia whose shares are publicly traded on the Australian Securities Exchange.

The nature of the operations and principal activities of the Group are exploration for iron ore, gold and base metal deposits.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The half-year financial report does not include all notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report.

The half-year financial report should be read in conjunction with the Annual Financial Report of Legend Mining Limited for the year ended 31 December 2013.

It is also recommended that the half-year financial report be considered together with any public announcements made by Legend Mining Limited and its controlled entities during the half-year ended 30 June 2014 in accordance with the continuance disclosure obligations arising under the Corporations Act 2001.

(a) Basis of preparation

The half-year financial report is a general-purpose condensed financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 and AASB 134 Interim Financial Reporting. The half-year financial report has been prepared on a historical cost basis except for certain financial instruments and the assets of the disposal group classified as held for sale, which have been measured at fair value.

The half-year financial report is presented in Australian dollars and all values are expressed as whole dollars. For the purpose of preparing the half-year financial report, the half-year has been treated as a discreet reporting period.

(b) Adoption of new and revised Accounting Standards

The Company has adopted all new and revised Australian Accounting Standards issued by the AASB which are mandatory to apply to the current period as listed below:

• AASB 1031 Materiality;

• AASB 1048 Interpretation of Standards;

• AASB CF 2013-1 Amendments to the Australian Conceptual Framework and AASB 2013-9 Amendments to Australian Accounting Standards – Conceptual Framework, Materiality and Financial Instruments;

• AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements;

• AASB 2012-3 Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities (Amendments to AASB 132);

Legend Mining Limited Half-Year Report 2014

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 30 JUNE 2014

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

• AASB 2013-3 Amendments to AASB 136 – Recoverable Amount Disclosures for Non-Financial Assets; and

• AASB 2013-4 Amendments to Australian Accounting Standards – Novation of Derivatives and Continuation of Hedge Accounting.

These standards have introduced new disclosures for the interim report but did not have a material affect the entity’s accounting policies or any of the amounts recognised in the financial statements.

The Group has not elected to early adopt any other new Standards or amendments that are issued but not yet effective.

(c) Significant accounting policies

The half-year financial report has been prepared using the same accounting policies as used in the annual financial statements for the year ended 31 December 2013.

(d) Estimates

The preparation of the half-year financial report requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

Legend Mining Limited Half-Year Report 2014

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 30 JUNE 2014

NOTE 3: REVENUE AND EXPENSES Revenues and expenses from continuing operations a) Finance Revenue Bank interest received and receivable b) Other Income Sundry income c) Employee Benefits Expense Salaries & On costs Other employee benefits d) Other Expenses Depreciation Loss on disposal of property, plant and equipment e) Net Gain/(Loss) on Revaluation of Investments Fair value revaluation on Nemex Resources Limited shares Fair value revaluation on Pilbara Minerals Limited shares Fair value revaluation on Artemis Resources Limited shares Fair value revaluation on Sirius Resources Limited shares NOTE 4: LOSS PER SHARE (a) Earnings used in the calculation of basic loss per share Net loss from continuing operations attributable to ordinary equity holders of Legend Mining Limited (b) Weighted average number of shares on issue during the financial period used in the calculation of basic loss per share Weighted average number of ordinary shares on issue used in the calculation of diluted loss per share	CONSOLIDATED 30 June 2014 $ 30 June 2013 $ 65,174 176,224
	- 30,000
	- 30,000
	454,771 399,069 8,021 8,176
	462,792 407,245
	8,650 18,260 7,162 -
	15,812 18,260
	11,550 (56,100) 14,000 (29,750) (60,000) 120,000 1,455,000 (480,000)
	1,420,550 (445,850)
	CONSOLIDATED 30 June 2014 $ 30 June 2013 $ (444,431) (23,928,003)
	1,962,850,801 1,963,565,213 1,962,850,801 1,963,565,213

Legend Mining Limited Half-Year Report 2014

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 30 JUNE 2014

NOTE 5: SEGMENT INFORMATION

AASB 8 requires operating segments to be identified on the basis of internal reports that are used by the chief operating decision maker (“CODM”) in order to allocate resources to the segment and to assess its performance. The CODM of the Group is the Board of Directors.

The Group has identified its operating segments based on the internal reports that are provided to the CODM on a regular basis. The Group has two reportable operating segments being Australia and Africa, and conducts exploration and evaluation activities in Africa.

The accounting policies applied for internal reporting purposes are consistent with those applied in the preparation of this financial report.

Segment Income Segment Result Segment Assets Segment Liabilities	Australia West Africa Total June 2014 $ June 2013 $ June 2014 $ June 2013 $ June 2014 $ June 2013 $ 1,485,724 206,224 - - 1,485,724 206,224 570,656 (826,903) (1,127,874) (25,667,889) (557,218) (26,494,792) 8,492,138 10,093,996 12,602,964 20,286,450 21,095,102 30,380,446 (224,207) (228,433) (30,322) (3,741) (254,529) (232,174)

Segment revenues and expenses are those directly attributable to the segments and include those expenses incurred by head office where a reasonable basis of allocation exists. Segment assets include all assets used by a segment and consist principally of cash and cash equivalents, receivables, property, plant and equipment, investments in listed entities and capitalised exploration. Segment liabilities consist principally of payables, employee benefits, accrued expenses and provisions.

NOTE 6: CASH AND EQUIVALENTS Cash at bank and in hand Term deposits Total cash and cash equivalents NOTE 7: OTHER FINANCIAL ASSETS Current Shares in Sirius Resources Limited at market value Shares in Pilbara Minerals Limited at market value Shares in Nemex Resources Limited at market value Shares in Artemis Resources Limited at market value Non-current Performance and other bonds(a)	Consolidated 30 June 2014 $ 31 December 2013 $ 1,153,407 652,135 2,000,000 4,000,000 3,153,407 4,652,135
	Consolidated 30 June 2014 $ 31 December 2013 $ 4,860,000 3,405,000 35,000 21,000 72,600 61,050 180,000 240,000
	5,147,600 3,727,050
	50,000 50,000

Legend Mining Limited Half-Year Report 2014

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 30 JUNE 2014

NOTE 7: OTHER FINANCIAL ASSETS (cont’d)

The equity investments are all classified as held for trading. The market value of all equity investments represent the fair value based on quoted prices on active markets (ASX) as at the reporting date without any deduction for transaction costs. These investments are classified as Level 1 financial instruments. There have been no transfers between levels of the fair value hierarchy used in measuring the fair value of these financial instruments, or changes in its classification as a result of a change in the purpose or use of these assets.

(a) Bank deposit held as security for credit cards. At 30 June 2014 this deposit is held on a 6 month term deposit with an interest rate of 3.7% per annum (31 December 2013, 6 months at 3.75%pa).

NOTE 8: DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE Assets – at fair value less costs to sell Prepayments Inventory Property, plant and equipment Deferred exploration assets (i) Reserves attributable to disposal group classified as held for sale Foreign currency translation reserve	Consolidated 30 June 2014 $ 31 December 2013 $ 19,263 48,944 2,577 11,164 619,486 842,304 11,919,612 13,174,102
	12,560,938 14,076,514
	2,647,058 3,497,527

On 20 November 2013 Legend announced that it had entered into a Share Sale and Debt Assignment Agreement (“Agreement”) for the sale of Legend’s 90% interest in Camina SA, the holding company of the Ngovayang Project in the Republic of Cameroon (the “Transaction”). The sale is to be implemented by the sale of 100% of Legend’s wholly-owned British Virgin Islands subsidiary, Legend Iron Limited (“Company”), and transfer of intercompany debts by Legend Cameroon Pty Ltd (“Seller”) to Jindal Mining & Exploration Limited (“Purchaser”).

Pursuant to the Agreement, Legend shall receive cash consideration of:

• $6 million upon completion of the Transaction;

• $6 million twelve months after completion; and

• $5.5 million within 10 business days of the execution of a Mining Convention between the purchaser and the Government of Cameroon.

The fair value of the disposal group, classified as level 3 in the fair value hierarchy, has been determined by reference to the estimated fair value of the consideration receivable. In determining fair value, the first tranche of $6 million has been valued at its face value given the expected short term maturity thereof. The second tranche of $6 million is due to be received on 22 July 2015 and has been discounted at 8% over this period.

The contingent consideration of $5.5 million is dependent upon the execution of a mining convention between the purchaser and the government of Cameroon. Given the probability and time risk of the mining convention being executed, the directors have taken a conservative view and assigned a nil fair value to the contingent consideration.

Completion occurred on 22 July 2014 and the first tranche of $6 million was received on 5 August 2014.

Legend Mining Limited Half-Year Report 2014

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 30 JUNE 2014

NOTE 8: DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE (cont’d)

Note:

(i) The carrying value of the Group’s projects in West Africa were reviewed, and impairment of $1,127,874 recognised during the current period, in light of the sale agreement entered into. The carrying value has been determined by reference to the fair value of the proceeds to be received in accordance with the sale agreement.

NOTE 9: PROPERTY, PLANT AND EQUIPMENT

Consolidated At 31 December 2013 Cost Accumulated depreciation Net carrying amount Half-Year Ended 30 June 2014 Opening net carrying amount Additions Disposals Depreciation expense Closing net carrying amount At 30 June 2014 Cost Accumulated depreciation Net carrying amount NOTE 10: DEFERRED EXPLORATION ASSETS Deferred exploration costs (a) Deferred exploration and evaluation assets At 1 January, at cost Exchange differences Expenditure incurred during the period Expenditure written-off during the period (i) At 30 June, at cost (ii)	Plant and equipment $ 250,488 (187,864) 62,624 62,624 10,315 (7,162) (8,650) 57,127 129,237 (72,110) 57,127 Consolidated 30 June 2014 $ 31 December 2013 $	Plant and equipment $ 250,488 (187,864)
		62,624
		62,624 10,315 (7,162) (8,650)
		57,127
		129,237 (72,110)
		57,127
	120,126 66,979
	6 Months Ended 30 June 2014 $ 6 Months Ended 30 June 2013 $ 66,979 38,904,952 - 4,583,827 69,937 1,365,564 (16,790) (25,667,889)
	120,126 19,186,454

Legend Mining Limited Half-Year Report 2014

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 30 JUNE 2014

NOTE 10: DEFERRED EXPLORATION ASSETS (cont’d)

Note:

• (i) Deferred exploration assets for the current period relate solely to Australian-based projects, with the Group’s West African projects included in the disposal group classified as held for sale (refer note 8). During the 2013 interim period the carrying value of the West African projects were reviewed, and impairment recognised, based on the following:

• Value is anticipated to be recovered through either sale of the projects or exploitation of the projects by the Group;

• The carrying value has been determined by reference to the estimated fair value of the projects; and

• The fair value was supported by discussions held with potential partners.

• (ii) The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration and evaluation asset through sale.

NOTE 11: TRADE AND OTHER PAYABLES

Current – unsecured Trade payables Other payables & accruals	30 June 2014 $ 31 December 2013 $ 42,989 122,604 46,401 44,316
	89,390 166,920

Terms and conditions relating to the above financial instruments

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

• (ii) Other payables are non-interest bearing and normally settled as they fall due.

NOTE 12: CONTRIBUTED EQUITY

Ordinary shares Issued and fully paid Issue costs Movement in ordinary shares on issue 2014 At 1 January 2014 No movement At 30 June 2014	Consolidated and Company 30 June 2014 $ 31 December 2013 $ 63,075,664 63,075,664 (3,268,594) (3,256,774)
	59,807,070 59,818,890
	30 June 2014 30 June 2014 No of Shares $ 1,962,850,801 63,075,664
	1,962,850,801 63,075,664

Fully paid ordinary shares carry one vote per share and carry the right to dividends.

Legend Mining Limited Half-Year Report 2014

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 30 JUNE 2014

NOTE 13: COMMITMENTS

(a) Exploration expenditure commitments

In order to maintain current rights of tenure to exploration tenements, the Group will be required to outlay approximately $120,000 (2013: $nil) in the following twelve months in respect of tenement lease rentals and to meet minimum expenditure requirements of the Department of Industry & Resources. These obligations are expected to be fulfilled in the normal course of operations and have not been provided for in the financial report.

(a) Operating Lease commitments

The company has a lease commitment over its office premises located at 8 Kings Park Road, West Perth. The lease is for a period of two years commencing 1 November 2013. The lease commitment is $68,122 for the first year increased for CPI in the second year.

NOTE 14: CONTINGENT LIABILITIES

There are no contingent liabilities at the reporting date.

NOTE 15: EVENTS AFTER THE BALANCE SHEET DATE

The sale of the Ngovayang Project completed on 22 July 2014, refer to note 8 for details.

During August 2014 Legend cancelled a total of 800 million Performance Options for cash consideration of $1 million.

No other matters or circumstances have arisen since the end of the half-year to the date of this report which have significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity.

NOTE 16: DIVIDENDS PAID AND PROPOSED

No dividends were paid or proposed this financial period.

Legend Mining Limited Half-Year Report 2014

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DIRECTORS’ DECLARATION

In accordance with a resolution of the directors of Legend Mining Limited, I state that:

In the opinion of the Directors:

• a) the financial statements and notes, of the consolidated entity, are in accordance with the Corporations Act 2001, including;

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

• ii. Complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001; and

• 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.

On behalf of the Board.

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---

Mark Wilson Managing Director

Dated this 11 September 2014

Legend Mining Limited Half-Year Report 2014

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

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

Auditor’s Independence Declaration to the Directors of Legend Mining Limited

In relation to our review of the financial report of Legend Mining Limited for the half-year ended 30 June 2014, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.

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Ernst & Young

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Gavin Buckingham Partner

11 September 2014

GB:EH:LEG:020

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

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

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To the members of Legend Mining Limited

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Legend Mining Limited, which comprises the consolidated statement of financial position as at 30 June 2014, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the half-year end or from time to time during the half-year.

Directors’ Responsibility for the Half-Year Financial Report

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

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 30 June 2014 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of Legend Mining Limited and the entities it controlled during the half-year, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

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

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 . We have given to the directors of the company a written Auditor’s Independence Declaration, a copy of which is included in the Directors’ Report.

GB:EH:LEG:021

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

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Conclusion

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

• a) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2014 and of its performance for the half-year ended on that date; and

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

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Ernst & Young

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Gavin Buckingham Partner Perth 11 September 2014

GB:EH:LEG:021

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