METALSTECH LIMITED

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Financial Report For the period ended 30 June 2016

METALSTECH LIMITED CONTENTS PAGE FOR THE PERIOD ENDED 30 JUNE 2016

Director’s Report	3
Auditors Independence Declaration	7
Financial Report
Statement of Profit or Loss and Other Comprehensive Income	8
Statement of Financial Position	9
Statement of Changes in Equity	10
Statement of Cash Flows	11
Notes to the Financial Statements	12
Director’s Declaration	22
Independent Auditor's Report	23

METALSTECH LIMITED DIRECTOR’S REPORT FOR THE PERIOD ENDED 30 JUNE 2016

The directors present their report, together with the financial report of MetalsTech Limited (“MetalsTech”) for the period from incorporation (being 25 May 2016) to 30 June 2016 and auditor's report thereon. This financial report has been prepared in accordance with Australian Accounting Standards and for the purpose of the preparation of the Investigating Accountants Report for inclusion in a prospectus.

Directors

The names of the directors in office at any time during or since the end of the period are:

Mr. Gino D’Anna (appointed 25 May 2016) Mr. Russell Moran (appointed 25 May 2016) Mrs. Rachel D’Anna (appointed 25 May 2016)

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

Principal activities

The principal activity of the company during the financial year was lithium exploration.

Financial results

The financial results of the company for the period ended 30 June 2016 are:

	30-June-16
Cash and cash equivalents (AUD $)	293,416
Net assets (AUD $)	428,993
Total revenue (AUD $) Net loss after tax (AUD $)	- (680,344)

Review of operations

The company continued to engage in its principal activity, the results of which are disclosed in the attached financial statements.

Significant changes in state of affairs

There were no significant changes in the company's state of affairs that occurred during the financial period.

METALSTECH LIMITED DIRECTOR’S REPORT FOR THE PERIOD ENDED 30 JUNE 2016

After balance date events

Following the end of the financial year MetalsTech has completed a seed capital raising of $805,000 by issuing 8,050,000 ordinary shares at an issue price of $0.10 per share ($490,000 was receipted by the company prior to 30 June 2016).

On 21 September 2016, MetalsTech entered into an agreement to acquire 100% of the share capital of LiGeneration Pty Ltd (“LiGeneration”). MetalsTech issued 3,600,000 fully-paid ordinary shares in full consideration for the acquisition of LiGeneration.

The Company is currently in the process of an Initial Public Offering (‘IPO’). At the signing date of this financial report this process is still in progress. The fundraising under this prospectus is expected to raise up to $4,000,000 with a further $3,000,000 available in the case of oversubscriptions.

Other than the above, there have been no other matters or circumstances which have arisen since 30 June 2016 that have significantly affected or may significantly affect:

(a) the operations, in financial years subsequent to 30 June 2016, of the company, or
(b) the results of those operations, or
(c) the state of affairs, in financial years subsequent to 30 June 2016, of the company.

Information on directors

Name Gino D’Anna Title Executive Director and Company Secretary Qualifications Bachelor of Commerce (Honours) Experience Mr D’Anna is a founder and Executive Director of the Company. Mr D’Anna has significant primary and secondary capital markets experience and has extensive experience in resource exploration, public company operations and administration and financial management.

Mr D’Anna has particular experience in Canadian Government and First Nations relations in the mining sector. Mr D’Anna was a founding shareholder and founding Executive Director of Atrum Coal (ASX: ATU) which is developing the Groundhog Anthracite Project, located in British Columbia, Canada.

Special Responsibilities

Mr D’Anna is currently a Director of BC Anthracite NL, Non-Executive Director of Metals Australia Limited (ASX: MLS) and K2fly Limited (ASX: K2F) and Director of Lac Grande Gold Pty Ltd. None

Name Russell Moran Title Non-Executive Director Qualifications N/A Experience Mr Moran is a co-founder and Executive Chairman of the Company. He is an experienced natural resources and technology investor with experience across bulk commodities, base metals and mining and engineering services sectors. He is the Founder and former Executive Director of Canadian anthracite mine developer Atrum Coal (ASX: ATU) and has significant experience in Canadian exploration and resource development.

METALSTECH LIMITED DIRECTOR’S REPORT FOR THE PERIOD ENDED 30 JUNE 2016

Mr Moran is currently Chairman of Oceanic Dental Pty Ltd and BC Anthracite NL, and Non-Executive Director K2 Technology Pty Ltd and K2fly Limited (ASX: K2F). Special Responsibilities None Name Rachel D’Anna Title Non-Executive Director Qualifications Diploma of Business Administration Experience Mrs D’Anna has in excess of 7 years experience in business administration, accounting and financial administration having worked within local government organisations and in the private sector. Special Responsibilities None

Likely developments and expected results of operation

The company expects to maintain the present status and level of operations.

Director’s Meetings

The following directors’ meetings (including meetings of committees of directors) were held during the year and the number of meetings attended by each of the directors during the year were:

	Directors’ meetings eligible		Directors’ meetings
2016	to attend		attended
Directors
Gino D’Anna		-		-
Russell Moran		-		-
Rachel D’Anna		-		-
Shares under option

Unissued ordinary shares of MetalsTech Ltd under option at the date of this report are as follows:

Expirydate Exercise price	Balance at start ofyear Issued during the year Cancelled/ lapsed during theyear	Balance at end of the year
24 May 16 $0.25	- 9,600,000 -	9,600,000

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

Environmental regulation

The company's operations are not regulated by any significant environmental regulation under a law.

Dividends paid, recommended and declared

No dividends were paid or declared since the start of the period. No recommendation for payment of dividends has been made.

Proceedings on behalf of the company

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Group, or to intervene in any proceedings to which the Group is a party, for

METALSTECH LIMITED DIRECTOR’S REPORT FOR THE PERIOD ENDED 30 JUNE 2016

the purposes of taking responsibility on behalf of the Group for all or part of those proceedings.

Indemnification of officers

No indemnities have been given or insurance premiums paid, during or since the end of the period, for any person who is or has been an officer of the company.

Indemnification of auditors

No indemnities have been given or insurance premiums paid, during or since the end of the period, for any person who is or has been an auditor of the company.

Auditor’s independence declaration

The auditor’s independence declaration as required under section 307C of the Corporations Act 2001 can be found on page 7.

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

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Gino D’Anna Executive Director 24 November 2016

AUDITORS INDEPENENCE DECLARATION

METALSTECH LIMITED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE PERIOD ENDED 30 JUNE 2016

Notes	30-June-16
	AUD $
Revenue
Sales income	-
	-
Expenses
Administration Expenses	640
Audit Fees	7,000
Corporate Compliance	421
Directors Benefits Expense 12	618,992
Directors and Consulting Fees	42,000
Project Due Diligence Expenses	11,039
Foreign Exchange Loss	252
	680,344
Loss from continuing operations before income tax
Income tax expense	-
Loss from continuing operations after income tax	680,344

Other comprehensive income,net of tax	-
Total other comprehensive loss for the period	680,344

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

METALSTECH LIMITED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2016

Notes	30-June-16
	AUD $
ASSETS
Current Assets
Cash and cash equivalents 4	293,416
Trade and other receivables 5	4,643
Total Current Assets	298,059

Non-Current Assets
Prepayment 6	184,134
Total Non-Current Assets	184,134
TOTAL ASSETS	482,193

LIABILITIES
Current Liabilities
Trade and otherpayables 7	53,200
Total Current Liabilities	53,200
TOTAL LIABILITIES	53,200
NET ASSETS	428,993

EQUITY
Share capital 8	490,345
Reserves 9	618,992
Accumulated losses 10	(680,344)
TOTAL EQUITY	428,993

The Statements of Financial Position is to be read in conjunction with the accompanying notes.

METALSTECH LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 30 JUNE 2016

	Issued		Accumulated	Total
	Capital	Reserves	Losses	Equity
	AUD $	AUD $	AUD $	AUD $
Balance at incorporation	-	-	-	-
Comprehensive income:
Loss after income tax expense for the	-	-	(680,344)	(680,344)
period
Total comprehensive loss for the period	-	-	(680,344)	(680,344)
Transactions with owners in their capacity as owners:
Capital raising	490,345	-	-	490,345
Share-based payment – performance rights	-	23,792	-	23,792
Share-based payment – options	-	595,200	-	595,200
At 30 June 2016	490,345	618,992	(680,344)	428,993

The Statement of Changes in Equity is to be read in conjunction with the accompanying notes.

METALSTECH LIMITED STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED 30 JUNE 2016

Notes Cash flows from operating activities Payment to suppliers and employees (include GST) Net cash flows from operating activities 4(b) Cash flows from investing activities Prepaid acquisition costs for exploration assets Net cash flows from investing activities Cash flows from financing activities Proceeds from application funds held in trust Net cash flows from financing activities Net (decrease) / increase in cash and cash equivalents Cash and cash equivalents at beginning of period Exchange rate adjustments Cash and cash equivalents at the end of the period 4(a)	30-June-16
	AUD $ (12,198)
	(12,198)
	(184,134)
	(184,134)
	490,000
	490,000
	293,668 - (252)
	293,416

The Statement of Cash Flows is to be read in conjunction with the accompanying notes.

METALSTECH LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2016

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

a) Basis of preparation of the financial report

In the directors' opinion, the company is not a reporting entity because there are no users dependent on general purpose financial statements.

These are special purpose financial statements that have been prepared for the purposes of complying with the Corporations Act 2001 requirements to prepare and distribute financial statements to the owners of MetalsTech Limited. The directors have determined that the accounting policies adopted are appropriate to meet the needs of the owners of MetalsTech Limited.

These financial statements have been prepared in accordance with the recognition and measurement requirements specified by the Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the disclosure requirements of AASB 101 'Presentation of Financial Statements', AASB 107 'Statement of Cash Flows', AASB 108 'Accounting Policies, Changes in Accounting Estimates and Errors', AASB 1048 'Interpretation of Standards' and AASB 1054 'Australian Additional Disclosures', as appropriate for for-profit oriented entities.

Historical Cost Convention

The financial report has been prepared under the historical cost convention, as modified by revaluations to fair value for certain classes of assets as described in the accounting policies.

Critical accounting estimates

The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 3.

Comparative information

This report presents the financial information for the 2 month period ended 30 June 2016. Given the Company was incorporated on the 25 May 2016 there are no comparatives for this reporting period.

Functional and presentation currency

The functional currency of the company is measured using the currency of the primary economic environment in which the entity operates. The financial statements are presented in Australian dollars, which is the entity’s functional currency.

METALSTECH LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2016

b) Going concern

For the period ended 30 June 2016 the company has incurred a net loss of AUD$708,108, experienced net cash outflows from operations of AUD$12,198 and net cash outflows from investing activities of AUD$184,134. As at 30 June 2016 the cash balance is at $293,416.

The Directors have reviewed the cash flow requirements in the next 12 months and recognise that the ability of the company to continue as a going concern is dependent upon the success of the fundraising under the prospectus to continue to fund its operational activities.

These conditions indicate a material uncertainty that may cast a significant doubt about the company’s ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business.

The Director believes there are sufficient funds to meet the company’s working capital requirements as at the date of this report.

The financial statements have been prepared on the basis that the company is a going concern, which contemplates the continuity of normal business activity, realisation of assets and settlement of liabilities in the normal course of business for the following reasons:

Completion of a seed capital raising post year end for $805,000 by issuing 8,050,000 ordinary shares at $0.10 per share
Expected successful completion of the fundraising under the prospectus to raise up to $4,000,000 with a further $3,000,000 available in the case of oversubscriptions

Should the company not be able to continue as a going concern, it may be required to realise its assets and discharge its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial statements and that the financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or liabilities that might be necessary should the company not continue as a going concern.

c) New, revised or amending Accounting Standards and Interpretations adopted

The company has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (“AASB”) that are mandatory for the current reporting period.

Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

Any significant impact on the accounting policies of the company from the adoption of these Accounting Standards and Interpretations are disclosed below. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the company.

METALSTECH LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2016

d) Income tax

The charge for current income tax expenses is based on the profit for the year adjusted for any non-assessable or disallowed items. It is calculated using tax rates that have been enacted or are substantively enacted by the statement of financial position date.

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

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary difference can be utilised. The amount of benefits brought to account or which may be released in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the company will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

e) Exploration and evaluation expenditure

Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest.

These costs 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 against profit in the year in which the decision to abandon the area is made.

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

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

Costs incurred on identifiable areas of interest where the Company has not been granted rights to tenure as at reporting date are capitalised when the Company are confident that it is probable the Company will be granted rights in the near future. If the Company is subsequently not granted rights to tenure, costs capitalised to affected areas of interest are written off in the profit and loss in the year in which this decision is known.

f) 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 in the statement of financial position.

g) Trade and other payables

Trade and other payables represent the liabilities at the end of the reporting period for goods and services received by the company that remain unpaid.

Trade payables are recognised at their transaction price. Trade payables are obligations on the basis of normal credit terms.

METALSTECH LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2016

h) Issued Capital

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.

i) Current and non-current classification

Assets and liabilities are presented in the statement of financial position based on current and non-current classification.

An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.

A liability is classified as current when: it is either expected to be settled in normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.

j) Fair value measurement

When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence of a principal market, in the most advantageous market.

Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

NOTE 2: ACCOUNTING STANDARDS AND INTERPRETATIONS ISSUED BUT NOT OPERATIVE AT 30 JUNE 2016

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the company for the annual reporting period ended 30 June 2016. The company has not yet assessed the impact of these new or amended Accounting Standards and Interpretations.

NOTE 3: CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial period are discussed below.

METALSTECH LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2016

Provision for impairment of receivables

The provision for impairment of receivables assessment requires a degree of estimation and judgement. The level of provision is assessed by taking into account the recent sales experience, the aging of receivables historical collection rates and specific knowledge of the individual debtors financial position.

Share-based payments

The valuation of share-based payment transactions is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using valuation methods including the Black Scholes valuation model and the Binomial – barrier up and in model taking into account the terms and conditions upon which the instruments were granted.

NOTE 4: CASH AND CASH EQUIVALENTS

NOTE 4: CASH AND CASH EQUIVALENTS	NOTE 4: CASH AND CASH EQUIVALENTS
(a) Reconciliation to cash at the end of the period
		30-June-16 AUD $ 293,416 293,416


Cash at bank and in hand


(b) Reconciliation of net loss after income tax to net cash flows used in operating activities

		30-June-16 AUD $ (680,344) 618,992 (4,046) 53,200 (12,198)


Net loss after income tax

Adjustments for:
Directors benefits expense

Changes in assets and liabilities:
(Increase)/decrease in trade and other receivables
Increase/(decrease)in trade and otherpayables
Net cash flows used in operating activities

NOTE 5: TRADE AND OTHER RECEIVABLES GST receivable Sundry receivables	30-June-16 AUD $ 4,298 345
	4,643

METALSTECH LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2016

NOTE 6: PREPAYMENTS

Prepayments Reconciliation: Balance at the beginning of the year Deposits and acquisition costs for exploration assets Balance at the end of the year	30-June-16
	AUD $ 184,131
	184,131
	- 184,131
	184,131

NOTE 7: TRADE AND OTHER PAYABLES

NOTE 7: TRADE AND OTHER PAYABLES
	30-June-16
	AUD $

Trade and other payables	46,200
Accrued expenses	7,000
	53,200
NOTE 8: ISSUED CAPITAL 34,480,000 fully paid ordinary shares (a)	30-June-16
	AUD $ 490,345
	490,345

(a) Movements in Ordinary Shares

DATE	DETAILS	ISSUE AUD ($)
Balance at incorporation	Opening balance	-
June 2016	Issue of shares	345
June 2016	Application funds for shares	490,000
30 June 2016	Closing balance	490,345

Capital management

When managing capital, management's objective is to ensure the company continues as a going concern as well as to maintain optimal returns to shareholders and benefits for other stakeholders. This is achieved through the monitoring of historical and forecast performance and cash flows.

METALSTECH LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2016

NOTE 9: RESERVES

NOTE 9: RESERVES
	30-June-16
	AUD $
Share-based payments reserve
Balance at incorporation Valuation of performance shares Valuation of founders options Balance at the end of the period NOTE 10: ACCUMULATED LOSSES	- 23,792 595,200
	618,992
	30-June-16 AUD $ - 680,344 680,344



Balance at incorporation Loss after income tax expense for the period Balance at the end of the period

NOTE 11: REMUNERATION OF AUDITORS

During the financial period the following fees were paid or payable for services provided by BDO Audit (WA) Pty Ltd, the auditor of the company:

		30-June-16
		AUD $
Audit services - BDO Audit (WA) Pty Ltd
Audit of the financial statements		7,000
		7,000

METALSTECH LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2016

NOTE 12: SHARE-BASED PAYMENTS

(a) Performance shares

MetalsTech Ltd issued 2,750,000 performance shares to directors. These performance shares were issued in eight classes, each with different performance milestones. Each performance share will convert into 1 ordinary share of MetalsTech Ltd upon achievement of the performance milestone.

The company has assessed each class as being probable of being achieved and have therefore recognised an expense over the expected vesting period. The details of each class are tabled below:

Class	Number	Grant Date	Exercise Price	Underlying Share Price	Total Fair Value
1	343,750	24/05/16	Nil	$0.10	-
2	343,750	24/05/16	Nil	$0.10	-
3	343,750	24/05/16	Nil	$0.10	$8,322
4	343,750	24/05/16	Nil	$0.10	$7,903
5	343,750	24/05/16	Nil	$0.10	$7,567
6	343,750	24/05/16	Nil	$0.10	-
7	343,750	24/05/16	Nil	$0.10	-
8	343,750	24/05/16	Nil	$0.10	-

Performance Milestones:

Class 1 : 343,750 Performance Rights will convert into Shares upon the achievement of a JORC or NI 43-101 Inferred Resource of >15,000,000 tonnes grading >1% Li2O across any of the Company’s Projects;
Class 2 : 343,750 Performance Rights will convert into Shares upon the achievement of a JORC or NI 43-101 Indicated Resource of >15,000,000 tonnes grading >1% Li2O across any of the Company’s Projects;
Class 3 : 343,750 Performance Rights will convert into Shares upon:
(i) the Company successfully completing an initial public offering on the ASX; and
(ii) the Volume Weighted Average Price ( VWAP ) of the Company’s Shares as traded on the ASX over 10 days being equal to or exceeding 60 cents;
Class 4 : 343,750 Performance Rights will convert into Shares upon the VWAP of the Company’s Shares as traded on the ASX over 10 days being equal to or exceeding 90 cents;
Class 5 : 343,750 Performance Rights will convert into Shares upon the VWAP of the Company’s Shares as traded on the ASX over 10 days being equal to or exceeding $1.20;
Class 6 : 343,750 Performance Rights will convert into Shares upon the Company completing a positive pre-feasibility study ( PFS ) on any of the Company’s Projects;
Class 7 : 343,750 Performance Rights will convert into Shares upon the Company completing a positive bankable feasibility study ( BFS ) on any of the Company’s Projects; and
Class 8 : 343,750 Performance Rights will convert into Shares upon the Company executing a binding offtake agreement with respect to any of the Projects.

METALSTECH LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2016

NOTE 12: SHARE-BASED PAYMENTS (continued)

The total expense arising from share based payment transactions recognised during the period in relation to the performance shares issued was $23,792. This amount has been included in Directors benefits expense.

(b) Options

The following options were issued to Directors during the period:

Grant Date Expiry Date Exercise Price	Balance at start of the period Issued during the period Exercised during the period Number Number Number	Cancelled or Expired during the period Balance at end of the period Number Number
2016 24 May 2016 24 May 2021 $0.25 - 9,600,000 - - 9,600,000 - Weighted average remaining contracted life of options (Years) Weighted average exercise price	- 9,600,000 -	- 9,600,000
	- 9,600,000 -	- 9,600,000
		5.00 Years $0.25

Fair values at grant date are determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option. The fair value of the options issued during the period were based on the following:

Type of Options:	Directors
Number of options issued	9,600,000
Exercise price	$0.25
Share price at date granted	$0.10
Risk free rate	1.86%
Volatility factor	100%
Valuation	6.2c

NOTE 12: COMMITMENTS

The company had no commitments as at 30 June 2016.

NOTE 13: CONTINGENT LIABILITIES

The company had no contingent liabilities as at 30 June 2016.

METALSTECH LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2016

NOTE 14: EVENTS SUBSEQUENT TO REPORTING DATE

Following the end of the financial year MetalsTech has completed a seed capital raising of $805,000 by issuing 8,050,000 ordinary shares at an issue price of $0.10 per share.

Other than the above, there have been no other matters or circumstances which have arisen since 30 June 2016 that have significantly affected or may significantly affect:

(a) the operations, in financial years subsequent to 30 June 2016, of the company, or
(b) the results of those operations, or
(c) the state of affairs, in financial years subsequent to 30 June 2016, of the company.

NOTE 15: COMPANY DETAILS

The registered office and principal place of business of the company is: Suite 1 108 Hay Street

Subiaco WA 6008

METALSTECH LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2016

In the directors' opinion:

the company is not a reporting entity because there are no users dependent on general purpose financial statements. Accordingly, as described in note 1 to the financial statements, the attached special purpose financial statements have been prepared for the purposes of complying with the Corporations Act 2001 requirements to prepare and distribute financial statements to the owners of MetalsTech Limited;
the attached financial statements and notes thereto comply with the Corporations Act 2001 , the Accounting Standards as described in note 1 to the financial statements, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes thereto give a true and fair view of the company's financial position as at 30 June 2016 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001 .

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Gino D’Anna Executive Director 24 November 2016

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF METALSTECH LIMITED

Tel: +61 8 6382 4600 38 Station Street Fax: +61 8 6382 4601 Subiaco, WA 6008 www.bdo.com.au PO Box 700 West Perth WA 6872 Australia

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INDEPENDENT AUDITOR’S REPORT

To the members of MetalsTech Limited

Report on the Financial Report

We have audited the accompanying financial report, being a special purpose financial report of MetalsTech Limited, which comprises the statement of financial position as at 30 June 2016, the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the period then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view and have determined that the basis of preparation described in Note 1 to the financial report is appropriate to meet the requirements of the Corporations Act 2001 and is appropriate to meet the needs of the members.

The directors’ responsibility also includes such internal control as the directors determine is necessary to enable the preparation of a financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

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

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

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

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.

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Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of MetalsTech Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.

Opinion

In our opinion the financial report of MetalsTech Limited is in accordance with the Corporations Act 2001 including:

(a) giving a true and fair view of the company’s financial position as at 30 June 2016 and of its performance for the period ended on that date; and
(b) complying with Australian Accounting Standards to the extent described in Note 1 and the Corporations Regulations 2001

Emphasis of matter

Without modifying our opinion, we draw attention to Note 1(b) in the financial report which describes the events and conditions which give rise to the existence of a material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern and therefore the company may be unable to realise its assets and discharge its liabilities in the normal course of business.

Basis of accounting

Without modifying our opinion, we draw attention to Note 1 to the financial report, which describes the basis of accounting. The financial report has been prepared for the purpose of fulfilling the directors’ financial reporting responsibilities under the Corporations Act 2001 . As a result, the financial report may not be suitable for another purpose.

BDO Audit (WA) Pty Ltd

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Dean Just

Director

Perth, 24 November 2016

Tel: +61 8 6382 4600 38 Station Street Fax: +61 8 6382 4601 Subiaco, WA 6008 www.bdo.com.au PO Box 700 West Perth WA 6872 Australia

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DECLARATION OF INDEPENDENCE BY DEAN JUST TO THE DIRECTORS OF METALSTECH LIMITED

As lead auditor of MetalsTech Limited for the period ended 30 June 2016, I declare that, to the best of my knowledge and belief, there have been:

No contraventions of the auditor independence requirements of the Corporations Act 2001 relation to the audit; and
No contraventions of any applicable code of professional conduct in relation to the audit.

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Dean Jus t Director

BDO Audit (WA) Pty Ltd

Perth, 24 November 2016

AI assistant

METALSTECH LIMITED — Annual Report 2016

65380_rns_2017-02-22_4d17f98b-62eb-427b-8793-9cd94cf43a92.pdf