POLARX LIMITED — Interim / Quarterly Report 2018

Mar 13, 2018

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PolarX Limited

ABN 76 161 615 783

Financial Report for the half-year ended 31 December 2017

PolarX Limited

CONTENTS

	Page No
Corporate Directory	1
Directors’ Report	2
Statement of Profit or Loss and Other Comprehensive Income	9
Statement of Financial Position	10
Statement of Cash Flows	11
Statement of Changes in Equity	12
Notes to the Financial Statements	13
Directors’ Declaration	27
Auditor’s Independence Declaration	28
Independent Audit Report	29

PolarX Limited

PolarX Limited

CORPORATE DIRECTORY

Directors

Mr. Mark Bojanjac Executive Chairman Dr. Frazer Tabeart Managing Director Dr. Jason Berton Executive Director Mr. Robert Boaz Non-Executive Director

Company Secretary

Mr. Ian Cunningham

Registered Office

Suite 9, 5 Centro Avenue Subiaco WA 6008 Australia Telephone: (+61 8) 9226 1356 Facsimile: (+61 8) 9226 2027

Principal Place of Business

Suite 1, 245 Churchill Avenue Subiaco WA 6008 Australia Telephone: (+61 8) 6465 5500 Facsimile: (+61 8) 6465 5599

Share Register

Computershare Investor Services Pty Ltd Level 11 172 St Georges Terrace Perth WA 6000 Australia Telephone: 1300 787 272 International: (61 8) 9323 2000 Facsimile: (61 8) 9323 2033

Stock Exchange Listing

Australian Securities Exchange ASX Code: PXX

Auditors

Stantons International Audit and Consulting Pty Ltd Level 2, 1 Walker Avenue West Perth WA 6005

PolarX Limited

1

Operations Report

The Directors present their report for PolarX Limited (“PolarX” or “the Company”) and its subsidiaries (“the Group”) for the half-year ended 31 December 2017.

DIRECTORS

The names of the Directors in office during the period and until the date of this report are set out below. Directors were in office for this entire period unless otherwise stated.

Mark Bojanjac Executive Chairman Dr. Frazer Tabeart Managing Director (appointed 25 July 2017) Dr. Jason Berton Executive Director (appointed 25 July 2017) Michael Fowler Non-Executive Director (resigned 1 December 2017) Robert Boaz Non-Executive Director

RESULTS OF OPERATIONS

The Group’s total comprehensive loss after taxation attributable to the members of PolarX Limited for the half-year ended 31 December 2017 was $687,778 (2016: $182,908).

REVIEW OF OPERATIONS

Alaska Range Project, Alaska USA

During the half-year ended 31 December 2017, the Company significantly expanded its highly prospective footprint in Alaska by acquiring 100% of the issued capital of Vista Minerals Pty Ltd ( Vista Acquisition ), which holds a 100% interest in the Stellar Copper Gold Project ( Stellar Property ).

Subsequent to the Vista Acquisition, PolarX’s focus has been on the exploration and development of its newly named Alaska Range Project which contains both the Caribou Dome Copper Project ( Caribou Dome Property ) and the new Stellar Property (refer Figure 1). The combined Alaska Range Project now comprises 417 State mineral claims covering a total area of ~243km[2] , which follows the staking of an additional 104 State Mining Claims during the reporting period. Collectively these claims now form a contiguous package with ~35km strike length containing extensive copper and goldin-soil anomalism, with significant upside potential for resource extensions and larger porphyry copper-gold discoveries.

PolarX Limited

2

Operations Report

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Figure 1: Location map showing main deposits and prospects at the Stellar and Caribou Dome properties in central Alaska, which collectively form the Alaska Range Project, regional copper geochemistry in soil sampling draped on digital elevation.

Stellar Property

The Stellar Property contains five main prospects: the Zackly Cu-Au skarn; the Jupiter, Mars and Gemini porphyry CuAu-Mo targets, and the Au-only Moonwalk Prospect. Prior to the Vista Acquisition, Zackly was the only prospect to have been tested by drilling, undertaken between 1981 and 1994. This drilling identified a mineralized skarn with average grades of 2.9% Cu and 4.51g/t Au along a strike-length of ~800m. PolarX identified the opportunity to significantly increase the strike length of the mineralisation through further drilling.

Zackly C-Au Skarn

During the reporting period a program of thirteen drill holes, for a total of 2,054m, were drilled at Zackly. Preliminary assays have been received for seven of the thirteen holes (see Figure 2 and table below).

PolarX Limited

3

Operations Report

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Figure 2: Zackly Prospect showing location of 2017 drill collars, historical and planned IP survey lines and historical drill hole collar locations.

The key initial assay results, which were announced on 23 November and 6 December 2017, are provided in the table below:

Hole_ID	From(m)	To(m)	*Interval(m) **	Cu %	**Aug/t **	**Ag g/t **
ZM‐17002	98.27	131.7	33.43	1.16	1.27	11.4
incl.	99.06	102.51	3.45	3.85	2.23	46.5
and	112.63	127.41	14.78	1.23	2.08	12.4
ZW‐17004	131.87	136.55	4.68	0.92	1.52	10.9
ZM‐17005	193.24	206.87	13.63	0.68	1.07	7.0
and	227.38	230.14	2.76	2.57	0.50	23.8
ZM‐17006	9.7	14.95	5.25	2.00	2.71	26.1
ZM‐17008	85.70	95.55	9.85	1.95	2.00	20.1
ZM‐17010	155.85	161.39	5.54	0.65	1.11	5.8
and	169.47	187.91	18.44	1.34	1.15	12.4
ZM‐17015	88.80	94.65	5.85	1.23	2.20	12.3

* Thickness of mineralisation reported is down-hole thickness. There is insufficient interpretation of the mineralisation to confidently report “true widths”. It is however noted that the mineralized lenses appear to be relatively steeply dipping. As such it is probable that “true widths” will be smaller than the down-hole widths by approximately 50% (depends on hole dip).

Key observations to date from the 2017 Zackly exploration program include:

• Mineralisation occurred in two distinct phases:

• An initial mineralising event occurred when a diorite intrusion formed marbles and weakly mineralised skarns in the adjacent silty-limestones and volcanic rocks, and introduced disseminated Fe, Cu and Mo sulphides.

• A stronger mineralising event in which widespread garnetiferous skarns containing clots, veines and disseminations of bornite, covellite, magnetite, chalcopyrite and native copper overprinted the earlier mineralisation (Figure 3).

PolarX Limited

4

Operations Report

• The drilling results to date highlight that the best mineralisation in the skarn generally occurs in the stratigraphically upper part of the skarn body near the faulted contact with the limestone, indicating stratigraphic and structural control to the mineralisation.

• The presence of porphyry style veins overprinting potassic alteration containing K-feldspar and secondary biotite and sub-vertical hydrothermal breccias provide evidence for the possible presence of a buried porphyritic intrusion.

• Mineralisation remains open along strike and at depth.

PolarX’s drilled intersections are in a number of cases wider than those recorded in the early 1980’s.

Following review of the remaining conventional assay results, along with the results from the selected samples sent for re-assaying using screen fire assay techniques, the Company will finalise its maiden JORC mineral resource estimate for Zackly. This is scheduled for publication in March 2018.

Further drilling is also being planned for 2018 to establish the potential scale and commercial extent of this mineralised system at Zackly, and to assess the deeper porphyry potential.

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Figure 3 Bornite mineralisation in garnetiferous skarn, ZM17010, 179.4m down-hole depth.

Mars Cu-Au Target

The Mars prospect lies 6km to the WNW of the Zackly Skarn. Geological evidence indicates a WNW structural corridor extending between Mars and Zackly (Figure 4). This potentially hosts multiple buried porphyry Cu-Au systems.

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Figure 4: WNW trending structural corridor between Mars and Zackly plotted on an image of aeromagnetic data draped on digital terrain.

PolarX Limited

5

Operations Report

The Mars prospect is characterised by co-incident copper, gold, molybdenum and silver anomalism in broadly spaced soil samples over a large area of approximately 2,000m x 1,500m. Up to 7.4% Cu and 1.8g/t Au is evident in rock-chip samples.

PolarX conducted an initial IP survey over the Mars prospect in late August 2017. Three lines of data and one short tie line were collected using a pole-dipole array with 100m spaced electrodes. The IP results (Figure 5) show a buried chargeability anomaly located 100-150m below the surface geochemical anomalism. This is consistent with a buried, mineralised porphyry Cu-Au system.

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Figure 5: Mars Prospect showing IP chargeability anomaly directly below soil geochemistry results and rock-chip sampling copper assays.

The full extent of the chargeability anomaly is not yet known as the anomalism extends to the edge of the 800m wide survey area which lies within the 2km long soil anomaly – further IP surveying will be undertaken to map out the full extent of the IP anomaly and together with, gravity surveys and re-processing of aeromagnetic data, will lead to a drill campaign on the prospect.

Senator Cu Target

The Senator copper prospect, which forms part of the Caribou Dome Property, was discovered through a soil sampling program undertaken by the Company in 2016. This highlighted an area covering approximately 5km x 2.5km with elevated copper in soils (>100ppm Cu) and sporadic outcrop. Site visits undertaken during 2017 highlighted the potential of this area having identified intense iron alteration (jarosite and hematite) and the presence of copper oxides on fracture surfaces.

Five lines of IP data were read across the Senator copper anomaly in August 2017 for a total of 6.35km using 50m electrode spacing. Final pseudo-sections and inverted data were delivered to the Company in mid-October 2017. Results will be reported once the data has been analysed and interpreted by the Company’s consulting geophysicist.

Caribou Dome Deposit

During 2017 detailed geological mapping and structural interpretation of outcrop and drill core at the high-grade Caribou Dome Cu deposit was undertaken. This work will aid understanding the structural influences and geometry of the known mineralisation and will be used to assist in planning extensional drilling at the Caribou Dome Deposit.

PolarX Limited

6

Operations Report

A small program of metallurgical test-work on mineralised samples from the Caribou Dome deposit commenced in the last quarter of 2017. This program will use the remaining 20kg of mineralised material from Lens 6 of Caribou Dome (the largest mineralised lens) to determine if copper selectivity can be increased through the use of different collectors which are selective against pyrite along with trailing several pyrite and carbon depressants. Results are expected in the next quarter.

Environmental Baseline Surveys

Environmental baseline studies to monitor surface and ground water at the Caribou Dome and Zackly deposits for future mine permitting purposes commenced during the period and included a reconnaissance level wetlands survey over Zackly and collection of initial water samples from a number of baseline monitoring stations at Zackly and Caribou Dome.

Uncle Sam Gold Project, Alaska USA

The Uncle Sam Project is located 75 kilometres southeast of the City of Fairbanks in Alaska. Intrusion-related gold has been targeted in previous exploration programs.

The Company acquired the Uncle Sam Project in April 2013 from Millrock. Subsequently in July 2015, the Company entered into a mineral lease and purchase agreement with Great American Minerals Exploration Inc. ( GAME ), pursuant to which GAME agreed to lease the Uncle Sam Project for 10 years with an option to purchase the property at any time during the lease period (refer Note 29 to the 2017 Annual Financial Report for key terms).

During the reporting period the Company received noticed from the Department of Natural Resources (State of Alaska) that the mineral claims which comprise the Uncle Sam Gold Project had been declared abandoned ( DNR Notice ). The basis for the decision was an error on the affidavit of labor filed by the previous tenement owner in 2011. As a result, GAME has sought to terminate the Option Agreement .

The Company is currently reviewing its options in relation to this matter, including whether GAME has complied with its obligations under the Option Agreement, but notes that the Uncle Sam Gold Project:

• is considered a non-core asset and had a $nil carrying value in the Company’s financial statements at the time of receipt of the DNR Notice; and

• is independent of the Company’s Alaska Range Project.

AUDITOR’S DECLARATION

Section 307C of the Corporations Act 2001 requires the Group’s auditors to provide the Directors of PolarX with an Independence Declaration in relation to the review of the half-year financial report. A copy of that declaration is included at page 28 of this report. There were no non-audit services provided by the Company’s auditor for the half-year ended 31 December 2017.

Signed on behalf of the board in accordance with a resolution of the Directors.

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Mark Bojanjac Executive Chairman 13 March 2018

PolarX Limited

7

Operations Report

Competent Person’s Statement

The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the ‘JORC Code’) sets out minimum standards, recommendations and guidelines for Public Reporting in Australasia of Exploration Results, Mineral Resources and Ore Reserves. The information contained in this report has been presented in accordance with the JORC Code.

Information in this report relating to Exploration results is based on information compiled by Dr Frazer Tabeart (an employee of PolarX Limited), who is a member of The Australian Institute of Geoscientists. Dr Tabeart has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person under the 2012 Edition of the Australasian Code for reporting of Exploration Results, Mineral Resources and Ore Reserves. Dr Tabeart consents to the inclusion of the data in the form and context in which it appears.

The information in this report that relates to Mineral Resources for the Caribou Dome Project is based on information compiled by Mr Peter Ball who is a Member of The Australasian Mining and Metallurgy. Mr Ball has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and the activity he is undertaking to qualify as a Competent Person as defined in the JORC Code. Mr Ball consents to the inclusion in the report of the matters based on the information in the form and context in which it appears .

*Foreign Historic Mineral Resource Estimate for the Zackly Main Skarn in the Alaska Range Project:

• Readers are referred to the Company's initial market release dated 24 May 2017 which provides supporting information on these historical foreign resource estimates.

• The Company confirms that the supporting information disclosed in the initial market announcement continue to apply and have not materially changed. Readers are cautioned that that this estimate is a "foreign estimate" under ASX Listing Rule 5.12 and is not reported in accordance with the JORC Code.

• A Competent Person has not yet undertaken sufficient work to classify the foreign estimate as mineral resources or ore reserves in accordance with the JORC Code.

• It is uncertain that, following evaluation and/or further exploration work, it will be possible to report this foreign estimate as mineral resources or ore reserves in accordance with the JORC Code.

Forward Looking Statements:

Any forward-looking information contained in this report is made as of the date of this report. Except as required under applicable securities legislation, PolarX does not intend, and does not assume any obligation, to update this forward-looking information. Any forward-looking information contained in this report is based on numerous assumptions and is subject to all of the risks and uncertainties inherent in the Company’s business, including risks inherent in resource exploration and development. As a result, actual results may vary materially from those described in the forward-looking information. Readers are cautioned not to place undue reliance on forward-looking information due to the inherent uncertainty thereof.

Previously Reported Results:

There is information in this report relating to:

• (i) Exploration Results which were previously announced on 25 October 2017, 23 November 2017, 6 and 8 December 2017 and 7 February 2018; and

• (ii) the Mineral Resource Estimate for the Caribou Dome Deposit (Alaska Range Project), which was previously announced on 5 April 2017.

Other than as disclosed in those announcements, the Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements, and that all material assumptions and technical parameters have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcements.

PolarX Limited

8

PolarX Limited

Consolidated Statement of Profit or Loss and Other Comprehensive Income

Notes

2017 2016 $ $ $ 3,436 $ 8,536 27,048 28,995 213,738 166,688 29,738 22,458 27,090 17,202 26,858 30,507 16,000 36,000 570 873 140,716 970 117,725 4,709 (22,374) 33,125 (8,512) - 119,466 69,733 688,063 411,260 $ (684,627) $ (402,724) - - $ (684,627) $ (402,724) - - (3,151) 219,816 (3,151) 219,816 $ (687,778) $ (182,908) $ (0.31) $ (0.46) 1 218,137,321 88,115,449 1 Consolidated Six months ended December 31

Interest Revenue & Other Income Public company costs Consulting and directors fees Share-based compensation 15 Legal fees Staff costs Serviced office and outgoings Interest and penalties Investor relations Travel expenses Foreign exchange loss Loss on covertible loan Other expenses 5 Loss from operations Income tax expense Loss after Income Tax Other comprehensive (loss) / income Items that may be reclassified to profit and loss in subsequent periods Foreign currency translation 13 Other comprehensive (loss) / income for the period Total comprehensive loss for the period Loss per share: Basic and diluted loss per share (cents per share) Weighted Average Number of Shares: Basic and diluted number of shares

1. The prior period weighted average number of ordinary shares have been restated for comparative purposes to reflect the number of shares post consolidation.

The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

PolarX Limited

9

PolarX Limited

Consolidated Statement of Financial Position

Consolidated Statement of Financial Position
Notes	December 31 2017 June 30 2017 $ $ Consolidated As at
Current Assets Cash and cash equivalents Other receivables and prepayments 6 Total current assets Non-Current Assets Property, plant and equipment 7 Exploration and evaluation assets 8 Total Non-Current Assets Total Assets Current liabilities Trade and other payables 10 Convertible note 9 Total Current Liabilities Total Liabilities	$ 1,443,078 $ 54,856 318,217 35,612
	1,761,295 90,468
	$ 10,197 $ 12,165 17,930,663 6,031,415
	17,940,860 6,043,580
	$ 19,702,155 $ 6,134,048
	$ 108,967 123,934 - 108,863
	108,967 232,797
	$ 108,967 $ 232,797
NET ASSETS	$ 19,593,188 $ 5,901,251
Equity Contributed equity 11 Reserves 13 Accumulated losses 12	$ 75,473,913 $ 61,123,936 5,180,467 5,153,880 (61,061,192) (60,376,565)
TOTAL EQUITY	$ 19,593,188 $ 5,901,251
Commitments 18 Contingent Liability 19

The above statement of financial position should be read in conjunction with the accompanying notes.

PolarX Limited

10

PolarX Limited

Consolidated Statement of Cash Flows

**Consolidated Statement of Cash Flows **
Notes	2017 2016 $ $ Consolidated Six months ended December 31
Cash flows from Operating activities
Payments to suppliers and employees	$ (988,152) $ (529,945)
Interest received and other income	3,436 8,536
Net cash flows used in operating activities	(984,716) (521,409)
Cash flows from investing activities Cash acquired on acquisition	35,142 -
Payments for expenditure on exploration Net cash flows used in investing activities	(2,818,235) (2,745,883)
	(2,783,093) (2,745,883)
Cash flows from financing activities Proceeds from issue of shares	5,495,000 1,807,160
Share issue costs Net cash flows from financing activities	(341,449) (146,068)
	5,153,551 1,661,092
Net increase / (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period	1,385,742 (1,606,200) 54,856 2,137,481
Foreign exchange variances on cash	2,480 (2,086)
Cash and cash equivalents at end of period	$ 1,443,078 $ 529,195

The above statement of cash flows should be read in conjunction with the accompanying notes.

PolarX Limited

11

PolarX Limited

Consolidated Statement of Changes in Equity

					Foreign
					Currency		Share Based	Option
		Number of	Issued	Accumulated	Translation	Warrant	Payment	Premium
Consolidated	Notes	Shares	Capital	Losses	Reserves	Reserves	Reserves	Reserve	Total
At 1 July 2017		91,982,673	$ 61,123,936	$(60,376,565)	$ (215,978)	$ 1,190,098 $ 4,176,760		$ 3,000 $ 5,901,251
Loss for the period		-	-	(684,627)	-		- -		- (684,627)
Other comprehensive loss		-	-	-	(3,151)		- -		-(3,151)
Total comprehensive loss for
the period		-	$ -	$ (684,627)	$ (3,151)	$	- $ -	$	- $ (687,778)
Transactions with owners in
their capacity as owners
Shares issued	11	54,950,000	5,495,000	-	-		- -		- 5,495,000
Share issue costs	11	-	(341,449)	-	-		- -		- (341,449)
Shares issued for acquisition of
Vista Minerals	11	91,964,430	9,196,426	-	-		- -		- 9,196,426
Options issued to consultants	13, 15, 16	-	-	-	-		- 29,738		- 29,738
Balance at 31 December 2017		238,897,103	$ 75,473,913	**$(61,061,192) **	$ (219,129)	$ 1,190,098 $ 4,236,236		$ 3,000 $ 19,622,926
					Foreign
					Currency		Share Based	Option
		Number of	Issued	Accumulated	Translation	Warrant	Payment	Premium
Consolidated	Notes	Shares	Capital	Losses	Reserves	Reserves	Reserves	Reserve	Total
At 1 July 2016		80,687,923	$ 59,462,844	$(59,452,089)	$ (83,965)	$ 1,190,098 $ 4,098,880		$ 3,000 $ 5,218,768
Loss for the period		-	-	(402,724)	-		- -		- (402,724)
Other comprehensive income		-	-	-	219,816		- -		- 219,816
Total comprehensive loss for
the period		-	$ -	$ (402,724)	$ 219,816	$	- $ -	$	- $ (182,908)
Transactions with owners in
their capacity as owners
Shares issued	11	11,294,750	1,807,160	-	-		- -		- 1,807,160
Share issue costs	11	-	(146,068)	-	-		- -		- (146,068)
Options issued to consultants	13, 15	-	-	-	-		- 49,197		- 49,197
Share-based compensation	15	-	-	-	-		- 22,458		- 22,458
Balance at 31 December 2016		91,982,673	**$ 61,123,936 **	**$(59,854,813) **	**$ 135,851 **	$ 1,190,098 $ 4,170,535		$ 3,000 $ 6,768,607

The above statement of changes in equity should be read in conjunction with the accompanying notes.

PolarX Limited

12

Condensed notes to the financial statements for the half-year ended 31 December 2017

PolarX Limited

1. Corporate Information

The financial report of PolarX Limited ( PolarX or the Company ) and its subsidiaries (the Group ) for the half-year ended 31 December 2017 was authorised for issue in accordance with a resolution of the Directors on 7 March 2018.

On 7 August 2017, the Company completed a 1 for 5 security consolidation ( Consolidation ) and on 15 September 2017 it changed its name to PolarX Limited (formerly Coventry Resources Limited).

PolarX Limited is an Australian public company limited by shares and which is listed on the Australian Securities Exchange.

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

2. Going Concern

The financial report has been prepared on a going concern basis, which contemplates continuity of normal business activities and realisation of assets and settlement of liabilities in the ordinary course of business.

For the half-year ended 31 December 2017, the Group incurred a loss of $684,627 (2016: $402,724) and incurred net cash inflows of $1,385,742 (2016: outflows of $1,606,200). At 31 December 2017, the Group had net current assets of $1,652,328 (30 June 2017: net current liabilities of $142,329).

The Group’s ability to continue as a going concern is dependent upon it maintaining sufficient funds for its operations and commitments. The Directors continue to be focused on meeting the Group’s business objectives and is mindful of the funding requirements to meet these objectives. The Directors consider the basis of going concern to be appropriate for the following reasons:

• given the Company’s market capitalisation and the underlying prospects for the Group to raise further funds from the capital markets; and

• the fact that future exploration and evaluation expenditure are generally discretionary in nature (i.e. at the discretion of the Directors having regard to an assessment of the Group’s eligible expenditure to date and the timing and quantum of its remaining earn-in expenditure requirements). Subject to meeting certain minimum expenditure commitments, further exploration activities may be slowed or suspended as part of the management of the Group’s working capital.

The Directors are confident that the Group can continue as a going concern and as such are of the opinion that the financial report has been appropriately prepared on a going concern basis. However, should the Group be unable to raise further required financing, there is uncertainty which may cast doubt as to whether or not the Group will be able to continue as a going concern and whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial statements.

The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts nor to the amounts and classification of liabilities that might be necessary should the Group not continue as a going concern.

3. Summary of Significant Accounting Policies

(a) Basis of Presentation

These general purpose interim financial statements for the half-year reporting period ended 31 December 2017 have been prepared in accordance with requirements of the Corporations Act 2001 and Australian Accounting Standard AASB 134: Interim Financial Reporting. The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards.

This interim financial report is intended to provide users with an update on the latest annual financial statements of the Group. It is therefore recommended that this financial report be read in conjunction with the annual financial

PolarX Limited

13

PolarX Limited Condensed notes to the financial statements for the half-year ended 31 December 2017

statements of the Group for the year ended 30 June 2017 ( 2017 Annual Financial Report ), together with any public announcements made during the following half-year.

(b) Accounting Policies

New and revised accounting requirement applicable to the current reporting period

The same accounting policies and methods of computation have been followed in this interim financial report as were applied in the 2017 Annual Financial Report.

The Group has considered the implications of new and amended Accounting Standards but determined that their application to the financial statements is either not relevant or not material.

4. Acquisition

On 23 May 2016, the Company announced it had entered into agreements that provided it the right to acquire an 100% interest in the Stellar Copper Gold Project ( Stellar Property ) via the acquisition of Vista Minerals Pty Ltd ( Vista ) (the Vista Transaction ), subject to shareholder approval and certain closing conditions. On 30 June 2017, the Company’s shareholders approved the Vista Transaction and it was completed on 26 July 2017.

Pursuant to the Vista Transaction, PolarX issued 91,964,430 (post-Consolidation basis) fully paid ordinary shares ( Shares ) to Vista’s shareholders, being the consideration for the acquisition of 100% of the issued capital of Vista. Concurrently, the Company completed a private placement ( Placement ) pursuant to which 54,950,000 shares were issued at $0.10 per Share (post-Consolidation basis) for gross proceeds of $5.495 million.

The Company has accounted for the Vista Transaction as a business combination and has identified and recognized the individual identifiable assets acquired and liabilities assumed. The purchase price was allocated to the individual identifiable assets and liabilities on the basis of their fair values at the date of purchase. Consideration consisted entirely of shares of the Company which were measured at the fair value of the PolarX Shares issued using quoted price per share. The fair value of the 91,964,430 Shares issued to Vista’s shareholders to complete the Vista Transaction was $9,196,426.

The fair value of net assets at the Vista Transaction date is as follows:

	July 26, 2017
ASSETS Cash Convertible note (refer to Note 9) Other receivables Exploration and evaluation assets Total Assets LIABILITIES Accounts payables Accrued liabilities Total Liabilities Net assets	$ 35,142 100,921 44,191 9,240,287
	9,420,541
	140,787 83,328
	224,115
	$ 9,196,426

The acquired subsidiary contributed no revenue and a loss of $8,186 for the period 26 July 2017 to 31 December 2017.

PolarX Limited

14

PolarX Limited Condensed notes to the financial statements for the half-year ended 31 December 2017

5. Other expenses Accounting and audit fees Bank fees Computer expenses Insurance Printing and stationary Postage Telephone Depreciation Others 6. Other Receivables and Prepayments Current GST / VAT receivable Prepayments	Consolidated For the six months ended 31 December 2017 $ 31 December 2016 $ 22,395 19,448 1,964 6,090 3,303 2,618 16,474 21,880 3,206 2,759 5,134 569 1,061 1,699 119 108 65,810 14,562
	119,466 69,733
	Consolidated 31 December 30 June 2017 2017 $ $ 33,559 18,101 284,658 17,511
	318,217 35,612

Trade debtors, other debtors and goods and services tax are non-interest bearing and generally receivable on 30 day terms. They are neither past due nor impaired. The amount is fully collectible. Due to the short term nature of these receivables, their carrying value is assumed to approximate their fair value.

7. Property, Plant and Equipment Plant and Equipment Cost Accumulated depreciation Net carrying amount	Consolidated 31 December 30 June 2017 2017 $ $ 16,734 17,557 (7,026) (5,958)
	9,708 11,599

PolarX Limited

15

PolarX Limited

Condensed notes to the financial statements for the half-year ended 31 December 2017

Office Furniture and Fixtures Cost Accumulated depreciation Net carrying amount Computer Equipment Cost Accumulated depreciation Net carrying amount Total property, plant and equipment Cost Accumulated depreciation Net carrying amount	519 519 (291) (266)
	228 253
	1,946 1,946 (1,685) (1,633)
	261 313
	19,199 20,022 (9,002) (7,857)
	10,197 12,165

Reconciliations of the carrying amounts of property, plant and equipment at the beginning and end of the current financial period:

Plant and Equipment Carrying amount at beginning of year Additions Depreciation expense Net exchange differences on translation Carrying amount at end of period Office Furniture and Fixtures Carrying amount at beginning of year Additions Depreciation expense Net exchange differences on translation Carrying amount at end of year Computer Equipment Carrying amount at beginning of period Additions Depreciation expense Net exchange differences on translation Carrying amount at end of period Total property, plant and equipment	Consolidated 31 December 30 June 2017 2017 $ $ 11,599 17,118 - - (1,717) (5,068) (174) (451)
	9,708 11,599
	253 316 - - (25) (63) - -
	228 253
	313 468 - - (52) (154) - (1)
	261 313
	10,197 12,165

PolarX Limited

16

PolarX Limited

Condensed notes to the financial statements for the half-year ended 31 December 2017

8. Deferred Exploration and Evaluation Expenditure Exploration and evaluation expenditure At cost Accumulated provision for impairment Total exploration and evaluation Carrying amount at beginning of the year CEE acquired on Acquisition of Vista Minerals (Note 4) Exploration and evaluation expenditure during the period Payment related to mineral lease agreement Net exchange differences on translation Carrying amount at end of period	Consolidated 31 December 30 June 2017 2017 $ $ 19,221,113 7,321,865 (1,290,450) (1,290,450)
	17,930,663 6,031,415
	Consolidated 31 December 30 June 2017 2017 $ $ 6,031,415 3,794,242 9,240,286 - 2,686,079 2,410,010 - (42,781) (27,117) (130,056)
	17,930,663 6,031,415

The Directors’ assessment of the carrying amount for the Group’s exploration and development expenditure was after consideration of prevailing market conditions; previous expenditure for exploration work carried out; and the potential for mineralisation based on the Group’s independent geological reports. The recoverability of the carrying amount of the deferred exploration and evaluation expenditure is dependent on successful development and commercial exploitation, or alternatively the sale, of the respective areas of interest.

9. Convertible note

On 29 April 2017, the Company entered into a convertible note deed (the Note ) with Vista ( Noteholder ) to borrow up to $200,000. Under the terms of the Note, the funds could be withdrawn on the “liquidity date”, which was the date the Company’s consolidated cash position was at or below $50,000. On 14 June 2017, the Company borrowed $100,000 pursuant to the Note, which was repayable within twelve months. Interest accrued on the balance at 8% per annum. At 30 June 2017, there was accrued interest of $351 and a loss on the change in the fair value of the convertible note of $8,512.

The Noteholder had the option to convert the outstanding balance and accrued interest into shares of the Company. Upon issue of a conversion notice, the Noteholder is entitled to receive that number of shares equal to the amount withdrawn plus accrued interest divided by a 10% discount to the volume weighted average price of the closing price of the Company’s Shares trading on the ASX for 30 trading days immediately prior to the date of the conversion notice. The Company repaid the outstanding balance plus accrued interest on 2 August 2017.

PolarX Limited

17

PolarX Limited Condensed notes to the financial statements for the half-year ended 31 December 2017

10. Current Liabilities Trade and other payables Trade payables Accruals Convertible note	Consolidated 31 December 30 June 2017 2017 $ $ 64,400 67,742 44,567 56,192
	108,967 123,934 - 108,863
	108,967 232,797

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

11. Contributed Equity (a) Issued and paid up capital Ordinary shares fully paid (b) Movements in ordinary shares on issue Balance at beginning of period Shares issued for Vista acquisition Share issues (net of costs) Balance at end of the period**	Consolidated 31 December 30 June 2017 2017 $ $ 75,473,913 61,123,936 31 December 2017 30 June 2017 Number of shares $ Number of shares $ 91,982,673 61,123,936 80,687,923 59,462,844 91,964,430 9,196,426 - - 54,950,000 5,153,551 11,294,750 1,661,092 238,897,103 75,473,913 91,982,673 61,123,936	Consolidated 31 December 30 June 2017 2017 $ $ 75,473,913 61,123,936

• All numbers shown on a post-Consolidation basis

** Balance at period end incorporates an additional 156 shares due to the rounding of fractional entitlements pursuant to the Consolidation

On 26 July 2017, the Company completed a placement consisting of 54,950,000 Shares at an issue price of $0.10 per Share for net proceeds of $5,153,551 to institutional and sophisticated investors.

PolarX Limited

18

PolarX Limited

Condensed notes to the financial statements for the half-year ended 31 December 2017

12. Accumulated losses Movements in accumulated losses were as follows: Balance at beginning of period Loss for the period Balance at end of the period 13. Reserves Foreign currency translation reserve Warrant reserves Share based payments reserves Option premium reserve Balance at end of period Movement in reserves: Share based payments and option premium reserve Balance at beginning of period Options issued to consultants Options exercised Equity benefits expense Balance at end of period	Consolidated 31 December 30 June 2017 2017 $ $ 60,376,565 59,452,089 684,627 924,476
	61,061,192 60,376,565
	Consolidated 31 December 30 June 2017 2017 $ $ (219,129) (215,978) 1,190,098 1,190,098 4,206,498 4,176,760 3,000 3,000 5,180,467 5,153,880 Consolidated 31 December 30 June 2017 2017 $ $ 4,179,760 4,101,880 29,738 49,197 - - - 28,683 4,209,498 4,179,760

The Share based payments and option premium reserve is used to record the value of equity benefits provided to individuals acting as employees, directors as part of their remuneration, and consultants and for their services.

PolarX Limited

19

PolarX Limited Condensed notes to the financial statements for the half-year ended 31 December 2017

Foreign currency translation reserve Balance at beginning of period Items that will not be reclassified to profit or loss in subsequent periods Items that may be reclassified to profit and loss in subsequent periods Balance at end of period	Consolidated 31 December 30 June 2017 2017 $ $ (215,978) (83,965) - - (3,151) (132,013)
	(219,129) (215,978)

The foreign currency translation reserve is used to record the currency difference arising from the translation of the financial statements of the foreign operations.

Warrant reserve Balance at beginning of period Warrants exercised Balance at end of period	Consolidated 31 December 30 June 2017 2017 $ $ 1,190,098 1,190,098 - -
	1,190,098 1,190,098

The warrant reserve is used to record the value of warrants provided to shareholders as part of capital raising activities.

14. Related Party Disclosures

The ultimate parent entity is PolarX Limited.

Mitchell River Group Pty Ltd., a Company of which Fraser Tabeart is a Director and Principal, provided the Company with consulting services totalling $25,559 during the half-year ended 31 December 2016 (2016: $nil) of which $99 was outstanding at period end (30 June 2017: $nil).

There were no other related party disclosures for the half-year ended 31 December 2017 (2016: Nil).

PolarX Limited

20

PolarX Limited Condensed notes to the financial statements for the half-year ended 31 December 2017

15. Share Based Payment Plans

(a) Recognised share based payment expenses

Total expenses arising from share based payment transactions recognised during the half-year as part of share based payment expense were as follows:

Operating expenditure Options issued to employees and directors Options issued to consultants Balance at end of period	Consolidated 31 December 31 December 2017 2016 $ $ - 22,458 29,738 -*
	29,738 22,458

*Expense of $49,197 was recorded in the financial year ending 30 June 2016, being the fair value of consultant stock options which were subsequently issued in August 2016.

(b) Share based payment - options

The Group has established an employee share option plan (ESOP) and also issues options to executive officers, directors, consultants and employees outside the Plan (collectively the “Options”). The objective of the Options is to assist in the recruitment, reward, retention and motivation of the recipients and/or reduce the level of cash remuneration that would otherwise be paid to the recipient. An eligible person may receive the options or nominate a relative or associate to receive the options. Details of Options granted are as follows (post-Consolidation basis):

2017

Grant date	Expiry date	Exercise	Balance at	Granted	Exercised	Expired	Balance at	Exercisable
		price	start of the	during the	during the	during the	end of the	at end of the
			period	period	period	period	period	period
			Number	Number	Number	Number	Number	Number
8 Jan 2013	17 Aug 2017	C$0.25	226,170	-	-	(226,170)	-	-
20 Feb 2015	19 Feb 2020	A$0.0715	4,000,000	-	-	-	4,000,000	4,000,000
18 Jun 2015	17 Jun 2020	A$0.175	400,000	-	-	-	400,000	400,000
18 Jun 2015	30 Jun 2018	A$0.13	146,200	-	-	-	146,200	146,200
31 Aug 2016	31 Aug 2019	A$0.195	400,000	-	-	-	400,000	400,000
19 Sept 2017	18 Sept 2020	A$0.12	-	400,000	-	-	400,000	400,000
31 December	2017		5,172,370	400,000	-	(226,170)	5,346,200	5,346,200
Weighted remaining contractual			2.47				2.12	2.12
life (years)
Weighted average exercise price			$ 0.10				$ 0.09	$ 0.09

On 19 September 2017, the Company issued 400,000 options, each exercisable at $0.12 on or before 18 September 2020, in lieu of cash consideration for consulting services. Refer further to Note 16.

PolarX Limited

21

PolarX Limited

Condensed notes to the financial statements for the half-year ended 31 December 2017

2016

Grant date	Expiry date	Exercise	Balance at	Granted	Exercised	Expired	Balance at	Exercisable
		price	start of the	during the	during the	during the	end of the	at end of the
			period	period	period	period	period	period
			Number	Number	Number	Number	Number	Number
8 Jan 2013	1 Dec 2016	C$0.25	301,560	-	-	(301,560)	-	-
8 Jan 2013	17 Aug 2017	C$0.25	226,170	-	-	-	226,170	226,170
8 Jan 2013	8 Mar 2017	C$0.25	25,130	-	-	-	25,130	25,130
28 Nov 2013	28 Nov 2016	C$0.25	670,000	-	-	(670,000)	-	-
20 Feb 2015	19 Feb 2020	A$0.0715	4,000,000	-	-	-	4,000,000	2,000,000
18 Jun 2015	17 Jun 2020	A$0.175	400,000	-	-	-	400,000	400,000
18 Jun 2015	30 Jun 2018	A$0.13	146,200	-	-	-	146,200	146,200
31 Aug 2016	31 Aug 2019	A$0.195	-	400,000	-	-	400,000	400,000
31 December	2016		5,769,060	400,000	-	(971,560)	5,197,500	3,197,500
Weighted remaining contractual			2.97				2.96	2.84
life (years)
Weighted average exercise price			$ 0.10				$ 0.10	$ 0.10

On 31 August 2016, the Company issued 400,000 options, each exercisable at $0.195 on or before 30 August 2019, in lieu of cash consideration for consulting services. Refer further to Note 16.

16. Issue of Options

On 19 September 2017, 400,000 Options with a fair value of $29,738 were issued, as consideration for consulting services. The fair value at grant date of options granted during the period and in previous reporting periods, was determined using the Black Scholes option pricing model that takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share and the risk free interest rate for the term of the Option. The model inputs for the options granted during the period ended 31 December 2017 included:

• a) options were issued with an exercise price of $0.12;

• b) expected life of options is 3 years; c) share price at grant date was $0.10;

• c) share price at grant date was $0.10; d) expected volatility of 135%, based on the history of the Company’s share prices for the expected life of the options;

• e) expected dividend yield of nil; and

• f) a risk-free interest rate of 2.13%

PolarX Limited

22

PolarX Limited Condensed notes to the financial statements for the half-year ended 31 December 2017

Prior year issue of Options

On 31 August 2016, 400,000 Options with a fair value of $49,197 were issued during the half-year, as consideration for consulting services provided during the 2016 financial year. The model inputs for the options granted during the period ended 31 December 2016 included:

• a) options were issued with an exercise price of $0.195;

• b) expected life of options is 3 years; c) share price at grant date was $0.15;

• d) expected volatility of 162%, based on the history of the Company’s share prices for the expected life of the options;

• e) expected dividend yield of nil; and

• f) a risk-free interest rate of 1.4%

17. Operating Segment

For management purposes, the Group is organised into one main operating segment, which involves mineral exploration, predominantly for copper. All of the Group’s activities are interrelated, and discrete financial information is reported to the Board (Chief Operating Decision Makers) as a single segment. Accordingly, all significant operating decisions are based upon analysis of the Group as one segment. The financial results from this segment are equivalent to the financial statements of the Group as a whole. The Group operates in Australia and the USA. The following table shows the assets and liabilities of the Group by geographic region:

Assets Australia United States Total Assets Liabilities Australia United States Total Liabilities Operating Result Australia United States Total loss from operations	Consolidated 31 December 30 June 2017 2017 $ $ 2,070,659 122,164 17,631,496 6,011,884
	19,702,155 6,134,048
	98,030 223,407 10,937 9,390
	108,967 232,797
	31 December 31 December 2017 2016 $ $ (671,439) (393,832) (13,188) (8,892)
	(684,627) (402,724)

PolarX Limited

23

PolarX Limited Condensed notes to the financial statements for the half-year ended 31 December 2017

18. Expenditure commitments

(a) Tenement expenditure commitments

Caribou Dome Property

Remaining commitments related to the Caribou Dome Property at reporting date but not recognized as liabilities below include the following:

• (i) maintaining the claims (licenses) at the property in good standing, including making annual claim rental payments and ensuring minimum expenditure commitments are met;

• (ii) expending a minimum of US$2,000,000 in each of the periods (i) 2 September 2017 to 1 September 2020; and (ii) 2 September 2020 to 6 June 2023 (unless the earn-in deadline of 6 June 2023 is extended);

• (iii) expending a total of US$9,000,000 on the property (inclusive of the payments in (ii) above) or completing a feasibility study on the Project by 6 June 2023 (unless the earn-in deadline of 6 June 2023 is extended); and

• (iv)

• making annual payments to the underlying vendors of the property in the amounts of:

Due Date	Payment
6 June 2018	US$100,000
6 June 2019	US$100,000
6 June 2020	US$100,000
6 June 2021	US$100,000
6 June 2022	US$100,000
Earn-in deadline (currently 6 June 2023)	US$1,360,000

and

• (v) a 5% net smelter return royalty is payable in relation to the sale of ore from the property and the Company has the right to purchase the royalty for US$1,000,000 for each 1.0%.

PolarX Limited

24

PolarX Limited Condensed notes to the financial statements for the half-year ended 31 December 2017

Stellar Copper Gold Property

Remaining commitments related to the Stellar Copper Gold Property at reporting date but not recognized as liabilities below include the following:

• (i) Vista will pay USD $1,000,000 cash to Millrock if a JORC Indicated Resource of 1Moz contained Au or more is delineated;

• (ii) Vista will pay USD $2,000,000 cash to Millrock if a JORC Indicated Resource of 1Moz contained copper (or copper equivalent) metal is delineated;

• (iii) 45 claim blocks covering the Zackly, Moonwalk, Mars and Gemini prospects, are subject to a royalty payable to Altius Minerals, being:

• a. 2% gross value royalty on all uranium produced

• b. 2% net smelter return royalty on gold, silver, platinum, palladium and rhodium

• c. 1% net smelter return royalty on all other metals;

• (iv) All Stellar claim blocks are subject to a royalty payable to Millrock, being:

• a.

• 1% gross value royalty on all uranium produced; and

• b. 1% net smelter royalty on all other metals;

and

• (v) making advance royalty payments (payments are deductible from future royalty payments) to Millrock in the amounts of:

Due Date	Payment
31 March 2019	US$20,000
31 March 2020	US$25,000
31 March 2021	US$30,000
31 March 2022	US$35,000
31 March 2023*	US$40,000
31 March 2024*	US$45,000
31 March 2025*	US$50,000
31 March 2026*	US$55,000
31 March 2027,* and 31 March of each year thereafter occurring prior to the fifth anniversary of the commencement of Commercial Production	US$60,000

• Such payments will not be payable if the fifth anniversary of the commencement of Commercial Production has occurred before such date.

Uncle Sam Project

in July 2015, the Company entered into a mineral lease and purchase agreement ( Option Agreement ) with Great American Minerals Exploration Inc. ( GAME ), pursuant to which GAME agreed to lease the Uncle Sam Project for 10 years with an option to purchase the property outright at any time during the lease period.

During the reporting period the Company received noticed from the Department of Natural Resources (State of Alaska) that the mineral claims which comprise the Uncle Sam Gold Project had been declared abandoned ( DNR Notice ). The basis for the decision was an error on the affidavit of labor filed by the previous tenement owner in 2011. As a result, GAME has sought to terminate the Option Agreement.

PolarX Limited

25

PolarX Limited Condensed notes to the financial statements for the half-year ended 31 December 2017

The Company is currently reviewing its options in relation to this matter, including whether GAME has complied with its obligations under the Option Agreement. Refer further to the Review of Operations .

19. Contingent Liabilities

The Company has a contingent liability arising from the termination of a drilling contract in Paraguay in 2008, subsequent to which Arbitration proceedings were commenced by the drilling contractor.

In August 2016, the Company received notice of the Arbitration Tribunal’s determination. Based on its review of the Tribunal’s judgement and advice from its Paraguayan legal counsel, the Company assessed the quantum of damages that may be payable by it to be approximately US$40,000 plus interest. Subsequently on 7 March 2018, the Company received notice that the plaintiff was seeking a Paraguayan judicial order for the enforcement of an arbitration award against the Company in the amount of US$123,853.

The Company does not anticipate making any damages payment until it has received further advice in relation to the matter, including the accuracy of the claimed amount, enforceability of any judgement in Australia and the Company’s rights to challenge such enforcement.

20. Subsequent events

Other than as disclosed in Note 19 above, there have been no significant events after the reporting date.

PolarX Limited

26

PolarX Limited

DIRECTORS' DECLARATION

The directors of PolarX Limited declare that:

• (a) in the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and

• (b) in the directors’ opinion, the financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the consolidated entity.

Signed in accordance with a resolution of the directors made pursuant to the Corporations Act 2001.

On behalf of the Directors

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Mark Bojanjac Executive Chairman 13 March 2018

PolarX Limited

27

Stantons International Audit and Consulting Pty Ltd trading as

PO Box 1908 West Perth WA 6872 Australia

Chartered Accountants and Consultants

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Level 2, 1 Walker Avenue West Perth WA 6005 Australia

Tel: +61 8 9481 3188 Fax: +61 8 9321 1204

ABN: 84 144 581 519 www.stantons.com.au

13 March 2018

Board of Directors PolarX Limited Suite 9, 5 Centro Avenue SUBIACO WA 6008

Dear Directors

RE: POLARX LIMITED

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of PolarX Limited.

As Audit Director for the review of the financial statements of PolarX Limited for the half year ended 31 December 2017, I declare that to the best of my knowledge and belief, there have been no contraventions of:

• (i) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

• (ii)

• any applicable code of professional conduct in relation to the review.

Yours sincerely

STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD

(Trading as Stantons International) (An Authorised Audit Company)

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Martin Michalik Director

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Liability limited by a scheme approved under Professional Standards Legislation

Stantons International Audit and Consulting Pty Ltd trading as

PO Box 1908 West Perth WA 6872 Australia

==> picture [181 x 24] intentionally omitted <==

Chartered Accountants and Consultants

Level 2, 1 Walker Avenue West Perth WA 6005 Australia Tel: +61 8 9481 3188 Fax: +61 8 9321 1204

ABN: 84 144 581 519 www.stantons.com.au

INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS OF POLARX LIMITED

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of PolarX Limited (formerly Coventry Resources Limited), which comprises the consolidated statement of financial position as at 31 December 2017, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity, and consolidated statement of cash flows for the half-year ended on that date, condensed notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration for PolarX Limited (the consolidated entity). The consolidated entity comprises of PolarX Limited (the Company) and the entities it controlled during the half year.

Directors’ Responsibility for the Half-Year Financial Report

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

Auditor’s Responsibility

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

Whilst we considered the effectiveness of management’s internal controls over financial reporting when determining the nature and extent of our procedures, our review was not designed to provide assurance on internal controls.

Our review did not involve an analysis of the prudence of business decisions made by the directors or management.

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Liability limited by a scheme approved under Professional Standards Legislation

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Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001 , has been provided to the directors of PolarX Limited on 13 March 2018.

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 PolarX 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 31 December 2017 and of its performance for the half-year ended on that date; and

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

Material Uncertainty Regarding Going Concern

We draw attention to Note 2 of the half year financial report, which describes the management’s use of the going concern basis of preparation of the financial statements.

As referred to in Note 2 to the half year financial report, the financial statements have been prepared on a going concern basis. As at 31 December 2017, the consolidated entity had cash and cash equivalents of $1,443,078 and had incurred a loss after tax of $684,627 for the half year then ended.

In the event that the consolidated entity is unable to raise additional funding as described in Note 2 to the financial report, and based on the current commitments and planned expenditure, there is a material uncertainty whether the consolidated entity will continue as a going concern, and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report. The financial report does not include any adjustments relating to recoverability and classification of recorded assets amounts, or to the amounts and classification of liabilities, that might be necessary should the consolidated entity not continue as a going concern. Our conclusion is not modified in respect of this matter.

STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD (Trading as Stantons International) (An Authorised Audit Company)

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Martin Michalik Director

West Perth, Western Australia 13 March 2018