PROSPECT RESOURCES LIMITED — Interim / Quarterly Report 2014

Jul 28, 2014

Rule 5.5

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/2013

Name of entity

PROSPECT RESOURCES LIMITED

30 124 354 329 30 June 2014

ABN Quarter ended ("current quarter")

Consolidated statement of cash flows

		Current quarter	Year to date
Cash flows related to operating activities		$A'000	(12 .months)
			$A'000
1.1	Receipts from product sales and related debtors
1.2	Payments for
	(a)production
	(b)administration	(167)	(620)
	(c)project generation	(26)	(151)
	(d)Exploration and evaluation expensed	(124)	(168)
1.3	Dividends received
1.4	Interest and other items of a similar nature received
1.5	Interest and other costs of finance paid
1.6	Income taxes paid
1.7	Other (provide details if material)
	Net Operating Cash Flows	(317)	(939)
	Cash flows related to investing activities
1.8	Payment for purchases of:
	(a) prospects
	(b) equity investments
	(c) other fixed assets	(2)	(6)
1.9	Proceeds from sale of:
	(a) prospects
	(b) equity investments
	(c) other fixed assets
1.10	Loans to other entities	‐	‐
1.11	Loans repaid by other entities
1.12	Other (provide details if material)
	(a)exploration and evaluation	(113)	(208)
	(b)development
	(c)Interest and other items of a similar nature	‐	3
	received
	Net investing cash flows	(115)	(211)
1.13	Total operating and investing cash flows (carried	(432)	(1,150)
	forward)

• See chapter 19 for defined terms.

1.13	Total operating and investing cash flows	(432)	(1,150)
	(brought forward)
	Cash flows related to financing activities
1.14	Proceeds from issues of shares, options, etc.	75	1,025
1.15	Proceeds from sale of forfeited shares
1.16	Proceeds from borrowings (related party)	15	93
1.17	Repayment of borrowings
1.18	Dividends paid
1.19	Other (provide details if material)
	‐Proceeds from share applications not issued	‐	600
	‐Repayment of share applications	‐	(600)
	‐Cost of issues of shares, options	‐	(64)
	Net financing cash flows	90	1,054
	Net increase (decrease) in cash held	(342)	(96)
1.20	Cash at beginning of quarter/year to date	646	400
1.21	Exchange rate adjustments to item 1.20
1.22	Cash at end of quarter	304	304

Payments to directors of the entity, associates of the directors, related entities of the entity and associates of the related entities

		Current quarter$A'000
1.23	Aggregate amount of payments to the parties included in item 1.2	40
1.24	Aggregate amount of loans to the parties included in item 1.10	‐
1.25	Explanation necessary for an understanding of the transactions

Rent and option fee

Non‐cash financing and investing activities

2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

Entities related to Mr Warner loaned the Company $75,000 in a previous quarter (included in 1.16). This amount was converted into equity as part of a share placement

+ See chapter 19 for defined terms.

2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

Financing facilities available

Add notes as necessary for an understanding of the position.

		Amount available$A'000	Amount used$A'000
3.1	Loan facilities
3.2	Credit standby arrangements

Estimated cash outflows for next quarter

		$A'000
4.1	Exploration and evaluation	226
4.2	Development
4.3	Production
4.4	Administration	128
	Total	354

Reconciliation of cash

Reconciliation of cash at the end of the quarter (asshown in the consolidated statement of cash flows)to the related items in the accounts is as follows.		Current quarter$A'000	Previous quarter$A'000
5.1	Cash on hand and at bank	7	12
5.2	Deposits at call	78	28
5.3	Bank overdraft
5.4	Other (provide details)
	USD$ at bank	219	606
	Total: cash at end of quarter (item 1.22)	304	646

+ See chapter 19 for defined terms.

Changes in interests in mining tenements and petroleum tenements

		Tenementreferenceandlocation	Nature of interest(note (2))	Interest atbeginningof quarter	Interest atend ofquarter
6.1	Interests in miningtenements andpetroleum tenementsrelinquished, reducedor lapsed		No change in interest
6.2	Interests in miningtenements andpetroleum tenementsacquired or increased

Refer to Quarterly Activities Report for schedule of tenements held.

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

		Total number	Number quoted	Issue price persecurity (seenote 3) (cents)	Amount paid upper security (seenote 3) (cents)
7.1	Preference+securities
7.2	(description)Changes during
	quarter(a) Increasesthrough issues
	(b) Decreasesthrough returns
	of capital, buy‐backs,
7.3	redemptions+Ordinary	604,593,287	604,593,287	Not applicable	Not applicable
	securities
7.4	Changes duringquarter
	(a) Increases	15,000,000	15,000,000	1.0	1.0
	through issues(b) Decreases	60,000,000	60,000,000	0.7	0.7
	through returns
	of capital, buy‐backs
7.5	+Convertible
	debt
	securities
	(description)

+ See chapter 19 for defined terms.

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

7.6	Changes duringquarter(a) Increasesthrough issues(b) Decreasesthroughsecuritiesmatured,converted
7.7	Options		Exercise price	Expiry date
	(description and	134,500,000	1.5 cents	30 June 2015
	conversion
	factor)
7.8	Issued during
	quarter
7.9	Exercised
	during quarter
7.10	Expired during
	quarter
7.11	Debentures
	(totals only)
7.12	Unsecured
	notes (totals
	only)

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 5).
• 2 This statement does /does not* (delete one) give a true and fair view of the matters disclosed.

(Director)

Sign here: Date: 29 July 2014

Print name: Hugh Warner

Notes

1 The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash

+ See chapter 19 for defined terms.

position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

• 2 The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements and petroleum tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement or petroleum tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.
• 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities*.*
• 4 The definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report.
• 5 Accounting Standards ASX will accept, for example, the use of International Financial Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

== == == == ==

+ See chapter 19 for defined terms.