PROSPECT RESOURCES LIMITED — Interim / Quarterly Report 2015

Jan 28, 2016

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

ABN Quarter ended ("current quarter")

30 124 354 329 31 December 2015

Consolidated statement of cash flows

		Current quarter	Year to date
Cash flows related to operating activities		$A'000	(6 .months)
			$A'000
1.1	Receipts from product sales and related debtors	17	29
1.2	Payments for
	(a)production
	(b)administration	(168)	(179)
	(c)project generation	(81)	(81)
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	(232)	(231)
	Cash flows related to investing activities
1.8	Payment for purchases of:
	(a) prospects
	(b) equity investments
	(c) other fixed assets	(81)	(95)
1.9	Proceeds from sale of:
	(a) prospects
	(b) equity investments
	(c) other fixed assets
1.10	Loans to other entities	(96)	(96)
1.11	Loans repaid by other entities
1.12	Other (provide details if material)
	(a)exploration and evaluation	(31)	(61)
	(b)development
	(c)Interest and other items of a similar nature	1	1
	received
	Net investing cash flows	(207)	(251)
1.13	Total operating and investing cash flows (carried	(439)	(482)
	forward)

+ See chapter 19 for defined terms.

1.13	Total operating and investing cash flows	(439)	(482)
	(brought forward)
	Cash flows related to financing activities
1.14	Proceeds from issues of shares, options, etc.	127	609
1.15	Proceeds from sale of forfeited shares
1.16	Proceeds from borrowings (related party)	27	46
1.17	Repayment of borrowings
1.18	Dividends paid
1.19	Other (provide details if material)
	‐Cost of issue of shares, options	(17)	(17)
	‐Proceeds from shares not yet issued	7	7
	Net financing cash flows	144	645
	Net increase (decrease) in cash held	(295)	163
1.20	Cash at beginning of quarter/year to date	555	100
1.21	Exchange rate adjustments to item 1.20	(2)	(5)
1.22	Cash at end of quarter	258	258

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	8
1.24	Aggregate amount of loans to the parties included in item 1.10	96

1.25 Explanation necessary for an understanding of the transactions Consulting fees Advance to Mixnote Investment (Pvt) Limited – owner of the West Nicolson Gold

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

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

Processing Plant

+ See chapter 19 for defined terms.

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
4.1Exploration and evaluation	33
4.2Development	104
4.3Production	380 (a)
4.4Administration	77
Total	594

(a) The production expenditure is expected to result in cash inflows during the quarter

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
5.1Cash on hand and at bank		18	132
5.2	Deposits at call	210	298
5.3	Bank overdraft
5.4	Other (provide details)
	USD$ at bank	30	125
	Total: cash at end of quarter (item 1.22)	258	555

+ 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	Bushtick	Special Grant	70%	‐%
6.2	Interests in miningtenements andpetroleum tenementsacquired or increased		No changes

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
	(description)
7.2	Changes during
	quarter
	(a) Increasesthrough issues
	(b) Decreases
	through returns
	of capital, buy‐
	backs,
	redemptions
7.3	+Ordinary	886,544,882	886,544,882	Not applicable	Not applicable
	securities
7.4	Changes during
	quarter
	(a) Increases	35,755,000	35,755,000	0.4
	through issues
	(b) Decreasesthrough 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 during
	quarter
	(a) Increases
	through issues
	(b) Decreases
	through
	securities
	matured,
	converted
7.7	Options(description and	65,000,000	Exercise price$0.005	Expiry date14/12/2018
	conversion
	factor)
7.8	Issued during	65,000,000	$0.005	14/12/2018
	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 give a true and fair view of the matters disclosed.

(Director)

Sign here: Date: 29 January 2016

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

+ See chapter 19 for defined terms.

• 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.