RAREX LIMITED — Interim / Quarterly Report 2017

Mar 12, 2017

CLANCY EXPLORATION LIMITED

ABN: 65 105 578 756 AND CONTROLLED ENTITY

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

HALF YEAR ENDED 31 DECEMBER 2016

CLANCY EXPLORATION LIMITED

CORPORATE DIRECTORY

DIRECTORS

Mr Evan Cranston Non-Executive Chairman

Mr David Scoggin Non-Executive Director

Mr Scott Patrizi Non-Executive Director

COMPANY SECRETARY

Mr Rowan Caren

PRINCIPAL PLACE OF BUSINESS

Suite 23, 513 Hay Street Subiaco Western Australia 6008

Telephone: (08) 6143 6720 Facsimile: (08) 9388 8824 Website: www.clancyexploration.com

REGISTERED OFFICE

Suite 23, 513 Hay Street Subiaco Western Australia 6008

ASX CODE : CLY

LAWYERS

Bellanhouse Legal Ground Floor, 11 Ventnor Avenue West Perth Western Australia 6005

AUDITOR

Walker Wayland WA Audit Pty Ltd (Formerly Hall Chadwick WA Audit Pty Ltd) 129 Melville Parade Como

Western Australia 6152

SHARE REGISTRY

Security Transfer Australia

770 Canning Highway Applecross WA 6153 Australia

Telephone: +61 8 9315 2333 Facsimile: +61 8 9315 2233

CLANCY EXPLORATION LIMITED

TABLE OF CONTENTS

DIRECTORS' REPORT
AUDITOR'S INDEPENDENCE DECLARATION
CONDENSED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 3
CONDENSED STATEMENT OF FINANCIAL POSITION
CONDENSED STATEMENT OF CHANGES IN EQUITY
CONDENSED STATEMENT OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
DIRECTORS' DECLARATION
AUDITOR'S REPORT

DIRECTORS' REPORT

FOR THE HALF YEAR ENDED 31 DECEMBER 2016

The Board of Directors has pleasure in presenting its report on the consolidated entity for the half-year ended 31 December 2016.

1. DIRECTORS

The names of the Company's directors in office during the half-year and until the date of this report are set out below. Directors were in office for this entire period unless otherwise stated.

Mr Evan Cranston Mr David Scoggin Mr Scott Patrizi (appointed 7 July 2016) Mr Nathan Featherby (resigned 7 July 2016)

2. REVIEW OF OPERATIONS

During the half year, the Company focused on securing a new project opportunity. It has an active identification and assessment process underway, with several interesting opportunities under consideration, though no suitable opportunities have been advanced to date. The Company also continued to seek new partners for the Trundle, Condobolin and Fairholme projects.

3. FINANCIAL RESULTS

The loss of the Company for the period ending 31 December 2016 was \$281,268 (Six months to 31 December 2015: loss of \$937,107). During the half year, total expenses amounted to \$294,825 (Six months to 31 December 2015: \$954,244).

Unrestricted cash and cash equivalents amounted to \$1,736,365 as at 31 December 2016 (at 30 June 2016: \$1,868,760).

During the period, the Company raised a total of \$350,000, before costs, through a placement of shares.

4. AUDITOR'S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001

The auditor's independence declaration is set out on page 2 and forms part of the Directors' Report for the half year ended 31 December 2016.

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

On behalf of the Directors.

E CRANSTON Director

Signed this 10th day of March 2017.

Walker Wayland WA Audit Pty Ltd

Associated with Walker Wayland (WA) Pty Ltd

ABN 94 608 776 834

PERTH Level 2, 129 Melville Parade Como WA 6152

PO Box 2162 Como Beach WA 6152

Telephone: +61 8 9364 9988 Facsimile: +61 8 9367 3444

www.ww-wa.com.au

AUDITOR'S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001

TO THE DIRECTORS OF CLANCY EXPLORATION LIMITED

I declare that, to the best of my knowledge and belief, during the half-year ended 31 December 2016 there has been no contraventions of:

• the auditor independence requirements as set out in the Corporations Act $(i)$ 2001 in relation to the review; and
• any applicable code of professional conduct in relation to the review. $(ii)$

Walker Waylard WA audit Ag Ltd

Walker Wayland WA Audit Pty Ltd (Formerly Hall Chadwick WA Audit Pty Ltd)

Jagge

Richard Gregson Director

Perth, WA Dated this 10^th day of March 2017

CONDENSED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 31 DECEMBER 2016

			Consolidated
Income	Notes	6 months to 31 December 2016 \$	6 months to 31 December 2015 \$
Other Income	3	13,557	17,137
Total Income		13,557	17,137
Expenses
Administration expenses		(134,506)	(32,211)
Consultants & management expenses		(103,761)	(499,607)
Depreciation, amortisation and impairment expense	4	(2,581)	(5,235)
Financial costs		(1,270)	-
Legal expenses		(5,435)	(2,317)
Exploration expenses		(44,006)	(414,874)
Loss on sale of plant and equipment		(3,266)	-
Total expenses		(294,825)	(954,244)
Loss from continuing operations before income tax expense		(281,268)	(937,107)
Income tax expense		-	-
Loss from continuing operations after income tax expense		(281,268)	(937,107)
Other comprehensive income		-	-
Total comprehensive loss attributable to owners of the parent		(281,268)	(937,107)
Loss per share - basic and diluted		(0.01) cents	(0.4) cents

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

CONDENSED STATEMENT OF FINANCIAL POSITION

FOR THE HALF YEAR ENDED 31 DECEMBER 2016

		Consolidated
		31 December 2016	30 June 2016
	Notes	\$	\$
ASSETS
Current Assets
Cash and cash equivalents	5	1,736,365	1,868,760
Restricted cash asset	5	131,234	130,107
Trade and other receivables		15,267	21,903
Other assets		7,012	4,017
Total Current Assets		1,889,878	2,024,787
Non-current Assets
Plant and equipment		10,841	21,495
Total Non-current Assets		10,841	21,495
TOTAL ASSETS		1,900,719	2,046,282
LIABILITIES
Current Liabilities
Trade and other payables	7	24,406	227,938
Total Current Liabilities		24,406	227,938
TOTAL LIABILITIES		24,406	227,938
NET ASSETS		1,876,313	1,818,344
EQUITY
Contributed equity	8	17,413,780	17,074,543
Reserves		1,685,087	1,685,087
Accumulated losses		(17,222,554)	(16,941,286)
TOTAL EQUITY		1,876,313	1,818,344

The above Condensed Statement of Financial Position is to be read in conjunction with the accompanying notes.

CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2016

CONSOLIDATED	Notes	Ordinary Shares	Options Reserve	(Accumulated Losses)	Total Equity
		\$	\$	\$	\$
At 1 July 2016		17,074,543	1,685,087	(16,941,286)	1,818,344
Total comprehensive income for the period, net of tax		-	-	(281,268)	(281,268)
Transactions with owners in their capacity as owners
Share issues		350,000	-	-	350,000
Transaction costs		(10,763)	-	-	(10,763)
At 31 December 2016		17,413,780	1,685,087	(17,222,554)	1,876,313
At 1 July 2015		15,207,200	1,665,605	(15,644,656)	1,228,149
Total comprehensive income for the period, net of tax		-	-	(937,107)	(937,107)
At 31 December 2015		15,207,200	1,665,605	(16,581,763)	291,042

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

CONDENSED STATEMENT OF CASH FLOWS

FOR THE HALF YEAR ENDED 31 DECEMBER 2016

6 months ended 31 December 2016 Notes \$ CASH FLOWS USED IN OPERATING ACTIVITIES Management Fee Received - Reimbursement of Exploration Expenses - Payments to suppliers and employees (483,713) Interest received 8,137 NET CASH FLOWS USED IN OPERATING ACTIVITIES (475,576) CASH FLOWS USED IN INVESTING ACTIVITIES Proceeds from sale of fixed assets 3,944 NET CASH FLOWS FROM INVESTING ACTIVITIES 3,944 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from share issue 350,000 Costs of share issue (10,763)	6 months ended 31 December 2015 \$ 6,165 336,107 (845,566) 8,417
	(494,877)
	-
	-
	-
	-
NET CASH FLOWS FROM FINANCING ACTIVITIES 339,237	-
NET DECREASE IN CASH AND CASH EQUIVALENTS (132,395)	(494,877)
Cash and cash equivalents at beginning of period 1,868,760	1,231,434
CASH AND CASH EQUIVALENTS AT END OF PERIOD 1,736,365 5

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

1. CORPORATE INFORMATION

The consolidated financial report of Clancy Exploration Limited ("the Company") for the half-year ended 31 December 2016 was authorised for issue in accordance with a resolution of the directors on 10th March 2017.

Clancy Exploration is a company incorporated in Australia and limited by shares which are publicly traded on the Australian Securities Exchange. The principal activities during the year of the entities within the consolidated entity were mineral exploration and development.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The half-year financial report does not include all the notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report, and should be read in conjunction with the annual Financial Report of Clancy Exploration Limited for the year ended 30 June 2016.

It is also recommended that the half-year financial report be considered together with any public announcements made by Clancy Exploration Limited and its controlled entities ('the Group') during the half-year ended 31 December 2016 in accordance with the continuous disclosure obligations arising under the Corporations Act 2001.

(a) Basis of Preparation

The half-year consolidated financial report has been prepared in accordance with AASB 134 "Interim Financial Reporting". The half-year financial report has been prepared on a historical cost basis, except for the revaluation of financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars.

For the purpose of preparing the half-year financial report, the half-year has been treated as a discrete reporting period.

This report presents financials for the six month period to 31 December 2016, with comparatives for the six month period to 31 December 2015.

(b) Changes in accounting policies

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 30 June 2016.

The Group has adopted all mandatory new and amended standards and interpretations applicable for the current period. The adoption of these standards and interpretations had no material impact on these financial statements or on the financial position or performance of the Group.

The Group has not elected to early adopt any other new standards or amendments that are issued but not yet effective. Certain amounts in the comparative financial statements have been reclassified to conform to the current period presentation.

(c) Basis of consolidation

The half-year consolidated financial statements comprise the financial statements of Clancy Exploration Limited and its controlled subsidiary.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(d) Segment Reporting

A geographical segment is a distinguishable component of the entity that is engaged in providing products or services within a particular economic environment and is subject to risks and returns that are different from those of segments operating in other economic environments. The Company operates in a single business segment, in one geographical location. The operations of the consolidated entity consist of gold and copper exploration and development, within Australia. Accordingly, no segment information is presented in this half-year financial report.

(e) New Standards and Interpretations

In the half year ended 31 December 2016, the Directors have reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to the Group's operations and effective for annual reporting periods commencing on or after 1 July 2016. It has been determined by the Directors that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on the Group and, therefore, no change is necessary to accounting policies.

				Consolidated
		Notes	6 months ended 31 December 2016 \$	6 months ended 31 December 2015 \$
3.	OTHER INCOME
	Management fees		-	8,720
	Interest received		13,557	8,417
			13,557	17,137

		6 months ended 31 December 2016 \$	Consolidated 6 months ended 31 December 2015 \$
4.	EXPENSES Depreciation, amortisation and impairment included in Statement of Consolidated Income
	Depreciation of plant & equipment	2,581	4,502
	Amortisation of software/leasehold improvements	-	733
		2,581	5,235

		Consolidated
		31 December 2016 \$	30 June 2016 \$
5.	CASH AND CASH EQUIVALENTS
	Cash at bank	536,365	43,028
	Short term bank deposits	1,200,000	1,825,732
		1,736,365	1,868,760

In addition, as at 31 December 2016 the Company has \$131,234 in restricted cash (30 June 2016: \$130,107) which is included as a current asset in the Condensed Statement of Financial Position, held at Westpac Banking Corporation. This has been established as security in respect of a \$130,000 bank guarantee facility provided in turn for exploration licence security purposes.

6. FINANCIAL ASSETS

For all financial instruments held as at 31 December 2016, the carrying value approximates fair value.

7. TRADE AND OTHER PAYABLES

	Consolidated
	31 December 2016 \$	30 June 2016 \$
Trade and other payables	24,406	227,938

30 June 2016 \$
17,074,543

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

	6 months ended 31 December 2016		12 months ended 30 June 2016
Movement in ordinary shares on issue	Number of shares	\$	Number of shares	\$
As at beginning of period:	2,357,540,408	17,074,543	256,254,392	15,207,200
Shares issued	350,000,000	350,000	2,101,286,016	2,101,287
Less: Transaction costs		(10,763)		(233,944)
As at end of the period:	2,707,540,408	17,413,780	2,357,540,408	17,074,543

9. COMMITMENTS AND CONTINGENCIES

The only changes to the commitments and contingencies disclosed in the most recent annual financial report are specified below:

	Consolidated
	31 December 2016	30 June 2016
	\$	\$
(a) Exploration Expenditure Commitments:
Under 8 (30 June 2016: 8) New South Wales ("NSW") Government exploration licences
Payable
- not later than one year	536,544	580,550
- later than one year and not later than five years	-	-
	536,544	580,550

(b) Operating Lease Commitments

The Company has operating lease commitments in respect of its office and core shed together with a photocopier, as follows:

	Consolidated
	31 December 2016	30 June 2016
	\$	\$
Payable
- not later than one year	2,448	23,238
- later than one year and not later than five years	3,468	4,692
	5,916	27,930

10. EVENTS AFTER THE BALANCE SHEET DATE

There are no matters or circumstances which have arisen since the end of the half year which significantly affected or may significantly affect the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in subsequent financial periods.

DIRECTORS' DECLARATION

In accordance with a resolution of the directors of Clancy Exploration Limited, I state that:

In the opinion of the Directors:

• (a) the financial statement and notes set out on pages 3 to 11 are in accordance with the Corporations Act 2001, including:
• (i) giving a true and fair view of the consolidated entity's financial position as at 31 December 2016 and of its performance for the half-year ended on that date; and
• (ii) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 including compliance with Accounting Standards; and
• (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

On behalf of the Board,

E CRANSTON Director

Signed this 10th day of March 2017

Walker Wayland WA Audit Pty Ltd

Associated with Walker Wayland (WA) Pty Ltd

ABN 94 608 776 834

PERTH Level 2, 129 Melville Parade Como WA 6152

PO Box 2162 Como Beach WA 6152

Telephone: +61 8 9364 9988 Facsimile: +61 8 9367 3444

www.ww-wa.com au

INDEPENDENT AUDITOR'S REVIEW REPORT TO THE MEMBERS OF CLANCY EXPLORATION LIMITED Report on the Half-year Financial Report

We have reviewed the accompanying half-year financial report of Clancy Exploration, which comprises the consolidated statement of financial position as at 31 December 2016, consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity, and the consolidated statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information and the directors' declaration.

Directors' Responsibility for the Half-Year Financial Report

The directors of Clancy Exploration 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 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 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 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 Clancy Exploration Limited's financial position as at 31 December 2016 and its performance for the half-year ended on that date, and complying with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Requlations 2001. As the auditor of Clancy Exploration 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 review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

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

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 Clancy Exploration Limited is not in accordance with the Corporations Act 2001 including:

giving a true and fair view of Clancy Exploration Limited's financial position as at 31 December 2016 $(i)$ and of its performance for the half-year ended on that date; and

$(ii)$ complying with AASB 134: Interim Financial Reporting and the Corporations Regulations 2001.

Walker Washered Wil audit Ay LAd

Walker Wayland WA Audit Pty Ltd (Formerly Hall Chadwick WA Audit Pty Ltd)

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Richard Gregson Director Dated this 10^th day of March 2017