RTG Mining Inc. — Interim / Quarterly Report 2020

Aug 27, 2020

Consolidated Interim Financial Statements

For the six month period ended June 30, 2020

CORPORATE DIRECTORY	2
DIRECTORS' REPORT	3
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME	5
CONSOLIDATED STATEMENT OF FINANCIAL POSITION	6
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	7
CONSOLIDATED STATEMENT OF CASH FLOWS	8
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	9
DIRECTORS' DECLARATION	20
AUDITOR'S INEPENDENCE DECLARATION	21
INDEPENDENT AUDITOR'S REVIEW REPORT	22

RTG MINING INC. CORPORATE DIRECTORY

Directors	Michael J CarrickJustine A MageeRobert N ScottPhillip C LockyerDavid A T Cruse	ChairmanPresident and Chief Executive OfficerNon-Executive Lead DirectorNon-Executive DirectorNon-Executive Director
Company secretary	Ryan R Eadie
Office	RegisteredSea Meadow HouseBlackburne HighwayPO Box 116 Road TownTortola VG1110British Virgin Islands	PrincipalLevel 2338 Barker RoadSubiaco, Western Australia, 6008AustraliaTelephone:+61 8 6489 2900Facsimile:+61 8 6489 2920
Bankers	Westpac Banking Corporation130 Rokeby RoadSubiaco, Western Australia, 6008Australia
Auditors	BDO Audit (WA) Pty Ltd38 Station StreetSubiaco, Western Australia, 6008Australia
Share registry	Australian RegisterComputershare Investor Services Pty LimitedLevel 11, 172 St Georges TerracePerth, Western Australia, 6000Australia	Canadian RegisterComputershare Investor Services Inc.th Floor, 100 University Avenue8Toronto, Ontario, M5J2Y1Canada
	Telephone:+61 8 9323 2000Facsimile:+61 8 9323 2033	Telephone:+1 416 263 9200Facsimile:+1 888 453 0330
Stock Exchange	AustraliaAustralian Securities Exchange LimitedExchange Code:RTG – Chess Depositary Interests (CDI's)	CanadaToronto Stock Exchange Inc.Exchange Code:RTG – Fully paid shares
Lawyers	Gilbert and TobinLevel 16, Brookfield Place Tower 2123 St Georges TerracePerth, Western Australia, 6000AustraliaCorrs Chambers WestgarthLevel 2, MRDC HausNational Capital, District 111Papua New Guinea	Blake, Cassels & Graydon LLP595 Burrard StreetSuite 2600, 3 Bentall CentreVancouver, BC, V7X 1L3, Canada

RTG MINING INC. DIRECTORS' REPORT

The Directors of RTG Mining Inc. ("the Company" or "RTG") present their report on the consolidated entity consisting of RTG and the entities it controlled during the period ended June 30, 2020 (the "Consolidated Entity" or "the Group"). The Company's functional and presentation currency is USD ($).

DIRECTORS AND COMPANY SECRETARY

The names of the Directors in office during the period and until the date of this report are as follows:

Name	Position	Appointment date
Michael J Carrick	Chairman	March 28, 2013
Justine A Magee	President and Chief Executive Officer	March 28, 2013
Robert N Scott	Non-Executive Lead Director	March 28, 2013
Phillip C Lockyer	Non-Executive Director	March 28, 2013
David A Cruse	Non-Executive Director	March 28, 2013
Ryan R Eadie	Company Secretary	October 2, 2017

REVIEW OF OPERATIONS AND RESULTS

Operating Results

RTG holds a 40% interest in Mt. Labo Exploration and Development Corporation ("Mt. Labo") which holds the highgrade Copper and Gold Mabilo Project in the Philippines. During the quarter ending June 30, 2020, Mt. Labo received written confirmation that the Mines and Geosciences Bureau ("MGB") had approved the expansion of the current Mineral Production Sharing Agreement ("MPSA") No. MLC-MRD-459 for the Nalesbitan Project to include the Mabilo Project, which has already secured an approved Declared Mine Feasibility Study and Environmental Clearance Certificate.

Subsequent to the period, on August 21, 2020, the Tribunal handed down a favourable Final Award to Mt. Labo in the international arbitration against Galeo Equipment Corporation ("Galeo") in the Singapore International Arbitration Centre ("SIAC"). Mt. Labo prevailed on all matters considered important including a determination that the Joint Venture Agreement ("JVA") with Galeo was validly terminated, the compromise agreement was validly rescinded, Galeo is not entitled to any shares in Mt. Labo, Galeo was not a co-permittee of the Mt. Labo Exploration Permit and Galeo is not the operator of the project. The Tribunal ordered Galeo to pay damages of approximately US$18.6m (plus interest at 6% from various dates) and legal costs, including the Tribunal's fees of approximately S$7.45m. Interest payable is currently in excess of US$4m on top of the damages and costs awards.

RTG is the nominated development partner with the joint venture company, Panguna Minerals Limited ("PML"), established by the Special Mining Lease Osikaiyang Landowners Association ("SMLOLA") and Central Exploration Pty Ltd ("Central"), in their proposal with respect to the redevelopment of the Copper-Gold Panguna Project located in the Central Region of the island of Bougainville, within the Autonomous Region of Bougainville, PNG. The proposal is an initiative of the old Panguna mine's customary landowners (who are represented by SMLOLA) and is conditional upon securing the support of the Autonomous Bougainville Government ("ABG"), who to date has not yet supported the Landowner's proposal.

On May 22, 2020, the Company announced that it had received commitments of approximately US$6 million (circa A$9.2 million) in a private placement to Australian and international institutional and sophisticated investors ("Private Placement") for approximately 162 million new Chess Depository Instruments ("Securities") to be issued through two tranches. On May 29, 2020, 60,128,550 Securities were issued at a price of A$0.057 per Security to Australian and international institutional and sophisticated investors pursuant to tranche one of the Private Placement, raising proceeds of circa US$2.2 million (before costs).

Subsequent to the period, on July 7, 2020, Shareholders approved tranche two of the Private Placement at the Annual General Meeting, for the issue of approximately 102,422,120 Securities at a price of A$0.057 per Security to Australian and international institutional and sophisticated investors, raising proceeds of circa US$3.8 million (before costs), with settlement successfully completed on July 15, 2020.

Net loss after tax for the period ended June 30, 2020 was $3,404,470 (June 30, 2019 loss: $6,886,116).

RTG MINING INC. DIRECTORS' REPORT

Response to the COVID-19 Pandemic

The Company continues to assess the wide reaching impacts of COVID-19, responding decisively on several fronts:

• our offices in Perth and Manila have commenced returning to normal working arrangements in compliance with country-specific recommendations. The head office and project teams are operating at full capacity with reduced staff and working remotely where available, which has to date been both efficient and effective;
• the Company undertook a review of costs and has made significant adjustments reducing overheads across the board, including executive salaries. This initiative resulted in the reduction of total overheads in the order of half of the pre-existing level;
• despite the very challenging times for most, it is noted that we have had a significant improvement in both copper and gold commodity prices, with the net present value of the Mabilo Project, a near term development opportunity, having increased by 146% to US$384 million (July 24, 2020: Cu US$6,523/t, Au US$1,878/oz) since the Feasibility Study was first completed and announced; and
• our focus for now is directed primarily at advancing the Mabilo Project to start-up with the project having a very significant advantage in these times, where access to capital will be more limited. With the first phase being a Direct Shipping Operation, the capital requirements upfront are nominal (less than US$25 million) which should be able to be financed primarily with debt, given the first 12 months of operations can deliver cashflows in excess of US$105 million at current commodity prices of US$6,523/t of Cu and US$1,878/oz Au (subject to movements in commodity prices) (i.e. payback in less than 12 months).

AUDITOR'S INDEPENDENCE DECLARATION

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 21, which forms part of the Directors' Report.

This report is made in accordance with a resolution of the Directors on August 26, 2020.

Justine Alexandria Magee President and Chief Executive Officer Perth August 28, 2020

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

	REVIEWED
		6 MONTH PERIOD ENDED
		June 302020	June 302019
	Note	US$	US$
Continuing operations
Other income	4	755	26,677
Exploration and evaluation expenditure	5	(86,120)	-
Business development expenses	5	(647,475)	(1,686,994)
Fair value loss on financial asset at fair value through profit or loss	5	(856,548)	(2,793,710)
Impairment expense	5	(232,893)	(1,222,853)
Foreign exchange loss		(520,222)	(55,774)
Administrative expenses	5	(1,061,967)	(1,153,462)
Loss before income tax from continuing operations		(3,404,470)	(6,886,116)
Income tax benefit		-	-
Loss for the period from continuing operations		(3,404,470)	(6,886,116)
Other comprehensive income / (loss)
Exchange differences on translation of foreign operations		158,274	444
Net gain on financial assets at fair value through other comprehensiveincome		282,668	209,945
Total comprehensive loss for the period		(2,963,528)	(6,675,727)
Loss attributable to:
Equity holders of the Company		(3,262,191)	(6,502,532)
Non-controlling interest		(142,279)	(383,584)
		(3,404,470)	(6,886,116)
Total comprehensive loss attributable to:
Equity holders of the Company		(2,821,249)	(6,292,143)
Non-controlling interest		(142,279)	(383,584)
		(2,963,528)	(6,675,727)
Loss per share attributable to ordinary shareholders
Basic loss per share (cents)		(0.66)	(1.36)

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

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

		REVIEWED	AUDITED
		June 302020	December 312019
	Note	US$	US$
Current assets
Cash and cash equivalents	6	2,944,118	3,927,667
Receivables		145,495	33,247
Prepayments		53,122	113,392
Total current assets		3,142,735	4,074,306
Non-current assets
Property, plant and equipment		216,559	236,663
Financial assets at fair value through other comprehensive income	7	2,229,287	1,946,619
Exploration and evaluation assets	8	2,560,746	2,929,501
Right-of-use Asset		240,078	298,468
Total non-current assets		5,246,670	5,411,251
Total assets		8,389,405	9,485,557
Current liabilities
Trade and other payables	10	400,463	663,865
Provisions		241,808	220,376
Lease liability		114,990	105,510
Loan	11	2,650,000	2,650,000
Total current liabilities		3,407,261	3,639,751
Non-current liabilities
Lease liability		139,852	194,328
Total non-current liabilities		139,852	194,328
Total liabilities		3,547,113	3,834,079
Net assets		4,842,292	5,651,478
Shareholder's equity
Issued capital	12	170,567,250	168,412,908
Reserves		10,475,264	10,034,322
Accumulated losses		(175,211,654)	(171,949,463)
Parent shareholder's equity		5,830,860	6,497,767
Non-controlling interest		(988,568)	(846,289)
Total shareholder's equity		4,842,292	5,651,478

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

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Six months to June 30, 2020	Issued capital	Assetrevaluationreserve	Share basedpaymentreserve	Other capitalreserve	Foreigncurrencytranslationreserve	Accumulatedlosses	Noncontrollinginterest	Total
	US$	US$	US$	US$	US$	US$	US$	US$
Balance at January 1, 2020	168,412,908	446,619	8,696,142	30,662	860,899	(171,949,463)	(846,289)	5,651,478
Loss for the period	-	-	-	-	-	(3,262,191)	(142,279)	(3,404,470)
Currency translation differences	-	-	-	-	158,274	-	-	158,274
Net gain on financial assets at FVOCI	-	282,668	-	-	-	-	-	282,668
Total comprehensive income / (loss) for the period	-	282,668	-	-	158,274	(3,262,191)	(142,279)	(2,963,528)
Shares issued during the period	2,239,143	-	-	-	-	-	-	2,239,143
Share issue expenses	(84,801)	-	-	-	-	-	-	(84,801)
Balance at June 30, 2020	170,567,250	729,287	8,696,142	30,662	1,019,173	(175,211,654)	(988,568)	4,842,292
Six months to June 30, 2019	Issued capital	Assetrevaluationreserve	Share basedpaymentreserve	Other capitalreserve	Foreigncurrencytranslationreserve	Accumulatedlosses	Noncontrollinginterest	Total
	US$	US$	US$	US$	US$	US$	US$	US$
Balance at January 1, 2019	167,858,807	483,145	8,696,142	30,662	853,617	(158,528,797)	(534,419)	18,859,157
Loss for the period	-	-	-	-	-	(6,502,532)	(383,584)	(6,886,116)
Currency translation differences	-	-	-	-	444	-	-	444
Net gain on financial assets at FVOCI	-	209,945	-	-	-	-	-	209,945
Total comprehensive income / (loss) for the period	-	209,945	-	-	444	(6,502,532)	(383,584)	(6,675,727)
Shares issued during the period	-	-	-	-	-	-	-	-
Share issue expenses	(10,408)	-	-	-	-	-	-	(10,408)
Balance at June 30, 2019	167,848,399	693,090	8,696,142	30,662	854,061	(165,031,329)	(918,003)	12,173,022

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

CONSOLIDATED STATEMENT OF CASH FLOWS

		REVIEWED
		6 MONTH PERIOD ENDED
		June 302020	June 302019
	Note	US$	US$
Operating activities
Payments to suppliers and employees		(1,929,539)	(3,991,008)
Interest received		505	1,555
Exploration and evaluation expenditure		(86,120)	-
Net cash flows used in operating activities		(2,060,154)	(3,989,453)
Investing activities
Payments for property, plant and equipment		(6,660)	-
Advances to associate entities		(1,043,634)	(2,587,452)
Net cash flows used in investing activities		(1,050,294)	(2,587,452)
Financing activities
Repayment of borrowings		-	-
Proceeds from shares issued		2,239,143	-
Share issue expenses		(84,800)	(10,409)
Lease liability payments		(44,996)	(65,698)
Net cash flows from financing activities		2,109,347	(76,107)
Net decrease in cash and cash equivalents		(956,101)	(6,653,012)
Cash and cash equivalents at the beginning of the period		3,927,667	16,469,474
Net foreign exchange difference		(27,448)	(41,458)
Cash and cash equivalents at end of the period	6	2,944,118	9,775,004

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

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. CORPORATE INFORMATION

The consolidated interim financial statements of RTG are presented as at June 30, 2020 for the period January 1, 2020 to June 30, 2020.

RTG was incorporated on December 27, 2012, and is domiciled in the British Virgin Islands. The Company's registered address is Sea Meadow House, Blackburne Highway, PO Box 116 Road Town, Tortola, British Virgin Islands. Its shares are publicly traded on the Australian Securities Exchange ("ASX") and the Toronto Stock Exchange ("TSX").

2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation

The consolidated interim financial statements are a general purpose condensed financial report which has been prepared in accordance with the requirements of International Accounting Standard 34 ("IAS 34") as issued by the International Accounting Standards Board.

The consolidated interim financial statements have been prepared on a historical cost basis, except for financial assets at fair value through other comprehensive income and financial assets at fair value through profit which have been measured at fair value. Historical costs are generally based on the fair values of the consideration given in exchange for goods and services.

The financial report is presented in United States Dollars (US$) unless otherwise noted.

Significant accounting policies

The consolidated interim financial statements do not include full disclosures of the type normally included in an annual financial report. Therefore, it cannot be expected to provide as full an understanding of the financial performance, financial position and cash flows of the Company as in the annual audited financial statements. It is recommended that these consolidated interim financial statements be read in conjunction with the annual financial report for the year ended December 31, 2019, and any public announcements made by the Company during the period.

(i) Significant accounting judgments

The valuation of certain assets held by the Group is dependent upon the estimation of mineral resources and ore reserves. There are numerous uncertainties inherent in estimating mineral resources and ore reserves and assumptions that are valid at the time of estimation may change significantly when new information becomes available.

Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic status of reserves and may ultimately result in the reserves being restated. Such change in reserves could impact on asset carrying values.

(ii) Significant accounting estimates and assumptions

Expected credit losses of financial asset at amortised cost

Loss allowances for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Company's past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

Impairment of investment in Joint Venture

Where there is objective evidence that the investment in a joint venture should be impaired the carrying amount of the investment is tested for impairment in the same way as other non-financial assets. Other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount, the asset is written down accordingly. Impairment charges are included in profit or loss.

IFRS 16 Leases

IFRS 16 Leases was adopted from January 1, 2019 and relates to the recognition, classification and measurement of leases. The Company currently has one lease, for the principal office based in Subiaco. The Company assessed which business model applied to the lease and classified its lease into the appropriate IFRS 16 category. On recognition the Company recognises a lease liability and a right of use asset in its balance sheet.

The subsequent recognition comprises of the Company recognising a lease liability based on the discounted payments required under the lease. The lease liability is measured with reference to an estimate of the lease term, including optional lease periods if RTG is reasonably certain to exercise an option to extend the lease. RTG uses the cost model to recognise the ROU asset and amortise it over the remaining years of its term. Refer to note 9 for more details.

COVID-19

Based on the information available the impact of COVID-19 on the Group has been considered. After considering the operations of the Group including the staffing, geographical areas, local government regulations there does not appear to be any significant impact on the Company's financials from the pandemic other than the necessary cost reductions that were made during the period before the Private Placement was confirmed and due to the uncertainty of available funding.

3. CHANGES IN ACCOUNTING POLICIES

There were no changes in accounting policies during the period.

4. OTHER INCOME

		REVIEWED
		6 MONTH PERIOD ENDED
		June 30	June 30
		2020	2019
		US$	US$
Interest income		755	26,677
		755	26,677
5.EXPENSES
Exploration and evaluation expenditure
Exploration and evaluation expenditure		86,120	-
		86,120	-
Business development expenses
Conferences		6,852	20,688
Employee and director fees		200,677	188,713
Project analysis		10,257	42,775
Travel expenses		109,043	281,222
Legal fees		156,862	481,061
Consultants fees		138,015	641,382
Other expenses		25,770	31,173
		647,475	1,686,994
Administrative expenses
Accounting, tax services and audit fees		32,822	43,414
Computer support fees		6,846	7,843
Consultants fees		194,141	169,868
Depreciation expenses		24,295	20,420
Employee and directors' fees		393,029	577,912
Insurance expenses		51,939	38,584
Legal expenses		9,197	6,426
Listing and shareholder reporting costs		46,784	38,341
Occupancy expenses		61,773	65,487
Travel expenses		7,087	128,863
Finance costs		9,197	-
Other expenses		224,8571,061,967	56,3041,153,462
Share of Philippines Associate loss
Share of net losses of Philippines Associates		-	-
		-	-
Fair value loss on financial asset at fair value through profit or loss
Fair value loss on advances to Philippines Associates	(i)	856,548856,548	2,793,7102,793,710

(i) Advances to Philippines Associates have been classified as a financial asset at fair value through profit or loss. The fair value is calculated using the expected cashflow to be received from the underlying project of the associate, discounted using a risk adjusted discount rate relating to the loan. Refer to notes 10 for further information.

5. EXPENSES – continued

		REVIEWED6 MONTH PERIOD ENDED
		June 30	June 30
		2020	2019
		US$	US$
Impairment expense
Impairment of investment in joint venture	(i)	232,893	1,222,583
		232,893	1,222,583

(i) The recoverable amount of the investment in the joint venture was assessed to be nil and the asset was fully impaired as at June 30, 2020.

6. CASH AND CASH EQUIVALENTS

		REVIEWED	AUDITED
		June 30	December 31
		2020	2019
		US$	US$
Cash on hand		47	38
Cash at bank	(i)	2,944,071	3,927,629
		2,944,118	3,927,667

(i) Cash at bank earns interest at floating rates based on daily bank deposit rates.

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Non-current
Financial assets at fair value through other comprehensive income	2,229,287	1,946,619
	2,229,287	1,946,619
Reconciliation of movements in financial assets at fair valuethrough other comprehensive income:
Opening balanceAdditions	1,946,619-	1,983,145-
Gain on fair value measurement	282,668	(36,526)
Closing balance	2,229,287	1,946,619

8. EXPLORATION AND EVALUATION ASSETS

	2,560,746	2,929,501
Foreign exchange gain/(loss)	(368,755)	15,913
Acquisition of exploration and evaluation assets		2,913,588
Opening balance	2,929,501	-

(i) Exploration and evaluation expenditure after acquisition has been expended to the statement of profit or loss and other comprehensive income. Refer to note 5 for further details.

9. FINANCIAL ASSET AT FAIR VALUE THROUGH PROFIT OR LOSS

	REVIEWED	AUDITED
	June 30	December 31
	2020	2019
	US$	US$
Advances to Philippines Associates
Opening balance	-	-
Advances to Philippines Associates	856,548	6,645,657
Fair value loss	(856,548)	(6,645,657)
	-	-

The Group determines the fair value of the advances in consideration of the investments in associates. Considering the investments were held at nil valuation as at June 30, 2020, and the status of the relevant opportunities and credit risk, there was no recognised fair value of the advances to Philippines Associates.

10. TRADE AND OTHER PAYABLES

	400,463	663,865
Accrued expenses	30,641	235,689
Trade creditors	369,822	428,176
Current liabilities

Trade payables are non-interest bearing and are normally settled on 30 to 60 day terms. There are no amounts that are expected to be settled greater than 12 months.

11. LOANS AND BORROWINGS

Closing balance	2,650,000	2,650,000
Interest-bearing loan facility	-	2,500,000
Facility fee	-	150,000
Opening balance	2,650,000	-

The loan is an interest-bearing unsecured facility with repayment extended to June 30, 2021. Subsequent to period end, the proceeds of the placement were used in part to repay US$1 million of the facility, with fees and interest to 16 April 2020 satisfied by an issue of shares, as approved by shareholders at the Annual General Meeting.

12. ISSUED CAPITAL AND RESERVES

(a) Issued and paid up share capital

	June 302020	June 302019	June 302020	June 302019
	Number	Number	US$	US$
Issued and paid up capital	550,782,016	478,940,889	170,567,250	167,848,399

Fully paid shares carry one vote per share and the right to dividends. The Company is authorised to issue an unlimited number of shares of no par value of a single class.

Movements in contributed equity during the period were as follows:

	Number	US$
Opening balance at January 1, 2020	490,653,466	168,412,908
Shares issues	60,128,550	2,239,143
Shares issue costs	-	(84,801)
Total shares on issue at June 30, 2020	550,782,016	170,567,250
Opening balance at 1 January 2019	478,940,889	167,858,807
Shares issues	-	-
Shares issue costs	-	(10,408)
Total shares on issue at June 30, 2019	478,940,889	167,848,399
(b)Reserves
	REVIEWED	AUDITED
	June 30	December 31

	2020	2019
	US$	US$
Asset revaluation reserve	729,287	446,619
Share based payment reserve	8,696,142	8,696,142
Foreign currency translation reserve	1,019,173	860,899
Other reserves	30,662	30,662
	10,475,264	10,034,322

Movements in options during the period were as follows:

12,715,201
-12,715,201

13. DIVIDENDS

No dividends have been paid or provided for during the period. (June 30, 2019: nil).

14. FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS

Fair value

The carrying amount of financial assets and financial liabilities recorded in the financial statements approximates their respective net fair values, determined in accordance with the Company's accounting policies. All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole, is described as follows:

• Level 1 Quoted (unadjusted) market prices in active markets for identical assets or liabilities
• Level 2 Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
• Level 3 Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

Recognised fair value measurements

The following table presents the Group's assets measured at fair value at June 30, 2020 and December 31, 2019:

At June 30, 2020	Level 1US$	Level 2US$	Level 3US$	TotalUS$
Financial asset at fair value through othercomprehensive income	2,229,287	-	-	2,229,287
Total	2,229,287	-	-	2,229,287
At December 31, 2019	Level 1US$	Level 2US$	Level 3US$	TotalUS$
Financial asset at fair value through othercomprehensive income	1,946,619	-	-	1,946,619
Total	1,946,619	-	-	1,946,619

Fair value of other financial instruments not measured at fair value

The carrying amounts of receivables and trade payables are assumed to approximate their fair value due to their short term nature.

15. SEGMENT REPORTING NOTE

The Company's operations are segmented on a regional basis and are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker who is responsible for allocating resources and assessing performance of the operating segments has been defined as the Chief Executive Officer.

The Company operates in a single segment, being mineral exploration and development.

The following is the geographical locations of the Company's assets:

June 30, 2020

Operating segment	Philippines	Australia	Kyrgyz	Other	Consolidated
	June 30	June 30	June 30	June 30	totalJune 30
	2020	2020	2020	2020	2020
Revenue	US$	US$	US$	US$	US$
Revenue from external customers	-	-	-	-	-
Interest income	-	755	-	-	755
Other	-	-	-	-	-
Total revenue					755
Results
Segment profit / (loss) before tax	(856,548)	(1,783,569)	(693,576)	(70,777)	(3,404,471)
Revenue	-	755	-	-	755
Administrative expenses	-	(863,060)	(125,349)	(73,558)	(1,061,967)
Foreign exchange	-	(52,114)	(470,888)	2,781	(520,222)
Impairment expense	-	(232,893)	-	-	(232,893)
Fair value loss on financial assets throughprofit or loss	(856,548)	-	-	-	(856,548)
Other expenses	-	(647,475)	(86,120)	-	(733,595)
Segment loss before income tax fromcontinuing operations					(3,404,470)
Operating segment	Philippines	Australia	Kyrgyz	Other	Consolidatedtotal
	June 30	June 30	June 30	June 30	June 30
	2020	2020	2020	2020	2020
	US$	US$	US$	US$	US$
Segment assets
Corporate assets	-	5,703,589	2,662,809	23,006	8,389,405
Total assets					8,389,405
Segment liabilities
Corporate liabilities	-	(3,351,971)	(180,346)	(14,796)	(3,547,113)

June 30, 2019

totalJune 30June 30June 30June 302019201920192019RevenueUS$US$US$US$Revenue from external customers----Interest income-26,677-26,677Other----Total revenue26,677ResultsSegment profit / (loss) before tax(2,793,710)(4,015,250)(77,156)(6,886,116)Revenue-26,677-26,677Administrative expenses-(1,078,003)(75,459)(1,153,462)Foreign exchange-(54,077)(1,697)(55,774)Share of associate loss----Impairment expense-(1,222,853)-(1,222,853)Fair value loss on financial assets through profit or(2,739,710)--(2,793,710)lossOther expenses-(1,686,994)-(1,686,994)Segment loss before income tax from continuing(6,886,116)operationsPhilippinesAustraliaOtherConsolidatedOperating segmenttotalJune 30June 30June 30June 302019201920192019US$US$US$US$Segment assetsCorporate assets-13,116,53951,78213,168,321Total assets13,168,321Segment liabilitiesCorporate liabilities-(986,243)(9,056)(995,299)	Operating segment	Philippines	Australia	Other	Consolidated

16. COMMITMENT AND CONTINGENCIES

a) Commitments

As at June 30, 2020, the Group recognised the following commitments:

Chanach Licence Costs

As at June 30, 2020, there was approximately US$40,735 remaining in licence fees to be paid to maintain the licence that expires at the end of 2020.

b) Contingencies and contingent liabilities

As at June 30, 2020, the Group recognised the following contingent liabilities:

Associate

Investment in Philippines Associates

As at June 30, 2020, Mt. Labo and Galeo had estimated contingent liabilities relating to the legal proceedings for both the civil case in the Philippines and arbitration through the Singapore International Arbitration Centre. Galeo's claims against Mt. Labo were for PHP1,500,000 under the civil case and USD309,519.05 under arbitration, plus legal costs and costs of arbitration of USD1,968,469.57, SGD545,208.34 and PHP54,317,362.50 (plus pre and post award interest). The Associates had no other contingent liabilities or capital commitments as at June 30, 2020 (nil: December 31, 2019). Subsequent to the period end, Mt. Labo received a favourable Final Award in the SIAC with the Tribunal dismissing all of Galeo's counterclaims and awarding all costs to Galeo for all costs. Refer to Note 18 for further details on the damages and costs awards handed down in favour of Mt. Labo.

Subsidiary

Central Exploration Pty Ltd

In 2018, the Group acquired A2V Mining Inc. ("A2V"), a non-listed company with a direct interest in Central Exploration Pty Ltd ("Central"). Through the conversion of loan funding into shares in Central, the Group's total interest in Central increased to 69%. The acquisition gave rise to a contingent liability of $1,333,257 relating to Duncan Mining Pty Ltd's (a related entity of Central) acquisition of URM (South Pacific) Pty Ltd. Repayment of the liability is dependent on the development of Central's Bougainville interests. Given the current status of the project, repayment of the liability is not considered probable. At balance date, the value of the liability increased to $1,742,881 (December 31, 2019: $1,661,545), however repayment is still not considered probable. This is not a liability of the Company but Central and is not guaranteed by RTG.

17. RELATED PARTY DISCLOSURE

Controlling entity

The ultimate controlling entity in the wholly owned group is RTG Mining Inc.

Other transactions with related parties

Transactions with related parties consist of companies with Directors and Officers in common and companies owned in whole or in part by Executives and Directors as follows for the three and six months ended June 30, 2020 and 2019:

Name	Nature of transactions
Coverley Management Services Pty Ltd	Consulting as Director

The Company paid the following fees in the normal course of operation in connection with companies owned by Directors:

		UNAUDITED3 MONTH PERIOD ENDED		REVIEWED
				6 MONTH PERIOD ENDED
	June 30	June 30		June 30
	2020	2019	2020	2019
	US$	US$	US$	US$
Directors fees	12,743	13,267	12,743	13,267
Total	12,743	13,267	12,743	13,267

Advances to Philippines Associates

During the period ended June 30, 2020 the Group entered into transactions with related parties:

• Loans of $856,548 were advanced on to the associates of the Company.

These transactions were undertaken on the following terms and conditions:

• Loans are repayable at call, and
• No interest is payable on the loans at present.

18. EVENTS AFTER REPORTING PERIOD

On July 7, 2020, Shareholders approved tranche two of the Private Placement at the Annual General Meeting, for the issue of approximately 102,422,120 Securities at a price of A$0.057 per Security to Australian and international institutional and sophisticated investors, raising proceeds of circa US$3.8 million (before costs), with settlement successfully completed on 15 July 2020.

On July 7, 2020, Shareholders also approved the issue of 6,806,612 unlisted advisor options, which were issued to the US Placement Agent on 15 July 2020.

On July 7, 2020, the Company announced that it had finalised agreements for the sale of its remaining interests in Thor Explorations Ltd ("Thor"), received in consideration for the sale of the Segilola Gold Project in Nigeria some years ago. The Company sold its interests for a total consideration of C$3.35 million: the shareholding for a total consideration of C$2.45 million and the royalty for a further C$0.65 million in cash and C$0.25 million in Vox Royalty Corp. (TSXV:VOX) shares. The Company received full consideration for the sale of the shareholding on 14 July 2020 and the sale of the royalty is expected to settle by approximately the first week of September due to notice periods.

On August 21, 2020, the Tribunal handed down a favourable Final Award to Mt. Labo in the international arbitration against Galeo Equipment Corporation in the Singapore International Arbitration Centre. Mt. Labo prevailed on all matters considered important including a determination that the Joint Venture Agreement with Galeo was validly terminated, the compromise agreement was validly rescinded, Galeo is not entitled to any shares in Mt. labo, Galeo was not a co-permittee of the Mt. Labo Exploration Permit and Galeo is not the operator of the project. The Tribunal ordered Galeo to pay damages of approximately US$18.6m (plus interest at 6% from various dates) and legal costs, including the Tribunal's fees of approximately S$7.45m.

The full impact of the COVID-19 pandemic continues to evolve at the date of this report. The Company is therefore uncertain as to the full impact that the pandemic will have on its financial condition, liquidity, and future results of operations during 2020. Management continues to actively monitor the global situation and its impact on the Company's financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for the 2020 financial year.

Other than these matters, no significant events have occurred subsequent to reporting date that would have a material impact on the consolidated financial statements.

DIRECTORS' DECLARATION

In accordance with a resolution of the Directors of the Company, I state that in the opinion of the Directors:

• (a) the financial statements and notes of the Consolidated Entity:
  • (i) give a true and fair view of the Consolidated Entity's financial position as at June 30, 2020 and of its performance for the six month period ended June 30, 2020; and
  • (ii) comply with International Accounting Standards and other mandatory professional reporting 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.

Justine Alexandria Magee President and Chief Executive Officer Perth August 28, 2020

Tel: +61 8 6382 4600 Fax: +61 8 6382 4601 www.bdo.com.au

38 Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia

DECLARATION OF INDEPENDENCE BY DEAN JUST TO THE DIRECTORS OF RTG MINING INC.

As lead auditor for the review of RTG Mining Inc. for the half-year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have been:

No contraventions of any applicable code of professional conduct in relation to the review.

This declaration is in respect of RTG Mining Inc. and the entities it controlled during the period.

Dean Just Director

BDO Audit (WA) Pty Ltd Perth, 28 August 2020

Tel: +61 8 6382 4600 Fax: +61 8 6382 4601 www.bdo.com.au

38 Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia

INDEPENDENT AUDITOR'S REVIEW REPORT

To the members of RTG Mining Inc.

Report on the Half-Year Financial Report

Conclusion

We have reviewed the half-year financial report of RTG Mining Inc. (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2020, 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 then ended, a summary of significant accounting policies and other explanatory information, and the directors' declaration.

Based on our review, which is not an audit, nothing has come to our attention that causes us to believe that the accompanying half-year financial report of the Group does not present fairly, in all material respects, the financial position of the Group as at 30 June 2020, and of its financial performance and its cash flows for the half-year ended on that date, in accordance with AASB 134 Interim Financial Reporting.

Basis for conclusion

We conducted our review in accordance with ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Company. Our responsibilities are further described in the Auditor's Responsibilities for the Review of the Financial Report section of our report. We are independent of the Company in accordance with the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to the audit of the annual financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

Responsibility of the directors for the financial report

The directors of the Group are responsible for the preparation and fair presentation of the half-year financial report in accordance with AASB 134 Interim Financial Reporting and for such internal control as the directors determine is necessary to enable the preparation and fair presentation of the 30 June 2020 financial report that is free from material misstatement, whether due to fraud or error.

Auditor's responsibility for the review of the financial report

Our responsibility is to express a conclusion on the half-year financial report based on our review. ASRE 2410 requires us to conclude whether anything has come to our attention that causes us to believe that the half-year financial report does not present fairly, in all material respects, the financial position of the Group as at 30 June 2020 and of its financial performance and its cash flows for the half-year ended on that date, accordance with AASB 134 Interim Financial Reporting.

A review of a 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.

BDO Audit (WA) Pty Ltd

Dean Just Director

Perth, 28 August 2020