S2 RESOURCES LTD — Governance Information 2016

Sep 5, 2016

Corporate Governance Statement

Financial Year ending 30 June 2016

This statement describes the corporate governance practices of S2 Resources Limited (S2 or the Company) as at 6 September 2016.

The Company was admitted to the Official List of the Australian Securities Exchange (ASX) on 19 October 2015. As part of the Company's application for admission to the Official List of ASX, the Company prepared a Corporate Governance Statement, disclosing the extent to which the Company would comply with the 3rd Edition of the ASX Corporate Governance Council Principles and Recommendations (Recommendations) and, if any Recommendations were not to be complied with, the reasons for non-compliance.

The Board of Directors of the Company (Board) remains committed to achieving high standards of corporate governance. The Board considers that an effective corporate governance regime is integral to the culture of the Company. The Board acknowledges that the adoption of certain Recommendations is still not appropriate or practical for the Company, given the size, scale and nature of its operations; this is the Company's first reporting period as a listed entity. Where the Company is not currently in compliance with a Recommendation, the Company has provided an explanation and information in relation to the alternative governance practices the Company has in place. The Company regularly reviews its corporate governance practices to ensure that they are adequate and remain appropriate for the Company's circumstances.

Charters and policies referred to in this Corporate Governance Statement are available on S2's website within the "Company" section, under "Corporate Governance".

Corporate Governance Compliance

This statement is current as at 6 September 2016 and has been approved by the Board.

The Company's main corporate governance policies and practices are summarised in the table below.

Copies of the Company's Constitution and the Board's formal charter (Board Charter) and policies referred to in this Corporate Governance Statement are available in the "Corporate Governance" section of the Company's website at www.[s2resources.com.au.](http://www.siriusresources.com.au/)

ASX RECOMMENDATION		COMMENT	COMPLIANCE
		PRINCIPLE 1: LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
(a)(b)	ASX Recommendation 1.1: A listed entity should disclose:the respective roles and responsibilities of its board andmanagement; andthose matters expressly reserved to the board andthose delegated to management.	The Board has adoptedthe Board Charter, whichsets outthe respectivefunctions and responsibilities of the Board and management.Under theBoard Charter, the Board is responsible for all matters relating to therunning of the Company and, more specifically, all matters relating to thepolicies, practices, management and operations of the Company. Thosematters that the Board is responsible for(and which cannot be delegatedto management) include:•Directors acquiring or selling shares of the Company;•issuing shares of the Company;•acquiring, selling or otherwise disposing of property in excess of theamount set out in the Company's approval matrix;•founding, acquiring or selling subsidiaries of or any company within theCompany, participating in other companies or dissolving or selling theCompany's participation in other companies (including project jointventures);•acquiring or selling patent rights, rights in registered trademarks,licences or other intellectual property rights of the Company;•founding, dissolving or relocating branch offices or other offices, plantsand facilities;•starting new business activities, terminating existing business activitiesor initiating major changes to the field of the Company's businessactivities;	

ASX RECOMMENDATION	COMMENT	COMPLIANCE
	•approving and/or altering the annual business plan (including financialplanning) for the Company or any part of the Company;
	•taking or granting loans which exceed the amount set out in theCompany's approval matrix;
	•granting securities of any type;
	•granting loans to Company officers or employees and taking overguarantees for the Company's officers and employees;
	•entering into agreements for recurring, voluntary, or additional socialbenefits, superannuation agreements or agreements for general wageand salary increases;
	•determining the total amount of bonuses and gratuities for Companyofficers and employees;
	•determining the appointment, termination, prolongation ofemployment or amendment to conditions of employment of membersof the Board; and
	•granting or revoking a power of attorney or limited authority to signand/or act on behalf of the Company.
	The detail of some Board functions is handled through Board Committees.As at the date of this Corporate Governance Statement,the Company hadestablished an Audit and Risk Committee and a Remuneration andNomination Committee.However, the Board as a whole is responsible fordetermining the extent of powers residing in each Board Committee and isultimately responsible for accepting, modifying or rejecting BoardCommittee recommendations.

ASX RECOMMENDATION	COMMENT	COMPLIANCE
	The Board has delegated the Managing Director / CEO of the Companyresponsibilityfor the effective leadership and day-to-day operations andadministration of the Company.
	The Board Charter sets out further information about the responsibilities ofthe Board as a whole, the Chair, the Company Secretary, individualDirectors and senior executives.
	Copies of the Board Charter, the Audit and Risk Committee Charter and theRemuneration and Nomination Committee Charterare available atwww.s2resources.com.au.
ASX Recommendation 1.2: A listed entity should:(a)undertake appropriate checks before appointing aperson, or putting forward to security holders acandidate for election as a director; and(b)provide security holders with all material information inits possession relevant to a decision on whether or notto elect or re-elect a director.	The Board Charter requires the Boardto undertake appropriatebackground checks prior to nominating a candidatefor election or reelectionas a Director. The Remuneration and Nomination Committee isresponsible for undertaking these background searches, reviewing theresults and providing recommendations to the Board based on the results.All material information relevant to the election or re-election of a directorwill beprovided to the Company's shareholders in the form of a Notice ofMeeting (and accompanying explanatory memorandum) for anygeneralmeeting at whichthe election or re-election of a directoris proposed.	
ASX Recommendation 1.3: A listed entity should have a writtenagreement with each director and senior executive setting outthe terms of their appointment.	Under theBoard Charter, the Company must have awritten agreementwith eachDirectorand senior executiveof the Company, setting out theterms of their appointment.As at thedate of this Corporate Governance Statement:	
	•S2's IndependentNon-Executive Directors, Jeff Dowling and GreyEgerton-Warburtoneach havea letter of appointment;•S2's Executive Directors,Mark Bennett and Anna Neuling, each have anexecutive servicesagreement; and•the following senior management personnel have employmentagreements with S2:Chief Financial Officer, Su-Mei Chan;-

ASX RECOMMENDATION			COMMENT	COMPLIANCE
			General Manager –Exploration, John Bartlett; and-General Manager –Project Generation, Jeffrey Foster.-
			Other than as mentioned above, the Companydoes not currently employany other senior executives.
ASX Recommendation 1.4: The company secretary of a listedentity should be accountable directly to the board, through thechair, on all matters to do with the proper functioning of theboard.			The Company Secretary has primary responsibility for ensuring that theBoard processes and procedures run efficiently and effectively. The BoardCharterstates that "The Company Secretary is accountable to the Board,through the Chairman, on all governance matters and reports directly tothe Chairman as the representative of the Board".	
(a)		ASX Recommendation 1.5: A listed entity should:have a diversity policy which includes requirements forthe board or a relevant committee of the board to setmeasurable objectives for achieving gender diversityand to assess annually both the objectives and theentity's progress in achieving them;	The Company strives to foster a culture that encourages diversity in thecomposition of the Company's Directors, executives and employees. Dueto the size of the Company,and the number of executivesand employeesitemploys, the Company has not yet established a formal diversity policyorset any measurable objectivesfor achieving gender diversity in accordancewith Recommendation1.5 at this time.The Company currently comprises of the following percentage of females:	
(b)(c)	disclose that policy or a summary of it; anddisclose as at the end of each reporting period themeasurable objectives for achieving gender diversity setby the board or a relevant committee of the board inaccordance with the entity's diversity policy and itsprogress towards achieving them, and either:(i)the respective proportions of men and women onthe board, in senior executive positions and	•25% of the Board;•50% of Executive Directors;•25%of senior management (where "senior management" is defined asDirectors of the Company and any employees reporting directly to theor Executive Director)1;Managing Directorand
	(ii)	across the whole organisation (including how theentity has defined "senior executive"for thesepurposes); orif the entity is a "relevant employer"under the	•40% of the Company'stotal workforce.The proportion of females on the Board, employed as Executive Directors,in senior management positions and in the Company's total workforceareoutlined in theCompany's 2016 Annual Report.

	ASX RECOMMENDATION	COMMENT	COMPLIANCE
	Workplace Gender Equality Act, the entity's mostrecent "Gender Equality Indicators", as defined inand published under that Act.
ASX Recommendation 1.6: A listed entity should:(a)have and disclose a process for periodically evaluatingthe performanceof the board, its committees andindividual directors; and		The Board Charter sets outthe process for evaluating the Board, itscommittees and individual directors, which involves an annual selfassessment of the ongoing development and improvement of the Board's(and individual Directors') performance.	
(b)	disclose, in relation to each reporting period, whether aperformance evaluationwas undertaken in thereporting period in accordance with that process.	No performance evaluations have taken place as at the date of thiscorporate governance statement. The Company intends to performevaluations in accordance with the process set out in the Board Charter inthe financial year ended June 2017. Details of the performance evaluationsthat will be undertaken by the end of the 2017financial yearwill be set outin the Company's2017Annual Report.
		A copy of the Board Charter is available in the "Corporate Governance"section of the Company's website at www.s2resources.com.au.
ASX Recommendation 1.7:A listed entity should:(a)have and disclose a process for periodically evaluatingthe performance of its senior executives; and(b)disclose, in relation to each reporting period, whether aperformance evaluation was undertaken in thereporting period in accordance with that process.		The Board Charter sets out the process for evaluating its senior executives'performanceon an annual basis. The Board Charter requires the seniorexecutives to establish a set of performance targets. These targets arealigned to overall business goals and the Company's requirements of theposition. In the case of the Managing Director / CEO, these targets arenegotiated between the Managing Director / CEO and the Board andapproved by the whole Board.	
		An informal assessment of progress is carried out throughout the year. Afull evaluation of an executive's performance takes place annually.
		The Companyhasn'tperformedevaluations in accordance with the processset out in the Board Charter forthis financial yeardue to the Companylisting on October 2015 and the focus of the company on explorationactivities since then. The evaluation process will be performed for the yearended June 2017.Details of the performance evaluations that will be

ASX RECOMMENDATION		COMMENT	COMPLIANCE
		undertaken by the end of this financial year will be set out in theCompany's 2017Annual Report.A copy of the Board Charter is available in the"CorporateGovernance"section of the Company's website at www.s2resources.com.au.
		PRINCIPLE 2: STRUCTURE THE BOARD TO ADD VALUE
(a)(i)(ii)(iii)(iv)(v)(b)	ASX Recommendation 2.1: The board of a listed entity should:havea nomination committee which:has at least three members, a majority of whomare independent directors; andis chaired by an independent director, anddisclose:the charter of the committee;the members of the committee; andas at the end of each reporting period, thenumber of times the committeemet throughoutthe period and the individual attendances of themembers at those meetings; orif it does not have a nomination committee, disclosethat fact and the processes it employs to address boardsuccession issues and to ensure that the board has theappropriate balance of skills, knowledge, experience,independence and diversity to enable it to discharge itsduties and responsibilities effectively.	The Boardhas established a Remuneration and Nomination Committee.The purpose of the Remunerationand Nomination committee is to assistthe Board by making recommendations in respect of:•the composition, performance and effectiveness of the Board; and•the Company's remuneration policy.Once the size and scale of the Company's activities, and therefore the sizeof the Board, permit, the Remuneration and Nomination Committee willconsist of only non-executive directors, a majority of whom will beindependent (as assessed by the Board in accordance with the BoardCharter), in compliance with Recommendation2.1(a). At present, theCommittee will comprise a majority of independent non-executivedirectors and one executive director.The Board has adopted a charter with respect to the Remuneration andNomination Committee, which sets out the role and responsibilities of theRemuneration and Nomination Committee and the authority delegated bythe Board to the Remuneration and Nomination Committee.The Board, with the assistance of the Remuneration and NominationCommittee,is responsible for ensuringthat the appropriate balance ofskills, knowledge, experience, independence and diversity are representedon the Board, inpart by utilising the Board skills matrix(as set out in theBoard Charter)as part ofthe procedure for the nomination of persons forelection or re-election as Directors.	

	ASX RECOMMENDATION	COMMENT				COMPLIANCE
		The Board will continue to review its framework and practices in thisregard to ensure they remain appropriate to the Company's circumstances.
ASX Recommendation 2.2: A listed entity should have anddisclose a board skills matrix setting out the mix of skills anddiversity that the board currently has or is looking to achieve inits membership.		The Board Charter incorporates aBoard skills matrix, which liststhefollowing areas of knowledge as required by the Board as a whole:•geology;•health, safety and environment;•commercial;•legal;•corporate governance;•communications;•accounting and finance.The Board believes that having a diverse mix of experience, gender andculture across the Board leads to better outcomes for the Company andthe Company's shareholders.			
	ASX Recommendation 2.3: A listed entity should disclose:	As at the date of this Corporate Governance Statement, theBoardconsisted of:			
(a)(b)	the names of the directors considered by the board tobe independent directors;if a director has an interest, position, association orrelationship of the type described in Box 2.3 but theboard is of the opinion that it does not compromise the	NameJeff DowlingMark Bennett	RoleNon-ExecutiveChairmanManaging	Independent?YesNo	DateappointedMay 2015May 2015
(c)	independence of the director, the nature of the interest,position, association or relationship in question and anexplanation of why the board is of that opinion; andthe length of service of each director.	Anna NeulingGrey EgertonWarburton	Director / CEOExecutiveDirectorNon-ExecutiveDirector	NoYes	May 2015April 2016

ASX RECOMMENDATION	COMMENT	COMPLIANCE
ASX Recommendation 2.4: A majority of the board of a listedentity should be independent directors.	As set out in the table above, since April 2016, the Board has consisted of:•twoIndependent Non-Executive Directors(Jeff Dowlingand GreyEgerton-Warburton); and	
	•twoExecutive Directors(Mark Bennett and Anna Neuling).[Under the Board Charter, the Board's policy is that, at a time when thesize of the company and its activities warrants such a structure (in theopinion of the Board, from time to time),the Board will consist of amajority of independent, non-executive Directors. Mr Grey EgertonWarburton was appointed to the Board in April 2016 as an IndependentNon-Executive director, such that the Board now comprises 50%independent directors (compared with 33% on listing). Going forward, theCompany intends to review the composition of the Board to ensure itremains appropriate to the Company's circumstances.
	In addition, the Board Charter states that each Director is expected toexercise considered and independent judgment on all matters beforethem. To assist with this, the Companyprovideseach Director withaccessto independent professional advice on such matters. Prior to seekingindependent professional advice, a Director must inform the Chair (who isindependent) about the nature of the opinion or information sought, thereason for the advice the terms of reference of the advice and theestimated cost. Board approval must be sought if costs are likely to exceed$10,000.
ASX Recommendation 2.5: The chair of the board of a listedentity should be an independent director and, in particular,should not be the same person as the CEO of the entity.	The role of Chairmanand CEO are not exercised by the same person. JeffDowling is the Chairman, and Mark Bennett is the Managing Director / andCEO of the Company.Jeff Dowling (the Chairman) is considered by the Board to be independent.	

ASX RECOMMENDATION	COMMENT	COMPLIANCE
ASX Recommendation 2.6: A listed entity should have aprogram for inducting new directors and provide appropriateprofessional development opportunities for directors todevelop and maintain the skills and knowledge needed toperform their role as directors effectively.	The Board Charterrequires that allnew directors go through an inductionprocess which includes meeting with key executives, tours of the premises(including site), an induction package and presentations. The BoardCharter also provides for continuing professional education programsandrequires each Director to undertake at least 2 days of professionaldevelopment each year. This reflects the Company's commitment to thecontinuing development of its Directors and executives.	
	PRINCIPLE 3: PROMOTE ETHICAL AND RESPONSIBLE DECISION-MAKING
ASX Recommendation 3.1: A listed entity should:(a)have a code of conduct for its directors, seniorexecutives and employees; and(b)disclose that code or a summary of it.	The Company fostersa governance culture where all employees areexpected not onlytocomply with their legal obligations, but alsotoactethically and responsibly. The Company is committed to integrity and fairdealing in its business affairs and recognises its duty of care to allemployees, clients and stakeholders in this regard.	
	Given the size of the Company's operations,and the number of employeesand officers currently employed by the Company, the Board does notconsider it appropriate to establisha formal code of conduct in respect ofall employeesat this time. However, the Company has established a codeof conduct that applies to Directors and senior executives of the Companyas part of the Board Charter. This code of conduct sets out the principlescovering appropriate conduct and the minimum standard of behaviourexpected from Directors and senior executives.
	The Board has also adopted a Securities Trading Policy, which sets out theCompany's policy on trading of the Company's securities by keymanagement personnel.
	Copiesof the Board Charter and the Company's Securities Trading Policyare available in the "Corporate Governance"section of the Company'swebsite atwww.s2resources.com.au.

ASX RECOMMENDATION			COMMENT	COMPLIANCE
PRINCIPLE 4: SAFEGUARD INTEGRITY IN CORPORATE REPORTING
(a)	(i)(ii)(iii)(iv)(v)(vi)	ASX Recommendation 4.1: The board of a listed entity should;have an audit committee which;has a least three members, all of whom are nonexecutive directors and a majority of whom areindependent directors; andis chaired by an independent director, who is notthe chair of the board,and disclose;the charter of the committee;the relevant qualifications and experience of themembers of committee; andin relation to each reporting period, the number	The Board has established an Audit and Risk CommitteeThe purpose ofthe Audit and Risk Committee is to, among other things, assist the Board inthe effective discharge of its responsibilities for financial and corporatereporting and audit matters.Once the size and scale of the Company's activities, and therefore the sizeof the Board, permit, the Audit and Risk Committee will consist of onlynon-executive directors, a majority of whom will be independent (asassessed by the Board in accordance with the Board Charter), incompliance with Recommendation 4.1(a). At present, the Committee willcomprise a majority of independent non-executive directors and oneexecutive director.The Board has adopted a charterwith respect to the Audit and RiskCommittee, which sets out the role and responsibilitiesof the audit andRisk Committee and the authority delegated by the Board to the Audit and	
(b)		of times the committee met throughout theperiod and the individual attendances of themembers at those meetings; orif it does not have an audit committee disclose that factand the processes it employs that independently verifyand safeguard the integrity of its corporate reporting,including the processes for the appointment, andremoval of the external auditor and the rotation of theaudit engagement partner.	Risk Committee.The ultimate responsibility for the Company's financial statements restswith the Board.The Board, with the assistance of the Audit and Risk Committee,will reviewthe Company's financial statements and reports, focusing on (among otherthings) any changes in accounting policies and practices, significantadjustments and compliance with accounting policies and standards andlegal requirements.The Board has appointed BDO Audit (WA) Pty Ltdas its external auditor.The BoardCharter requires that the Boardwill annually review theappointment of the external auditor, itsindependence, the audit fee andany matters regarding itsresignation or dismissal(with the assistance ofthe Audit and Risk Committee). The Audit and Risk Committeeisalsoresponsible for(among other things)meeting with the external auditor at

ASX RECOMMENDATION	COMMENT	COMPLIANCE
	least twice in each financial year, ensuring that no managementrestrictions are being placed on the external auditor,reviewing theadequacy of accounting and financial controls together with theimplementation of any recommendations of the external auditor inrelation to those, and reviewingthe external auditor's management letterand management's response.
	The Board Charter also sets out the Company's policy in relation to rotationof the audit engagement partner and the S2 Constitutionsets out theprocess for appointing and removingthe external auditor.
	Copiesof the S2 ConstitutionandBoard Charter are available in the"Corporate Governance"section of the Company's website atwww.s2resources.com.au.
ASX Recommendation 4.2: The board of a listed entity should,before it approves the entity's financial statements for afinancial period, received from its CEO and CFO a declarationthat, in their opinion, the financial records of the entity have	Underthe Board Charter,the Board must receive a declaration from theManaging Director / CEO and CFO of the nature described inRecommendation 4.2 prior to the Board approvingany ofthe Company'sfinancial statements.	
been properly maintained and that the financial statementscomply with the appropriate accounting standards and give atrue and fair view of the financial position and performance ofthe entity and that the opinion has been formed on the basis ofa sound system of risk management and internal control whichis operation effectively.	The Board has receiveddeclarations from the Managing Director / CEO andCFO in respect of itsfinancial statements in respect to all financial periodduring the financial year ended30 June 2016.
ASX Recommendation 4.3: A listed entity that has an AGMshould ensure that it external auditors attend its AGM and isavailable to answer questions from security holders relevant tothe audit.	As set out in the Board Charter, it is the Company's policy that its externalauditor attends the Company's AGM and is available to answer questionsfrom shareholders in relation to its audit.	
	PRINCIPLE 5: MAKE TIMELY AND BALANCED DISCLOSURE
ASX Recommendation 5.1: A listed entity should:(a)have a written policy for complying with its continuousdisclosure obligations under the Listing Rules; and	The Board recognises that, as a company listed on ASX, the Company isrequired to comply withthe ASX Listing Rules which (among other things)requires a listed entity,subject to certain exceptions,to disclose to ASX	

ASX RECOMMENDATION	COMMENT	COMPLIANCE
(b)disclose that policy or a summary of it.	immediately any information concerning it that a reasonable person wouldexpect to have a material effect on the price or value of its securities. TheCompany is committed to complying with its continuous disclosureobligations, so that investors have equal and timely access to materialinformation concerning the Company.
	Given the size of the Company and the number of employees currentlyemployed by the Company, the Board does not consider it appropriate toestablish a formal written policy in relation to the Company's continuousdisclosure policies at this time.
	PRINCIPLE 6: RESPECT THE RIGHTS OF SHAREHOLDERS
ASX Recommendation 6.1: A listed entity should provideinformation about itself and its governance to investors via itswebsite.	The Company has a website, that is accessibleat:www.s2resources.com.au.This website contains information about theCompany's corporate governance measures,includinglinks tothe S2Constitution,Board Charterand Securities Trading Policy.	
	The website also containsfurther information about the Company,including: strategy and projects,compositionand profiles of the Board andsenior executives, annual reports and financial statements, ASXannouncements and notices of meeting.
ASX Recommendation 6.2: A listed entity should design andimplement an investor relations program to facilitate effectivetwo-way communications with investors.	The Board aims to ensure that shareholders are informed of all majordevelopments affecting the Company.The Company keeps investors informed through its website,www.s2resources.com.au, which containsinformation on the Company,the Board and the corporate governance policies and procedures.Investors will alsobe able toaccess copies of the Company's financialreports, ASX announcements and notices of meetingon its website.	
ASX Recommendation 6.3: A listed entity should disclose thepolicies and procedures it has in place to facilitate andencourage participation at meetings of security holders.	The Company encourages shareholders to attend and ask questions atannual general meetings and general meetings. As set out in the BoardCharter, it is the Company's policy that its external auditor attends theCompany's AGM and is available to answer questions from shareholders inrelation to its audit. The Company continues to review and reassess the	

		ASX RECOMMENDATION	COMMENT	COMPLIANCE
			need for a formal shareholder communications strategy.
ASX Recommendation 6.4: A listed entity should givesecurityholders the option to receive communication from and sendcommunications to, the entity and its security registry			The Companyprovidesinformation through its website to enableshareholders to email the Company,and to receive Companyannouncements by email.	
electronically.			The Company's share registry, Computershare Investor Services,also offersservices to shareholders through an online service available onits website.The Computershare contact details are available through the "ShareRegistryService"page on the Company website:www.s2resources.com.au/investor-registry.php
PRINCIPLE 7: RECOGNISE AND MANAGE RISK
ASX Recommendation 7.1: The board of a listed entity should:			The Board has established anAudit and Risk Committee.
(a)	have a committee or committees to oversee risk, eachof which:		The purpose of the Audit and Risk Committee is to, among other things,assist the Board in the effective discharge of its responsibilities for risk	
	(i)	has at least three members, a majority of whomare independent directors; and	management and compliance.Once the size and scale of the Company's activities, and therefore the sizeof the Board, permit, the Audit and Risk Committee will consist of onlynon-executive directors, a majority of whom will be independent (as
	(ii)	is chaired by an independent director,
	and disclose:		assessed by the Board in accordance with the Board Charter), in
	(iii)	the charter of the committee;	compliance with Recommendation 7.1(a). At present, the Committee willcomprise a majority of independent non-executive directors and one
	(iv)	the members of the committee; and	executive director.
	(v)	as at the end of each reporting period, thenumberoftimesthecommitteemetthroughout the period and the individualattendances of the members at those meetings;or	The Board has adopted a charter with respect to the Audit and RiskCommittee, which sets out the role and responsibilities of the audit andRisk Committeeand the authority delegated by the Board to the Audit andRisk Committee. The Company is committed to the identification,monitoring and management of risks associated with its business activities.
(b)if it does not have a risk committee or committees thatsatisfy(a) above, disclose that fact and the processes itemploys for overseeing the entity's risk management			Under the Board Charter, the Board, with the assistance of the Audit andRisk Committee,is responsible for overseeing, reviewing and ensuring theintegrity and effectiveness of the Company's risk and compliance systems.

ASX RECOMMENDATION		COMMENT	COMPLIANCE
	framework.	The Board utilises an external independent auditor who is responsible forverifying the Company's compliance systems and reporting to the Board onthose systems. The risk management systems covers operational, financialand compliance risks.
(a)(b)	ASX Recommendation 7.2: The board or a committee of theboard should:review the entity's risk management framework at leastannually to satisfy itself that it continues to be sound;anddisclose, in relation to each reporting period, whethersuch a review has taken place.	Under the Board Charter, the Board, with the assistance of the Audit andRiskCommittee,is responsible for reviewing all major strategies andpurchases for their impact on the risks facing the Company.The Company, via the Audit and Risk Committee,undertakes an annualreview of the effectiveness of its risk management framework andoperations to update its risk profile,which normally occurs in conjunctionwith the strategic planning process.The Company conducteda review of its risk management frameworkduring the financial yearand resolved to establish the Audit and RiskCommittee. Details of this revieware contained in the Company's 2016Annual Report.Copies of the charter of the Audit and Risk Committee are available in the"Corporate Governance" section of S2's website:www.s2resources.com.au.	
(a)(b)	ASX Recommendation 7.3: A listed entity should disclose:if it has an internal audit function, how the function isstructured and what role it performs; orif it does not have an internal audit function, that factand the processes it employs for evaluating andcontinually improving the effectiveness of its riskmanagement and internal control processes.	The Company does not employ an internal audit function at this time, andthe Board considers that this approach is appropriate for a company of S2'ssize and the nature of its operations. The Board has established an Auditand Risk Committee which will assist the Board in reviewing the Company'srequirement for an internal audit function periodically.Under the Board Charter, responsibility for undertaking and assessing riskmanagement and internal control effectiveness is delegated to theMD /CEO. The MD/ CEO is required to assess risk management and associatedinternal compliance and control procedures and reportto the Boardvia theAudit and Risk Committeeon whether any risks are being managedineffectively.	

ASX RECOMMENDATION	COMMENT		COMPLIANCE
ASX Recommendation 7.4: A listed entity should disclosewhether it has any material exposure to economic,environmental and social sustainability risks, and if it does, howit manages or intends to manage those risks	The Board has identified areas of risks that have the potentialto havematerial adverse impact on the Company's business, including:•operational;•environmental;•insurance;•litigation;•financial;•treasury and finance; and•compliance.		
	Security oftenure andnecessaryapprovals	There is a risk that the necessary landuse approvals(including, in respect of any native title rights andcultural heritage sites)and environmental permits maynot be obtained, granted or renewed, or may beobtained, granted or renewed on terms not satisfactoryto S2, or may be obtained, granted or renewed but notwithin the timeframes anticipated by S2.
	Operatinghistory	S2 does not currently conduct mining productionoperations. There can be no assurance that it can bringany of its other future projects into production oroperate any such project profitably.While the Company aims to generate working capitalthrough future mining operations, there is no assurancethat the Company will be capable of producing positivecash flow on a consistent basis or that any such fundswill be available for further exploration anddevelopment programs.
	Future capitalrequirements	There can also be no assurance that the Company willbe able to obtain additional equity financing whenrequired on acceptable terms.

ASX RECOMMENDATION			COMMENT		COMPLIANCE
			Reliance on keypersonnel andemployees	Although the Company believes that additional capitalcan be obtained, no assurance can be made thatappropriate capital or funding, if and when needed, willbe available on terms acceptable to S2. If S2 is unableto obtain additional financing as needed, it may berequired to reduce, delay or suspend its operations andthis could have a material adverse effect on its activities.Retaining and recruiting personnel is critical to theCompany's success and growth prospects. If S2 cannotretain and attract qualified personnel it could adverselyaffect S2' current exploration program and its futuregrowth plans.
				The Audit and Risk Committee established by the Board is responsible foroverseeing and monitoring, by receiving reports from management, theestablishment and maintenance, by management, of processes to ensurethere is a process to identify and manage any material exposure toeconomic, environmental and social sustainability risks.
PRINCIPLE 8: REMUNERATE FAIRLY AND RESPONSIBLY
ASX Recommendation 8.1: The board of a listed entity should:(a)have a remuneration committee which:		The Board has	establisheda Remunerationand Nomination Committee.The purpose of the Remuneration and Nomination committee is to assistthe Board by making recommendations in respect of:	
	(i)	has at least three members, a majority of whomare independent directors; and	••	the composition, performance and effectiveness of the Board; andthe Company's remuneration policy.
	(ii)	is chaired by an independent directors,and disclose:		Once the size and scale of the Company's activities, and therefore the sizeof the Board, permit, the Remuneration and Nomination Committee will
	(i)(ii)	the charter of the committee;the members of the committee; and		consist of only non-executive directors, a majority of whom will beindependent (as assessed by the Board in accordance with the BoardCharter), in compliance with Recommendation 8.1. At present, the
	(iii)	as at the end of the each reporting period, thenumberoftimesthecommitteemet		Committee will comprise a majority of independent non-executivedirectors and one executive director.

ASX RECOMMENDATION	COMMENT	COMPLIANCE
throughout the period and the individualattendances of the members at those meetings;or(b)if it does not have a remuneration committee, disclosethat fact and the processes it employs for setting thelevel and composition of remuneration for directors andsenior executives and ensuring that such remunerationis appropriate and not excessive.	The Board has adopted a charter with respect to the Remuneration andNomination Committee, which sets out the role and responsibilities of theRemuneration and Nomination Committee and the authority delegated bythe Board to the Remuneration and Nomination Committee.Copies of the Board Charter and the Remuneration and NominationCommittee Charter areavailable in the "Corporate Governance"section ofthe Company's website atwww.s2resources.com.au.
ASX Recommendation 8.2: A listed entity should separatelydisclose its policies and practices regarding the remuneration of	Mr Jeff Dowlingand Mr Grey Egerton-Warburton areeachpaid a fixedannual fee for their servicesto the Company asNon-Executive Directors.	
non-executive directors and the remuneration of executivedirectors and other senior executives.	Executives of the Company(being Executive Directors and other seniorexecutives)typically receive remuneration comprising an appropriatebalance of:
	•fixed remuneration (including a base salary component and other fixedbenefits based on the terms of their employment agreements withtheCompany);and
	•performance-based remuneration (such as the ability to participate inthe Company's short term incentive plan and the Company's long termincentive plan).
	Details of the remuneration of Directors and senior executives areoutlinedin the Company's 2016 Annual Report.
ASX Recommendation 8.3: A listed entity which has an equitybased remuneration scheme should:	The Company currently has two equity-based remuneration schemes; onefor directors, and another for employees and service providers. The keyterms of these incentive plans, as well as initial offers under these planswere disclosed in the Demerger Scheme Booklet.	
(a)have a policy on whether participants are permitted toenter into transactions (whether through the use ofderivatives or otherwise) which limit the economic riskof participating in the scheme; and
(b)disclose that policy or a summary of it.