SABRE RESOURCES LIMITED — Interim / Quarterly Report 2015

Mar 12, 2015

SABRE RESOURCES LTD AND CONTROLLED ENTITIES

(ACN 008 982 474 )

Interim Financial Report for the Six Month Period Ended 31 December 2014

SABRE RESOURCES LTD AND CONTROLLED ENTITIES

CONTENTS

Directors’ Report	3
Auditor’s Independence Declaration	15
Consolidated Statement of Profit or Loss and Other Comprehensive Income	16
Consolidated Statement of Financial Position	17
Consolidated Statement of Changes in Equity	18
Consolidated Cash Flow Statement	19
Notes to the Financial Statements	20
Directors’ Declaration	24
Independent Auditor’s Review Report To The Members	25

SABRE RESOURCES LTD AND CONTROLLED ENTITIES

DIRECTORS' REPORT

Your Directors present their report on consolidated group of Sabre Resources Ltd and controlled entities (the “Group”) for the half year ended 31 December 2014.

1. DIRECTORS

The names of Directors in office during the half year and up to the date of this report:

Jonathan Downes Michael Scivolo Paul Mazzoni

2. REVIEW OF OPERATIONS

Financial Result

The Group incurred a loss after income tax of $154,243 for the half year period (2013: Loss of $379,340). As at 31 December 2014 the Group had cash funds of $1,850,760 (30 June 2014: $2,886,962).

3. EXPLORATION ACTIVITIES

Otavi Mountain Land copper and base metal project, Namibia

Sabre’s focus is the exploration and development of the Otavi Mountain Land (OML) copper and base metal project in northern Namibia. The project is located in the Otavi Mountain Land metallogenic province, historically a globally important source of copper, zinc, lead, and vanadium. The OML has a long mining history dating back to the late 1800s and consequently has excellent infrastructure, including roads, power, water, rail to port and the Tsumeb base metal smelter complex, one of only five operating copper smelters in Africa.

During this half-year, Sabre embarked on a program of regional exploration aimed at discovering significant Tsumeb-scale deposits beneath shallow cover. Historical mining and exploration overwhelmingly concentrated on outcropping areas and therefore significant potential remains located in the shallow concealed areas. We have utilised our in-house expertise to define and drill-test a series of targets throughout our tenement holding in the OML.

Regional scale geochemical RC drill program

A 10,000 m regional-scale reverse circulation (RC) geochemical drilling program is underway in the Otavi Mountain Land. The program is intended to provide rapid shallow testing of concealed high priority targets together with some deeper RC follow up of significant base metal anomalism. The targets were defined by the regional targeting exercise undertaken by the Company earlier in 2014.

The first phase of the 10,000 m regional-scale geochemical RC drilling program is approximately 70% complete (Table 1). This first phase comprises systematic shallow RC drilling of target areas to intercept bedrock, sampling both bedrock and regolith profiles for anomalism and mineralisation.

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	Table 1- Summary ta ble for the RCg eochemical dr ill program
Total me treage	10,000m
No.of dril l holes	Approxima tely 500 sha llow geoche mical drillho les and arou nd 50	deepe r drillholes
Coppert argets	12 - includ ing Guchab South andS chlangenflac h. Others at Guchab Mi ning
	Centre, ne ar Kombat,a nd between .
Zinc-lead targets	2 - Toggen burg and Ea st Border
Timing	Commence d, expected to take arou nd 6 month s to complet e
Cost	A$550,000

3.1.1 Program lo g istics

The Co m pany belie v es that th e discovery p otential for large and/or high-grad e copper or zinc-lead deposit s in the Ota v i Mountain L and is high in those ar e as not amenable to su rf ace prospecting and unlikely to have be e n tested by previous e x plorers. Th e se areas c o ntain little o r no outcro p , with all newly d e fined targe t s located beneath soil- c overed plains. These p lains consti t ute over 6 0 % of the region and are almost completely unexplore d . Drilling h a s shown th a t soil cover is thin (less than 5 m deep) o v er each of t h e areas tested.

Of the R C drill program, 5,000 m is allocate d for shallow geochemic a l drill testin g of targets. T his firstpass sh a llow drillin g is testing f o r subsurfa c e mineralis a tion in eac h target are a in order to coarsely define t h at mineralisation’s exte n t and style. Under this p hase of the d rill progra m , around 50 0 shallow RC drill holes are t e sting 12 buried copper targets within the Kom b at-Guchab c orridor and 2 buried zinc-lea d targets on the Pavian Trend (Fig u re 1). In m o st cases, e c onomic gr a des of min e ralisation are not t o be expect e d in this fir s t pass – rat h er the pres e nce and st y le of minera l isation and alteration will be u s ed to deter m ine the prospectivity of the target f o r the secon d phase of t h e drill progr a m.

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Figure 1 - Targets (re d ) for the first phase of the re g ional geoche m ical RC drilling program are a ll located ben e ath surface cov e r. All targets o n the Kombat T rend are cop p er targets and both targets o n the Pavian T r end are zinc-l e ad targets. Kno w n outcropping prospects, occ u rrences, depo s its and mines a re shown as black crosses.

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For this second pha s e of RC drilling, 5,000 m is allocat e d for appro x imately 50 d eeper drillh o les. Drill hole arr a ys will atte m pt to defin e the distribution of copp e r or zinc-le a d mineralis a tion at dep t h. These deeper h oles will ai m at the mor e mineralise d or more p r omising por t ions of the t argets. Tar g ets to be drilled i n this second phase will be define d by the results of the s hallow first phase of t h e drilling progra m .

Succes s of this regi o nal RC dril l ing progra m will likely l e ad to expa n sion of the p rogram to t est other recently defined targets.

3.1.2 R C drilling at copper tar g ets

Copper exploration comprises t h e bulk of t h e regional g eochemica l shallow drill program. A ll of the selecte d targets are located on t h e Kombat T rend that is host to the K ombat dep o sits.

Of the t w elve target s defined, fir s t-pass expl o ration is co m pleted at nine, with wo r k currently u nderway on two more. Visible copper m ineralisatio n has been recorded at several lo c alities, including that reporte d at Guchab South. Co p per mineralisation is c o nsidered to be nuggett y , as it is a t Guchab Canyon, so the definition of well-defined g e ochemical a nomalies around the c o pper occurrences is importa n t because it is allowing d efinition of d istinct copper targets.

Several of the copp e r targets selected for te s ting are not yet accessi b le. Two hig h -ranking tar g ets near to Kombat town require additional envir o nmental clearance a n d commu n ity and st a keholder consult a tion. One o f these targ e ts is also p artly inacc e ssible bec a use it is lo c ated bene a th crops. Negotia t ions are un d erway to s e cure acces s once the c r ops are harvested. Of t h e 12 copp e r targets, first-pha s e drilling is complete a t 9 and is u n derway at o ne. Several of the targ e ts, includin g Guchab South, S chlangenfla c h and Uch a b Siding, w e re defined o n the flats i n the south o f the Guch a b Mining Centre. T he targets are directly a long strike from, and i n a similar st r uctural and stratigraphi c position to, the K ombat Cop p er Mine 10km to the w est. Sabre’ s work show s common g enetic links between these ta r gets and th e nearby Gu c hab Canyo n copper de p osit.

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Figure 2 - Chalcocite ( b lack-grey) and malachite (gr e en) mineralisa t ion in silicified dolomite at Guchab South, G CGDD0006 1.65 m

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Figure 3 - Distribution of visible copper mineralisation in bedrock samples and its manganese halo, c oinciding with interpreted faults and contact be t ween the shal e and dolomite.

The rec o nnaissanc e drilling pro g ram at Gu c hab South identified th e copper mi n erals, mala c hite and chalcoci t e, along wi t h minor chalcopyrite an d bornite, in 6 of the 16 d rill holes th a t ended in dolomite. The mi n eralisation i s characterised by str o ng alteratio n and brec c iation of th e host dolo m ite. The minerali s ed sample s appear to define a c o ntiguous z o ne that m e asures aro u nd 550 m b y 200 m (Figure 3 ). The Guc h ab South c o pper occur r ence appears to be open to the eas t as well as u nder the shale to the south a n d west.

Addition a l deeper d r illing will be planned o n completion of the anal y sis of the r e sults of th e bedrock geoche m ical drilling in order to delimit the ex t ent and the intensity of m ineralisati o n at Gucha b South.

3.1.3 RC drilling a t zinc target s

Reconn a issance sh a llow RC d r illing was u ndertaken a t the Togg e nburg and East Border targets, which a r e located o n the Pavian Zinc-Lea d Trend. Th e se are con c eptual and geochemic a l targets defined b eneath the soil-covere d Toggenbur g Plains bet w een the Border deposit and the So u th Ridge prospec t (Figure 4). Toggenbur g represents a significantly sized (+ 2 km long) ta r get under cover with anomal o us Zn-Pb s o il geochemistry and an a nomalousl y subdued t o pographic s i gnature. East Border coincides with geoc h emical ano m alism at th e eastern m a rgin of the B order depo s it.

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Figure 4 - The Pavian Trend, extendi n g over 30 km and showing m any deposits, p rospects and t argets. The n e wly-defined targ e ts at East Bor d er and Togge n burg are mark e d with a blac k ‘x’. Soil geochemistry for Zn + Pb illustrates t h e extent of the t r end, with war m er colours representing high v alues.

Visible s phalerite a n d galena mineralisation were recor d ed from bedrock geoc h emical drilling at the Toggen b urg target d uring the r e porting peri o d. Coherent Zn-Pb and other geoc h emical anomalies in the bed r ock and th e overlying r e golith exte n d over mor e than 2,00 0 metres stri k e length. I n January 2015 th e Company a nnounced s trong, exten s ive zinc-le a d anomalie s in the subs u rface at To g genburg and its intentions for follow-up d rilling. The Toggenbur g target is o p en to the e ast, but maize crops over tha t area precl u de drilling u n til harvest l a ter in 2015.

3.2 Zinc exploration recommences

The Co m pany has r e newed its exploration f o cus on the d iscovery an d developm e nt of zinc d e posits through o ut the Otavi Mountain L a nd. This wi l l compleme n t our contin u ing copper exploration i n the region. In addition to the regional geochemic a l RC drillin g program d e scribed abo v e, work is u nderway on a nu m ber of fronts.

Initial pr o grams are f ocussing on Sabre’s Pa v ian Zinc-Le a d Trend, a 3 0km long s t ructurally-c o ntrolled lineame n t of similar z inc-lead de p osits, occu r rences, and anomalies. The Compa n y’s zinc ex p loration strategy includes:

• Bedrock ge o chemical d rilling progr a m, to ass e ss the pro s pectivity b e neath cover of high priority zinc-lead targets for economi c mineralisa t ion (see ab o ve).

• T arget generation, using soil geochemical data, g eophysical d ata, and g e ological mo d elling.  Deposit defi n ition drilling, which will i n clude infill d rilling and r e source mo d elling.  Reassessm e nt of the B o rder zinc-le a d deposit.

3.2.1 R egional so i l sampling programs

Region a l soil geoch e mical sam p ling is used to collect i n itial data th a t will aid in the definitio n of zinclead tar g ets that wil l be the foc u s of future e xploration. The Sinkho l e-Harasib s o il sampling program was co m pleted duri n g the reporting period. The data a r e presently being analy s ed and inc o rporated into the C ompany’s r egional dat a set to assis t with region a l target generation.

In Dece m ber, a ne w soil sampling progra m comprising over 1600 samples w a s commenc e d to the south o f the Togge n burg area. The area w as selected due to its p roximity to t he Toggen b urg zinclead dis c overy and to close a g a p in the exi s ting soil ge o chemical d a taset cover a ge. Since t h e end of the reporting period t he program has been c o mpleted, with the data p resently bei n g analysed.

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3.2.2 Re assessment of Border

Infill drilling at the Border deposit will be considered to define potential higher-grade zones in the deposit. Currently, drill lines at Border are spaced at 200 m. Three-dimensional grade distributions near the centre of the deposit suggest that higher grade zones may exist between these lines. This opportunity will be assessed and drilling planned according to the potential size of the opportunity.

3.2.3 Target generation

Target generation is currently underway with a large regional soil geochemistry program covering the Sinkhole area in the central western part of the Pavian Trend (Figure 4). Around 3200 of the planned total 5000 samples have been collected. Like the Toggenburg Plains, the Sinkhole target area is under cover and may conceal buried zinc-lead mineralisation.

3.3 Border zinc-lead-silver resource updated to JORC 2012 standard

Sabre has completed a review of the Border deposit and associated revision of the resource to the JORC 2012 standard. Since the release of the previous resource (ASX release 24 January 2012), an additional two hundred and eight bulk density measurements were collected and incorporated into the model. A revised resource statement has been compiled.

Full details of supporting information relating to the resource estimate and Inferred classification are included in Appendix 3 – JORC Table 1 of the announcement dated 16 October 2014. The Border Resource is a key component of a strategy of identifying and developing multiple Zn-Pb-Ag deposits feeding a centrally located processing plant on the Pavian trend.

3.3.1 Border Inferred Mineral Resource Estimate

Sabre has estimated an Inferred Mineral Resource at the Border Deposit to JORC 2012 standard of 16.0 Mt @ 1.53% Zn , 0.59% Pb and 4.76 g/t Ag, when reported at a 1.25% Zn+Pb cut-off grade (Table 2). The mineral resource estimate increases to 31.2 Mt @ 1.10% Zn and 0.40% Pb and 3.37 g/t Ag when reported at 0.5% Zn+Pb cut-off grade (Table 2).

Table 2 - Border 2014 Mineral Resource Estimate

Resources Category Cut off Tonnage ( %) (Mt) Inferred 0.5 31.2 Inferred 1.25 16.0 Inferred 2.0 7.5	Metal Grade Zinc Lead Silver (%) (%) (g/t) 1.10 0.40 3.37 1.53 0.59 4.76 1.93 0.80 5.96	**Contained Metal **
		Zinc Lead Silver (t) (t) (Moz)
		343,000 126,000 3.4 246,000 95,000 2.5 144,000 59,000 1.4

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Figure 5 - Drillhole plan and c ontoured grad e -metres for the Border deposit.

3.3.2 M ineral Res o urce Estim a tion

Border i s consider e d to be an epigenetic zinc-lead-sil v er deposit that consis t s of sphal e rite (zinc sulphid e ) and galen a (lead sulp h ide) minera l isation within dolomitic h ost rocks. N o pyrite or a ny other sulphid e s are pres e nt in signif i cant amou n ts, and weathering is minor and s hallow so as to be immaterial. The dep o sit dips at 6 0° to the n o rth-northwe s t, stretches along strike for 2,430 m, extends for up t o 390 m ben e ath surface (with the bulk of the ton n age and gr a de within 1 5 0 m of surf a ce), and varies b e tween 10 m and 85 m t hick (25 m a verage thickness). A plan of the h o le collars a n d grademetre distributions o f the miner a lisation is s h own in A d r ill cross se c tion is sho w n in Figure 6. A long section s howing Zn + Pb% x m (g r ade thickne s s) is show n in Figure 7.

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Figure 6 - Cross sectio n of the Border Deposit (807,6 0 0mE section), showing the distribution of mineralisation do w nhole (red) and f r om 3D modelling (yellow).

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Figure 7- L ong section thr o ugh the Border Deposit, looking south.

The foll o wing inform a tion pertains to the Min e ral Resour c e estimate:

• T he Inferre d Resource e stimate is b ased on a n ominal 0.5 % Zn+Pb wi r eframe cut- o ff with a m aximum in t ernal dilution of five me t res, which w as used to define zinc a nd lead distributions t hroughout and beyon d the highe r -grade por t ions define d by the r e source. Grade was i nterpolated using an i n verse distance weighti n g squared (IDW2) technique in M icromine S oftware. A p pendix 1 contains a list o f all drilling collar infor m ation at Bor d er.

• A ppendix 2 c ontains a li s t of all drill intercepts u s ed in the c o nstruction o f the composites and u sed in the i nterpretatio n of the min e ralised wir e frames. A n o minal cuto ff of 0.5% Z n +Pb was u sed to de f ine the dri l l intersecti o ns composites and mineralisation distributions. A 5m m aximum in t ernal dilution was used. Higher gra d e intercepts within the c o mposites are shown i n the table.

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• Bulk density measurements have been taken and analysed. 208 samples within the mineralised envelope were determined by weight in air/ water technique. A regression line was determined for mineralisation samples where bulk density (D) = (Pb+Zn% * 0.014825) + 2.818494.

• A waste density of 2.82 was assigned.

• The entire resource is classified as an Inferred Resource. The limiting factors to a higher classification include the wide drill spacing of 200m x 50m and the use of handheld GPS for hole collar co-ordinates, which introduces significant uncertainty in the estimates.

3.3.3 Metallurgical testwork

Sabre has completed detailed metallurgical test work on the Border Deposit to test the response of the mineralisation to dense media separation (DMS). DMS is a cheap and efficient process that becomes more efficient with higher density contrasts, providing greatly reduced mineral processing costs. The results are summarised in Table 3.

The beneficiation tests on the bulk sample show exceptional upgrading of the mineralisation, in the DMS step with 92.5% of the lead and 86% of the zinc recovered to only 17% of the feed mass with a resulting product grade of 12.5% zinc and 6.3% lead. This greatly reduces the amount of material requiring grinding prior to flotation. Grind and float test work demonstrated excellent liberation at a relatively coarse grind size of 150 microns. Final flotation concentrate grades were around 65 % lead and 62 % zinc (from mineralisation grading 0.77% Pb and 1.66% Zn), with final recoveries of around 87% for lead and 82% for zinc.

Table 3 – Summary of the results of beneficiation testing of Border mineralisation on bulk composite sample (60kg, crushed and screened all passing 12.5mm)

Process	Lead	Zinc
1 - Original sample (head assay)	0.77%	1.66%
2 – Dense media separation sinks (+ fines from
crushing)
Product grade:	6.3%	12.5%
Enrichment factor (from 1):	8.2 times	7.5 times
Metal Recovery (from 1):	92.5 %	86.0 %
3 - Grind and float
Product grade:	63-69%	61-62%
Enrichment factor (from 2):	~10 times	~5 times
Recovery (from 2):	94-95 %	~95 %
Process Summary
Overall enrichment (from original):	~82 times	~37 times
Overall recovery (from original):	87.8%	81.7%

The optimised test results are as follows;

• At a coarse 12.5 mm (half inch) crush size approximately 87% of the waste mass can be rejected by DMS

• At a relatively coarse optimum grind size of 150 microns, good separation is achieved to produce lead and zinc cleaner concentrates

• After flotation, a lead cleaner concentrate grade of 65% Pb was achieved, recovering 94.5% of the lead in the flotation feed

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SABRE RESOURCES LTD AND CONTROLLED ENTITIES

• After flotation, a zinc cleaner concentrate grade of 61.5% Zn was achieved, recovering 95% of the zinc in the flotation feed

A major factor in the success of the DMS technique at Border is the lack of waste sulphides, such as the iron sulphides pyrite and pyrrhotite. Such minerals would typically concentrate with the galena and sphalerite and would thereby result in a lower concentrate grade, possibly requiring further processing such as flotation to separate waste sulphides from ore sulphides. However, the near absence of these waste sulphides at Border along with the coarse-grained and blebby nature of zinc and lead sulphides means that the simple DMS process is highly efficient, resulting in very low processing costs to produce a marketable concentrate. This indicates that lower grades of zinc and lead mineralisation can be processed profitably.

In summary, after dense media separation and flotation, 81.7% of the total zinc and 87.8% of the total lead and 89% of the total silver can be expected to be recovered. Most importantly for the economics of the project, after crushing and DMS, only 17% of the original feed would require milling and flotation. This mill feed is made up of naturally upgraded < 1mm fines (10%) and DMS concentrate (7%). Excellent liberation of zinc and lead sulphides in this mill feed occurs at a relatively coarse grind size of 150 microns providing a potential further cost benefit.

3.3.4 Border Scoping Study

A Scoping Study for Border was completed based on the 2011 Inferred Resource estimate, with positive results achieved. The cost assumptions and commodity prices utilised in this scoping study are no longer valid and are being reviewed by Sabre. In conjunction with this review, additional infill drilling may be warranted at Border to focus on defining higher grade zones, improving the resource classificastion to Indicated status and to assist with a pit re optimisation. Further processing test work will also be required to confirm earlier results, and assist with design of a cost effectiive process flowsheet. Depending on the results of these investigations and the results of nearby exploration, a revised Scoping Study for Border will be undertaken in calendar 2015.

3.3.5 Similar deposits in southern Africa

The Pering Zn-Pb Mine in the Northern Cape Province of South Africa shows many similarities to Sabre’s Border Deposit. Operated by Shell South Africa and BHP Billiton from 1988 to 2003, output over the life of mine was 20.4 Mt @ 0.58% Pb and 2.58% Zn. The mining cut-off was 1.1% Zn+Pb. (ref Pering Base Metals (Pty) Ltd Techno Economic Statement as at 31 December 2010) Pering is considered to be a Mississippi Valley-Type (MVT) deposit, hosted by dolomite sequences.

The example of the Pering Mine shows that moderate-grade, high-tonnage zinc-lead deposits can be economically viable, profitable assets in southern Africa. Sabre believes that Border, with additional tonnages from Driehoek and other deposits to be defined along the Pavian Trend, will be a significant lead and zinc producer in the Otavi Mountain Land.

3.4 Forthcoming drilling for 2015

Data is currently being collected and analysed from the drilling program. Second phase deeper drilling will be required at a number of targets in order to determine the subsurface distributions of mineralisation, with Guchab South and Toggenburg requiring follow-up. A total of 5,000 m of RC drilling for around 50 deeper drillholes is allotted for this second phase of drilling.

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SABRE RESOURCES LTD AND CONTROLLED ENTITIES

For further information please contact:

Dr Matthew Painter, General Manager – Exploration Paul Mazzoni, Technical Director

Phone (08) 9481 7833

Or consult our website:

http://www.sabresources.com/

Competent Person Declaration

The information in this report that relates to Exploration Results is based on information compiled by Dr Matthew Painter who is a full-time employee of Sabre Resources Ltd, and who is a member of The Australian Institute of Geoscientists. Dr Painter has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australian Code for Reporting of Exploration Results, Mineral Resource and Ore Reserves”. Dr Painter consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report that relates to Mineral Resources or Ore Reserves is based on information compiled by Luke Marshall, who is a member of The Australian Institute of Geoscientists. Mr Marshall is a full time employee of Golden Deeps Limited and consultant to Sabre Resources and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resource and Ore Reserves”. Mr Marshall consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Forward-Looking Statements

This document may include forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning Sabre Resources Ltd’s planned exploration program and other statements that are not historical facts. When used in this document, the words such as "could," "plan," "estimate," "expect," "intend," "may”, "potential," "should," and similar expressions are forward-looking statements. Although Sabre Resources Ltd believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements.

APPENDIX – LICENCE SCHEDULE

Country	State/Region	Project	Tenement ID	Area (km 2)	Grant date	Interest
Namibia	Otjozondjupa	Otavi Mountain Land base metals	EPL3540	213.2	30/10/2006	80%
			EPL3542	475.5	30/10/2006	70%

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4. AUDITOR’S INDEPENDENCE DECLARATION

A copy o f the audito r ’s independ e nce declar a tion as req u ired under section 307C of the Corp o rations Act 200 1 is set out on Page 15.

This rep o rt is made in accordan c e with a res o lution of th e Board of Directors.

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Michael Scivolo Director Perth, 13 March 2015

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Auditor’s Independence Declaration

To The Directors of Sabre Resources Ltd

Level 1 10 Kings Park Road West Perth WA 6005 PO Box 570 West Perth WA 6872 T +61 8 9480 2000 F +61 8 9322 7787 E info.wa@au.gt.com W www.grantthornton.com.au

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the review of Sabre Resources Ltd for the half-year ended 31 December 2014, I declare that, to the best of my knowledge and belief, there have been:

• a No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

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

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GRANT THORNTON AUDIT PTY LTD Chartered Accountants

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P W Warr Partner - Audit & Assurance

Perth, 13 March 2015

Grant Thornton Audit Pty Ltd ACN 130 913 594

a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.

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CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 31 DECEMBER 2014

Other Revenue Interest earned Cost recovery Expenditure Change in fair value of investments Depreciation Exploration costs Key management personnel remuneration Management fees Occupancy costs Reversal of VAT impairment Other operating costs (Loss) before income tax Income tax benefit (Loss) for the half year Other Comprehensive Income, net of tax Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign controlled entities Total comprehensive (loss) for the half year Basic and diluted profit/(loss) per share (cents)	Consolidated Half year 2014 $ 35,980 51,697 87,677 (14,667) 27,198 - 168,923 130,763 64,976 (225,891) 90,618 241,920 (154,243) - (154,243) (439,299) (593,542) (0.07)	Consolidated Half year 2013 $ 84,014 368,950
		452,964 6,667 25,445 2,250 183,556 128,334 55,601 - 430,451
		832,304 (379,340) -
		(379,340) (152,991)
		(532,331)
		(0.17)

The accompanying notes form part of these financial statements

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2014

CURRENT ASSETS Cash and cash equivalents Trade and other receivables TOTAL CURRENT ASSETS NON CURRENT ASSETS Financial assets Plant and equipment Exploration and evaluation expenditure TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables TOTAL CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Share option reserve Foreign currency translation reserve Accumulated losses TOTAL EQUITY	Consolidated 31 December 2014 30 June 2014 $ $ 1,850,760 2,886,962 371,792 131,450 2,222,552 3,018,412 24,000 9,333 151,577 173,643 25,216,456 24,164,267 25,392,033 24,347,243 27,614,585 27,365,655 222,187 258,313 222,187 258,313 222,187 258,313 27,392,398 27,107,342 51,936,045 51,936,045 262,500 262,500 (1,681,407) (2,120,706) (23,124,740) (22,970,497) 27,392,398 27,107,342	Consolidated 31 December 2014 30 June 2014 $ $ 1,850,760 2,886,962 371,792 131,450 2,222,552 3,018,412 24,000 9,333 151,577 173,643 25,216,456 24,164,267 25,392,033 24,347,243 27,614,585 27,365,655 222,187 258,313 222,187 258,313 222,187 258,313 27,392,398 27,107,342 51,936,045 51,936,045 262,500 262,500 (1,681,407) (2,120,706) (23,124,740) (22,970,497) 27,392,398 27,107,342
		3,018,412
		9,333 173,643 24,164,267
		24,347,243
		27,365,655
		258,313
		258,313
		258,313
		27,107,342
		51,936,045 262,500 (2,120,706) (22,970,497)
		27,107,342

The accompanying notes form part of these financial statements.

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2014

BALANCE AT 1 JULY 2013 Loss attributable for the period Total other comprehensive income/(loss) for the period BALANCE AT 31 DECEMBER 2013 BALANCE AT 1 JULY 2014 Loss attributable for the period Total other comprehensive income/(loss) for the period BALANCE AT 31 DECEMBER 2014	Ordinary Issued Capital Share Option Reserve Foreign Currency Translation Reserve (Accumulated Losses) Total $ $ $ $ $ 51,936,045 262,500 (1,358,551) (21,863,428) 28,976,566 - - - (379,340) (379,340) - - (152,991) (152,991)
	51,936,045 262,500 (1,511,542) (22,242,768) 28,444,235
	Ordinary Issued Capital Share Option Reserve Foreign Currency Translation Reserve (Accumulated Losses) Total $ $ $ $ $ 51,936,045 262,500 (2,120,706) (22,970,497) 27,107,342 - - - (154,243) (154,243) - - 439,299 439,299
	51,936,045 262,500 (1,681,407) (23,124,740) 27,392,398

The accompanying notes form part of these financial statements.

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CONSOLIDATED CASH FLOW STATEMENT FOR THE HALF YEAR ENDED 31 DECEMBER 2014

Cash Flows from Operating Activities Payments to suppliers and employees Interest received Other income Net cash (used in) operating activities Cash Flows From Investing Activities Purchase of fixed assets Payment for exploration expenditure Net cash (used in) investing activities Cash Flows from Financing Activities Net increase/(decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at the Beginning of the Half Year Effect of exchange rates on cash holdings in foreign currencies Cash and Cash Equivalents at the End of Half Year	Consolidated Half year 2014 Half year 2013 $ $ (496,939) (864,313) 30,844 109,796 51,697 292,667 (414,398) (461,850) - (3,690) (629,810) (1,541,769) (629,810) (1,545,459) - - (1,044,208) (2,007,309) 2,886,962 6,109,567 8,007 2,136 1,850,760 4,104,394	Consolidated Half year 2014 Half year 2013 $ $ (496,939) (864,313) 30,844 109,796 51,697 292,667 (414,398) (461,850) - (3,690) (629,810) (1,541,769) (629,810) (1,545,459) - - (1,044,208) (2,007,309) 2,886,962 6,109,567 8,007 2,136 1,850,760 4,104,394
		(461,850) (3,690) (1,541,769)
		(1,545,459) - (2,007,309) 6,109,567 2,136
		4,104,394

The accompanying notes form part of these financial statements.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2014

1. BASIS OF PREPARATION OF HALF YEAR REPORT

Sabre Resources Ltd is a company domiciled in Australia.

This general purpose financial report for the interim half year reporting period ended 31 December 2014 has been prepared in accordance with requirements of the Corporations Act 2001 and Australian Accounting Standards including AASB 134 Interim Financial Reporting. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards.

This interim financial report is intended to provide users with an update on the latest annual financial statements of Sabre Resources Ltd and its controlled entities (the Group). As such, it does not contain information that represents relatively insignificant changes occurring during the half year within the Group. It is therefore recommended that this financial report be read in conjunction with the annual financial statements of the Group for the year ended 30 June 2014 together with any public announcements made during the half year.

The same accounting policies and methods of computation have been followed in this interim financial report as were applied in the most recent annual financial statements except for the adoption of the following new and revised Accounting Standards.

The interim financial statements have been approved and authorised for issue by the Board of Directors.

Accounting Standards not previously applied

New or revised Standards and Interpretations that are first effective in the current reporting period:

The Group has adopted the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current period.

Adoption of new and revised accounting standards

The AASB has issued a number of new and amended Accounting Standards and Interpretations that have mandatory application date for future reporting periods. In the half year ended 31 December 2014, the Company has reviewed all of the new and revised Accounting Standards and Interpretations issued by the AASB that are relevant to its operations and effective for annual reporting periods beginning on or after 1 July 2014. It has been determined by the Company that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and no change is necessary to the Company accounting policies.

Going concern

The financial report has been prepared on the basis of going concern, which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business. During the period, the Group has reported a net loss of $154,243 and a net cash outflow from operating activities of $414,398.

The Directors consider this to be appropriate for the following reasons:

• the ability to vary the Group’s cost structure and in turn the levels of cash outflow dependent on timing of its exploration activities; and

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• the demonstrated ability to obtain funding through equity issues as required.

However, the ability of the Group to continue as a going concern will be dependent on the raising of additional capital within twelve months.

The Directors will evaluate a range of funding options including further equity issues to enable it to continue to meet its obligations as and when they fall due. The Directors are confident of obtaining additional funding based on the alternatives being explored, but note that this has not been secured at the date of this report.

Taking into account the current cash reserves of the Group and the points noted above, the Directors are confident the Group has adequate resources to continue in its main business activity for the foreseeable future.

Should the Group not achieve the matters set out above, there is significant uncertainty whether the Group will continue as a going concern and therefore whether they will realise their assets and extinguish their liabilities in the normal course of business and at the amounts stated in the financial report.

The financial statements do not include any adjustment relating to the recoverability or classification of recorded asset amounts nor the amounts or classification of liabilities that might be necessary should the Group not be able to continue as a going concern.

2. DIVIDENDS

No dividends have been paid or proposed during the six month period ended 31 December 2014.

3. CAPITAL AND LEASING COMMITMENTS AND CONTINGENCIES

There has been no material change in contingent liabilities and commitments since the end of the last annual reporting period.

4. FINANCIAL ASSETS (NON-CURRENT)

	December	2014	June 2014
	$		$
Investment in listed shares	24,000		9,333

The Company holds shares in a listed entity and these shares are classified as financial assets at fair value through profit and loss. Changes in fair value are included within profit or loss.

5. OPERATING SEGMENTS

Segment Information

Identification of reportable segments

The Group has identified its operating segments based on the internal management reports that are reviewed and used by the executive management team (the chief operating decision makers) in assessing performance and determining the allocation of resources. As the Group is focused on mineral exploration, the Board monitors the Group based on actual exploration expenditure incurred by area of interest. The internal reporting framework is the most relevant to assist the executive management team with making decisions regarding the Group and its ongoing exploration activities, while also taking into consideration the results of exploration work that has been performed to date.

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The executive management team has aggregated the performance of all segments as they maintain similar economic characteristics including the development and exploration of the Group’s mineral interests in Namibia.

Basis of Accounting for purposes of reporting by operating segments

Accounting Policies Adopted

All amounts reported to the Board of Directors with respect to operating segments are determined in accordance with accounting policies that are consistent with those adopted in the annual financial statements of the Group.

Unallocated items

Corporate costs are not considered core operations of any segment.

6. ISSUED CAPITAL

		Details	Number of	Amount
			Shares	$
1 July 2013	Balance		226,472,228	51,936,045
31 December 2013	Balance		226,472,228	51,936,045
30 June 2014	Balance		226,472,228	51,936,045
31 December 2014	Balance		226,472,228	51,936,045

The Company’s capital consists of Ordinary Shares. The Company does not have a limited amount of authorised share capital. The Shares have no par value and are entitled to participate in dividends and the proceeds on any winding up of the Company in proportion to the number of Shares held.

At shareholders’ meetings each fully paid ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

7. SHARE OPTION RESERVE

Date		Details	Number of Options	Amount $
1 July 2013	Balance		3,750,000	262,500
31 December 2013	Balance		3,750,000	262,500
1July 2014	Balance		3,750,000	262,500
31 December 2014	Balance		3,750,000	262,500

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8. RELATED PARTY TRANSACTIONS

The Group’s related parties include its subsidiaries, key management personnel and others as described below. None of the transactions incorporate special items and conditions and no guarantees were received or given.

			Half Year	Half Year
Related Party	Relationship	Nature of Transaction	Ended 31 December 2014	Ended 31 December 2013
			$	$
Sabre Resources Namibia (Pty) Ltd	Subsidiary	Advances	248,000	259,406
Gazania Investments Nine (Pty) Ltd	Subsidiary	Advances	392,000	858,000
Metals Australia Ltd	Common Directors	Other Income	12,288	23,997
Golden Deeps Limited	Common Directors	Other Income	-	18,519
Blaze International Limited	Common Directors	Other Income	15,261	9,502
Power Resources Limited	Common Directors	Other Income	441	1,151
Prime Minerals Limited	Common Directors	Other Income	713	1,319

9. EVENTS SUBSEQUENT TO REPORTING DATE

No matters or circumstances have arisen since the end of the half year which significantly affect or may significantly affect the operations of the Company, the results of those operations, or the state of affairs of the Company.

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_ _ __ _ ___ _ _ _ ___ _ _ _ ____ _

DIRECTORS' DECLARATION

In the o p inion of the Directors of Sabre Reso u rces Ltd:

• (a) the consolida t ed financial statements and notes, as set out on the acco m panying pages, are in a c cordance with the Corp o rations Act 2 001 including:

• (i) complying with Au s tralian Acc o unting Sta n dard, AAS B 134: Interi m Financial Reporting; and

• (ii) giving a true and f air view of its financial position as at 31 Dec e mber 2014 and of its perfor m ance for the half year e n ded on that date; and

• (b) there are rea s onable gro u nds to beli e ve that the Company w ill be able t o pay its debts as and w h en they be c ome due a n d payable.

Signed in accordan c e with a res o lution of th e Board of Directors.

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Michael Scivolo Director

Perth, dated this 13th day of March 2015

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Level 1 10 Kings Park Road West Perth WA 6005

Correspondence to: PO Box 570 West Perth WA 6872

Independent Auditor’s Review Report To the Members of Sabre Resources Ltd

T +61 8 9480 2000 F +61 8 9322 7787 E info.wa@au.gt.com W www.grantthornton.com.au

We have reviewed the accompanying half-year financial report of Sabre Resources Ltd (“Company”), which comprises the consolidated financial statements being the statement of financial position as at 31 December 2014, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, notes comprising a statement or description of accounting policies, other explanatory information and the directors’ declaration of the consolidated entity, comprising both the Company and the entities it controlled at the half-year’s end or from time to time during the half-year.

Directors’ responsibility for the half-year financial report

The directors of Sabre Resources Ltd are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such controls as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express a conclusion on the consolidated half-year financial report based on our review. We conducted our review in accordance with the 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 the Sabre Resources Ltd consolidated entity’s financial position as at 31 December 2014 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Sabre Resources Ltd, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.

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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 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.

Independence

In conducting our review, we complied with the independence requirements of the Corporations Act 2001.

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 Sabre Resources Ltd is not in accordance with the Corporations Act 2001, including:

• a giving a true and fair view of the consolidated entity’s financial position as at 31 December 2014 and of its performance for the half-year ended on that date; and

• b complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001.

Material Uncertainty regarding continuation as a going concern

Without qualification to the review opinion expressed above, we draw attention to Note 1 to the financial report, which indicates that the consolidated entity incurred a net loss of $154,243 and net cash outflows from operating activities of $414,398 during the half year ended 31 December 2014. These conditions, along with other matters as set forth in Note 1, indicate the existence of material uncertainty which may cast significant doubt about the consolidated entity’s ability to continue as a going concern and therefore, the consolidated entity bay be unable to realise its assets and discharge its liabilities in the normal course of business, and at the amounts stated in the financial report.

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GRANT THORNTON AUDIT PTY LTD Chartered Accountants

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P W Warr Partner - Audit & Assurance

Perth, 13 March 2015

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