SABRE RESOURCES LIMITED — Interim / Quarterly Report 2018

Mar 13, 2018

SABRE RESOURCES LTD AND CONTROLLED ENTITIES

(ACN 008 982 474*)*

Interim Financial Report for the Six Month Period Ended 31December 2017

CONTENTS

Review of operations	3
Directors' Report	3
Auditor's Independence Declaration	8
Consolidated Statement of Profit or Loss and Other Comprehensive Income	13
Consolidated Statement of Financial Position	14
Consolidated Statement of Changes in Equity	15
Consolidated Cash Flow Statement	16
Notes to the Financial Statements	17
Directors' Declaration	23
Independent Auditor's Review Report To The Members	24

DIRECTORS' REPORT

Your Directors present their report on the consolidated group of Sabre Resources Ltd and its controlled entities (the "Group") for the half year ended 31 December 2017.

1. DIRECTORS

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

Michael Scivolo David Chapman Robert Collins

2. REVIEW OF OPERATIONS

Sabre's ongoing focus is the exploration and development of the Otavi Mountain Land (OML) copper and base metal project in northern Namibia. In addition, the Company acquired a 70% interest in the Sherlock Bay Nickel Project in the Western Pilbara region of Western Australia during the reporting period. This project contains the Sherlock Bay Nickel Deposit and is also considered prospective for conglomerate-hosted gold mineralisation.

OTAVI MOUNTAIN LAND COPPER AND BASE METAL PROJECT, NAMIBIA

The Project is located in the Otavi Mountain Land (OML) 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 1800's 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.

No field work was completed on the Company's projects during the reporting period due to delays obtaining renewals of the relevant exploration tenements in Namibia from the Ministry of Mining and Energy. The Company's Exclusive Prospecting Licence (EPL) No. 3540 was renewed by the MME in August 2017 (Appendix I).

The lengthy delay in obtaining renewals for the tenements has impacted on the ability of the Company to progress its exploration and access the capital markets. The Company now has security of tenure and can proceed with its exploration and also consider other options such as farm-in or joint venture arrangements.

Figure 1: Location map of the Sabre Resources Limited Exclusive Prospecting Licences (EPL's) in the Otavi Mountain Land, northern Namibia

Figure 2: Schematic diagram of copper and zinc-lead mineralised trends within the Sabre tenements, showing key prospect areas and major mines and mineral occurrences

The significant upward trend in the zinc price continued over the last quarters supporting the ongoing review of the zinc and lead opportunities within the Otavi Mountain Land project. A summary of these opportunities is provided below.

The significant upward trend in the zinc price over the last year supports the review of the zinc and lead opportunities within the Otavi Mountain Land project.

Sabre's Border Zn-Pb project has a JORC 2012 Inferred Resource of 16.0Mt @ 1.53% Zn, 0.59% Pb and 4.76g/t Ag is located within a 25km significant regional zinc-lead anomalous corridor (Figure 2), which hosts a number known occurrences including Border, Toggenburg and South Ridge to the East, and Harasib to the west (Figure 3).

In light of the increase in the zinc price, a review of the capital and operating cost assumptions in the 2011 Scoping Study completed at Border continued. Metallurgical sighter testwork on a bulk sample conducted for that study shows that the mineralisation responds very favourably to Heavy Media Separation ('HMS'). Border mineralisation upgrades with HMS, before grinding and flotation, to a product of 12.5% Zn + 6.3% Pb with recoveries of 86% and 92.5% respectively.

Toggenburg is located along strike from Border, and is interpreted to be controlled by the same structures (Figure 3).

Anomalies defined at Toggenburg measure over 2.8 km long and up to 250 m wide and are open to the east and west. The anomalies have an area more than four times the size of the equivalent anomaly at Border, where a 0.1 % Zn+Pb cutoff in the near-surface approximates the footprint of zinc and lead sulphide mineralisation at depth.

Maximum combined zinc and lead values identified in shallow geochemical drilling at Toggenburg are in excess of 2.9%. Four targets have been selected for reverse circulation drilling. It is expected that, like the Border Zn-Pb deposit to the west, mineralisation will dip to the north-northwest, parallel to the host dolomite sequence.

Figure 3: Sabre's Border and Toggenburg Zn-Pb projects are located along the Border-Toggenburg Corridor which hosts anomalous zinc and lead mineralisation over 25km

Sabre's regional soil sampling programs have identified significant zinc-lead anomalism in the Auros area which is the possible western limit of a regional zinc-lead anomalous corridor extending east for about 20km. Over 1087 samples were collected resulting in the definition of the Auros zinc-lead anomaly which covers over 300 hectares, measuring over 2.5 km by 5.0 km (Figure 4).

Figure 4: The Auros Zinc-Lead anomaly

The Auros anomaly has been defined using a 0.1% Zn+Pb cutoff (as at Toggenburg) and contains a peak value of 8.25 % Zn+Pb (6.30 % Zn and 1.95 % Pb – determined by portable XRF) near the historic Nageib workings. Numerous percentage-grade results were obtained in areas with no known historic mining activity. One such area, which recorded soil values up to 4.65 % Zn+Pb (3.20 % Zn and 1.45 % Pb), exhibits outcropping brecciated and disseminated sphalerite and galena mineralisation (Figure 5).

Figure 5: Outcropping disseminated galena (dark grey) and sphalerite (brown-grey) mineralisation with secondary zinc oxides (brown) in the Auros area

Detailed interpretation of high-resolution aeromagnetic data over the Auros area shows that bedding and its interaction with several important cross-cutting structures seem to control the distributions of intense zinc and lead anomalism throughout the area.

Baltika is located within and toward the west of Sabre's EPL 3540 and the historical mine produced 5,820t of concentrate grading 9% vanadium pentoxide between 1931 and 1942. Vanadium mineralisation is associated with east-west trending zinc- and lead-bearing structures proximal to the contact which hosts the Kombat and Guchab Cu-Zn-Pb mining centres to the east within the Kombat Corridor.

Sabre has defined copper mineralisation in two major trends with potential for Tsumeb, Kipushi and Kombat breccia-style massive sulphide pipes, and Tschudi-style stratiform mineralisation.

Copper in geochemical drilling at Guchab South has identified visible chalcocite and malachite over an 850m by 100m zone which is located along trend east of the Kombat Copper Mine.

The disseminated copper mineralisation at Guchab South is interpreted to be a possible halo to potentially more massive mineralisation down plunge. Initial results show that the mineralisation has a shallow westerly plunge. The down-plunge mineralised zone is interpreted to be overlain by the subsurface shale/dolomite contact.

Mineralisation at Guchab South is very similar to that at the Kombat Copper Mine located 10km to the west. At Guchab South, copper sulphide mineralisation is hosted within hydraulic breccias that are often observed to be structurally controlled. Mineralised breccia zones are directly associated with various styles of alteration including silicification and calcitisation. Promisingly, hydrothermal calcite is manganese-rich, as it is in the major copper deposits of the region.

Figure 6: Map of the Kombat Copper Trend, showing prospect areas and historical mines overlain on copper soil geochemistry

The Kaskara copper-lead-zinc-vanadium prospect is considered to have potential for a large Tsumebstyle deposit. It was historically mined for vanadium and has shown very high grades of Cu, Pb, Zn and V2O5 in underground channel samples and RC percussion drilling.

Within the deposit, there is extensive alteration around numerous Pb, Zn, Cu, and V rich gossan-like breccias. A deep, funnel-shaped weathering profile, typical of shallow zones of major deposits of the region, is developed on the deposit. Extensive IP anomalism over several hundred metres laterally at depth, suggesting extensions of the mineralised zones (Figure 7).

Figure 7: Schematic cross section of the Kaskara Cu-Zn-Pb-V mine and geology showing possible deeper extensions of the mineralised zone

SABRE RESOURCES LTD AND CONTROLLED ENTITIES

Detailed interrogation of geophysical and other remotely sensed datasets continued throughout the licence areas.

Renewal applications for both EPL 3540 and EPL 3542 were submitted in September 2015. The Company has now been granted both these renewals by the Ministry of Mining and Energy (MME). Both tenements have been granted a 2 year renewal term and will now expire on 29 October, 2018.

The Namibian government continues to consider a draft New Equitable Economic Empowerment Framework (NEEEF) proposal seeking to give Namibian citizens greater opportunities to participate in the economic development of their country. It is still not clear at this stage what the final form of the legislation, if enacted, may take and it may have implications for the Company's future activities in Namibia.

It is further noted that the Department of Mines and Minerals have indicated that a condition for the renewal of licences include at least 5% ownership by a Namibian person or a company wholly owned by Namibians and a minimum 20% representation of historically disadvantaged Namibians. Management has indicated that the abovementioned conditions will be complied with in order to obtain relevant renewals.

Sabre intends to submit applications for a number of Mineral Deposit Retention Licences and/or Mining Licences within the forthcoming EPL renewal period. Several sites are shortlisted which include the Border Zn-Pb-Ag deposit and the Guchab Cu-Ag deposit, amongst others. The application process requires submission of extensive documentation, including detailed geological maps, environmental reports, resource reports, and scoping studies.

Progress was made on the collection and collation of data for the detailed geological maps. Work also commenced on preparation for the environmental reports.

Sherlock Bay Project, Western Australia

During the reporting period the Company was engaged in due diligence with the intention to acquire 70% interest in the Sherlock Bay Project located in the western Pilbara region of Western Australia. The Project is well-located, 12 km off Highway 1 with access to critical mining infrastructure. The Project tenements comprise two valid exploration licenses E47/1769 and E47/1770 and a mining lease M47/567 (Figure 8 and Appendix I). (Subsequent to the end of the reporting period the company completed satisfactory due diligence and has acquired the project interest, refer Note 8 on page 21.

Mining lease M47/567 contains the Sherlock Bay nickel-copper-cobalt deposit, which has an existing nickel resource (for full details, refer to the Company's announcement dated 29 January 2018). The deposit also contains a potentially significant amount of copper and cobalt.

Extensive previous exploration and development work has been completed on the Sherlock Bay Project and Sabre has obtained access to all these data for the deposit. Feasibility-level studies that have been completed by previous owners indicate that potential exists to develop a mining and heap leach processing operation and that nickel recoveries exceeding 90% are achievable.

The Sherlock Bay Project also covers highly sought after ground that has potential for conglomeratehosted gold mineralisation. The project area is almost totally surrounded by tenements held by Novo Resources Inc. on all sides (Figure 9). It sits strategically within the conglomerate-gold search area adjacent to and to the east of ground held by Artemis Resources Ltd and to the west of ground held by De Grey Mining Ltd. No prior exploration for gold has been undertaken in the project area. The Company intends to immediately commence exploration for conglomerate-hosted gold mineralisation.

Figure 8: Location map of the Sherlock Bay Project in Western Australia

Figure 9: Current tenement status map for the Sherlock Bay Project and surrounding area, source: WA Department of Mines, Industry Regulation and Safety

1. Appendix I – Sabre tenement schedule

Country	State/Region	Project	Tenement ID	Area(km2)	DateGranted	DateExpires	Interest
Namibia	Otjozondjupa	Otavi Mountain Land	EPL3540	110.98	30/10/2006	29/10/2018	80%
			EPL3542	236.90	30/10/2006	29/10/2018	70%
21.		Subsequent to the reporting period the Company acquired an interest in the following tenements. Refer Note 8 on page
Australia	WA	Sherlock Bay	M47/567	10.0	07/09/2004	22/09/2025	70%
			E47/1769	44.7	07/09/2009	06/09/2019	70%

Competent Person Declaration

The information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Lachlan Reynolds, who is a member of The Australasian Institute of Mining and Metallurgy. Mr Reynolds is a consultant to Sabre Resources Limited 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 Reynolds 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 Limited's planned exploration programme 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 Limited 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.

3. FINANCIAL RESULT

The Group incurred a loss after income tax of $262,251 for the half year period (2016: Loss of $144,811). As at 31 December 2017 the Group had cash funds of $ 76,065 (30 June 2017: $66,579).

4. 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 12.

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

Michael Scivolo

Director Perth 14 March 2018

Central Park, Level 43 152-158 St Georges Terrace Perth WA 6000

Correspondence to: PO Box 7757 Cloisters Square Perth WA 6850

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

Auditor's Independence Declaration to the Directors of Sabre Resources Limited

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the review of Sabre Resources Limited for the half-year ended 31 December 2017, 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.

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

P W Warr Partner – Audit & Assurance

Perth, 14 March 2018

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.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 31 DECEMBER 2017

	ConsolidatedHalf year 2017$	ConsolidatedHalf year 2016$
Other Revenue
Interest earned	702	681
Profit on sale of assets	-	5,852
Cost recovery	72,964	24,932
Change in fair value of investments	25,106	9,447
	98,772	40,912
Expenditure
Depreciation	11,038	18,731
Key management personnel remuneration	18,570	45,585
Provision for doubtful debts	4,840	-
Other operating costs	326,575	121,407
	361,023	185,723
(Loss) before income tax	(262,251)	(144,811)
Income tax benefit	-	-
(Loss) for the half year	(262,251)	(144,811)
Other Comprehensive Income, net of taxItems that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign controlled entities	366,738	1,020,524
Total Comprehensive Profit/(Loss) for the half year	104,487	875,713
Basic and diluted profit/(loss) per share (cents)	(0.0010)	(0.0006)

The accompanying notes form part of these financial statements

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2017

	Consolidated
	Notes	31 December2017$	30 June2017$
CURRENT ASSETSCash and cash equivalentsTrade and other receivablesFinancial assets	4.	76,06555,17436,170	66,57948,22711,063
TOTAL CURRENT ASSETS		167,409	125,869
NON CURRENT ASSETSPlant and equipmentExploration and evaluation expenditure		22,52626,622,601	33,04426,120,999
TOTAL NON-CURRENT ASSETS		26,645,127	26,154,043
TOTAL ASSETS		26,812,536	26,279,912
CURRENT LIABILITIESTrade and other payablesEmployee benefits		94,35617,644	87,66016,694
TOTAL CURRENT LIABILITIES		112,000	104,354
NON-CURRENT LIABILITIESTrade and other payablesLoans and borrowings		668,318660,000	457,827450,000
TOTAL NON-CURRENT LIABILITIES		1,328,318	907,827
TOTAL LIABILITIES		1,440,318	1,012,181
NET ASSETS		25,372,218	25,267,731
EQUITYIssued capitalForeign currency translation reserveOption reserveAccumulated losses	6.7.	52,325,045(1,893,218)10,000(25,069,609)	52,325,045(2,259,956)10,000(24,807,358)
TOTAL EQUITY		25,372,218	25,267,731

The accompanying notes form part of these financial statements.

SABRE RESOURCES LTD AND CONTROLLED ENTITIES

_________________________________________________________________________________________________________________

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2017

	OrdinaryIssuedCapital	ForeignCurrencyTranslationReserve	ShareOptionsReserve	(AccumulatedLosses)	Total
BALANCE AT 1 JULY 2016	$52,325,045	$(3,157,189)	$-	$(23,893,973)	$25,273,883
Loss attributable for the period	-	-	-	(144,811)	(144,811)
Total other comprehensiveincome/(loss) for the period	-	1,020,524	-	-	1,020,524
BALANCE AT 31 DECEMBER 2016	52,325,045	(2,136,665)	-	(24,038,784)	26,149,596

BALANCE AT 31 DECEMBER 2017	52,325,045	(1,893,218)	10,000	(25,069,609)	25,372,218
Total other comprehensiveincome/(loss) for the period	-	366,738	-	-	366,738
Loss attributable for the period	-	-	-	(262,251)	(262,251)
BALANCE AT 1 JULY 2017	$52,325,045	$(2,259,956)	$10,000	$(24,807,358)	$25,267,731
	OrdinaryIssuedCapital	ForeignCurrencyTranslationReserve	ShareOptionsReserve	(AccumulatedLosses)	Total

The accompanying notes form part of these financial statements.

CONSOLIDATED CASH FLOW STATEMENT FOR THE HALF YEAR ENDED 31 DECEMBER 2017

	Consolidated
	Half year2017$	Half year2016$
Cash Flows from Operating Activities
Payments to suppliers and employees	(141,341)	(127,878)
Interest received	702	24,932
Other income	79,679	681
Net cash (used in) operating activities	(60,960)	(102,265)
Cash Flows From Investing Activities
Proceeds from sale of fixed assets		16,780
Payment for exploration expenditure	(141,612)	(132,624)
Net cash (used in) investing activities	(141,612)	(115,844)
Cash Flows from Financing Activities
Proceeds from loans	210,000	250,000
	210,000	250,000
Net cash (used in) financing activities
Net increase/(decrease) in Cash and Cash Equivalents	7,314	31,891
Cash and Cash Equivalents at the Beginning of the Half Year	66,579	56,796
Effect of exchange rates on cash holdings in foreign currencies	2,172	3,194
Cash and Cash Equivalents at the End of Half Year	76,065	91,881

The accompanying notes form part of these financial statements.

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2017

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 2017 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 2017 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.

Adoption of new and revised Accounting Standards

As at the half year ended 31 December 2017, the Group has reviewed all of the new and revised 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 2017.

• AASB 9 Financial Instruments introduces new requirements for the classification and measurement of financial assets and liabilities and includes a forward-looking 'expected loss' impairment model and a substantially-changed approach to hedge accounting. When this standard is first adopted for the year ending 30 June 2018, there will be no material impact on the transactions and balances recognised in the financial statements.
• AASB 15 Revenue establishes a new revenue recognition model and changes the expands and improves disclosures about revenue. When this standard is first adopted for the year ending 30 June 2018, there will be no material impact on the transactions and balances recognised in the financial statements.
• AASB 16 Leases requires all leases, other than short term and low value asset leases to be accounted "on balance sheet". When this standard is first adopted for the year ending 30 June 2019, there will be no material impact on the transactions and balances recognised in the financial statements.

The directors have also reviewed all other new Standards and Interpretations that have been issued but are not yet effective for the half year ended 31 December 2017. As a result of this review the directors have determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on the Group and, therefore, no change is necessary to Group accounting policies. These accounting policies are consistent with Australian Accounting Standards and with International Reporting Standards.

The Group has also reviewed all new Standards and Interpretations that have been issued but are not yet effective for the half year ended 31 December 2017. As a result of this review the Directors have determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and therefore no change is necessary to Group 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 $262,251, (2016: $144,811) and a net cash outflow from operating activities of $60,960 (2016: $102,265). It is further noted that a shareholder has loaned the Company $210,000 during the period.

The Directors will continue to monitor the capital requirements of the Group, and this includes additional capital raisings in future periods as required. The Group has the ability to vary discretionary exploration expenditure if required.

In addition to planned capital raisings, a shareholder of the Company has agreed to provide cash advances to the Company until a capital raising has been completed. Up to 31 December 2017 a loan of $660,000 has been received by the Company under this arrangement. Repayments are not required for at least twelve months from the date of the issue of the audited financial statements. A further $40,000 has been advanced subsequent to period end.

In addition, Service Fees and Reimbursable Expenses have been deferred for at least 12 months from the issue of the audited financial statements.

The Directors recognise that the above represents a material uncertainty as to the Group's ability to continue as a going concern, however, they are confident that the Group will be able to continue its operations into the foreseeable future.

Should the Group be unable to obtain the funding as described above, there is a material uncertainty as to whether the Group will be able to continue as a going concern, and therefore, whether it will be required to realise its assets and extinguish its liabilities other than in the normal course of business and at amounts different from those stated in the financial report. The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts nor to the amounts and classification of liabilities that may be necessary should the Group be unable to continue as a going concern.

2. DIVIDENDS

No dividends have been paid or proposed during the six month period ended 31 December 2017.

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

	December 2017	June 2017
	$	$
Investment in listed shares	36,170	11,063

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.

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

Date	Details	Number ofShares	IssuePrice(cents)	Amount$
1 July 2016	Balance	251,472,228		52,325,045
31 December 2016	Balance	251,472,228		52,325,045
30 June 2017	Balance	251,472,228		52,325,045
31 December 2017	Balance	251,472,228		52,325,045

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 ofOptions	IssueAmountPrice$(cents)
1 July 2015	Balance	-	-
26 October 2015	Options granted	12,500,000	-
31 December 2016	Balance	12,500,000	-
8 February 2017	Options granted	100,000,000	10,000
30 June 2017	Balance	112,500,000	10,000
31 December 2017	Balance	112,500,000	10,000

7. 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.

Related Party	Relationship	Nature ofTransaction	Half YearEnded 31December2017$	Half YearEnded 31December2016$
Sabre Resources Namibia(Pty) Ltd	Subsidiary	Advances	118,000	95,000
Gazania Investments Nine(Pty) Ltd	Subsidiary	Advances	28,000	12,000
Golden Deeps Limited	Common directors	Cost Recovery	6,108	12,575
Oshivela Mining Pty Ltd	Common directors	Cost Recovery	5,527	-
Metals Australia Limited	Common directors	Cost Recovery	45,199	-
Huab Energy (Pty) Ltd	Common directors	Cost Recovery	5,991	-
Gazania Investments Nine(Pty) Ltd	Subsidiary	Cost Recovery	5,527	-
Metals Namibia (Pty) LtdMetals Namibia (Pty) Ltd	Common directorsCommon directors	Cost RecoveryTradeReceivables	4,433	6,2591,262
Golden Deeps Limited	Common directors	TradeReceivables	5,280	2,524
Metals Australia Limited	Common directors	TradeReceivables	7,919	-
Oshivela Mining Pty Ltd	Common directors	TradeReceivables	1,002	-
Huab Energy (Pty) Ltd	Common directors	TradeReceivables	1,491	-
Gazania Investments Nine(Pty) Ltd	Common directors	TradeReceivables	1,002	-
Metals Namibia (Pty) Ltd	Common directors	TradeReceivables	1,002	-

8. EVENTS SUBSEQUENT TO REPORTING DATE

No other matters or circumstances have arisen since the end of the half year which significantly affect or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group, except for the following:

Since the end of the half year the Company executed a binding agreement to acquire a 70% interest in the Sherlock Bay Project located in the Pilbara region of Western Australia. The Project comprises a mining lease (M47/567) and two exploration licenses (E47/1769 and E47/1770) that collectively cover a total of 189 km. The consideration for the acquisition is the issue of 12,000,000 fully paid shares in the Company to the Vendors. The acquisition was subject to shareholder approval, obtained on the 8th March 2018.

Subsequent to half year end the Company issued 37,000,000 unlisted options exercisable at $0.025 per Option on or before 1 August 2018. The issue price of the Unlisted Options was $0.0001 per Option which raised $3,700 (before costs).

Subsequent to half year end the Company issued 125,000,000 unlisted options exercisable at $0.015 per Option on or before 1 December 2021. The issue price of the Unlisted Options was $0.0001 per Option which raised $12,500 (before costs).

At a shareholder meeting held on the 8th March 2018, approval was obtained to issued up to 40 million shares by the directors.

Subsequent to half year end, following the resignation of Paul Fromson, Graham Baldisseri was appointed as Company Secretary / Chief Financial Officer.

The Namibian government released for comment a draft New Equitable Economic Empowerment Framework (NEEEF) discussion paper seeking to give Namibian citizens greater opportunities to participate in the economic development of their country. This paper was open for public comment until 29 April 2016, after which time any comments received will be analysed and may be included in any legislation subsequently presented to parliament.

It is not clear at this stage what the final form of the legislation, if enacted, may take and it may have implications for our future activities in Namibia.

It is further noted that the Department of Mines and Minerals have indicated that a condition for the renewal of licences include at least 5% ownership by a Namibian person or a company wholly owned by Namibians and a minimum 20% representation of historically disadvantaged Namibians. Management have indicated that the abovementioned conditions will be complied with in order to obtain relevant renewals.

DIRECTORS' DECLARATION

In the opinion of the Directors of Sabre Resources Ltd:

• (a) the consolidated financial statements and notes, as set out on the accompanying pages, are in accordance with the Corporations Act 2001 including:
  • (i) complying with Australian Accounting Standard, AASB 134: Interim Financial Reporting; and
  • (ii) giving a true and fair view of its financial position as at 31 December 2017 and of its performance for the half year ended on that date; 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.

Signed in accordance with a resolution of the Board of Directors.

Michael Scivolo Director

Perth, dated this 14th day of March 2018

Central Park, Level 43 152-158 St Georges Terrace Perth WA 6000

Correspondence to: PO Box 7757 Cloisters Square Perth WA 6850

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

Independent Auditor's Review Report to the Members of Sabre Resources Limited

Report on the Half Year Financial Report

Conclusion

We have reviewed the accompanying half year financial report of Sabre Resources Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 31 December 2017, and 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 ended on that date, a description of accounting policies, other selected explanatory notes, 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 half year financial report of Sabre Resources Limited does not give a true and fair view of the financial position of the Group as at 31 December 2017, and of its financial performance and its cash flows for the half year ended on that date, in accordance with the Corporations Act 2001, including complying with Accounting Standard AASB 134 Interim Financial reporting.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 in the financial report, which indicates that the Group incurred a net loss of $262,251 and net cash outflow from operating activities of $60,960 during the half year ended 31 December 2017. As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt on the Group's ability to continue as a going concern. Our conclusion is not modified in respect of this matter.

Directors' Responsibility for the Half Year Financial Report

The Directors of the Company 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 internal control as the directors determine is necessary to enable the preparation of the half-year financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

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.

Auditor's Responsibility

Our responsibility is to express a conclusion on the half year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half year financial report is not in accordance with the Corporations Act 2001 including giving a true and fair view of the Group's financial position as at 31 December 2017 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 Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and 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 have complied with the independence requirements of the Corporations Act 2001.

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

P W Warr Partner - Audit & Assurance

Perth,14 March 2018