STREAMPLAY STUDIO LIMITED — Interim / Quarterly Report 2014

Mar 13, 2014

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ABN 31 004 766 376 and Controlled Entities

FINANCIAL REPORT

FOR THE HALF-YEAR ENDED

31 DECEMBER 2013

GIPPSLAND LIMITED ABN 31 004 766 376 and Controlled Entities

CONTENTS

CORPORATE DIRECTORY DIRECTORS’ REPORT AUDITOR’S INDEPENDENCE DECLARATION CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2013 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2013 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2013 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2013 NOTES TO THE FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2013 10 DIRECTORS’ DECLARATION 19 INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS OF GIPPSLAND LIMITED 20

	GIPPSLAND LIMITED ABN 31 004 766 376	GIPPSLAND LIMITED ABN 31 004 766 376
	and Controlled Entities
	CORPORATE DIRECTORY
DIRECTORS	Ian Jeffrey Gandel – Non-Executive Chairman
	Jon Starink – Executive Director
	John Damian Kenny - Non-Executive Director
COMPANY SECRETARY	Rowan St John Caren
REGISTERED OFFICE	Suite 4, 207 Stirling Highway
	Claremont WA 6010
	Australia
POSTAL ADDRESS	PO Box 352
	Nedlands WA 6909
	Australia
TELEPHONE	+61 (0)8 9340 6000
FACSIMILE	+61 (0)8 9340 6060
E-MAIL	info@gippslandltd.com
WEBSITE	www.gippslandltd.com
AUDITORS	Deloitte Touche Tohmatsu
	Level 14, Woodside Plaza
	240 St Georges Terrace
	Perth WA 6000
	Australia
SOLICITORS	Steinepreis Paganin Level 4, 16 Milligan Street	Trowers & Hamlins 3rdFloor, 1 El Gabalaya Street
	Perth WA 6000	Zamalek, Cairo
	Australia	Arab Republic of Egypt
	Gowlings (UK) LLP
	15th Floor, 125 Old Broad Street
	London EC2N 1AR
	United Kingdom
SHARE REGISTRY	Security Transfer Registrars Pty Ltd	PO Box 535
	Suite 1, 770 Canning Hwy	Applecross WA 6953
	Applecross WA 6153	Australia
	Australia
	Website: www.securitytransfer.com.au

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GIPPSLAND LIMITED ABN 31 004 766 376 and Controlled Entities

CORPORATE DIRECTORY (cont)

AUSTRALIAN SECURITIES EXCHANGE The Company’s securities are quoted on the official list of the Australian Securities Exchange (ASX Limited), the home exchange being: ASX Limited 2 The Esplanade Perth WA 6000 Australia ASX CODE GIP FRANKFURT STOCK EXCHANGE The Company’s securities are quoted on the Frankfurt Stock Exchange; Neue Börsenstrasse 1 60487 Frankfurt / Main Germany FSE – CODE GIX

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GIPPSLAND LIMITED ABN 31 004 766 376 and Controlled Entities

DIRECTORS’ REPORT

Your directors submit the financial report for the half-year ended 31 December 2013.

Directors

The names of directors who held office during or since the end of the half-year:

Mr Ian J Gandel Mr Jon Starink Mr John D Kenny

Review of Operations

The consolidated operating loss after tax for the half-year was $3,042,989 (2012 – loss of $1,735,373).

The principal activities of the economic entity during the half-year were the exploration and development of commercially and economically viable mineral resources. The Company continued to focus on the development of the Abu Dabbab tantalum, tin and feldspar project and production at the Alluvial Tin Project in Egypt, which is owned by Tantalum Egypt in which both Gippsland and the Egyptian Government have a 50% shareholding.

The Board is undertaking an advanced and comprehensive project review examining various financing opportunities for the development of the Abu Dabbab Tantalum-Tin Project (the “Project”). This ongoing review process has already highlighted the significant opportunity for Tantalum Egypt JSC (“TE JSC”) and the Company to significantly reduce its direct capital costs by outsourcing to contractors mining and crushing operations, the provision of utilities including desalinated water and power and services including camp services.

Various banks and financial institutions have been advised by Gippsland that financing discussions will be suspended until the project review referred to above is complete.

During the period, TEJSC sold approximately 74 tonnes of contained tin in concentrates from its Abu Dabbab Alluvial Mining Project and received total gross proceeds (before deduction of toll treatment charges) of US$1,644,665.

In Eritrea, the area of the Adobha Exploration Licence was reduced by 50% to a retained area of 1,056 km[2] in compliance with the requirements of the third year of the licence. The area of the Gerasi South Exploration Licence remains at 100 km[2] . Exploration was reduced to a minimum during the quarter as the Company’s focus is currently on the Egyptian projects.

Corporately, during the half-year Gandel Metals Pty Ltd, a company related to the Company’s Chairman, Mr Ian Gandel, provided an unsecured loan facility to the Company for up to $1 million. The terms of the agreement are as follows:

• (a) the interest rate for the loan is equal to the ANZ loan interest rate, as varied (currently 5.33%);

• (b) the loan is unsecured; and

• (c) the loan is repayable by 1 July 2014 or following the completion of a capital raising of not less than $1.5 million or such earlier date that Gippsland has surplus cash reserves to repay the loan in full without affecting Gippsland’s continuing operations in the reasonable opinion of the Directors.

Significant Events After the Balance Date

During January 2014, the final tranche of $250,000 of the existing $1 million loan facility from Gandel Metals Pty Ltd was drawn down by Gippsland.

On 13 February 2014, the Company entered into an agreement with Gandel Metals Pty Ltd (an entity controlled by Ian Gandel), pursuant to which Gandel Metals has provided a loan facility to the Company in the amount of $380,000. At the date of this report, the $380,000 loan had been fully drawn down by Gippsland.

The terms of the agreements are as follows:

• (a) the interest rate for the loan is equal to the ANZ loan interest rate, as varied (currently 5.33%);

• (b) the loan is unsecured; and

• (c) the loan is repayable by 1 July 2014 or following the completion of a capital raising of not less than $1.88 million or such earlier date that Gippsland has surplus cash reserves to repay the loan in full without affecting Gippsland’s continuing operations in the reasonable opinion of the Directors.

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GIPPSLAND LIMITED ABN 31 004 766 376 and Controlled Entities

DIRECTORS’ REPORT

On 10 February 2014, Gippsland appointed engineering firm Lycopodium to review and update the 2008 Definitive Feasibility Study with an estimated cost of approximately $291,000.

On 14 March 2014, Gandel Metals Pty Ltd provided a letter of extension to Gippsland in relation to the repayment terms of the existing loans totalling $1.38m advising that it is Gandel Metal’s intention not to enforce the repayment date of 1 July 2014.

On 12 March 2014, Gandel Metals Pty Ltd provided a letter of support to Gippsland in relation to providing further funding during the period 1 March to 30 June 2014 to enable Gippsland to meet its debts as and when they fall due. The letter of support is conditional on the Company continuing to make positive progress with respect to financing of the Abu Dabbab tantalum-tin project in Egypt. Any further funding provided will be repayable the earlier of:

• 5 business days after completion of a capital raising by Gippsland or repayment on the inter-company loan account between Tantalum International Pty Limited and Gippsland for an amount equal to or greater than the total amount of indebtedness to Gandel Metals; or

• such earlier date that Gippsland has surplus cash reserves to repay the further funding in full without affecting Gippsland’s continuing operations in the reasonable opinion of the Directors.

Tantalum Egypt JSC has advised Gippsland that all export issues in relation to the temporary suspension of concentrate shipments by the Egyptian government have been resolved and the Company expects to resume shipments later this month.

Since 31 December 2013, no other events have arisen that have materially affected the operations of the economic entity, the results of the economic entity or the state of affairs of the economic entity.

Auditor’s Declaration

The lead auditor’s independence declaration under section 307C of the Corporations Act 2001 is set out on page 4 for the half-year ended 31 December 2013.

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

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J STARINK DIRECTOR Dated this 14th day of March 2014

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Deloitte Touche Tohmatsu ABN 74 490 121 060

Woodside Plaza Level 14 240 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia

Tel: +61 8 9365 7000 Fax: +61 8 9365 7001 www.deloitte.com.au

The Board of Directors Gippsland Limited 207 Stirling Highway CLAREMONT WA 6010

14 March 2014

Dear Sirs

Gippsland Limited

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Gippsland Limited.

As lead audit partner for the review of the financial statements of Gippsland Limited for the half-year ended 31 December 2013, I declare that to the best of my knowledge and belief, there have been no contraventions of:

• (i) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

• (ii) any applicable code of professional conduct in relation to the review.

Yours faithfully

DELOITTE TOUCHE TOHMATSU

Chris Nicoloff Partner Chartered Accountants

Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited

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GIPPSLAND LIMITED ABN 31 004 766 376

and Controlled Entities

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2013

Note Revenue Finance revenue Other income Total income Cost of sales Administration expense Employee benefits expense Finance costs Foreign exchange (losses)/gains Depreciation expense Impairment of mine properties Impairment of other financial assets Impairment of exploration and evaluation expenditure Total expenses Loss before income tax Income tax expense Loss after income tax Other comprehensive income/(loss) Items that may be classified subsequently to profit or loss Exchange differences on translation of foreign operations Total other comprehensive income/(loss) Total comprehensive income/(loss) for the period Profit/(loss) is attributable to: Members of the parent Non-controlling interest Total comprehensive income/(loss) is attributable to: Members of the parent Non-controlling interest Earnings per share Basic profit (loss) (cents per share) Diluted profit (loss) (cents per share)	Consolidated 31 December 2013 $ 31 December 2012 $ 1,542,500 - 926 6,055 650 -
	1,544,076 6,055
	(2,069,379) - (758,713) (721,363) (574,694) (361,294) (4,576) - (7,432) (8,224) (43,015) (41,145) (969,711) - - (609,402) (159,545) -
	(4,587,065) (1,741,428)
	(3,042,989) (1,735,373) - -
	(3,042,989) (1,735,373) 212,919 (115,561)
	212,919 (115,561)
	(2,830,070) (1,850,934)
	(2,369,893) (1,699,850) (673,096) (35,535)
	(3,042,989) (1,735,373)
	(2,048,302) (1,863,051) (781,768) 12,117
	(2,830,070) (1,850,934)
	(0.22) (0.16) (0.22) (0.16)

The accompanying notes form part of these financial statements.

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GIPPSLAND LIMITED ABN 31 004 766 376 and Controlled Entities

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2013

Note CURRENT ASSETS Cash and cash equivalents Trade and other receivables Inventories Other assets TOTAL CURRENT ASSETS NON CURRENT ASSETS Property, plant and equipment Exploration and evaluation Mine properties 6 TOTAL NON CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Provisions Loans and borrowings 4 TOTAL CURRENT LIABILITIES TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 3 Reserves Accumulated losses Non-controlling interest TOTAL EQUITY	Consolidated 31 December 2013 $ 30 June 2013 $ 287,738 586,883 99,147 313,424 489,855 94,976 58,376 55,990
	935,116 1,051,273
	1,912,705 1,938,858 4,306,244 4,040,894 - 1,573,476
	6,218,949 7,553,228
	7,154,065 8,604,501
	1,987,446 1,355,268 105,064 107,848 750,240 -
	2,842,750 1,463,116
	- -
	2,842,750 1,463,116
	4,311,315 7,141,385
	48,530,322 48,530,322 (936,330) (1,257,921) (40,334,281) (37,964,388) (2,948,396) (2,166,628)
	4,311,315 7,141,385

The accompanying notes form part of these financial statements.

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GIPPSLAND LIMITED ABN 31 004 766 376 and Controlled Entities

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2013

Balance at 1 July 2012 Currency translation differences Loss for the period Total comprehensive income/(loss) for the period Transactions with owners in their capacity as owners Shares issued during the half-year Share issue costs Option reserve on recognition of unlisted options Balance at 31 December 2012 Balance at 1 July 2013 Currency translation differences Loss for the period Total comprehensive income/(loss) for the period Transactions with owners in their capacity as owners Shares issued during the half-year Share issue costs Option reserve on recognition of unlisted options Balance at 31 December 2013	Share Capital – Ordinary $ Accumulated Losses $ Option Reserve $ Foreign Currency Translation Reserve $ Non- Controlling Interest $ Total $ 45,530,847 (30,145,673) 534,662 (1,651,423) (2,057,470) 12,210,943 - - - (163,201) 47,640 (115,561) - (1,699,850) - - (35,523) (1,735,373)
	- (1,699,850) - (163,201) 12,117 (1,850,934)
	1,384,105 - - - - 1,384,105 (36,795) - - - - (36,795) - - - - - -
	46,878,157 (31,845,523) 534,662 (1,814,624) (2,045,353) 11,707,319
	48,530,322 (37,964,388) 534,662 (1,792,583) (2,166,628) 7,141,385 - - - 321,591 (108,672) 212,919 - (2,369,893) - - (673,096) (3,042,989)
	- (2,369,893) - 321,591 (781,768) (2,830,070)
	- - - - - - - - - - - - - - - - - -
	48,530,322 (40,334,281) 534,662 (1,470,992) (2,948,396) 4,311,315

The accompanying notes form part of these financial statements.

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GIPPSLAND LIMITED ABN 31 004 766 376 and Controlled Entities

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2013

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from sale of alluvial tin Payments to suppliers and employees Interest received Finance costs paid Other income Net cash flows from/(used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Receipts from sale of alluvial tin Payments for exploration and evaluation Payments for mine properties Purchase of property, plant and equipment Loans to other entities Net cash flows from/(used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Net proceeds from share issues Payment of share issue costs Proceeds from borrowings Repayment of borrowings Net cash flows from/(used in) financing activities Net increase / (decrease) in cash and cash equivalents Effects of exchange rate changes on cash Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	Consolidated 31 December 2013 $ 31 December 2012 $ 1,508,754 - (2,233,157) (816,140) 998 6,364 (8,270) - 651 -
	(731,024) (809,776)
	- 290,845 (277,800) (913,987) - (825,624) (37,238) (50,077) - -
	(315,038) (1,498,843)
	- 1,384,105 (6,221) (36,795) 750,000 - - -
	743,779 1,347,310
	(302,283) (961,309) 3,138 (7,642) 586,883 1,169,582
	287,738 200,631

The accompanying notes form part of these financial statements.

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GIPPSLAND LIMITED ABN 31 004 766 376 and Controlled Entities

NOTES TO THE FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2013

NOTE 1: BASIS OF PREPARATION

The half-year consolidated financial statements are a general purpose financial report prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standard AASB 134: Interim Financial Reporting. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 Interim Financial Reporting .

The half-year financial report does not include all of the notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report.

It is recommended that this financial report be read in conjunction with the annual financial report for the year ended 30 June 2013 and any public announcements made by Gippsland Limited and its controlled entities during the half-year in accordance with the continuous disclosure requirements arising under the Corporations Act 2001.

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

Reporting Basis and Conventions

The half-year report has been prepared on an accrual basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied.

Going Concern

The consolidated entity has incurred a net loss after income tax of $3,042,989 (2012: $1,735,373) and experienced net cash outflows from operations of $731,024 (2012: $809,776) and net cash outflows from investing activities of $315,038 (2012: $1,498,843) for the half year ended 31 December 2013. As at 31 December 2013, the consolidated entity had a working capital deficiency of $1,907,634 and had cash and cash equivalents of $287,738.

The ability of the consolidated entity to continue as a going concern is principally dependent upon raising additional capital and / or debt finance, and continuation of production of its Alluvial Tin project to fund exploration and project development, the Abu Dabbab project, other commitments, other principal activities and provide additional working capital.

These conditions indicate a material uncertainty that may cast significant doubt about the consolidated entity’s ability to continue as a going concern.

Subsequent to 31 December 2013, Gippsland entered into an agreement with Gandel Metals Pty Ltd (a director related entity of Ian Gandel) to provide $380,000 in short-term funding. Details of the terms of this loan have been disclosed in Note 9 to the half-year financial report. To the date of this report, the Company has drawn down $380,000 of this funding and the remaining $250,000 from the funding disclosed in Note 4. In addition to this loan, Gandel Metals Pty Ltd has provided a conditional letter of support for further loan funding to 30 June 2014 to an amount sufficient to enable Gippsland to meet its debts as and when they fall due for that period.

The directors have prepared a cash flow forecast for the period ending 31 March 2015 which indicates that the current cash resources will not meet expected cash outgoings without additional capital and / or debt funding. The directors anticipate that these requirements will be met through a combination of some or all of the following:

• Obtaining the further loan funding based on the conditional letter of support noted above, with drawdowns commencing in March 2014;

• The continual deferral of amounts payable to trade creditors;

• Obtaining deferral until at least March 2015 on exploration commitments on its Eritrean project from the Eritrean Ministry of Energy and Mines as referred to in Note 5;

• Revenue and expenditure in relation to the Alluvial Tin Project being in line with forecasts; and

• Further capital raisings and / or debt funding and/or strategic sale of minor interests in core projects of at least $5,000,000 by June 2014.

The Company will use part of the cash proceeds obtained from the completion of the capital raising to repay the funding provided to the Company by Gandel Metals Pty Ltd.

The directors are satisfied that they will achieve the matters set out above and therefore the going concern basis of preparation is appropriate. The financial report has therefore been prepared on the going concern basis, which assumes continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.

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GIPPSLAND LIMITED ABN 31 004 766 376 and Controlled Entities

NOTES TO THE FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2013

Should the consolidated entity be unable to achieve the initiatives referred to above, there is a material uncertainty whether the consolidated entity will be able to continue as a going concern and, therefore, whether it will realise its assets and discharge its liabilities in the normal course of business.

The financial report does not include adjustments relating to the recoverability and classification of recorded asset amounts, or to the amounts and classification of liabilities that might be necessary should the consolidated entity not continue as a going concern.

Accounting Policies

The accounting policies have been consistently applied by the entities in the consolidated entity and are consistent with those applied in the 30 June 2013 annual report, except for the adoption of amending standards mandatory for annual periods beginning on or after 1 July 2013, as noted below. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards.

(a) Revenue

Interest revenue is recognised when it is probable that the economic benefits will flow to the Group and the amount of revenue can be measured reliably. Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition.

Revenue from the sale of goods is measured at the fair value of the consideration received or receivable. Revenue from the sale of goods is recognised when the goods are delivered and title has passed, at which time all the following conditions are satisfied:

• the Group has transferred to the buyer the significant risks and rewards of ownership of the goods; and

• the Group has received the provisional advance payment from the buyer.

(b) Mine properties

When a mine construction project moves into the pre-production stage, any costs capitalised to ‘exploration and evaluation’ are reclassified to ‘mine properties’. During this pre-production stage, certain mine construction and commissioning costs continue to be capitalised to mine properties and offset any incidental revenue earned until such time as the project is operating in line with management’s expectation.

When a mine construction project moves into the production stage, the capitalisation of certain mine construction costs ceases and costs are either regarded as inventory or expensed, except for costs that qualify for capitalisation relating to mine asset additions or improvements, mine development or mineable reserve development. It is also at this point that depreciation / amortisation commences.

Mine properties are recorded at cost, less accumulated depreciation and amortisation and any impairment losses.

Amortisation is over the units of production of the economically recoverable reserves (that is, tonnes of ore).

New Standards and Interpretations

(a) Changes in Accounting Policies and Disclosures

The consolidated entity has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board that are relevant to their operations and are effective for the current financial reporting period.

Significant new and revised standards and interpretations effective for the current financial reporting period that are relevant to the consolidated entity are:

• AASB 10 ‘Consolidated Financial Statements’ and AASB 2011-7 ‘Amendments to Australian Accounting Standards arising from the consolidation and Joint Arrangements standards’

• AASB 13 ‘Fair Value Measurement’ and AASB 2011-8 ‘Amendments to Australian Accounting Standards arising from AASB 13’

• AASB 2012-2 ‘Amendments to Australian Accounting Standards – Disclosures – Offsetting Financial Assets and Financial Liabilities’

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GIPPSLAND LIMITED ABN 31 004 766 376 and Controlled Entities

NOTES TO THE FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2013

Impact of the application of AASB 10

AASB 10 replaces the parts of AASB 127 ‘Consolidated and Separate Financial Statements’ that deal with consolidated financial statements and Interpretation 112 ‘Consolidation – Special Purpose Entities’. AASB 10 changes the definition of control such that an investor controls an investee when a) it has power over an investee, b) it is exposed, or has rights, to variable returns from its involvement with the investee, and c) has the ability to use its power to affect its returns.

All three of these criteria must be met for an investor to have control over an investee. Previously, control was defined as the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Additional guidance has been included in AASB 10 to explain when an investor has control over an investee. Some guidance included in AASB 10 that deals with whether or not an investor that owns less than 50 per cent of the voting rights in an investee has control over the investee is relevant to the Group.

Although the first-time application of AASB 10 (together with the associated Standards) caused certain changes to the Group’s accounting policy for consolidation and determining control, it did not result in any changes to the amounts reported in the Group’s financial statements as the “controlled” status of the existing subsidiaries did not change, nor did it result in any new subsidiaries being included in the Group as a consequence of the revised definition.

Impact of the application of AASB 13

The Group has applied AASB 13 for the first time in the current year. AASB 13 establishes a single source of guidance for fair value measurements and disclosures about fair value measurements. The scope of AASB 13 is broad; the fair value measurement requirements of AASB 13 apply to both financial instrument items and non-financial instrument items for which other AASBs require or permit fair value measurements and disclosures about fair value measurements, except for share-based payment transactions that are within the scope of AASB 2 ‘Share-based Payment’, leasing transactions that are within the scope of AASB 117 ‘ Leases’, and measurements that have some similarities to fair value but are not fair value (e.g. net realisable value for the purposes of measuring inventories or value in use for impairment assessment purposes).

AASB 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions. Fair value under AASB 13 is an exit price regardless of whether that price is directly observable or estimated using another valuation technique. Also, AASB 13 includes extensive disclosure requirements.

AASB 13 requires prospective application from 1 January 2013. In addition, specific transitional provisions were given to entities such that they need not apply the disclosure requirements set out in the Standard in comparative information provided for periods before the initial application of the Standard. In accordance with these transitional provisions, the Group has not made any new disclosures required by AASB 13 for the 2012 comparative period, the application of AASB 13 has not had any material impact on the amounts recognised in the consolidated financial statements.

Impact of the application of AASB 2012-2 ‘Amendments to Australian Accounting Standards - Disclosures – Offsetting Financial Assets and Financial Liabilities’

The Group has applied the amendments to AASB 7 “Disclosures – Offsetting Financial Assets and Financial Liabilities’ for the first time in the current year. The amendments to AASB 7 require entities to disclose information about rights of offset and related arrangements (such as collateral posting requirements) for financial instruments under an enforceable master netting agreement or similar arrangement.

The amendments have been applied retrospectively. As the Group does not have any offsetting arrangements in place, the application of the amendments has had no material impact on the disclosures or on the amounts recognised in the consolidated financial statements.

(b) Accounting Standards and Interpretations issued but not yet effective.

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective and have not been adopted by the consolidated entity for the half-year ending 31 December 2013. Management are in the process of assessing the impact of the adoption of these standards and interpretations on the consolidated entity.

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GIPPSLAND LIMITED ABN 31 004 766 376 and Controlled Entities

NOTES TO THE FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2013

NOTE 2: OPERATING SEGMENT

(a) Industry segments

The Group operates predominantly in the mining and exploration industry.

Information reported to the Group’s chief operating decision maker for the purpose of resource allocation and assessment of segment performance is focussed on the type of resources being explored for and evaluated or developed. The Group’s reportable segments under AASB 8 are therefore as follows:

• Tantalum

• Gold

• • Copper • Corporate

The tantalum segment relates to the development of the Group’s Abu Dabbab tantalum-tin project in Egypt. The gold segment relates to the exploration activities at Wadi Allaqi in Egypt.

The copper segment relates to the exploration activities at the Adobha project in Eritrea.

The corporate segment relates to operations of the corporate head office in Perth, Western Australia.

(b) Business segments

The following tables present revenue and loss information and certain asset and liability information regarding business segments for the periods ended 31 December 2013 and 2012.

	Continuing Operations	Total Operations $
	Tin/Tantalum Gold Copper Corporate $ $ $ $
Period ended 31 December 2013 Revenue Other revenues from external customers Inter-segment transactions Total segment revenue Inter-segment elimination Total consolidated revenue Result Segment result (Loss) before income tax and minority interest Income tax expense Net (loss) for the year Assets Segment assets Total assets	1,542,530 4 - 1,542 - - - -	1,544,076 -
	1,542,530 4 - 1,542	1,544,076 -
	(2,106,074) (27,500) (216,279) (693,136)
		1,544,076
		(3,042,989)
	6,828,566 35,535 182,575 107,389	(3,042,989) -
		(3,042,989)
		7,154,065
		7,154,065

Page 13

GIPPSLAND LIMITED ABN 31 004 766 376

and Controlled Entities

NOTES TO THE FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2013

				Continuing Operations	Continuing Operations	Continuing Operations	Total Operations $
				Tin/Tantalum Gold Copper Corporate $ $ $ $
	Period ended 31 December 2012 Revenue Other revenues from external customers - - - 6,055 6,055 Inter-segment transactions - - - - - Total segment revenue - - - 6,055 6,055 Inter-segment elimination - Total consolidated revenue 6,055 Result Segment result (320,548) (12,875) (54,529) (1,347,421) (1,735,373) (Loss) before income tax and minority interest (1,735,373) Income tax expense - Net (loss) for the year (1,735,373) Assets Segment assets 6,549,764 35,315 3,665,983 2,764,710 13,015,772 Total assets 13,015,772 NOTE 3: CONTRIBUTED EQUITY 31 December 2013 31 December 2013 30 June 2013 30 June 2013 $ Number $ Number Issued capital: 1,375,700,081 (June 2013: 1,375,700,081) fully paid ordinary shares 48,530,322 1,375,700,081 48,530,322 1,375,700,081 Movement Opening Balance at 1 July 2013 48,530,322 1,375,700,081 Shares issued during the period - - Share issue costs - Closing balance at 31 December 2013 48,530,322 1,375,700,081 Options No of Options Opening balance at 1July 2013 600,000 Less: Exercise of options during the period - Less: Options expired during the period (600,000) Plus: Options issued during the period - Closing balance at 31 December 2013 -			- - - 6,055 - - - -			6,055 -
				- - - 6,055			6,055 -
				(320,548) (12,875) (54,529) (1,347,421)
							6,055
							(1,735,373)
				6,549,764 35,315 3,665,983 2,764,710			(1,735,373) -
							(1,735,373)
							13,015,772
						13,015,772 31 December 2013 30 June 2013 30 June 2013 Number $ Number 1,375,700,081 48,530,322 1,375,700,081 1,375,700,081 - 1,375,700,081 No of Options 600,000 - (600,000) - -	13,015,772
			48,530,322 - -
			48,530,322

As at 31 December 2013 the economic entity had nil options on issue.

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GIPPSLAND LIMITED ABN 31 004 766 376 and Controlled Entities

NOTES TO THE FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2013

NOTE 4: BORROWINGS

During the period, Gandel Metals Pty Ltd, a company related to the Company’s Chairman, Mr Ian Gandel, provided an unsecured loan facility to the Company for up to $1 million. The terms of the agreement are as follows:

• (a) the interest rate for the loan is equal to the ANZ loan interest rate, as varied (currently 5.33%);

• (b) the loan is unsecured; and

• (c) the loan is repayable by 1 July 2014 or such earlier date that Gippsland has surplus cash reserves to repay the loan in full without affecting Gippsland’s continuing operations in the reasonable opinion of the Directors.

As at 31 December 2013, $750,000 of the loan facility had been drawn down by Gippsland Ltd.

During the half-year, interest paid or payable on the loan was $7,342. As at 31 December 2013, $240 of this interest had been accrued to the loan balance.

NOTE 5: COMMITMENTS AND CONTINGENCIES

Operating lease commitments - Group as lessee

The Group has entered into commercial leases for office accommodation in:

• Perth, Australia;

• Cairo, Egypt; and

• Asmara, Eritrea

Perth Office Lease

The property lease is a non-cancellable lease with a 2.5 year term (expiring in April 2014), with rent payable monthly in advance. Gippsland has advised the landlord that it will not be exercising its option to renew the lease. Lease payments for 1 January 2014 to 10 April 2014 are estimated to be $36,100.

Cairo Office Lease

The property lease is a non-cancellable lease with a five year term expiring on 31 August 2016, with rent payable monthly in advance. Lease payments for the next 12 month period to 31 December 2014 are estimated to be $19,000 and for the remaining term of the current lease from 1 January 2015 to 31 August 2016 are estimated to be $31,000.

Asmara Office Lease

The property lease is a non-cancellable lease with a twelve month term expiring 31 December 2014, with rent payable monthly in advance. Lease payments for the next 12 month period to 31 December 2014 are estimated to be $12,000.

Bank Guarantee

A subsidiary of the Group has been required to provide a bank guarantee of US$30,000 to the General Authority for Investment and Free Zone in Egypt. The letter of guarantee is valid until 10 August 2014.

Minimum Exploration Expenditure – Eritrea

Under Eritrean mining law, expenditure commitments entered into by a tenement holder with respect to a tenement are mandatory. Failure to expend funds in accordance with a commitment may result in a liability to the Eritrean government to the extent of the unexpended portion of the expenditure commitment, or forfeiture of the tenement/s. The exploration expenditure commitment for Year 4 of the Adobha Exploration Licence is US$1,000,000 and for Year 3 of the Gerasi South Exploration Licence is US$400,000. Based on these exploration expenditure commitments, as at 31 December 2013, the Group is required to expend approximately a further A$949,000 on the Adobha Exploration Licence in Eritrea by no later than 23 July 2014, being the fourth anniversary of the grant of the tenement, and approximately a further A$425,000 on the Gerasi South Exploration Licence in Eritrea by no later than 25 August 2014, being the third anniversary of the grant of the tenement. The Company has made enquiries with the Eritrean Ministry of Energy and Mines for a deferment in relation to this and future year’s expenditure commitments until additional funds are raised for exploration and has received verbal approval of the deferment.

The Group has pending applications regarding other exploration licence areas.

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GIPPSLAND LIMITED ABN 31 004 766 376 and Controlled Entities

NOTES TO THE FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2013

Exploration Expenditure - Nuweibi

Prior to 30 June 2011, the Group committed to spend US$300,000 on exploration at its Nuweibi Tantalum-Tin Project.

Drilling at Nuweibi was deferred due to the lack of a suitable drilling rig. Accordingly, approximately a further US$294,400 is required to be spent in relation to exploration once a suitable drilling rig becomes available in order to meet this expenditure commitment.

Capital Commitments

Prior to 31 December 2013, Gippsland’s subsidiary, Tantalum Egypt JSC, purchased a crushing plant with a value of approximately US$50,000. As at 31 December 2013, a deposit of US$11,000 had been paid resulting in a capital commitment at the end of the half-year of US$39,000. This commitment of US$39,000 was paid in early February 2014.

Contingent Liability

The Group did not have any contingent liabilities as at Balance Date.

NOTE 6: MINE PROPERTIES

During the period, $745,421 of the net capitalised costs in relation to the Alluvial Tin Project were amortised based on production. This has been treated as a cost of sales. The Directors decided to fully impair the remaining balance of net capitalised costs of $969,711. Accordingly, the carrying value of Mine Properties in the financial statements at the end of the half-year is nil.

	31/12/2013 30/6/2013 $ $
Mine properties (at cost) Accumulated amortisation and impairment Movement: Mine properties Balance at beginning of year Additions Net pre-production revenue Prior period revenue adjustment Foreign exchange adjustments Amortisation Impairment Balance at end of year	1,750,059 1,573,476 (1,750,059) -
	- 1,573,476
	1,573,476 910,257 - 1,912,019 - (1,236,406) 111,260 - 30,396 (12,394) (745,421) - (969,711) -
	- 1,573,476

NOTE 7: DEREGISTRATION OF SUBSIDIARIES

During the period, the following dormant subsidiaries were deregistered:

• Here2win.com Pty Ltd;

• Oryx Resources Pty Ltd; and

• Gippsland (Jordan) Pty Ltd

The deregistration of these dormant subsidiaries did not impact the consolidated financial statements.

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GIPPSLAND LIMITED ABN 31 004 766 376 and Controlled Entities

NOTES TO THE FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2013

NOTE 8: FINANCIAL INSTRUMENTS

Fair Values

Set out below is a comparison by category of carrying amounts and fair values of all of the Group's financial instruments recognised in the financial statements:

recognised in the financial statements:
	Carrying Amount Fair Value 31/12/2013 30/6/2013 31/12/2013 30/6/2013 $ $ $ $
Financial Assets Cash Trade and other receivables - current Available for sale financial asset Financial Liabilities Trade and other payables Unsecured loans	287,738 586,883 287,738 586,883 99,147 313,424 99,147 313,424 - - - -
	1,987,446 1,355,268 1,987,446 1,355,268 750,240 - 750,240 -

Cash, cash equivalents and security deposits: The carrying amount approximates fair value because of their short term to maturity

Trade receivables and trade creditors: The carrying amount approximates fair value.

Shares in controlled entities are excluded from the above as these are accounted for at cost in accordance with AASB 127.

Financial asset designated as available for sale: The carrying amount of this asset, which consists of shares in an ASX listed company, approximates fair value as the asset is valued at market value based on the closing price of the ASX listed shares on the last business day of the reporting period.

NOTE 9: EVENTS SUBSEQUENT TO REPORTING DATE

During January 2014, the final tranche of $250,000 of the existing $1 million loan facility from Gandel Metals Pty Ltd was drawn down by Gippsland.

On 13 February 2014, the Company entered into an agreement with Gandel Metals Pty Ltd (an entity controlled by Ian Gandel), pursuant to which Gandel Metals has provided a loan facility to the Company in the amount of $380,000. At the date of this report, the $380,000 loan had been fully drawn down by Gippsland.

The terms of the agreements are as follows:

• (a) the interest rate for the loan is equal to the ANZ loan interest rate, as varied (currently 5.33%);

• (b) the loan is unsecured; and

• (c) the loan is repayable by 1 July 2014 or following the completion of a capital raising of not less than $1.88 million or such earlier date that Gippsland has surplus cash reserves to repay the loan in full without affecting Gippsland’s continuing operations in the reasonable opinion of the Directors.

On 10 February 2014, Gippsland appointed engineering firm Lycopodium to review and update the 2008 Definitive Feasibility Study with an estimated cost of approximately $291,000.

On 14 March 2014, Gandel Metals Pty Ltd provided a letter of extension to Gippsland in relation to the repayment terms of the existing loans totalling $1.38m advising that it is Gandel Metal’s intention not to enforce the repayment date of 1 July 2014.

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GIPPSLAND LIMITED ABN 31 004 766 376 and Controlled Entities

NOTES TO THE FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2013

On 12 March 2014, Gandel Metals Pty Ltd provided a letter of support to Gippsland in relation to providing further funding during the period 1 March to 30 June 2014 to enable Gippsland to meet its debts as and when they fall due. The letter of support is conditional on the Company continuing to make positive progress with respect to financing of the Abu Dabbab tantalum-tin project in Egypt. Any further funding provided will be repayable the earlier of:

• 5 business days after completion of a capital raising by Gippsland or repayment on the inter-company loan account between Tantalum International Pty Limited and Gippsland for an amount equal to or greater than the total amount of indebtedness to Gandel Metals; or

• such earlier date that Gippsland has surplus cash reserves to repay the further funding in full without affecting Gippsland’s continuing operations in the reasonable opinion of the Directors.

Tantalum Egypt JSC has advised Gippsland that all export issues in relation to the temporary suspension of concentrate shipments by the Egyptian government have been resolved and the Company expects to resume shipments later this month.

Since 31 December 2013, no other events have arisen that have materially affected the operations of the economic entity, the results of the economic entity or the state of affairs of the economic entity.

Page 18

GIPPSLAND LIMITED ABN 31 004 766 376 and Controlled Entities

DIRECTORS’ DECLARATION

The directors of Gippsland Limited declare that:

1. In the directors’ opinion, the financial statements and notes thereto are in accordance with the Corporations Act 2001 , including compliance with accounting standards and giving a true and fair view of the consolidated entity’s financial position as at 31 December 2013 and of its performance for the half-year ended on that date; and

2. In the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors dated this 14[th] day of March 2014.

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J STARINK Director

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Deloitte Touche Tohmatsu ABN 74 490 121 060

Woodside Plaza Level 14 240 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia

Tel: +61 8 9365 7000 Fax: +61 8 9365 7001 www.deloitte.com.au

Independent Auditor’s Review Report to the Members of Gippsland Limited

We have reviewed the accompanying half-year financial report of Gippsland Limited, which comprises the condensed consolidated statement of financial position as at 31 December 2013, and the condensed consolidated statement of profit or loss and other comprehensive income, the condensed consolidated statement of cash flows and the condensed consolidated statement of changes in equity for the half-year ended on that date, selected explanatory notes and, the directors’ declaration [of the consolidated entity comprising the company and the entities it controlled at the end of the half-year or from time to time during the half-year as set out on pages 6 to 19.

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.

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 consolidated entity’s financial position as at 31 December 2013 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 Gippsland 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.

Auditor’s Independence Declaration

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

Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Touche Tohmatsu Limited

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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 Gippsland Limited 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 2013 and of its performance for the half-year ended on that date; and

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

Material Uncertainty Regarding Continuation as a Going Concern

Without modifying our conclusion, we draw attention to Note 1 in the financial report which indicates that the consolidated entity has incurred net losses of $3,042,989 (2012: $1,735,373) and experienced net cash outflows from operations of $731,024 (2012: $809,776) and net cash outflows from investing activities of $315,038 (2012: $1,498,843) for the half year ended 31 December 2013. These conditions, along with other matters set out in Note 1, indicate the existence of a material uncertainty that may cast significant doubt about the consolidated entity’s ability to continue as a going concern and therefore, whether it will realise its assets and extinguish its liabilities in the ordinary course of business.

DELOITTE TOUCHE TOHMATSU

Chris Nicoloff Partner Chartered Accountants Perth, 14 March 2014

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