SUPERIOR RESOURCES LIMITED

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ANNUAL REPORT 2017
~~2017~~

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ABN 72 112 844 407

Corporate Directory

Directors

Peter Henry Hwang Carlos Alberto Fernicola Kenneth James Harvey

Corporate Secretary

ANNUAL REPORT

Carlos Alberto Fernicola

Stock Exchange

2017

ASX LIMITED ASX Code: SPQ

Company

SUPERIOR RESOURCES LIMITED ABN 72 112 844 407

Registered Office Unit 8, 61 Holdsworth Street COORPAROO QLD 4151

Principal Office Unit 8, 61 Holdsworth Street COORPAROO QLD 4151

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|---|---|---|
|Unit 8, 61 Holdsworth Street|Chairman’s Review 2017|1|
|COORPAROO QLD 4151|
|Telephone: 07 3847 2887|Highlights - Year in Review|2|
|Email: [email protected]|
|Internet Address|Operations Report|3|
|www.superiorresources.com.au|
|Postal Address|Corporate Review|28|
|PO Box 189|
|COORPAROO QLD 4151|
|Directors' Report|29|
|Share Registry|
|LINK MARKET SERVICES LIMITED|Auditor's Independence Declaration|43|
|ANZ Building|
|Level 15, 324 Queen StreetBRISBANE QLD 4000|Corporate Governance Statement|44|
|Postal AddressLocked Bag A14|Financial Report|45|
|SYDNEY SOUTH NSW 1235|
|Directors' Declaration|73|
|Telephone: 1300 554 474|
|Facsimile: 02 9287 0303|
|Email: [email protected]|Independent Auditor’s Report|74|
|Auditor|
|Shareholder Information|80|
|PKF|Hacketts Audit|
|Level 6, 10 Eagle Street|
|BRISBANE QLD 4000|Tenement Schedule|82|
|Telephone: 07 3839 9733|
|Facsimile: 07 3832 1407|Mineral Resources Statement|83|

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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

CHAIRMAN’S REVIEW

Chairman’s Review 2017

Dear fellow Shareholders,

On behalf of the Board of Directors, I take pleasure in presenting the Superior Resources Limited 2017 Annual Report.

The past 12 months have presented additional challenges and exciting opportunities for your company.

Exploration companies involved in zinc, copper and gold have experienced improvement in sentiment and investor interest due to the positive outlook and improvements in metal prices.

Throughout this period your board and management continued to work hard and achieved the following:

sought joint venture arrangements with major resources companies in respect of the Company’s tier 1 zinc – lead exploration project (Victor Project);
successfully obtained priority applicant status on a new exploration permit application (Cockie South), which contains the Steam Engine Gold Deposit and Galah Dam Gold-Zinc-Copper Project;
completed an initial drilling program on high priority targets in the Company’s highly prospective Greenvale Project: Bottletree, Steam Engine, Galah Dam and One Mile Dam Prospects; and
completed two share placement campaigns to sophisticated investors.

The Company continues to monitor and maintain strict controls on overhead expenses and cashflow management. The Directors, including myself as Company Secretary, have continued to defer the payment of a substantial portion of our Director and services fees in accordance with the ongoing implementation of cash conservation measures.

Our efforts are devoted to generating shareholder return by maximising the potential of our current projects, including building our mineral resources towards cashflow generation and seeking joint venture arrangements and building on our asset base through new project generation and acquisition.

We must ensure that capital is spent wisely and ore reserves must be discovered or acquired which is the essence of wealth creation in the resources industry.

The coming 2018 year promises to be an even more exciting year for the Company’s Shareholders and stakeholders. I look forward to increasing our exploration activity at the Company’s highly prospective Nicholson, Victor and Greenvale projects and realising further positive results and success.

On behalf of the Board, I express my appreciation to staff, management and contractors for their professionalism and dedication.

Sincerely, I thank my fellow directors for their commitment to the Company.

Carlos Fernicola Chairman

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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

OPERATIONS REPORT

Highlights – Year in Review

� Zinc - Lead

Nicholson Project (NW Queensland)

Identified sub-basins and major geological structures, favourable for hosting deposits similar to the McArthur River Mine and Century Zinc Mine.
Identified high priority AMT[1] conductivity anomaly, interpreted to be located in the same geological package which hosts the Century Zinc Mine.
Teck Australia Pty Ltd (Teck) progressed into the second year exploration program under an Earn-In and Joint Venture Agreement.

� Copper

Bottletree Prospect (NE Queensland)

Completed initial drilling program.
Wide zones of up to 150m (down hole) of 0.2% - 0.3% copper, open at depth intersected in initial drilling program.
Drill results confirm a large-scale zoned mineralised system developed over several square kilometres[2] .

� Copper – Zinc – Gold – Silver

Galah Dam Prospect (NE Queensland)

Completed initial drilling program.
Identified large advanced argillic alteration zone of at least 4km long, 100m to 500m wide and in excess of 200m depth extent.
Confirmed the potential for a large-scale porphyry or massive sulphide copper-zinc-gold-silver deposit[3] .

� Gold

Steam Engine Gold Deposit (NE Queensland)

Completed initial drilling program[4] .
Extended high-grade gold mineralisation at depth and along strike.
Mineral resource modelling.

Tick Hill Gold Project (NW Queensland)

Progressed metallurgical and scoping assessment of the Tick Hill tailings storage facility.

1 Audio-frequency Magneto-Telluric

2 Drilling program and assay results finalised September 2017

3 Drilling program and assay results finalised October 2017

4 Drilling program and assay results completed August 2017

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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

OPERATIONS REPORT

Operations Report

Summary 2017

The Company’s activities during the financial year period were focused on the following activities:

1. Exploration

Nicholson Project (Zinc, Lead)
Teck Australia Pty Ltd (Teck) completed initial $250,000 minimum expenditure requirement under the Nicholson Earn-In and Joint Venture Agreement and progressed to the second stage of the agreement.
Completion of an initial AMT[5] geophysical survey and commencement of an infill AMT survey.
Greenvale Project (VMS and porphyry copper, gold and zinc)
Data compilation and modelling of geophysical data in preparation for planning of next stage exploration programs at the Greenvale Project.
Grant of new tenement application EPM26165 (“Cockie South”) on 30 January 2017 as an additional tenement to the Greenvale Project.
Completed preparations for an initial 1,422m drilling program on four prospects within the Greenvale Project.
Completed initial drilling program[6] .
Tick Hill Gold Project (Gold exploration and tailings facility gold reprocessing)
Completed initial gravity concentration studies on the tailings reprocessing project.
Progressed metallurgical and scoping assessment of the Tick Hill tailings storage facility.

2. Corporate – Commercial

Participated as a shortlisted bidder in a formal sale process for the acquisition of advanced gold projects in Western Australia.
Identify and engage with third parties in relation to new project opportunities as well as potential joint venture arrangements in relation to the North West Queensland Projects.

3. Corporate – Capital Raising

Conducted two placement capital raising campaigns and a Share Purchase Plan.

4. Corporate – Dealings

Superior agreed with Diatreme Resources Limited to extend the Company’s earn-in period for 12 months to 31 December 2017 in respect of the Tick Hill Gold Project.

5 Audio-frequency Magneto-Telluric

6 Drilling program completed July 2017

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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

OPERATIONS REPORT

Project Portfolio

As at October 2017, Superior maintained a portfolio of zinc-lead, copper and gold projects (Figure 1). The Company’s current portfolio of projects are as follows:

North West Queensland “Tier 1” Zinc-Lead Projects
Victor Project
Nicholson Project

Mount Isa Style (lead-zinc-silver)

Greenvale Project
Bottletree Prospect
Steam Engine Gold Deposit
Galah Dam Prospect
Cockie Creek Prospect
Wyandotte Copper Prospect
Halls Reward Prospect
One Mile/One Mile Dam Prospect
Riesling Prospect

Potential porphyry / massive sulphide (copper-gold)

High-grade lode gold (gold)

Potential porphyry / massive sulphide (copper-gold) Potential porphyry / massive sulphide (copper-gold)

High-grade copper

Cyprus style (high-grade copper)

VMS / massive sulphide (copper-gold)

Broken Hill Style (zinc-lead-copper)

Tick Hill Gold Project
Tick Hill Gold Project
Tick Hill Tailings Project

High grade gold, low sulphur

Tailings re-processing

Changes to the projects during the year include:

Greenvale Project:
EPM26165
EPM25659 and EPM25691

Grant of new tenement

Voluntary area (sub-block) reductions

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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

OPERATIONS REPORT

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Figure 1. Location of Superior’s projects.

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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

OPERATIONS REPORT

“Tier 1” North West Queensland (Mt Isa Style Lead-Zinc-Silver)

OVERVIEW

The Victor and Nicholson projects are “Tier 1” zinc-lead exploration projects and provide the Company with an industry-leading opportunity to discover a world-class Mount Isa Style Zinc-Lead-Copper deposit. The projects are located in the Carpentaria Zinc Province, which contains 20% of the world’s zinc resource inventory (Figure 2).

In the region immediately surrounding Mount Isa, rocks prospective for Mount Isa Style deposits are exposed at, or close to surface and as a consequence, have been intensely explored. In contrast, the Company’s Victor Project, located about 150km northwest of Mount Isa, is in a region that is relatively unexplored.

In this region the prospective rock sequences are covered by varying depths of younger sediments. This is the most likely area within Queensland to make a second Mount Isa discovery.

Superior’s key focus at its north west Queensland projects is to discover a second Mount Isa base metals deposit.

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Figure 2. The Carpentaria Zinc Province

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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

OPERATIONS REPORT

NICHOLSON PROJECT (Mt Isa Style Lead-Zinc-Silver)

Introduction

The Nicholson Project (EPM15670 and EPM18203), located near the Walford Creek lead-zinc-silvercopper deposit, is considered to have the potential to contain sediment-hosted lead-zinc-silver massive sulphide deposits, similar to the Mount Isa and McArthur River deposits (Figure 3).

Exploration work completed to date has identified a discrete conductive anomaly at a depth of between 200 and 500 metres. This anomaly has been interpreted by Teck Australia Pty Ltd to be hosted by the same geological rock package as that which hosts the Century Zinc Mine.

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190000 E EPM18203 200000 E 210000 E 220000 E
8030000 N Walford 8030000 N
Creek
Prospect
Interpreted
Pyrite Body
Kingfisher
Walford East
KFW South Prospect
Prospect Prospect
EPM15670
8020000 N EPM18203 8020000 N
Hedleys
Uranium EPM18203
Prospect
Nicholson
West
Prospect
EPM15670
VTEM 210000 E 220000 E
Anomaly
8010000 N 8010000 N LEGEND
Proterozoic Cover Rocks
Doomadgee Formation Soil and Alluvium
Mount Les Siltstone Mesozoic Sediments
190000 E 200000 E Fish River Formation &Walford Dolomite South Nicholson Group
Peters Creek Volcanics Previous Company Drilling
Existing drill hole
Nicholson Granite
Minor lead prospect
Cliffdale Volcanics
0 5 10km Superior prospect
Fault
Geology after SPQ, GA and DME
Fault
River
Fault
River
Nicholson
River
Calvert Fault Fish
Nicholson
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Figure 3. Nicholson Project tenements and prospect locations overlaid on regional geology.

Teck Australia Earn-in and JVA

Teck Australia Pty Ltd (Teck), a wholly-owned subsidiary of Canada’s largest diversified resource company, Teck Resources Limited, commenced exploration work on Superior’s Nicholson Project (Project) during the March quarter of 2016. Teck is conducting the work under an Earn-in and Joint Venture Agreement (Agreement) with Superior that was entered into during October 2015.

Under the terms of the Agreement, Teck has an exclusive right to earn a 70% interest in the Project by spending $2,500,000 in accordance with the following structure:

(Initial Period) – incurring $250,000 minimum expenditure: to be spent on exploration by 30 September 2016; and
(Earn-In Period) – incurring $2,250,000 in optional expenditure on or before the 31 December 2018.

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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

OPERATIONS REPORT

On 1 September 2016, the Company agreed with Teck to extend the “Initial Period” of Teck’s earn-in right under the Agreement to 31 December 2016. All other terms remain unchanged as set out in ASX announcement dated 3 November 2015.

On 8 November 2016, Teck confirmed that it had completed the $250,000 minimum expenditure requirement for the Initial Period and that it will commit to the Earn-in Period, which requires expenditure of a further $2,250,000 to be completed on or before 31 December 2018 (refer ASX Announcement 14 November 2016).

At the end of the full year to 30 June 2017, Teck had spent an approximate total of $475,000 on the Project.

Work completed during the year

In summary, the exploration work that was completed by Teck on the Project during the period consisted of:

completion of an Aboriginal cultural heritage survey;
completion of an AMT geophysical survey;
completion of analysis and interpretation of results from the initial AMT survey; and
preparations and planning for a follow-up and infill AMT geophysical survey.

Additional exploration work was completed after 30 June 2017 and includes:

completion of additional Aboriginal cultural heritage surveys; and
completion of a follow-up and infill AMT geophysical survey.

Initial AMT survey

The initial AMT survey comprised 24 survey stations over three survey lines, totalling 19 kilometres. The survey targeted potential sub-basins identified through the integration of magnetics, seismic and gravity data and focussed on the south-western portions of the two tenements proximal to a key geological structure called the Nicholson River Fault.

The results of the initial AMT survey will determine if a conductive body is developed within prospective stratigraphy defined by seismic interpretations.

The AMT survey was undertaken to confirm the presence of key interpreted growth faults which provide conduits for mineralised fluids and to better determine the nature of interpreted sub-basin locations within EPM 15670 and EPM 18203, including the presence and extent of conductive pyritic carbonaceous shale host units.

AMT electro-magnetic survey and imaging techniques provide the potential to map geological structures to depths of 500 meters or more. AMT surveys provide the ability to determine the characteristics of base metal (and other) deposits and anomalies as well as investigate deep geological structures in greater clarity at depth than other geophysical methods.

AMT survey results

The results of the initial AMT survey indicate that permissive rock packages are believed to be detected to a depth of 1,000 metres and located in the hanging wall of the major Nicholson River fault.

Survey line #1 (Figure 4) identified a discrete conductive anomaly at a depth of between 200 and 500 metres, which is interpreted by Teck to be hosted by the same geological rock package as that which hosts the Century Zinc Mine (Figure 5).

Having identified a high priority anomaly at this early stage of exploration is a particularly significant

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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

OPERATIONS REPORT

result. The Company is very encouraged by the results so far and looks forward to further characterising the AMT conductivity anomaly with Teck during the 2018 calendar year.

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Figure 4. Interpreted sub-basins (outlined in yellow) and AMT survey lines (yellow crosses) superimposed on RTP magnetics and major structural features. AMT survey line #1, which traverses the two central sub-basins is labelled (2016 Nicholson Annual Report, Teck Australia Pty Ltd).

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Figure 5. AMT survey line #1 – 2D inversion modelling of AMT data presented in section showing the variation of interpreted conductivity with depth. The top image is modelled to 2km and the bottom image modelled to 1km. AMT anomaly clearly present at station Lh012 (2016 Nicholson Annual Report, Teck Australia Pty Ltd).

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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

OPERATIONS REPORT

Follow-up infill AMT survey

Preparations and planning for a follow-up and infill AMT geophysical survey were being conducted by Teck during the first calendar half of 2017. The follow-up and infill survey is designed to:

follow up the single point anomalism from the 2016 AMT survey (AMT survey line #1);
survey over Superior’s existing Walford South drill hole in order to assist in constraining the AMT results; and
survey the intersection between the Nicholson Fault and the prospective Mt Les stratigraphy.

As at the date of this report, the Company has not received the results of the follow-up infill survey.

VICTOR PROJECT (Mt Isa Style Lead-Zinc-Silver)

Introduction

The Victor Project represents the Company’s “Next Mount Isa” project and comprises five exploration permits for minerals (EPM) covering a combined total area of 1,135 km[2] .

Work conducted by the Company indicates that stratigraphy prospective for the discovery of Mount Isa Style deposits is likely to be present under moderate sedimentary cover within the Victor Project area. This area is relatively un-explored.

Superior’s exploration strategy is based on the mechanism of geochemical “leakage” of key metals (lead, zinc and copper) from a deeper Proterozoic mineralised source into the younger sediments overlying the Proterozoic (Figure 6).

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Figure 6. Diagrammatic representation of the ‘leakage’ concept. Superior believes that ‘leakage’ from Proterozoic deposits into the overlying cover rocks may be one of the best methods of targeting prospective areas for Mount Isa Style deposits under younger sediments.

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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

OPERATIONS REPORT

Geochemical Leakage into Surrounding Rocks and Overlying Cover

Superior understands that there are two important types of “leakage”:

the formation of major metal deposits is accompanied by “leakage” of metals at the time of formation into the surrounding area resulting in “halo” anomalies/mineralisation. At Mount Isa a subtle lead anomaly extends along the faults/stratigraphy well beyond the ore bodies. These anomalies are recognisable in regional geochemical images; and
it is apparent that lead and zinc (and probably copper) are remobilized into rocks above deposits post deposit formation. The lead-zinc within Cambrian cover sediments at Century and Grevillea support this statement. The large lead-zinc anomaly at the Victor Project make this an area potentially containing large Proterozoic deposits below the Cambrian cover in which the anomaly is hosted (Figure 7).

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Figure 7. Imaging of historical stream and soil geochemical values highlight the Victor Project area because of strong lead and zinc anomalies. This image shows that zinc anomalies are associated with other areas of significant mineralisation including Mount Isa, Lady Loretta, Century and Grevillea. The size and intensity of the Victor Project lead and zinc anomaly is similar to that at Mount Isa.

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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

OPERATIONS REPORT

Historical Airborne Surveys

The north-west Queensland area is blessed by almost complete coverage by airborne magnetics and radiometrics (Figure 8). In addition to this coverage there are numerous historical airborne EM surveys available which are largely ignored by explorers. Superior has acquired most of the EM surveys in digital form and processed a number of surveys to produce conductivity sections. Many of the surveys contain anomalies over conductive graphitic sediments which makes interpretation for mineralisation difficult. However, the surveys provide a view of the stratigraphy in covered areas. As mineralisation is often associated with graphitic sediments the location of these conductive units can assist the delineation of prospective areas.

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Figure 8. Soil lead geochemical anomalies coincident with deeper large basement structures.

NORTH-WEST QUEENSLAND STRATEGY

The Company’s Mount Isa Style targets are large, world class projects that are benefitting from record increases in zinc prices, which are expected to continue for at least the near to medium term. With the exciting developments with Teck at the Nicholson Project and the potential presented by the Victor Project, the Board will continue to maximise the exploration efforts and exposure of the projects within the bull market.

The Tier 1 zinc development strategy will focus on:

progressing the Nicholson Project together with Teck;
progressing exploration activities and seeking an appropriate joint venture partner on the Victor Project; and
increasing the Company’s zinc portfolio by identifying acquisition opportunities in highly prospective and advanced zinc-lead-silver-copper projects.

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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

OPERATIONS REPORT

Greenvale Project (Porphyry, VMS, High Grade Gold)

The Greenvale Project covers a region of volcanic and intrusive rocks of Ordovician age that are similar in type and age to the porphyry copper belt in New South Wales. The New South Wales belt of rocks host the large Cadia and North Parkes porphyry copper mines. The sequence of rocks in the Greenvale area are likely to be the northern-most extension of remnant New South Wales Ordovician rocks (Figure 9).

Superior’s Greenvale Project is highly prospective for VMS and porphyry copper, gold, zinc and silver deposits and contains at least eight known prospects (Figure 10). The project is located within an area of notable economic significance, being proximal to the Kidston, Balcooma, Surveyor and Dry River deposits.

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Figure 9. A reconstruction of the Macquarie Arc across eastern Australia showing the development of the Greenvale Province and other provinces including the Charters Towers Province.

On 30 January 2017 the Department of Natural Resources and Mines granted the Company’s new EPM application, EPM26165 “Cockie South”.

EPM26165 covers the highly prospective Steam Engine Gold Deposit, the Bottletree Copper Prospect and the Galah Dam Gold-Zinc-Copper Prospect.

The Company commenced preparations to conduct exploration drilling programs on the Steam Engine Gold Deposit, the Bottletree Prospect and the Galah Dam prospect immediately after landholder access arrangements and native title procedural requirements were finalised.

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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

OPERATIONS REPORT

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Figure 10. Greenvale Project tenement location map showing locations of key prospects.

Greenvale Drilling Program 2017

The Company conducted preparatory work to facilitate the commencement of an initial 1,000m drilling program (as originally planned) on four prospects within the Greenvale Project. The four prospects targeted in the initial program were:

Steam Engine Gold Deposit (gold);
Bottletree Prospect (copper);
Galah Dam Prospect (gold-silver-zinc-copper); and
One Mile Dam Prospect (copper-gold).

This work included:

Negotiation of Landowner Access and Compensation Agreements;
Finalisation of drilling contract and geological services terms;
Commencement of drill site and access track preparations; and
Completion of Aboriginal cultural heritage survey and regulatory compliance procedures.

The drilling programs are aimed to:

(Steam Engine) – enable completion of an initial gold resource estimate on the main Steam Engine lode;
(Steam Engine) – extend the known mineralisation and to locate significant widths of higher grade gold within the lesser explored Eastern Ridge lode of the project;
(Bottletree) – identify broad intersections of copper mineralisation and characterise the mineralisation style; and
(Galah Dam) – target prospective chargeable sources. The Galah Dam prospect is a large plunging alteration zone with similarities to the nearby Balcooma copper, zinc, lead and silver

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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

OPERATIONS REPORT

mine. Previous exploration at Galah Dam had identified gold, zinc and copper mineralisation within the alteration zone.

(One Mile Dam Prospect) – identify the source of an intense and extensive bedrock EM, IP and VTEM geophysical anomaly that is likely to be associated with extensive massive sulphide mineralisation at the nearby One Mile Prospect.

The Drilling program commenced on 10 July 2017 and was completed on 29 July 2017. A total of 1,422 metres were drilled at the four prospects. The program was extended by 422 metres over the initially planned 1,000 metres, due to the presence of extensive zones of visible copper mineralisation and strong alteration at the Bottletree Prospect together with strongly altered sulphide and massive sulphide intervals in the single hole at the Galah Dam Prospect.

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STEAM ENGINE GOLD DEPOSIT (Gold)

Background

The Steam Engine Gold Deposit contains two main sub-parallel gold bearing lodes, referred to as the Steam Engine Lode and the Eastern Ridge Lode, which are separated by about 600 metres (Figure 11).

The lodes are north-north-east trending, west-dipping lodes and are essentially mineralised shear zones comprising pyrite-quartz-muscovite-carbonate schist within amphibolite, metasediment and/or metatonalite. An area of gold mineralisation comprising lodes (Southern Zone) is located between and to the south of these two lodes.

Historical drilling

Steam Engine was discovered by Noranda Australia Limited in 1983 with the first drilling being undertaken in 1985. Substantial drilling of the deposit established a resource following which, the area was covered with a Mineral Development Licence (MDL107) in 1991.

MDL107 has been held by various parties until it was recently relinquished along with a surrounding EPM making the area available for application.

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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

OPERATIONS REPORT

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LEGEND
11400 mN Geology Local Grid Translation to MGA Z55: 11400 mN
10000E, 10000N = 262773.07E, 7895414.27N
Gold Bearing Lode Local Grid North = 17.95 Degrees MGA
Feldspar Porphyry
Andesite
Metagranodiorite
Metadiorite
Metatonalite
Chert
11000 mN Metabasalt with Chert 11000 mN
Metabasalt
Metadacite
Metasediments
10600 mN 10600 mN
EPM25659
(SPQ)
Section 10350N
Section 10250N
10200 mN 10200 mN
EPM26165
(SPQ)
9800 mN 9800 mN
9400 mN 9400 mN
Old Working
EPM25659 South er n Zone
(SPQ) Lodes 9000 mN
Geology after 0 metres 200
Noranda Australia Limited Drill Hole
7,897,000N
7,896,500N
7,896,000N
7,895,500N
7,895,000N
7,894,500N
Gregory Developmental Road
263,500E
262,000E
263,000E
261,500E
262,500E
Steam Engine Lode
Eastern Ridge Lode
9000 mE 9400 mE 9800 mE 10200 mE
9400 mE 9800 mE 10200 mE
----- End of picture text -----

Figure 11. Steam Engine Gold Deposit – Interpreted geology showing the gold-bearing lodes (in red), drill holes and soil gold geochemistry (over the Eastern Ridge Lode and Southern Zone).

Most of the historical drilling at Steam Engine has been concentrated on the Steam Engine Lode. Approximately 75 holes have been drilled into and adjacent to the Steam Engine Lode, including 45 reverse circulation holes and 12 diamond drill holes. The drilling shows that the gold mineralisation dips consistently to the west at about 55° and that it has good continuity.

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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

OPERATIONS REPORT

The drilling on the Steam Engine Lode is generally restricted to the near surface zone down to about 120m vertical depth. Only one hole has been drilled to any significant depth, which indicated that the lode continues to at least a vertical depth of about 220m below surface.

2017 Drilling Program

Six reverse-circulation (RC) holes totalling 510 metres were drilled at the Steam Engine Gold Project. Each of the holes intersected high-grade gold mineralisation. The successful drilling program extends the mineralised envelope along strike and at depth at the Steam Engine Lode and extends the depth extent of a portion of the Eastern Ridge Lode.

At the Steam Engine Lode, two holes were drilled to the north of the main area of historical resource drilling undertaken by Noranda Australia and others. There is good potential for additional gold resources on the Steam Engine Lode to the north of the area of detailed drilling (Figure 12). Superior will be conducting a follow-up drilling program during the first half of 2018, which will be aimed at extending the extent of mineralisation of the Steam Engine Lode. Summary results of the drilling at the Steam Engine Lode are set out in Table 1.

Table 1. Gold intersections from the 2017 drilling of the Steam Engine Lode[#]

Hole Name	From (m)	To (m)	Length (m)	Gold (g/t Au)
SSERC005	70	72	2	1.90
SSERC006	66	68	2	2.79
SSERC006	90	94	4	2.34
# Drill hole intersections have been calculated using a cut-off of 1g/t with no included material below the cut-off. True widths ofintersections are approximately0.9 times the intersection lengths shown in the table.

At the Eastern Ridge Lode, four shallow holes were drilled in a part of the lode where earlier historical drilling had shown the best gold results (Figure 13). All four holes intersected the Eastern Ridge Lode structure. Summary results of the drilling at the Eastern Ridge Lode are set out in Table 2.

The strong results from the Eastern Ridge Lode confirm the potential to extend the lode at depth and also the possibility of delineating multiple parallel mineralised lodes. Multiple zones of mineralisation were intersected in two of the four holes drilled at the Eastern Ridge Lode.

Table 2. Gold intersections from the recent drilling of the Eastern Ridge Lode[#]

Hole Name	From (m)	To (m)	Length (m)	Gold (g/t Au)
SSERC001	10	12	2	2.24
SSERC001	16	18	2	2.14
SSERC001*	45	48	3	3.09
SSERC002*	33	34	1	5.28
SSERC003	36	40	4	2.47
SSERC003*	54	56	2	4.73
SSERC004	42	43	1	4.67
SSERC004*	50	53	3	3.81
# Drill hole intersections have been calculated using a cut-off of 1g/t with a maximum of 1m of included material below the cut-off. True widths of intersections are approximately 0.9 times the intersection lengths shown in the table. * Intersections of the main Eastern Ridge Lode structure.

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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

OPERATIONS REPORT

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----- Start of picture text -----

Local Grid Translation to MGA Z55:
10000E, 10000N = 262773.07E, 7895414.27N
Local Grid North = 17.95 Degrees MGA
Dam
10600 mN 10600 m N
New SPQ
Drill Holes
10400 mN 10400 mN
10200 mN 10200 mN
L EGEND
Au (g/t)
1.0 to 2.0
2 to 3
3 to 5
5 to 100
7,896,000N
262,000E
Steam Engine Lode
9200 mE 9400 mE LSRC034
LSP10
LSRC033 LSP09 LSP08 LSP07 LSP06
LSP04
SSERC006
SSERC005 LSP03 LSP02 LSP01 LSRC025
LSDD004 LSRC032 LSRC019 LSRC064
61
0
LSRC063 LSRC062 9LSRC
C05
LSDD011 LSDD005 LSRC031 LSRC003 LSRC060 LSR
LSRC058 LSRC057 053 LSRC056
RC
LSRC055 LSRC012 LSRC054 SERC004LS
LSDD006 050
C
LSRC052 LSRC051 LSR
LSDD003 LSDD002 LSDD007 LSDD001 LSRC002 LSRC049 64 LSRC048 5 4
SERC001 0
LSRC047 LSRC LSRC0
2
4
0
LSRC044 LSRC009 LSRC043 LSRC
LSDD008
LSRC041 LSRC 040 LSRC039
37 0 380
LSDD012 SERC002 LSDD009 LSRC030 LSRC001 SRC L LSRC
LSDD010 LSRC018
SERC003
9200 mE 9400 mE
----- End of picture text -----

Figure 12. Steam Engine Lode – Gold bearing lodes and drill holes.

Page | 18

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

OPERATIONS REPORT

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----- Start of picture text -----

Local Grid Translation to MGA Z55:
10000E, 10000N = 262773.07E, 7895414.27N
Local Grid North = 17.95 Degrees MGA
New SPQ
Drill Holes
LEGEND
Au (g/t)
1.0 to 2.0
2 to 3
3 to 5
5 to 100
7,895,500N
7,895,000N
262,500E
Eastern Ridge Lode
LSRC016
SERC008
SSERC004 LSRC028
LSRC027 SSERC003 LSRC005
SSERC002
94SERC002
SSERC001 94SERC001
LSRC006
SERC009
LSRC011
LSRC007
LSRC013
----- End of picture text -----

Figure 13. Portion of the Eastern Ridge Lode showing historic and recent Superior drill holes.

Page | 19

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

OPERATIONS REPORT

BOTTLETREE PROSPECT (Copper)

Background

The Bottletree Prospect is a large (2km x 1km) soil copper anomaly (Figure 14), which supports an interpretation that the mineralisation may be of the porphyry copper style. Historically, Pancontinental Mining Limited completed 15 RC drill holes into higher order anomalies. The drilling identified thick intervals (about 60m) of above 0.3% copper mineralisation.

2017 Drilling Program

The Company completed a four-hole, 528 metre RC drilling program on the Bottletree Prospect during July 2017. The drill results together with existing geophysical and geochemical data sets confirm that Bottletree is a large area of copper mineralisation located five kilometres south of and in the same geological terrane as the Steam Engine Gold Deposit.

As clearly indicated in Figure 14, Bottletree has a particularly strong surface expression, which appears as a several square kilometre copper-in-soil anomaly. Further processing has revealed strong evidence of metal zoning with a central copper zone surrounded by an annular pattern of zinc-in-soils.

This is the metal zoning pattern that would be expected from a large-scale bulk mineralised system, possibly driven by a buried intrusive body where there is a temperature gradient for the mineralising fluid from a hot copper core to a cooler zinc halo. Similar types of metal-zoned bulk-mineralised systems often include a gold zone surrounding the zinc halo.

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Figure 14. Copper-in-soil processed image showing large scale regional Bottletree anomaly.

Page | 20

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

OPERATIONS REPORT

Drill results from the initial drilling program on the Bottletree Prospect indicate that both oxide and sulphide copper mineralisation have developed within a significant volume of rock. Wide zones of 40 metres to 150 metres down hole of 0.2% to 0.3% copper extend from surface and remain open at depth (Figures 15 and 16). Copper grades similar to historic reports are now shown to extend to greater depths. Key intercepts are set out in Table 3.

Table 3. Bottletree Prospect drill hole sample assay results

Hole ID	From	To	m	Cu %	Au g/t
SBTRC001	24	178	154	0.25		2m sampling
SBTRC002 includes SBTRC002	28	54	26	0.44		2m sampling including 1m check-sampling
	36	41	5	1.05	0.3	1m sampling including 1m check-sampling
SBTRC003	12	68	56	0.19		2m sampling
SBTRC004	2	14	12	012		2m sampling
SBTRC004	30	36	6	0.15		2m sampling

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Figure 15. Plan view of northern section of Bottletree copper anomaly showing traces of Superior’s July 2017 and historic drill holes with down hole copper, key intercepts and orientation of drill sections.

Page | 21

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

OPERATIONS REPORT

The limits to this large copper mineralised system have not yet been delineated and it remains open both laterally and at depth.

The drill holes were designed to test a large (1.5km x 1km) surface copper geochemical anomaly comprising malachite-stained outcrops and a regionally extensive copper-in-soil anomaly, which is in part coincident with strong IP chargeability anomalies.

Next Steps

The Company is planning a second phase drilling program together with a detailed geophysical survey for the purpose of delineating the extent and characterisation of the mineralised system. This follow up work is planned for the remainder of 2017 and early 2018.

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Figure 16. Cross section showing drill hole SBTRC001 drilled during July 2017, including historic drilling.

Page | 22

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

OPERATIONS REPORT

GALAH DAM (gold-silver-zinc-copper)

Background

The Galah Dam Prospect is a large southerly plunging anticlinal alteration zone, containing gold, zinc, copper and silver mineralisation. This prospect shows similarities to the nearby Balcooma Deposit (Figure 17).

2017 Drilling Program

Superior’s initial drilling, comprising a single deep (192m) vertical RC hole (SGDP001) targeting one of a series of high order induced polarisation (IP) chargeability anomalies, confirmed that Galah Dam is potentially a large-scale porphyry or massive sulphide copper-zinc-gold-silver mineralised system.

The drill hole encountered intensely altered and metamorphosed advanced argillic alteration mineral assemblages over the entire length of the hole from surface to 192m end-of-hole depth.

This result indicates that the very large folded alteration zone, which is visible at the surface (Figure 16), has dimensions of 4 kilometres of strike length, widths of between 100 metres to 500 metres and a depth extent in excess of 200 metres.

The drill hole assay results have reported high sulphur values (wide zones of 2% to 5% pyrite (up to 20% semi-massive pyrite bands), but low gold and base metal values (Figure 18). The copper, zinc and gold values are only elevated when associated with the high sulphide zones.

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Figure 17. Aster imagery showing the large folded alteration zone at Galah Dam and the similarities with the alteration zone at Balcooma. Surface dimensions of Galah Dam intense advanced argillic alteration zone are in the order of 4000m x 100m-500m. Recent drilling has shown this alteration is deep-seated and extending to depths in excess of 200 metres.

Page | 23

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

OPERATIONS REPORT

Redistribution of metals

The low metal values observed in the drill hole are a result of the redistribution of metals caused by intense alteration together with observed deep acid leaching within the advanced argillic alteration zone.

This redistribution or “stripping” of metals is typical of leached advanced argillic alteration systems, resulting in a concentration of metal content away from the acid leach zone (Figure 19).

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Figure 18. Galah Dam drill hole cross section #1 (SGDP001). Downhole lithologies, original pyrite content and silica contents.

Page | 24

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

OPERATIONS REPORT

Enhanced potential at Galah Dam

Superior’s exploration has enhanced the potential of the Galah Dam Prospect by:

establishing that intense advanced argillic alteration extends to depth;
identifying gold, zinc and silver mineralisation along trend to the north east and south west of the Galah Dam drill hole.

Given the size of the Galah Dam alteration zone and the lack of previous exploration drilling, there is significant potential to target the alteration interfaces for polymetallic ore zones along the several kilometres of strike length.

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Figure 19. Model of alteration and metal zones in a typical intrusion-related porphyry system. Applying this model to Galah Dam would have the recent hole in the Advance Argillic Alteration zone juxta-posed to a potential ore zone.

Next steps

Superior is continuing its evaluation of Galah Dam. Planning is underway towards a Phase 2 exploration program to be conducted during the first half of 2018. Exploration programs will likely include high resolution ground magnetics, surface prospecting, geological mapping, detailed geochemical sampling, downhole geophysics and Phase 2 drilling.

Page | 25

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

OPERATIONS REPORT

Tick Hill Tailings Project (Gold)

Further metallurgical studies were undertaken during the first half of the reporting year to assess the efficiency of gravity separation (via a Knelson concentrator) on a single 50kg sample of Tick Hill tailings taken from one of the two tailings paddocks (the eastern paddock) at the historic Tick Hill mine site. Although a gravity concentrate with free gold was produced, the overall gold recovery to concentrate was too low for gravity separation to be considered as an alternate or complementary processing method for the Tick Hill tailings.

Following the gravity test work, further test work has been planned to enable detailed design of a process flowsheet and the determination of a financial model. Discussions with third parties were also commenced to investigate arrangements to minimise the potential capital and operating costs.

The Company continued a process of data review and planning for the preparation of a deep drilling program.

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Figure 20. Tick Hill Tailings Storage Facility – First and Second Stage drill hole locations.

Page | 26

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

OPERATIONS REPORT

Extension to JVA Earn-in Period

The Company received confirmation from Diatreme Resources Limited (DRX) of a 12-month extension to the Earn-in Period under the Tick Hill Exploration Farm-in and Joint Venture Agreement (JVA) (refer below for details of the agreement). Subject to any further extension of term, the Earn-in Period will expire on 31 December 2017.

The parties have agreed to conduct a full review of progress on the project on or around 30 September 2017 for the purpose of considering each parties’ positions and future extensions of term.

Tick Hill Background: JVA with Diatreme Resources Limited

Under the terms of the JVA, the tailings, alluvial-colluvial gold and all other surface sources of gold are being assessed jointly with DRX. The joint arrangement requires each party to contribute 50% of all costs associated with the operations.

All drilling operations associated with the surface gold assessment program have been conducted with a DRX-owned drill rig. These costs have been shared equally between the parties.

Under the JVA, Superior has the right to earn a 50% interest in the project by spending a minimum of $750,000 on exploration, which will include substantial drilling over a two year earn-in period (which can be extended by agreement). All expenditure incurred by Superior on the Surface Gold Project will constitute earn-in expenditure and will be counted towards SPQ’s $750,000 minimum earn-in obligation.

During the earn-in period Superior will have the sole and exclusive right to access and conduct exploration on the project as well as to determine the nature of the exploration programs.

Upon a transfer of a 50% interest in the THGP to Superior, Superior will be required to pay DRX $100,000 and an amount equal to 50% of the government security bond on the mining leases.

Mt Isa Mines Limited retains a royalty on gold produced from the mining leases, which is set at a variable rate depending on the annual grade of gold produced from mining. The royalty applies initially to gold produced above 5g/t Au and then, after payment of royalties totalling $5M, to gold produced above 10g/t Au. A separate royalty rate applies to gold produced from tailings resulting from previous mining.

Page | 27

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

CORPORATE REVIEW

Company Background

Superior Resources Limited ( Superior or the Company ) is a Brisbane based ASX-listed company (ASX code: SPQ) exploring for lead-zinc-silver, copper and gold deposits in Australia.

Superior currently holds a number of exploration permits, one exploration permit application and a granted mining lease in northern Queensland for base metals exploration.

In northwest Queensland exploration for Mount Isa style deposits over the last six years has resulted in Superior holding a first-class portfolio of properties for these deposits. Superior has an expanding portfolio of volcanogenic massive sulphide and porphyry properties in the Greenvale area of north eastern Queensland with inferred resources defined for one property.

Superior is also a party to a farm-in agreement for gold over three granted mining leases at Tick Hill in northwest Queensland. Tick Hill provides the Company with exposure to an area with potential for high grade gold mineralisation adjacent to a previously mined high grade gold mine.

Corporate Philosophy

Superior’s aim is to increase shareholder value through the discovery and acquisition of significant mineral deposits and it has a strategy consistent with this aim.

Superior targets areas with potential for larger high-grade deposits of copper, lead-zinc-silver and gold. These include the large Mount Isa style deposits in northwest Queensland, the more moderate volcanogenic massive sulphide (VMS) deposits in northeast Queensland and the Proterozoic Tick Hill gold deposits in northwest Queensland.

Superior has adopted a conceptual approach in its search for Mount Isa style deposits which identifies permissive environments for these deposits and then explores these areas. Models, derived from the existing large mineral deposits, are an integral part of this approach. Once a permissive environment is identified, Superior utilises advanced exploration methods (particularly geophysics) with modern computer modelling of results to produce targets for further testing.

While a conceptual approach is also appropriate to a search for Proterozoic gold and VMS copper-gold deposits, Superior has adopted the more traditional approach in this search of exploring around existing indications of mineralisation.

Drilling is an essential part of Superior’s exploration programs with drill testing of conceptual targets being part of the search for Mount Isa style deposits and drilling around and beneath existing mineralisation part of the search for gold and copper-gold deposits.

Superior continues to utilise experienced explorers in its exploration as they offer the best chance for discovery of resources.

Your Directors present their report on the consolidated entity (referred to hereafter as the Group) consisting of Superior Resources Limited (‘the Company’) and the entities it controlled at the end of, or during, the year ended 30 June 2017.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

DIRECTORS’ REPORT

DIRECTORS

The following persons were Directors of the Company during the year and up to the date of this report:

P H Hwang (Managing Director) C A Fernicola (Chairman and Company Secretary) K J Harvey (Non-executive Director)

PRINCIPAL ACTIVITIES

During the year the principal activity of the Group was exploration for base metals and gold in northern Queensland, Australia. There were no significant changes in the nature of the company’s activities during the year and no significant activity changes are anticipated.

DIVIDENDS

There were no dividends paid to members during the financial year.

REVIEW OF OPERATIONS

The loss after tax for the year was $416,235 (2016 loss: $2,458,561).

The Company’s activities during the full year period were focused on the following activities and events:

Nicholson Project (Zinc, Lead)
Teck Australia Pty Ltd ( Teck ) progressed the first year and part of the second year exploration program under an Earn-In and Joint Venture Agreement.
Greenvale Project (VMS and porphyry copper, gold and zinc)
data compilation and modelling of geophysical data in preparation for planning of next stage exploration programs at the Greenvale Project;
new tenement application, EPM26165 (“Cockie South”), was granted on 30 January 2017 as an addition to the Greenvale Project;
conduct preparations for a 1,422m drilling program at the Greenvale Project.
Tick Hill Gold Project (Gold exploration and tailings facility gold reprocessing)
progress metallurgical and scoping assessment of the Tick Hill tailings storage facility.
Corporate – Commercial
participated as a shortlisted bidder in a formal sale process for the acquisition of advanced gold projects in Western Australia;
identify and engage with third parties in relation to new project opportunities as well as potential joint venture arrangements in relation to the North West Queensland Projects.
Corporate – Capital Raising
conducted two placement capital raising campaigns and a Share Purchase Plan.

NORTH WEST QUEENSLAND – NICHOLSON PROJECT

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

DIRECTORS’ REPORT

NORTH WEST QUEENSLAND – NICHOLSON PROJECT (continued)

Teck Australia Pty Ltd, a wholly-owned subsidiary of Canada’s largest diversified resource company, Teck Resources Limited, commenced exploration work on Superior’s Nicholson Project ( Project ) during the March quarter of 2016. Teck is conducting the work under an Earn-in and Joint Venture Agreement ( Agreement ) with Superior that was entered into during October 2015.

Under the terms of the Agreement, Teck has an exclusive right to earn a 70% interest in the Project by spending $2,500,000 in accordance with the following structure:

(Initial Period) – incurring $250,000 minimum expenditure: to be spent on exploration by 30 September 2016; and
(Earn-In Period) – incurring $2,250,000 in optional expenditure on or before the 31 December 2018.

At the end of the full year to 30 June 2017, Teck had spent an approximate total of $475,000 on the Project.

Work completed during the year

In summary, the exploration work that was completed by Teck on the Project during the period consisted of:

completion of an Aboriginal cultural heritage survey;
completion of an initial Audio-frequency Magnetotelluric (AMT) geophysical survey;
completion of analysis and interpretation of results from the initial AMT survey; and
preparations and planning for a follow-up and infill AMT geophysical survey.

Initial AMT survey

The results of the initial AMT survey will determine if a conductive body is developed within prospective stratigraphy defined by seismic interpretations.

Initial AMT survey results

The results of the initial AMT survey indicate that permissive rock packages are believed to be detected to a depth of 1,000 metres and located in the hanging wall of the major Nicholson River fault.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

DIRECTORS’ REPORT

NORTH WEST QUEENSLAND – NICHOLSON PROJECT (continued)

Survey line #1 identified a discrete conductive anomaly at a depth of between 200 and 500 metres, which is interpreted by Teck to be hosted by the same geological rock package as that which hosts the Century Zinc Mine.

Follow-up infill AMT survey

Preparations and planning for a follow-up and infill AMT geophysical survey were being conducted by Teck during the first calendar half of 2017. The follow-up and infill survey is designed to:

follow up the single point anomalism from the 2016 AMT survey (AMT survey line #1);
survey over Superior’s existing Walford South drill hole in order to assist in constraining the AMT results; and
survey the intersection between the Nicholson Fault and the prospective Mt Les stratigraphy.

The Company is very encouraged by the results of the survey so far and looks forward to further characterising the AMT conductivity anomaly already identified during the first year of operations with Teck.

Aboriginal cultural heritage

An Aboriginal cultural heritage survey was completed with the Waanyi native title holders to enable the completion of the follow up and infill AMT survey.

GREENVALE PROJECT

Superior’s Greenvale Project is highly prospective for VMS and porphyry copper, gold, zinc and silver deposits and contains at least eight known prospects. The project is located within an area of notable economic significance being proximal to the Kidston, Balcooma, Surveyor and Dry River deposits.

On 30 January 2017 the Department of Natural Resources and Mines granted the Company’s new Exploration Permit for Minerals ( EPM ) application, EPM26165 “Cockie South”.

EPM26165 covers the highly prospective Steam Engine Gold Deposit and the Galah Dam Gold-ZincCopper Prospect.

Greenvale Drilling Program

Work during the quarter comprised preparatory work to facilitate the commencement of an initial 1,000m drilling program (as originally planned) on four prospects within the Greenvale Project. The four prospects targeted in the initial program are:

Steam Engine Gold Deposit (gold);
Bottletree Prospect (copper);
Galah Dam Prospect (gold-silver-zinc-copper); and
One Mile Dam Prospect (copper-gold).

This work included:

Negotiation of Landowner Access and Compensation Agreements;
Finalisation of drilling contract and geological services terms;
Commencement of drill site and access track preparations; and
Completion of Aboriginal cultural heritage survey and regulatory compliance procedures.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

DIRECTORS’ REPORT

GREENVALE PROJECT – (continued)

The drilling programs are aimed to:

(Steam Engine) – enable completion of an initial gold resource estimate on the main Steam Engine lode;
(Steam Engine) – extend the known mineralisation and to locate significant widths of higher grade gold within the lesser explored Eastern Ridge lode of the project;
(Bottletree) – identify broad intersections of copper mineralisation and characterise the mineralisation style; and
(Galah Dam) – target prospective chargeable sources. The Galah Dam prospect is a large plunging alteration zone with similarities to the nearby Balcooma copper, zinc, lead and silver mine. Previous exploration at Galah Dam had identified gold, zinc and copper mineralisation within the alteration zone.
(One Mile Dam Prospect) – identify the source of an intense and extensive bedrock EM, IP and VTEM geophysical anomaly that is likely to be associated with extensive massive sulphide mineralisation at the nearby One Mile Prospect.

The Drilling program commenced on 10 July 2017 and was completed on 29 July 2017. A total of 1,422 metres were drilled at the four prospects. The program was extended by 422 metres over the initially planned 1,000 metres, partly due to the presence of extensive zones of visible copper mineralisation and strong alteration at the Bottletree Prospect together with strongly altered sulphide and massive sulphide intervals in the single hole at the Galah Dam Prospect.

Field Reconnaissance

An initial field reconnaissance program was conducted during May 2017 over the four Greenvale Project prospects, which confirmed widespread and significant areas of surface copper mineralisation at the Bottletree Prospect and several gossanous outcrops in the vicinity of the Galah Dam Prospect.

A total of 12 rock chip reconnaissance samples were taken from various outcrops that were potentially mineralised to establish the presence of metals and any associated elements.

At Galah Dam, a rock chip sample from a gossan outcrop returned anomalously high assays for gold and silver (7.35g/t Au, 25.6g/t Ag) (refer to ASX Announcement dated 30 June 2017).

At the Bottletree prospect, areas of surface copper minerals including malachite and chyrsocolla, with distinct vegetation anomalies (including Eriachne Mucronata [copper grass] and Polycarpaea [copper weed]), were found to be coincident with high order gradient-array chargeability anomalies. Two rock chip samples from these areas returned assays of up to 2.61% Cu and 0.3g/t Au (refer to ASX Announcement dated 30 June 2017).

A rock chip sample was taken from an old mine dump on the Eastern Ridge Lode at the Steam Engine Prospect, in the vicinity of Superior’s proposed drill holes. This sample was taken to confirm that the gold present was hosted by muscovite-quartz-carbonate-pyrite schist. It returned 4.64g/t Au and 1.6g/t Ag (refer to ASX Announcement dated 30 June 2017).

TICK HILL TAILINGS PROJECT

Further metallurgical studies were undertaken during the first half of the year to assess the efficiency of gravity separation (via a Knelson concentrator) on a single 50kg sample of Tick Hill tailings taken from one of the two tailings paddocks (the eastern paddock) located at the historic Tick Hill mine site. Although a gravity concentrate with free gold was produced, the overall gold recovery to concentrate was too low for gravity separation to be considered as an alternate or complementary processing method for the Tick Hill tailings.

The Company continued a process of data review and planning for the preparation of a deep drilling program.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

DIRECTORS’ REPORT

TICK HILL TAILINGS PROJECT – (continued)

Extension to JVA Earn-in Period

The Company received confirmation from Diatreme Resources Limited of a 12-month extension to the Earn-in Period under the Tick Hill Exploration Farm-in and Joint Venture Agreement (refer below for details of the agreement). Subject to any further extension of term, the Earn-in Period will expire on 31 December 2017.

The parties have agreed to conduct a full review of progress on the project on or around 30 September 2017 for the purpose of considering each parties’ positions and future extensions of term.

Tick Hill Background: JVA with Diatreme Resources Limited

Under the terms of an Exploration Farm-in and Joint Venture Agreement ( JVA ) with Diatreme Resources Limited ( DRX ), the tailings, alluvial-colluvial gold and all other surface sources of gold are being assessed

jointly with DRX. The joint arrangement requires each party to contribute 50% of all costs associated with the operations.

All drilling operations associated with the surface gold assessment program have been conducted with a DRX-owned drill rig. These costs have been shared equally between the parties.

During the earn-in period Superior will have the sole and exclusive right to access and conduct exploration on the project as well as to determine the nature of the exploration programs.

Upon a transfer of a 50% interest in the THGP to Superior, Superior will be required to pay DRX $100,000 and an amount equal to 50% of the government security bond on the mining leases.

CORPORATE – COMMERCIAL

New Project Opportunities

Superior continued to actively seek advanced project acquisition and joint venture opportunities.

On 7 July 2016, Superior announced that it was participating as a shortlisted bidder in a formal sale process for the acquisition of an advanced stage gold project. The project was the Lake Carey Gold Project held by Fortitude Gold Pty Ltd (In Liquidation) and located in the Eastern Goldfields of Western Australia. The Company was not successful in acquiring the project.

The Company also evaluated and considered several other gold and other project opportunities that range from strategically significant exploration portfolios through to near development projects.

Superior continues to seek new project opportunities.

NORTH WEST QUEENSLAND – VICTOR PROJECT

The Company has engaged with several parties in relation to farm-in and joint venture arrangements in respect of its Tier 1 North West Queensland zinc project, the Victor Project.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

DIRECTORS’ REPORT

CAPITAL RAISING

Placement to Sophisticated Investors – July 2016

The Company completed a placement to sophisticated investors on 15 July 2016 to raise $299,000 through an issue of fully paid ordinary shares to sophisticated investors at $0.008 per new share, with a free attaching option (exercise price $0.03 expiring 30 June 2019) for every new share subscribed. Some of the Directors participated in the placement for a total of $64,000. Shareholder approval was obtained at the Company’s 2016 AGM for the Directors’ subscriptions and the attaching options to the placement shares.

A total of 29,375,000 shares were issued under the placement, with the balance of the placement being issued following shareholder approval at the 2016 AGM.

The placement was made using the Company’s existing 15% capacity and shareholder approval was not required in respect of the 29,375,000 shares.

Funds raised under the placement were used for working capital.

Placement to Sophisticated Investors – May 2017

The Company completed a placement to sophisticated investors on 1 May 2017 to raise $473,000 through an issue of 86,884,432 fully paid ordinary shares to sophisticated investors at an issue price of $0.0055 per new share. The placement was made using the Company’s existing capacity under Listing

Rules 7.1 and 7.1A and shareholder approval was not required for the issue.

Funds raised under the placement were used to:
fund the drilling of four prospects within the Greenvale Project; and
provide working capital.

Share Purchase Plan – December 2016

The Company completed a Share Purchase Plan ( SPP ) that was offered to existing shareholders on 13 December 2016 to raise $447,000, resulting in the issue of 83,600,000 shares. The SPP closed oversubscribed and exceeded the targeted maximum of $418,000 (refer to ASX announcement dated 14 December 2016).

The funds raised from the SPP will be used to:

fund the drilling of priority gold, zinc and copper targets at the Company’s Greenvale Project (refer ASX announcement dated 2 November 2016);
progress the Company’s objective of acquiring a new gold project; and
provide working capital.

CASH CONSERVATION

The Company’s Board continues to maintain the current cash conservation measures with respect to the Company’s operations and administration.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

DIRECTORS’ REPORT

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

Significant changes in the state of affairs of the Group during the financial year were as follows:

During the year the company completed capital raisings totalling $1,155,447 comprising 83,600,000 ordinary shares issued to existing shareholders under a Share Purchase Plan and 130,059,432 ordinary shares issued to sophisticated investors and Directors.

On 16 December 2016 the Company issued 37,375,000 options, being a free attaching option to each new share issued to sophisticated investors and Directors on 14 July and 16 December 2016.

MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR

There are no matters or circumstances that have arisen since 30 June 2017 that have significantly affected, or may significantly affect:

(a) the Group’s operations in future financial years, or
(b) the results of those operations in future financial years, or
(c) the Group’s state of affairs in future financial years.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS FROM OPERATIONS

Results from exploration are difficult to predict in advance so expected results are uncertain.

ENVIRONMENTAL REGULATION

The Group’s operations are subject to significant environmental regulation under the laws of the commonwealth and state.

INFORMATION ON DIRECTORS

Peter Henry Hwang B.Sc(Hons), LLB. Managing director. Age 48

Experience and expertise

Originally an exploration geologist, Mr Hwang worked as a solicitor for 15 years in national law firms specialising in resources and native title law. He has extensive experience in advising on the development of mining and major infrastructure projects as well as resource mergers and acquisitions. Mr Hwang is a member of the Australian Government Attorney-General’s Department Native Title Practitioner’s Panel and previously a member of the Government of Western Australia Native Title Taskforce on Mineral Tenement and Land Title Applications.

Other current directorships

None.

Former directorships in last 3 years

None.

Special responsibilities

Managing Director.

Interests in shares and options

18,077,974 ordinary shares in Superior Resources Limited.

4,250,000 options over unissued ordinary shares in Superior Resources Limited.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

DIRECTORS’ REPORT

INFORMATION ON DIRECTORS (continued)

Carlos Fernicola B.Com, FCA, F Fin FCIS FCSA Chairman. Age 56

Graduate Diploma Advanced Accounting, Graduate Diploma Applied Finance and Investments, Graduate Diploma Corporate Governance and Graduate Certificate Financial Planning.

Experience and expertise

Mr Fernicola is the Principal of Carlos Fernicola & Co., Chartered Accountants. Mr Fernicola is a Fellow of the Institute of Chartered Accountants in Australia, Fellow of the Governance Institute of Australia and Fellow of the Financial Services Institute of Australia. He has over 30 years of experience in accounting, taxation, audit and the financial services industry.

Other current directorships

None.

Former directorships in last 3 years

None.

Special responsibilities

Chairman and Company Secretary. Member of the Audit Committee.

Interests in shares and options

23,500,000 ordinary shares in Superior Resources Limited. 3,750,000 options over unissued ordinary shares in Superior Resources Limited.

Kenneth James Harvey M.Sc, MAusIMM, MAIG, MSEG, MGSA. Non-executive Director. Age 72 Experience and expertise

Mr Harvey has 47 years experience in mineral exploration, project evaluation, resource estimation and exploration management.

Other current directorships

None.

Former directorships in last 3 years

None.

Special responsibilities

Member of the Audit Committee.

Interests in shares and options

22,454,432 ordinary shares in Superior Resources Limited.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

DIRECTORS’ REPORT

INFORMATION ON DIRECTORS (continued)

Company Secretary

The Company Secretary is Mr Carlos Alberto Fernicola B.Com, FCA, FFin FCIS FGIA. Graduate Diploma Advanced Accounting, Graduate Diploma Applied Finance and Investments, Graduate Diploma Corporate Governance and Graduate Certificate Financial Planning. Mr Fernicola was appointed to the position of Company Secretary on 11 November 2010.

MEETINGS OF DIRECTORS

The numbers of meetings of the company’s board of Directors held during the year ended 30 June 2017, and the numbers of meetings attended by each director were:

Board

Board
Director	Meetings	Meetings
	Eligible to attend	attended
PH Hwang	4	4
CA Fernicola	4	4
KJ Harvey	4	4
Audit Committee
Director	Meetings	Meetings
	eligible to attend	attended
CA Fernicola	2	2
KJ Harvey	2	2

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

DIRECTORS’ REPORT

REMUNERATION REPORT (AUDITED)

The directors are pleased to present your Group’s 2017 remuneration report which sets out remuneration information for Superior Resources Limited’s non-executive directors, executive directors, and other key management personnel.

The report contains the following sections:

(a) Directors and key management personnel disclosed in this report
(b) Remuneration governance
(c) Use of remuneration consultants
(d) Executive remuneration policy and framework
(e) Relationship between remuneration and Superior Resources Limited’s performance
(f) Non-executive director remuneration policy
(g) Voting and comments made at the company’s 2016 Annual General Meeting
(h) Details of remuneration
(i) Service agreements
(j) Details of share-based compensation and bonuses
(k) Equity instruments held by key management personnel
(l) Loans to key management personnel
(m) Other transactions with key management personnel

(a) Directors and key management personnel disclosed in this report

Non-executive and executive directors (see pages 35 to 36 for details about each director)	Non-executive and executive directors (see pages 35 to 36 for details about each director)
PH Hwang CA Fernicola KJ Harvey
_Other key management personnel _
Name	Position
CA Fernicola	Company Secretary

(b) Remuneration governance

The board is responsible for:

the over-arching executive remuneration framework
operation of the incentive plans which apply to the executive team, including key performance indicators and performance hurdles
remuneration levels of executive directors and other key management personnel, and
non-executive directors fees

The objective is to ensure that remuneration policies and structures are fair and competitive and aligned with the long-term interests of the Group.

(c) Use of remuneration consultants

The Group has not engaged the services of any remuneration consultants during the current or prior financial years.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

DIRECTORS’ REPORT

REMUNERATION REPORT (AUDITED) (continued)

(d) Executive remuneration policy and framework

The combination of base pay and superannuation make up the executive directors total remuneration. Base pay for the executive directors is reviewed annually to ensure the executives’ pay is competitive with the market. The board ensures that executive reward satisfies the following key criteria for good reward governance practices:

competitiveness and reasonableness
acceptability to shareholders
transparency
capital management

Long-term incentives

Long-term incentives are provided to executive directors by obtaining approval at a general meeting of shareholders. Any issue of options to executive directors is designed to focus executives on delivering long-term shareholder returns.

(e) Relationship between remuneration and Superior Resources Limited’s performance

There is no direct link between remuneration, company performance and shareholder wealth. The Group’s activities focus on the objective of delivery of long term shareholder returns.

(f) Non-executive director remuneration policy

Fees and payments to non-executive directors reflect the demands which are made on, and the responsibilities of, the directors. Non-executive directors’ fees and payments are reviewed annually by the Board.

Non-executive directors’ fees are determined within an aggregate directors’ fee pool limit, which is periodically recommended for approval by shareholders. The maximum currently stands at $250,000 in aggregate plus statutory superannuation.

(g) Voting and comments made at the company’s 2016 Annual General Meeting

Superior Resources Limited received more than 95% of “yes” votes on its remuneration report for the 2016 financial year. The company did not receive any feedback at the AGM or throughout the year on its remuneration practices.

(h) Details of remuneration

The following tables show details of the remuneration received by the directors and the key management personnel of the Group for the current and previous financial year.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

DIRECTORS’ REPORT

REMUNERATION REPORT (AUDITED) (continued)

2017	Short-term benefits	Post- employment benefits	Share- based payments
Name	Cash salary and fees $	Superannuation $	Options $	Total $
Non-executive directors CA Fernicola KJ Harvey	24,000 21,918	- 2,082	- -	24,000 24,000
Other key management personnel CA Fernicola (Company Secretary)	24,000	-	-	24,000
Sub-total non-executive directors and other key management personnel	69,918	2,082	-	72,000
Executive directors PH Hwang - Managing Director	211,000	20,045	-	231,045
Totals	280,918	22,127	-	303,045

2016	Short-term benefits	Post- employment benefits	Share- based payments
Name	Cash salary and fees $	Superannuation $	Options $	Total $
Non-executive directors CA Fernicola KJ Harvey DJ Horton(Retired 16 November 2015)	21,000 21,918 9,000	- 2,082 -	- - -	21,000 24,000 9,000
Other key management personnel CA Fernicola (Company Secretary)	24,000	-	-	24,000
Sub-total non-executive directors and other key management personnel	78,918	2,082	-	81,000
Executive directors PH Hwang - Managing Director	211,000	20,045	-	231,045
Totals	289,918	22,127	-	312,045

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

DIRECTORS’ REPORT

REMUNERATION REPORT (AUDITED) (continued)

(i) Service agreements

Remuneration and other terms of employment of the Managing Director are formalised in an agreement. The major provisions of the agreement relating to remuneration are set out below.

PH Hwang, Managing Director

Term of employment agreement – indefinite commencing 22 April 2013.
Base salary, inclusive of superannuation, for the year ended 30 June 2017 of $231,045, to be reviewed at least annually by the Board.
Payment of a termination benefit on early termination by the company, other than for gross misconduct, equal to six months remuneration.
Agreement may be terminated by employee giving six months’ notice in writing.

(j) Details of share based compensation and bonuses

There have been no options granted affecting remuneration in the current or a future reporting period.

(k) Equity instruments held by key management personnel

The tables below show the number of shares and options in the company that were held during the financial year by key management personnel of the Group, including their close family members and entities related to them.

Ordinary Shares

	Balance at the	Received on
	start of the	exercising	Net purchased	Other changes	Balance at the
Name	_year _	options	/ (sold)		_end of the year _
*Directors of*	*Superior Resources Limited*
PH Hwang	6,677,974	-	11,400,000	-	18,077,974
CA Fernicola	10,340,000	-	13,160,000	-	23,500.000
KJ Harvey	19,454,432	-	3,000,000	-	22,454,432
*Options Over*	*Unissued Ordinary Shares*
	Balance at the	Options
	start of the	Exercised	Net purchased	Other changes	Balance at the
Name	_year _		/ (sold)		_end of the year _
*Directors of*	*Superior Resources Limited*
PH Hwang	-	-	4,250,000	-	4,250,000
CA Fernicola	-	-	3,750,000	-	3,750,000
KJ Harvey	-	-	-	-	-

(l) Loans to key management personnel

There were no loans to key management personnel during the financial period.

(m) Other transactions with key management personnel

There were no other transactions with key management personnel.

End of Remuneration Report

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

DIRECTORS’ REPORT

SHARES UNDER OPTION

There are 37,375,000 unissued ordinary shares of SPQ under option at the date of this report.

During the year ended 30 June 2017, and since year end, there were no shares issued on the exercise of options granted.

INSURANCE OF OFFICERS

During the financial year the Group paid a premium of $11,370 to insure the directors and secretaries of the company.

The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers and any other payments arising from liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the company. It is not possible to apportion the premium between amounts relating to the insurance against legal costs and those relating to other liabilities.

PROCEEDINGS ON BEHALF OF THE COMPANY

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.

No proceedings have been brought or intervened in or on behalf of the Company with leave of the court under section 237 of the Corporations Act 2001.

NON-AUDIT SERVICES

The Group may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the company are important.

Details of amounts paid or payable to the auditor for audit and non-audit services provided during the year are outlined in note 24 to the financial statements.

The board of directors has considered the position and, in accordance with the advice received from the audit committee is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 . The directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

all non-audit services have been reviewed by the audit committee to ensure they do not impact the impartiality and objectivity of the auditor, and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants.

During both the current and previous financial year there were no fees paid or payable for non-audit services provided by the auditor.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

DIRECTORS’ REPORT

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 44.

AUDITOR

PKF Hacketts Audit continues in office in accordance with section 327 of the Corporations Act 2001.

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

CA Fernicola Chairman

Brisbane, 19[th] day of September 2017

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AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF SUPERIOR RESOURCES LIMITED

I declare that, to the best of my knowledge and belief, during the year ended 30 June 2017, there have been:

(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.

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PKF HACKETTS AUDIT

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Liam Murphy Partner

Brisbane, 19[th] September 2017

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SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

CORPORATE GOVERNANCE

Corporate Governance practices that form the basis of a comprehensive system of control and accountability for the administration of the Company have been adopted. The Board is committed to administering the policies and procedures with openness and integrity, pursuing the true spirit of corporate governance commensurate with the Company’s needs.

The Company has reviewed its corporate governance practices against the Corporate Governance Principles and Recommendations (3rd edition) published by the ASX Corporate Governance Council.

A description of the Company’s current corporate governance practices is set out in the Company’s corporate governance statement. This statement is available on the Company’s website and can be viewed at www.superiorresources.com.au.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2017

Note Other income 8 Accounting and audit fees Administration expenses Depreciation and amortisation Impairment of available-for-sale financial assets 12 Office rent and outgoings Tenement expenditure written off 14 Loss before income tax Income tax (expense) / benefit 9 Loss for the year from continuing operations attributable to owners of Superior Resources Limited Earnings (loss) per share Basic earnings (loss) per share 29 Diluted earnings (loss) per share 29	2017 $ 2016 $ 2,690 2,437 (35,290) (30,088) (355,221) (344,134) (3,904) (3,700) - (42,000) (22,032) (16,421) (21,728) (2,024,655)
	(435,485) (2,458,561) 19,250 -
	(416,235) (2,458,561)
	Cents Cents (0.12) (1.01) (0.12) (1.01)

The accompanying notes form part of these financial statements.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2017

Note Loss for the year from continuing operations attributable to owners of Superior Resources Limited Other comprehensive income / (loss ) for the year, net of tax Total comprehensive income / (loss) for the year attributable to owners of Superior Resources Limited	2017 $ 2016 $ (416,235) (2,458,561) 50,750 -
	(365,485) (2,458,561)

The accompanying notes form part of these financial statements.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2017

Note ASSETS Current Assets Cash and cash equivalents 10 Trade and other receivables 11 Available-for-sale financial assets 12 Total Current Assets Non-Current Assets Property, plant and equipment 13 Exploration expenditure 14 Other 16 Total Non-Current Assets Total Assets LIABILITIES Current Liabilities Payables 17 Total Current Liabilities Non-Current Liabilities Payables 17 Total Non-Current Liabilities Total Liabilities Net Assets Equity Contributed equity Reserves 19 20 Retained profits (accumulated losses) 21 Total Equity	2017 $ 2016 $ 445,007 98,472 60,059 66,975 98,000 28,000
	603,066 193,447
	13,024 13,710 3,116,578 2,835,635 27,500 25,000
	3,157,102 2,874,345
	3,760,168 3,067,792
	262,646 360,232
	262,646 360,232
	235,288 235,288
	235,288 235,288
	497,934 595,520
	3,262,234 2,472,272
	9,031,677 50,750 7,876,230 - (5,820,193) (5,403,958)
	3,262,234 2,472,272

The accompanying notes form part of these financial statements.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2017

Balance at 1 July 2015 Loss for the year Other comprehensive income / (loss) Total comprehensive income for the year Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs Balance at 30 June 2016 Loss for the year Other comprehensive income / (loss) Total comprehensive income for the year Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs Balance at 30 June 2017	Contributed equity $ Reserves $ Retained profits (accumulated losses) $ Total $ 7,766,926 - (2,945,397) 4,821,529 - - (2,458,561) (2,458,561) - - - -
	- - (2,458,561) (2,458,561) 109,304 - - 109,304
	7,876,230 - (5,403,958) 2,472,272
	- - (416,235) (416,235) - 50,750 - 50,750
	- 50,750 (416,235) (365,485) 1,155,447 - - 1,155,447
	9,031,677 50,750 (5,820,193) 3,262,234

The accompanying notes form part of these financial statements

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2017

Note Cash flows from operating activities Receipts from customers (GST inclusive) Payments to suppliers and employees (GST inclusive) Interest received Net cash inflow(outflow) from operating activities 28 Cash flows from investing activities Payments for exploration expenditure Payments for property, plant and equipment Payment/(refund) of security deposits Net cash inflow(outflow) from investing activities Cash flows from financing activities Proceeds on issue of shares Payment of capital raising costs Proceeds of loan from related party Net cash inflow(outflow) from financing activities Net increase (decrease) in cash held Cash at beginning of financial year Cash at the end of financial year 10	2017 $ 2016 $ 21,900 20,576 (372,262) (154,092) 2,690 2,437
	(347,672) (131,079) (339,022) (293,268) (3,218) (7,446) (2,500) 2,500
	(344,740) (298,214) 1,079,864 170,000 (60,917) 20,000 (1,706) -
	1,038,947 168,294
	346,535 (260,999) 98,472 359,471
	445,007 98,472

Non-cash financing activities

Refer to note 19(a).

The accompanying notes form part of these financial statements.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017

1. General Information

Superior Resources Limited (the Company ) is a company limited by shares, incorporated and domiciled in Australia. The Company’s shares are listed on the Australian Securities Exchange.

The registered office of the Company is:

Unit 8, 61 Holdsworth Street Coorparoo QLD 4151 Ph 07 3847 2887

The principal place of business of the Company is:

Unit 8, 61 Holdsworth Street Coorparoo QLD 4151 Ph 07 3847 2887

The financial statements are for the Group consisting of Superior Resources Limited and its subsidiaries (the consolidated entity or the Group ).

2. Significant Accounting Policies

(a) Statement of compliance

These financial statements are general purpose financial statements which have been prepared in accordance with the Corporations Act 2001, Accounting Standards and Interpretations, and comply with other requirements of the law.

The financial statements comprise the consolidated financial statements of the Group. For the purposes of preparing the consolidated financial statements, the Company is a for-profit entity.

Accounting Standards include Australian Accounting Standards. Compliance with Australian Accounting Standards ensures that the financial statements and notes of the company and the Group comply with International Financial Reporting Standards (‘IFRS’).

The financial statements were authorised for issue by the directors on 19[th] September 2017.

(b) Basis of preparation

The financial statements have been prepared on an accrual basis and under the historical cost convention, as modified where applicable by the revaluation of available-for-sale financial assets, financial assets and liabilities (including derivative instruments) at fair value through profit or loss, certain classes of property, plant and equipment and investment property.

(c) Principles of consolidation

Subsidiaries

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017

2. Significant Accounting Policies (continued)

The acquisition method of accounting is used to account for business combinations by the Group (refer to note 2(o)).

Intercompany transactions, balances and unrealized gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated income statement and statement of comprehensive income, statement of changes in equity and balance sheet respectively.

(d) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable when it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

Interest revenue is recognised using the effective interest rate method.

All revenue is stated net of the amount of goods and services tax (GST).

(e) Income Tax

The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the reporting date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the assets and settle the liability simultaneously.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017

2. Significant Accounting Policies (continued)

(f) Cash and cash equivalents

For the consolidated statement of cash flows presentation purposes, cash and cash equivalents includes cash on hand and deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts.

(g) Investments and other financial assets

Available for sale

Available-for-sale financial assets, comprising principally marketable equity securities, are nonderivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the balance date.

When securities classified as available-for-sale are sold, the accumulated fair value adjustments recognised in other comprehensive income are included in the income statement as gains and losses from investment securities.

Subsequent measurement

Available-for-sale financial assets are subsequently carried at fair value. Gains or losses arising from changes in the fair value of the monetary and non-monetary securities classified as available-for-sale are recognised in other comprehensive income.

Fair value

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.

The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and available-for-sale securities) is based on quoted market prices at the balance date. The quoted market price used for financial assets is the current bid price.

In order to provide an indication about the reliability of the inputs used in determining fair value, the accounting standards prescribe that the Group must classify its financial instruments into three levels of fair value hierarchy.

The Group’s only financial instrument measured at fair value is its shares in Deep Yellow Limited which are classified as Level 1 under the fair value hierarchy, Level 1 represents the fair value, based on a quoted market price, determined by an active market.

Impairment

The Group assesses at each balance date whether there is objective evidence that a financial asset or Group of financial assets is impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of a security below its cost is considered as an indicator that the securities are impaired. If any such evidence exists for available-for-sale financial assets and the Group determines that the financial asset is impaired, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss – is recognised in the income statement. Impairment losses recognised in the income statement on equity instruments classified as availablefor-sale are not reversed through the income statement.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017

2. Significant Accounting Policies (continued)

(h) Plant and equipment

Plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Depreciation is calculated using the straight-line method to allocate their cost, net of their residual values, over their estimated useful lives, as follows:

Equipment / Software 3 – 5 years

The asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the income statement. When revalued assets are sold, it is company policy to transfer the amounts included in other reserves in respect of those assets to retained earnings.

(i) Trade and other payables

These amounts represent liabilities for goods and services provided to the company prior to the end of the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

(j) Exploration expenditure

Expenditure is accumulated separately for each area of interest until such time as the area is abandoned or sold. The realisation of the value of the expenditure carried forward depends on any commercial results that may be obtained through successful development and exploitation of the area of interest or alternatively by its sale. If an area of interest is abandoned or is considered to be of no further commercial interest the accumulated exploration costs relating to the area are written off against income in the year of abandonment. Some exploration expenditure may also be written off where areas of interest are partly relinquished and in cases where uncertainty exists as to the value, provisions for possible diminution in value are established.

(k) Contributed equity

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

(l) Dividends

Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the financial year but not distributed at balance date.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017

2. Significant Accounting Policies (continued)

(m) Earnings per share

(i) Basic earnings per share Basic earnings per share is calculated by dividing the profit/(loss) attributable to equity holders of the Group, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.

(ii) Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

(n) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the statement of financial position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flow.

(o) Business combinations

The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value of any asset or liability resulting from a contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets.

The excess of the consideration transferred and the amount of any non-controlling interest in the acquiree over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired and the measurement of all amounts has been reviewed, the difference is recognised directly in profit or loss as a bargain purchase.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017

2. Significant Accounting Policies (continued)

Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value with changes in fair value recognised in profit or loss.

(p) Employee benefits

(i) Short-term obligations Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liability for annual leave is recognised in the provision for employee benefits. All other short-term employee benefit obligations are presented as payables.

(ii) Other long-term employee benefit obligations The liability for long service leave and annual leave which is not expected to be settled within 12 months after the end of the period in which the employees render the related service is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the end of the reporting period on government bonds with terms and currencies that match, as closely as possible, the estimated future cash outflows.

The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting date, regardless of when the actual settlement is expected to occur.

(q) Parent entity financial information

The financial information for the parent entity, Superior Resources Limited, disclosed in note 31 has been prepared on the same basis as the consolidated financial statements.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017

3. Application of new and revised accounting standards

The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

Any significant impact on the accounting policies of the consolidated entity from the adoption of these Accounting Standards and Interpretations are disclosed below. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the consolidated entity.

Standards and Interpretations in issue not yet adopted

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the consolidated entity for the annual report year ended 30 June 2017.

AASB 15 Revenue from Contracts with Customers

The new standard contains a single model that applies to contracts with customers and two approaches to recognising revenue: at a point in time or over time. The model features a contractbased five-step analysis of transactions to determine whether, how much and when revenue is recognised.

The Group has not yet fully assessed the impact of AASB 15 as this standard does not apply mandatorily before 1 January 2018.

AASB 16 Leases

AASB 16 eliminates the operating and finance lease classifications for lessees currently accounted for under AASB 117 Leases. It instead requires an entity to bring most leases onto its balance sheet in a similar way to how existing finance leases are treated under AASB 117. An entity will be required to recognise a lease liability and a right of use asset in its balance sheet for most leases. There are some optional exemptions for leases with a period of 12 months or less and for low value leases. Lessor accounting remains largely unchanged from AASB 117.

The Group has not yet fully assessed the impact of AASB 16 as this standard does not apply mandatorily before 1 January 2019.

There are no other standards that are not yet effective and that are expected to have a material impact on the consolidated entity in the current or future reporting periods and on foreseeable future transactions.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017

4. Financial risk management

The Group’s overall risk management plan seeks to minimize potential adverse effects due to the unpredictability of financial markets.

The Group does not actively engage in the trading of financial assets for speculative purposes nor does it write options. The most significant financial risks to which the Group is exposed are credit risk, liquidity risk, market risk and cash flow interest rate risk.

The Group holds the following financial asset and liabilities:

Financial assets Cash and cash equivalents Trade and other receivables Available-for-sale financial assets Financial liabilities Trade and other payables	2017 $ 2016 $ 445,007 98,472 60,059 66,975 98,000 28,000
	603,066 193,447
	497,934 595,520
	497,934 595,520

Risk management is carried out by the Group’s finance function under policies and objectives which have been approved by the Board of Directors. The Managing Director has been delegated the authority for designing and implementing processes which follow the objectives and policies.

The Board receives monthly reports which provide details of the effectiveness of the processes and policies in place.

Credit risk

Credit risk is the risk of loss from a counter-party failing to meet its financial obligations to the Company.

The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognized financial assets is the carrying amount of those assets, net of any provision for doubtful debts, as disclosed in the balance sheet and notes to the financial statements.

Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions. For bank and financial institutions, only independently rated parties with a minimum rating of ‘A’ are accepted.

The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available).

Cash at bank and short-term bank deposits	2017 $ 2016 $ 445,007 98,472
	445,007 98,472

Other than cash and cash equivalents, the most significant other financial assets are trade and other receivables. The Group does not have any material credit risk exposure to any single debtor or Group of debtors under financial instruments entered into by the Group. There were no past due debts at balance date requiring consideration of impairment provisions.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017

4. Financial risk management (continued)

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities to meet obligations when due. At the end of the reporting period the Group held deposits at call of $34,839 (2015: $95,099) that are expected to readily generate cash inflows for managing liquidity risk.

The Group manages liquidity risk by continuously monitoring forecast and actual cash flows. No finance facilities were available to the Group at the end of the reporting period.

Maturities of financial liabilities

The table below analyses the Group’s financial liabilities into relevant maturity groupings.

Contractual maturities	Contractual maturities		Less	6 – 12	Between	Between	Between	Between	Over 5	Over 5	Total	Carrying
of financial liabilities			than 6	months	1 and 2	2 and	5		years		contractual	amount
			months		years	years					cash flows
At 30 June 2017			$	$	$	$			$		$	$
Trade and other payables			239,663	22,983	235,288			-		-	497,934	497,934
			239,663	22,983	235,288			-		-	497,934	497,934
At 30 June 2016
Trade and other payables			329,556	30,676	235,288			-		-	595,520	595,520
			329,556	30,676	235,288			-		-	595,520	595,520
Market risk
The Group is exposed to equity securities price risk. This arises from investments held by the Group in
Deep Yellow Limited and		classified on the statement of financial position as available-for-sale financial
assets. The Group	is not exposed to commodity				price risk.
The table below summaries the impact				of increases/decreases in the			Deep Yellow Limited share					price
on the Group’s total comprehensive income / (loss) for the year and on equity. The analysis is based
on the assumption	that the		share price	had increased/decreased by 25%					(2016	– 25%) from balance
date fair value with	all other variables held constant.
			Impact on post-tax loss					Impact on reserves
		2017		2016			2017				2016
			$		$			$			$
	+25%		-25%	+25%	-25%	+25%			-25%		+25% -25%
Investment in
Deep Yellow	6,737		(6,737)	7,000	(7,000)	17,763		(17,763)			-	-
Limited

Cash flow and fair value interest rate risk

As the Group has no significant interest-bearing assets or borrowings, the Group’s income and operating cash flows are not materially exposed to changes in market interest rates.

At 30 June 2017, if interest rates had changed by -/+ 100 basis points from the year-end rates with all other variables held constant, post-tax loss for the year would have been $2,717 lower/higher (2016 – change of 100 bps $2,290 higher/lower), as a result of higher/lower interest income from cash and cash equivalents.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017

4. Financial risk management (continued)

Fair value measurements

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. The net fair value of financial assets and financial liabilities approximates their carrying values as disclosed in the consolidated statement of financial position and notes to the financial statements.

5. Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.

Critical judgements in applying the entity’s accounting policies

The Group has capitalised exploration expenditure of $3,116,578 (2016: $2,835,635). This amount includes costs directly associated with exploration. These costs are capitalised as an intangible asset until assessment and/or drilling of the permit is complete and the results have been evaluated. These costs include employee remuneration, materials, rig costs, delay rentals and payments to contractors. The expenditure is carried forward until such a time as the area moves into the development phase, is abandoned or sold. Given exploration activities have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of recoverable resources and the difficulty in forecasting cash flows to assess the fair value of exploration expenditure there is uncertainty as to the carrying value of exploration expenditure. The ultimate recovery of the carrying value of exploration expenditure is dependent upon the successful development and commercial exploitation or, alternatively, sale of the interest in the tenements.

6. Going concern

Notwithstanding that the Group incurred an operating loss after tax of $416,235 (2016: loss of $2,458,561) these financial statements have been prepared on a 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.

The ability of the consolidated entity to continue as a going concern is dependent upon one or more of the following:

achieving sufficient future cash flows from operations to enable its obligations to be met;
the success of cost saving initiatives, which include entering into Joint Venture arrangements and reducing tenement areas, so as to reduce the carrying and expenditure costs for tenements, and
obtaining additional funding from capital raising activities.

The Directors acknowledge that to continue the exploration and development of the Group’s exploration projects, the budgeted cash flows from operating and investing activities for the future will necessitate further capital raisings. In addition, the directors have agreed to retain 50% of their salary payments until the Group has sufficient cash reserves to meet its operational commitments for at least the next 12 months.

At the date of this report and having considered the above factors, the directors are confident of achieving the above and that the Group will be able to continue as a going concern.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017

6. Going concern (continued)

In the event that the Group is unable to satisfy future funding requirements there exists a material uncertainty that may cast significant doubt on the Group’s ability to continue as a going concern with the result that the Group may be required to realise its assets at amounts different from those currently recognised, settle liabilities other than in the ordinary course of business and make provisions for costs which may arise as a result of cessation or curtailment of normal business operations.

7. Segment information

The Group operates solely within one segment, being the mineral exploration industry in Australia.

	2017	2016
	$	$
8. Other income
Interest	2,690	2,437
9. Income tax
	2017	2016
	$	$
(a) Numerical reconciliation of income tax expense / (benefit)
to prima facie tax payable
Profit (loss) from continuing operations before income tax expense	(435,485)	(2,458,561)
Tax at the Australian tax rate of 27.5% (2016: 30%)	(119,758)	(737,568)
Recognition of deferred tax assets not previously recognised	(19,250)	-
Adjustments for current tax of prior years	(662)	-
Adjustment to deferred tax assets and liabilities for tax losses and
temporary differences not recognised	120,420	737,568
Income tax expense / (benefit)	(19,250)	-
(b) Tax adjustment relating to items of other comprehensive
income
Available-for-sale financial assets – fair value adjustment	19,250	-
(c) Tax losses
Unused tax losses for which no deferred tax asset has been
recognised	6,731,323	6,295,017
Potential tax benefit at 27.5% (2016: 30%) (note 15)	1,851,114	1,888,505
(d) Franking credits
Franking credits available for use in subsequent financial years
based on a tax rate of 27.5% (2016: 30%)
	251,146	251,146

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017

10. Current assets - Cash and cash equivalents Cash at bank and on hand 11. Current assets - Trade and other receivables Other receivables Prepayments 12. Current assets – Available-for-sale financial assets Listed equity securities At beginning of year Impairment of available-for-sale financial asset Revaluation increment recognised in reserves At end of year 13. Non-current assets – Property, plant and equipment Equipment / software – at cost Accumulated depreciation Year ended 30 June 2017 Opening net book amount Additions Depreciation charge Closing net book amount Year ended 30 June 2016 Opening net book amount Additions Depreciation charge Closing net book amount	2017 $ 2016 $ 445,007 98,472
	2017 $ 2016 $ 10,818 13,200 49,241 53,775
	60,059 66,975
	2017 $ 2016 $ 98,000 28,000
	28,000 70,000 - (42,000) 70,000 -
	98,000 28,000
	2017 $ 2016 $ 82,457 79,239 (69,433) (65,529)
	13,024 13,710
	Equipment / Software $ 13,710 3,218 (3,904) 13,024 9,964 7,446 (3,700) 13,710

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017

14. Non-current assets – Exploration expenditure

Exploration phase property costs Deferred geological, geophysical, drilling and other expenditure – at cost The capitalised exploration expenditure carried forward above has been determined as follows: Opening balance Expenditure incurred during the year Exploration abandoned 15. Non-current assets – Deferred tax assets Deferred tax assets The balance comprises temporary differences attributable to: Amounts recognised in profit or loss Accruals Employee entitlements Business capital costs Tax losses Amounts recognised in equity Business capital costs Tax losses Total deferred tax assets Set-off of deferred tax assets/liabilities pursuant to set-off provisions (note 18) Net adjustment to deferred tax assets for tax losses not recognised Net deferred tax assets	2017 $ 2016 $ 3,116,578 2,835,635
	2,835,635 302,671 (21,728) 4,461,254 399,036 (2,024,655)
	3,116,578 2,835,635
	2017 $ 2016 $ - -
	17,395 6,320 25,570 2,626,026 28,421 9,203 21,089 2,644,762 24,993 41,059 21,151 30,380
	2,741,363 (890,249) (1,851,114) 2,755,006 (866,501) (1,888,505)
	- -

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017

15. Non-current assets – Deferred tax assets (continued)

At 30 June 2015 (Charged)/credited to profit or loss (Charged)/credited to contributed equity At 30 June 2016 (Charged)/credited to profit or loss (Charged)/credited to contributed equity At 30 June 2017 16. Non-current assets – Other Security deposits 17. Payables Current liabilities Trade payables Other payables Other payables – related party (i) Employee entitlements Non-current liabilities Other payables – related party (ii) Total Payables	Accruals $ Employee entitlements $ Business capital costs $ Tax losses incurred $ Total $ 13,232 5,854 51,763 2,447,232 2,518,081 15,189 3,349 271 217,604 236,413 - - (9,794) 10,306 512	Accruals $ Employee entitlements $ Business capital costs $ Tax losses incurred $ Total $ 13,232 5,854 51,763 2,447,232 2,518,081 15,189 3,349 271 217,604 236,413 - - (9,794) 10,306 512
	28,421 9,203 (11,026) (2,883) - -	42,240 2,675,142 2,755,006 4,481 (18,736) (28,164) 3,842 10,679 14,521
	17,395 6,320	50,563 2,667,085 2,741,363
		2017 $ 2016 $ 27,500 25,000
		2017 $ 2016 $ 86,478 165,416 35,528 113,632 117,657 50,508 22,983 30,676
		262,646 360,232
		235,288 235,288
		235,288 235,288
		497,934 595,520

(i) These amounts represent the unpaid directors’ remuneration that may be called within the next 12 months. The liability is unsecured and no decision has been made by the directors on the timing or nature of the consideration to be provided in settlement.

(ii) These amounts represent the unpaid directors’ remuneration for periods to 30 June 2016. The directors have agreed that they will not call upon the payment of this balance outstanding for a period of not less than 12 from the date of this report.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017

18. Non-current liabilities – Deferred tax liabilities Deferred tax liabilities The balance comprises temporary differences attributable to: Amounts recognised in profit or loss Exploration expenditure Investment Prepayments Property, plant and equipment Amounts recognised in other comprehensive income Available-for-sale financial assets Total deferred tax liabilities Set-off of deferred tax assets/liabilities pursuant to set-off provisions (note 15) Net deferred tax liabilities	2017 $ 2016 $ - -
	857,059 (2,175) 13,542 2,573 850,690 (2,372) 15,376 2,807 19,250 -
	890,249 (890,249) 866,501 (866,501)
	- -

At 30 June 2015 Charged/(credited) to profit or loss Charged /(credited) to other comprehensive income At 30 June 2016 Charged/(credited) to profit or loss Charged /(credited) to other comprehensive income At 30 June 2017	Exploration expenditure $ Available -for-sale financial assets $ Prepayments $ Property, plant and equipment $ Total $ 1,338,376 10,228 16,245 2,807 1,367,656 (487,686) (12,600) (869) - (501,155) - - - - -
	850,690 (2,372) 15,376 2,807 866,501 6,369 197 (1,834) (234) 4,498 - 19,250 - - 19,250
	857,059 17,075 13,542 2,573 890,249

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017

9. Contributed equity 463,421,804 (2016: 249,762,372) ordinary shares fully paid	2017 $ 2016 $ 9,031,677 7,876,230

19. Contributed equity

(a) Movements in ordinary share capital:

(a) Movements in ordinary share capital:
Date Details	Number of shares Issue Price $ $
At 30 June 2015 Balance 29 Jan-16 Shares issued Share issue expenses At 30 June 2016 Balance 14 Jul-16 Shares issued 16 Dec-16 Shares issued 20 Dec-16 Shares issued 20 Dec-16 Shares issued 11 May-17 Shares issued Share issue expenses At 30 June 2017 Balance	238,661,372 7,766,926 11,101,000 0.0100 111,010 (1,706)
	249,762,372 7,876,230 29,375,000 0.0080 235,000 8,000,000 0.0080 64,000 83,600,000 0.0050 418,000 5,800,000 0.0050 29,000 86,884,432 0.0055 477,864 (68,417)
	463,421,804 9,031,677

A total of $1,155,447 was raised of which $1,011,447 was received as cash (net of share issue costs of $68,417), $70,000 was received as cash prior to 1 July 2016, $64,000 was received by way of offset against amounts owing to related parties and $10,000 was received by way of offset against an amount owing to a trade creditor.

(b) Ordinary shares:

Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the company in proportion to the number of and amounts paid on the shares held.

On a show of hands every holder of ordinary shares present at a meeting, in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

(c) Share options

On 16 December 2016 the Company issued 37,375,000 options, being a free attaching option to each new share issued to sophisticated investors and Directors on 14 July and 16 December 2016. The options were subject to shareholder approval which was obtained at the Company AGM on 17 November 2016.

The options have an exercise price of 3.0 cents and expire on 30 June 2019. The options carry no dividend or voting rights. Each option is convertible into one ordinary share.

(d) Capital risk management

The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that they can continue to provide returns for shareholders, benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

The capital structure of the Group includes cash and cash equivalents, equity attributable to equity holders, comprising of contributed equity, reserves and accumulated losses. In order to maintain or adjust the capital structure, the Group may issue new shares, sell assets to reduce debt or adjust the level of activities undertaken by the company.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017

19. Contributed equity (continued)

The Group monitors capital on the basis of cash flow requirements for operational, and exploration and evaluation expenditure. The Group’s exposure to borrowings as at 30 June 2017 totals $nil (2016: $nil). The Group will continue to use capital market issues and joint venture participant funding contributions to satisfy anticipated funding requirements.

The Group’s strategy to capital risk management is unchanged from prior years.

0. Reserves Available-for-sale investments revaluation reserve At beginning of year Revaluation increment (note 12) Income tax @ 27.5% At end of year 1. Retained profits (accumulated losses) Retained profits / (accumulated losses) At beginning of year Net profit / (loss) for the year At end of year	2017 $ 2016 $ 50,750 -
	- - 70,000 - (19,250) -
	50,750 -
	2017 $ 2016 $ (5,820,193) (5,403,958)
	(5,403,958) (2,945,397) (416,235) (2,458,561)
	(5,820,193) (5,403,958)

20. Reserves

21. Retained profits (accumulated losses)

22. Joint venture entities

Tick Hill Gold Project (THGP)

On 17 June 2013, the consolidated entity entered into an Exploration Farm-In and Joint Venture Agreement (JVA) over the THGP with Diatreme Resources Limited (DRX). The commencement of the JVA was subject to certain conditions to be satisfied.

Formal arrangements between DRX and MIM Holdings Limited (MIM) for the transfer of Tick Hill mining leases were finalised by the signing of a Sale Implementation Deed between those parties on 7 November 2014. The transfer of the mining leases to DRX from MIM was completed on 20 March 2015.

On 30 January 2015, the consolidated entity and DRX confirmed that the remaining conditions of the JVA had been waived and as a result, the consolidated entity was entitled to commence earning into the THGP from 1 January 2015.

Under the JVA the consolidated entity has the right to earn a 50% interest in the THGP by spending a minimum of $750,000 on exploration, which will include substantial drilling over a two year earn-in period (which can be extended by agreement). All expenditure incurred by the consolidated entity on the Surface Gold Project (involving the tailings, alluvial-colluvial gold and all other surface sources of gold) will constitute earn-in expenditure and will be counted towards the $750,000 minimum earn-in obligation. During the earn-in period the consolidated entity will have sole and exclusive right to access

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017

22. Joint venture entities (continued)

and conduct exploration on the THGP as well as to determine the nature of the exploration programs. Upon a transfer of a 50% interest in the THGP, the consolidated entity will be required to pay DRX $100,000 and an amount equal to 50% of the government security bond on the mining leases.

MIM retains a royalty on gold produced from the mining leases, which is set at a variable rate depending on the annual grade of gold produced from mining. The royalty applies initially to gold produced above 5g/t Au and then, after payment of royalties totalling $5m, to gold produced above 10g/t Au. A separate royalty rate applies to gold produced from tailings resulting from previous mining.

Under the terms of the JVA, the Earn-in Period ended on 31 December 2016. The parties to the JVA have agreed to a 12-month extension to the Earn-in Period until 31 December 2017.

The consolidated entity had not earned any interest in the joint venture as at 30 June 2017.

Nicholson Project

On 3 November 2015 the consolidated entity entered into a Farm-in and Joint Venture Agreement with Teck Australia Pty Ltd (Teck Australia) to explore Superior’s Nicholson Project (zinc-lead-copper) in north-west Queensland, subject to certain conditions to be satisfied.

Under the original terms of the Agreement, Teck Australia has an exclusive right to earn a 70% interest in the project tenements by spending $2,500,000 in accordance with the following structure:

Initial Period - incurring $250,000 minimum expenditure to be spent on exploration or paid in cash to Superior Resources by 30 September 2016 (subsequently extended to 31 December 2016); and
Earn-In Period - incurring $2,250,000 in operational expenditure before 31 December 2018.

During November 2016 Teck Australia confirmed that it had completed the $250,000 expenditure for the Initial Period per the Joint Venture Agreement and that it will commit to the Earn-In Period which requires expenditure of a further $2,250,000 on or before 31 December 2018.

On satisfaction of the earn-in rights by Teck Australia, the parties will be in a 70:30 (Teck Australia: Superior Resources) joint venture.

Teck Australia had not earned any interest in the joint venture as at 30 June 2017.

23. Key Management Personnel disclosures

(a) Key management personnel compensation

a) Key management personnel compensation
Short-term employee benefits Post-employment benefits	2017 $ 2016 $ 280,918 289,918 22,127 22,127
	303,045 312,045

Detailed remuneration disclosures are provided in the remuneration report on pages 38 to 41. At 30 June 2017 $396,945 remains payable (2016: $281,796).

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017

23. Key Management Personnel disclosures (continued)

(b) Equity instrument disclosures relating to key management personnel

(i) Options provided as remuneration and shares issued on exercise of such options

There have been no options granted affecting remuneration in the current or a future reporting period.

(ii) Option holdings

The numbers of options over ordinary shares in the company held during the financial year by each Director of Superior Resources Limited and other key management personnel of the Group, including their personally related parties, is set out below. There were no options on issue during the previous financial year.

financial year.
2017	Balance at the	Options
	start of the	Exercised		Net purchased	Other changes	Balance at the
Name	_year _			/ (sold)		_end of the year _
*Directors of*	*Superior Resources*	*Limited*
PH Hwang	-		-	4,250,000	-	4,250,000
CA Fernicola	-		-	3,750,000	-	3,750,000
KJ Harvey	-		-	-	-	-

(iii) Share holdings

The number of ordinary shares in the company held during the financial year by each Director of Superior Resources Limited and other key management personnel of the Group, including their personally related parties, is set out below.

2017	Balance at the	Received on
	start of the	exercising	Net purchased	Other changes	Balance at the
Name	_year _	options	/ (sold)		_end of the year _
*Directors of Superior Resources*		*Limited*
PH Hwang	6,677,974	-	11,400,000	-	18,077,974
CA Fernicola	10,340,000	-	13,160,000	-	23,500,000
KJ Harvey	19,454,432	-	3,000,000	-	22,454,432
2016	Balance at the	Received on
	start of the	exercising	Net purchased	Other changes	Balance at the
Name	_year _	options	/ (sold)		_end of the year _
*Directors of Superior Resources*		*Limited*
P H Hwang	4,677,974	-	2,000,000	-	6,677,974
C A Fernicola	9,340,000	-	1,000,000		10,340,000
K J Harvey	18,454,432	-	1,000,000	-	19,454,432
D J Horton*	3,662,500	-	-	3,662,500	-
(* Retired 16
November 2015)

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017

24. Remuneration of auditors

During the year the following fees were paid or payable for services provided by the auditor, its related practices and nonrelated audit firms:

PKF Hacketts Audit Audit or review of financial report	2017 $ 2016 $ 29,000 29,800
	29,000 29,800

25. Contingencies

There are no contingent liabilities affecting the Group as at the date of this report.

26. Commitments

Exploration commitments

So as to maintain current rights to tenure of various exploration and mining tenements, the company will be required to outlay amounts in respect of tenement rent to the relevant governing authorities and to meet certain annual exploration expenditure commitments. These outlays (exploration expenditure and rent), which arise in relation to granted tenements, inclusive of tenement applications granted subsequent to 30 June 2017, are as follows:

Exploration expenditure commitments Commitments for payments under exploration permits for minerals in existence at the reporting date but not recognised as liabilities payable is as follows: Payable within one year Payable between one and five years	2017 $ 2016 $ 741,767 2,127,895 834,633 2,978,880
	2,869,662 3,813,513

Outlays may be varied from time to time, subject to approval of the relevant government departments, and may be relieved if a tenement is relinquished or certain contractual arrangements are entered into with third parties (e.g. a farm-in or joint venture arrangement). Cash security bonds totalling $27,500 (2016: $25,000) are currently held by the relevant governing authorities to ensure compliance with 6granted tenement conditions.

27. Events occurring after the balance date

No matter or circumstance has arisen since the end of the financial year that has significantly affected or may significantly affect the operations of the company, the results of the operations or the state of affairs of the company in financial years subsequent to 30 June 2017.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017

28. Reconciliation of profit / (loss) after income tax to net cash flows from operating activities

Profit / (loss) for the year Depreciation and amortisation Exploration abandoned Impairment of available-for-sale financial assets Income tax Changes in operating assets and liabilities: (Increase) / decrease in other receivables (Increase) / decrease in prepayments Increase/(decrease) in trade payables Increase/(decrease) in other payables - current Increase/(decrease) in other payables - non-current Increase / (decrease) in employee entitlements Net cash outflow from operating activities 29. Earnings (loss) per share (a) Basic earnings (loss) per share Profit (loss) attributable to the ordinary equity holders of the company (b) Diluted earnings (loss) per share Profit (loss) attributable to the ordinary equity holders of the company (c) Reconciliations of earnings (loss) used in calculating earnings per share Basic earnings (loss) per share Profit (loss) attributable to ordinary equity holders of the company used in calculating basic earnings per share Diluted earnings(loss) per share Profit (loss) attributable to ordinary equity holders of the company used in calculating diluted earnings per share	2017 $ 2016 $ (416,235) (2,458,561) 3,904 3,700 21,728 2,024,655 - 42,000 (19,250) 3,291 (6,821) (2,567) 2,865 (12,411) 39,415 81,561 (24,782) - 235,288 (7,693) 11,162
	(347,672) (131,079)
	2017 2016 Cents Cents (0.12) (1.01)
	(0.12) (1.01)
	2017 $ 2016 $ (416,235) (2,458,561)
	(416,235) (2,458,561)

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017

29. Earnings (loss) per share (continued)

9. Earnings (loss) per share (continued)
(d) Weighted average number of shares used as the denominator Weighted average number of ordinary shares used as the denominator in calculating basic earnings (loss) per share Adjustments for calculation of diluted earnings (loss) per share: Options Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating diluted earnings (loss) per share	2017 Number 2016 Number 341,820,745 243,332,285 - -
	341,820,745 243,332,285

9. Earnings (loss) per share (continued)

(d) Weighted average number of shares used as the
denominator
Weighted average number of ordinary shares used as the
denominator in calculating basic earnings (loss) per share
Adjustments for calculation of diluted earnings (loss) per share:
Options
Weighted average number of ordinary shares and potential
ordinary shares used as the denominator in calculating diluted
earnings (loss) per share

2017
Number
2016
Number
341,820,745
243,332,285
-
-

341,820,745
243,332,285

The 37,375,000 options granted on 16 December 2016 are not included in the calculation of diluted earnings per share because they are antidilutive for the year ended 30 June 2017. These options could potentially dilute basic earnings per share in the future.

30. Related party disclosures

(a) Parent entity

The parent entity within the Group is Superior Resources Limited.

(b) Subsidiaries

The consolidated financial statements include the financial statements of Superior Resources Limited and the subsidiary listed in the following table:

Superior Gold Pty Ltd	% equity interest Investment Country of incorporation 2017 2016 2017 $ 2016 $
	Australia 100 100 1,000 1,000 Ordinary shares

(c) Key management personnel

Disclosures relating to key management personnel are set out in note 23.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017

31. Parent entity information

(a) Summary financial information

The individual financial statements for the parent entity show the following aggregate amounts:

Statement of financial position Assets Current assets Non-current assets Total assets Liabilities Current liabilities Non-current liabilities Total liabilities Shareholders’ equity Issued capital Reserves Retained profits/(accumulated losses) Statement of profit or loss and other Comprehensive Income Loss for the year Other comprehensive income/(loss) net of tax Total comprehensive income/(loss) for the year	2017 $ 2016 $ 587,994 3,176,308 193,078 2,878,422 3,764,302 3,071,500 262,646 359,986 235,288 235,288 497,934 595,274 9,031,677 7,876,230 50,750 (5,816,059) - (5,400,004)
	3,266,368 2,476,226
	(416,055) (2,458,224) 50,750 -
	(365,305) (2,458,224)

(b) Contingent liabilities of the parent entity The parent entity did not have any contingent liabilities as at 30 June 2017 or 30 June 2016.

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

DIRECTORS’ DECLARATION

In the directors’ opinion:

the financial statements and notes set out on pages 46 to 73, are in accordance with the Corporations Act 2001, including:
(a) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and
(b) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2017 and of its performance for the financial year ended on that date, and
having regard to note 6 to the financial statements, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

Note 2(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board.

The directors have been given the declarations by the chief executive officer/chief financial officer required by section 295A of the Corporations Act 2001.

This declaration is made in accordance with a resolution of the directors.

CA Fernicola Chairman

Brisbane, 19[th ] September 2017

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INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF SUPERIOR RESOURCES LIMITED

Report on the Financial Report

Opinion

We have audited the accompanying financial report of Superior Resources Limited (“the company”), which comprises the consolidated statement of financial position as at 30 June 2017, the consolidated income statement, consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the company and the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.

In our opinion the financial report of Superior Resources Limited is in accordance with the Corporations Act 2001, including:

i) Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2017 and of its performance for the year ended on that date; and
ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. Our responsibilities under those standards are further described in the Auditor’s Responsibility section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of matter

Without modifying our opinion, we draw attention to the consolidated entity’s incurred losses of $416,235 and operating cash outflows of $347,672 for the year ended 30 June 2017. These conditions as described in Note 6 to the financial statements, 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, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business.

The financial report of the consolidated entity does not include any adjustments in relation 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.

Independence

We are independent of the consolidated entity in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

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Key Audit Matter

A key audit matter is a matter that, in our professional judgement, was of most significance in our audit of the financial report of the current period. This matter was addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter. For each matter below, our description of how our audit addressed the matter is provided in that context.

Carrying value of capitalised exploration expenditure

Why significant

How our audit addressed the key audit matter

As at 30 June 2017 the carrying value of exploration and evaluation assets was $3,116,578 (2016: $2,835,635), as disclosed in Note 14. This represents 83% of total assets of the consolidated entity.

The consolidated entity’s accounting policy in respect of exploration and evaluation expenditure is outlined in Note 2 (i).

Significant judgement is required:

in determining whether facts and circumstances indicate that the exploration and evaluation assets should be tested for impairment in accordance with Australian Accounting Standard AASB 6 Exploration for and Evaluation of Mineral Resources (“AASB 6”); and
in determining the treatment of exploration and evaluation expenditure in accordance with AASB 6, and the consolidated entity’s accounting policy. In particular:
whether the particular areas of interest meet the recognition conditions for an asset; and
which elements of exploration and evaluation expenditures qualify for capitalisation for each area of interest.

Our work included, but was not limited to, the following procedures:

Conducting a detailed review of management’s assessment of impairment trigger events prepared in accordance with AASB 6 including:
assessing whether the rights to tenure of the areas of interest remained current at reporting date as well as confirming that rights to tenure are expected to be renewed for tenements that will expire in the near future;
holding discussions with the directors and management as to the status of ongoing exploration programmes for the areas of interest, as well as assessing if there was evidence that a decision had been made to discontinue activities in any specific areas of interest; and
obtaining and assessing evidence of the consolidated entity’s future intention for the areas of interest, including reviewing future budgeted expenditure and related work programmes;
considering whether exploration activities for the areas of interest had reached a stage where a reasonable assessment of economically recoverable reserves existed;
testing, on a sample basis, exploration and evaluation expenditure incurred during the year for compliance with AASB 6 and the consolidated entity’s accounting policy; and
assessing the appropriateness of the related disclosures in Note 2(j) and 14.

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Other Information

Other information is financial and non-financial information in the annual report of the consolidated entity which is provided in addition to the Financial Report and the Auditor’s Report. The directors are responsible for Other Information in the annual report.

The Other Information we obtained prior to the date of this Auditor’s Report was the Director’s Report and Shareholder Information. The remaining Other Information is expected to be made available to us after the date of the Auditor’s Report.

Our opinion on the Financial Report does not cover the Other Information and, accordingly, the auditor does not and will not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report.

In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We are required to report if we conclude that there is a material misstatement of this Other Information in the Financial Report and based on the work we have performed on the Other Information that we obtained prior the date of this Auditor’s Report we have nothing to report.

Directors’ Responsibilities for the Financial Report

The Directors of the company are responsible for the preparation of the 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 financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 1, the Directors also state, in accordance with Australian Accounting Standard AASB 101 Presentation of Financial Statements, that the financial report complies with International Financial Reporting Standards.

In preparing the financial report, the Directors are responsible for assessing the consolidated entity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using a going concern basis of accounting unless the Directors either intend to liquidate the consolidated entity or to cease operations, or have no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Report

Our responsibility is to express an opinion on the financial report based on our audit. Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report.

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Auditor’s Responsibilities for the Audit of the Financial Report (continued)

The procedures selected depend on the auditor’s judgement, including assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.

The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report.

We conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the consolidated entity’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the consolidated entity to cease to continue as a going concern.

We evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.

We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the consolidated entity to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

The Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements. We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

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Report on the Remuneration Report

Opinion

We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2017.

In our opinion, the Remuneration Report of Superior Resources Limited for the year ended 30 June 2017, complies with section 300A of the Corporations Act 2001.

Responsibilities

The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

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PKF HACKETTS AUDIT

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Liam Murphy Partner

Brisbane, 19[th] September 2017

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

SHAREHOLDER INFORMATION

Shareholder Information

The information set out below was applicable at 22 September 2017.

A. DISTRIBUTION OF EQUITY SECURITIES

Analysis of numbers of equity security holders by size of holding:

Class of security - Ordinary Shares	Number of Holders
Range
1 - 1,000	16
1,001 - 5,000	8
5,001 - 10,000	103
10,001 - 100,000	209
100,001 and over	240
Total	576

The number of holders holding less than a marketable parcel of ordinary shares was 311 and they held 7,516,396 securities.

B. EQUITY SECURITY HOLDERS

Total of Ordinary Shares on Issue 463,421,804.

Twenty largest equity security holders

The names of the twenty largest holders of equity securities are listed below:

Name	Ordinary	Shares
	Number	Percent
Yarraandoo Pty Ltd	23,000,000	4.96
KJ Harvey & Associates Pty Ltd	22,454,432	4.85
Mr Terry Taylor & Mrs Lynda Louise Taylor	15,000,000	3.24
BT Portfolio Services Limited	14,250,000	3.07
J Moody Nominees Pty Ltd	13,500,000	2.91
HBH Family Pty Ltd HBH Investment	13,233,333	2.86
Jorlyn Investments Pty Ltd	11,000,000	2.37
BT Portfolio Services Limited	10,375,000	2.24
Mr Lindsay William Antoniolli & Mrs Diane Antoniolli	10,080,000	2.18
Dr Leon Eugene Pretorius	10,000,000	2.16
Terra Search Pty Ltd	9,838,333	2.12
Mr Simon David Beams & Mr Richard Hutton Lesh & Mr David Randal Jenkins S/F A/C>	8,516,666	1.84
Capital Financial Advisers Pty Ltd	8,088,693	1.75
Mr Simon David Beams & Mrs Ellen Mary Beams	7,600,000	1.64
Mr John Joseph Scholl & Mrs Patricia Joy Scholl The Scholl Family Superannuation Fund	7,250,000	1.56
Mr Carlos Alberto Fernicola & Mrs Kerrie Alison Fernicola	6,461,000	1.39
Gecko Resources Pty Ltd	5,500,000	1.19
Dr Leon Eugene Pretorius	5,500,000	1.19
Tranquil Plus Pty Ltd DG Roberts Superannuation Fund	5,150,000	1.11
Mr Jeffrey Howard Latimer & Mrs Judith Ann Latimer	5,100,000	1.10
Donald Cameron McIntosh	5,000,004	1.08
Total	216,897,461	46.80

Page | 80

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

SHAREHOLDER INFORMATION

Unquoted equity securities

	Unquoted Options	Number on	Number
		Issue	of
			Holders
Unlisted $0.03	options exercisable on or before 30 June 2019	37,375,000	19

Holders of greater that 20% of the unquoted equity securities

There were no holders with greater than 20% of the unlisted equity securities of Superior Resources Limited at the date of this report.

C. SUBSTANTIAL HOLDERS

Substantial holders of the company’s securities are set out below:

Shareholder		Ordinary Shares
	Number Held	Percentage of Issued Shares
Simon David Beams	32,846,667	7.09
Carlos Alberto Fernicola	23,500,000	5.07

D. VOTING RIGHTS

The voting rights attaching to each class of equity securities are set out below

(a) Ordinary shares

On a show of hands each member present at a meeting in person or by proxy shall have one vote and on a poll each share shall have one vote.

(b) Options

No voting rights

Page | 81

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

MINERAL RESOURCES STATEMENT

Tenement Schedule

Current interests in tenements held by Superior Resources Limited and its subsidiaries as at 22 September 2017 are set out below.

All tenements are located within Queensland. Exploration Permits for Minerals held are for all minerals other than coal.

Tenement	Name	Project	Date of	Date of	Area	Holder	SPQ
			Grant	Expiry			Interest
Northwest Queensland
EPM156701	Hedleys 2	Nicholson	21 Aug 06	20 Aug 24	186 km2	SPQ	100%
EPM182031	Hedleys South	Nicholson	29 May 14	27 May 21	126 km2	SPQ	100%
EPM18840	Harris Creek	Victor	9 May 12	8 May 20	39 km2	SPQ	100%
EPM19097	Tots Creek	Victor	27 Nov 14	26 Nov 19	354 km2	SPQ	100%
EPM19214	Scrubby Creek	Victor	27 Nov 14	26 Nov 19	300 km2	SPQ	100%
EPM25264	Tomahawk Creek	Victor	24 Dec 15	23 Dec 20	300 km2	SPQ	100%
EPM25843	W Creek	Victor	24 Dec 15	23 Dec 20	75 km2	SPQ	100%
ML70942	Tick Hill 1	Tick Hill	20 Jun 91	30 Jun 21	130 ha	DRX	0%
ML70962	Tick Hill 2	Tick Hill	20 Jun 91	30 Jun 21	130 ha	DRX	0%
ML70972	Tick Hill 3	Tick Hill	20 Jun 91	30 Jun 21	130 ha	DRX	0%
Northeast Queensland
EPM18987	Cockie Creek	Greenvale	25 Sep 13	24 Sep 18	171 km2	SPQ	100%
EPM19247	Cassidy Creek	Greenvale	28 May 13	27 May 18	90 km2	SPQ	100%
EPM25659	Dinner Creek	Greenvale	21 Apr 15	20 Apr 20	192 km2	SPQ	100%
EPM25691	Wyandotte	Greenvale	7 Apr 15	6 Apr 20	90 km2	SPQ	100%
EPM26165	Cockie South	Greenvale	30 Jan 17	29 Jan 22	108 km2	SPQ	100%
ML6750	One Mile	Greenvale	1 Nov 92	31 Oct 17	128 ha	SPQ	100%

Notes

Farm-in and Joint Venture Agreement Teck Australia Pty Ltd earning rights to a 70% interest in EPM15670 and EPM18203.
Farm-in and Joint Venture Agreement Superior Resources Limited earning rights to a 50% interest in ML7094, ML7096 and ML7097.

Abbreviations:

SPQ Superior Resources Limited DRX Diatreme Resources Limited EPM Exploration Permit for Minerals

ML Mining Lease ha hectare

Page | 82

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

MINERAL RESOURCES STATEMENT

Mineral Resources Statement

Mineral Resources at 30 June 2017

Project	Resource	Cut-off	Quantity	Average	Notes
	category	grade	tonnes	grade
Cockie Creek Copper	Inferred	0.25% Cu	13,000,000	0.42% Cu	1, 2
Tick Hill Gold Project Tailings	Indicated	0.5g/t Au	630,000	1.08g/t Au	3, 4

Notes:

Cockie Creek Copper Prospect lies approximately 5km northeast of Superior’s “One Mile” mining lease, ML6750, within granted EPM18987 “Cockie Creek” and is located 210km westnorthwest of Townsville, Queensland, Australia.
Competent person – Mineral Resources, Mr Ken Harvey (MAusIMM, MAIG)
The Tick Hill Gold Project Tailings is within ML7094 and ML709. The Tick Hill Gold Project incorporating ML’s 7094, 7096, and 7097 is operated as a Joint Venture between Diatreme Resources Limited and Superior Resources Limited and is located 110km south southwest of Mount Isa, Queensland, Australia.
Competent person – Mineral Resources, Mr Ian Reudavey (MAIG)

Cockie Creek Copper Prospect

The information in relation to the Cockie Creek Copper Prospect Mineral Resources has been reported in an announcement to the Australian Securities Exchange (ASX) on 27 March 2013 “Cockie Creek Copper Prospect Inferred Resource” which complies with the guidelines of the 2004 JORC Code. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.

The information in this report that relates to Mineral Resources and Exploration Results is based on information compiled by Mr Ken Harvey, a director and shareholder of the Company, who is a Member of the Australasian Institute of Mining and Metallurgy and a Member of the Australian Institute of Geoscientists. Mr Harvey has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which 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 Resources and Ore Reserves’. Mr Harvey consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

Tick Hill Gold Project Tailings

The information in relation to the Tick Hill Gold Project Tailings Mineral Resources has been reported in an announcement to the Australian Securities Exchange (ASX) on 19 January 2016 “Tick Hill – Maiden Resource Estimate” which complies with the guidelines of the 2012 JORC Code. It has not been updated since on the basis that the information has not materially changed since it was last reported.

Page | 83

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

MINERAL RESOURCES STATEMENT

The information in this report that relates to Mineral Resources and Exploration Results is based on information compiled by Mr Ian Reudavey, Chief Geologist of Diatreme Resources Limited, who is a Member of the Australian Institute of Geoscientists. Mr Reudavey has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which 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 Resources and Ore Reserves’. Mr Reudavey consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

Mineral Resource and Ore Reserve Governance

The Mineral Resources reported have been generated by a suitably qualified person using industry standard best practice modelling and estimation methods.

Mineral Resources and Ore Reserves are compiled in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code) 2012 Edition.

The Mineral Resources Statement included in the annual report is reviewed by a suitably qualified Competent Person.

Page | 84

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Superior Resources Limited
ABN 72 112 844 407
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Unit 8, 61 Holdsworth Street Coorparoo, Queensland, 4151 Telephone: 07 3847 2887 Email: [email protected]

www.superiorresources.com.au

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AI assistant

SUPERIOR RESOURCES LIMITED — Annual Report 2017

65848_rns_2017-10-30_4312ad19-86c5-45f9-840a-598c734609b0.pdf

Superior Resources Limited

Corporate Directory

Directors

Corporate Secretary

ANNUAL REPORT

Stock Exchange

2017

Company

Contents

CHAIRMAN’S REVIEW

Chairman’s Review 2017

OPERATIONS REPORT

Highlights – Year in Review

� Zinc - Lead

Nicholson Project (NW Queensland)

� Copper

Bottletree Prospect (NE Queensland)

� Copper – Zinc – Gold – Silver

Galah Dam Prospect (NE Queensland)

� Gold

Steam Engine Gold Deposit (NE Queensland)

Tick Hill Gold Project (NW Queensland)

OPERATIONS REPORT

Operations Report

Summary 2017

1. Exploration

2. Corporate – Commercial

3. Corporate – Capital Raising

4. Corporate – Dealings

OPERATIONS REPORT

Project Portfolio

OPERATIONS REPORT

OPERATIONS REPORT

OVERVIEW

OPERATIONS REPORT

Introduction

Teck Australia Earn-in and JVA

OPERATIONS REPORT

Work completed during the year

Initial AMT survey

AMT survey results

SUPERIOR RESOURCES LIMITED (ABN 72 112 844 407)

OPERATIONS REPORT

OPERATIONS REPORT

Follow-up infill AMT survey

VICTOR PROJECT (Mt Isa Style Lead-Zinc-Silver)

Introduction

OPERATIONS REPORT

Geochemical Leakage into Surrounding Rocks and Overlying Cover

OPERATIONS REPORT

Historical Airborne Surveys

NORTH-WEST QUEENSLAND STRATEGY

OPERATIONS REPORT

Greenvale Project (Porphyry, VMS, High Grade Gold)

OPERATIONS REPORT

Greenvale Drilling Program 2017

OPERATIONS REPORT

Background

Historical drilling

OPERATIONS REPORT

OPERATIONS REPORT

2017 Drilling Program

OPERATIONS REPORT

OPERATIONS REPORT

OPERATIONS REPORT

Background

2017 Drilling Program

OPERATIONS REPORT

OPERATIONS REPORT

Next Steps

OPERATIONS REPORT

GALAH DAM (gold-silver-zinc-copper)

Background

2017 Drilling Program

OPERATIONS REPORT

Redistribution of metals

OPERATIONS REPORT

SUPERIOR RESOURCES LIMITED Annual Report 2017