SUREFIRE RESOURCES NL — Interim / Quarterly Report 2017

Apr 19, 2017

SUREFIRE RESOURCES NL

ABN 48 083 274 024

INTERIM FINANCIAL REPORT

FOR THE HALF YEAR ENDED

31 DECEMBER 2016

CORPORATE DIRECTORY

Board of Directors

Mr Graeme Smith – Chairman Mr Brett Clark – Non-Executive Director Mr Don Valentino – Executive Director

Company Secretary

Mr Graeme Smith

Registered Office

c/ Ground Floor 63 Hay Street SUBIACO WA 6008

Phone: +61 8 9322 7822

Email: info@surefireresources.com.au www.surefireresources.com.au

Banker

National Australia Bank Limited 226 Main Street OSBORNE PARK WA 6017

Securities Exchange Listing

Australian Securities Exchange Surefire Resources NL ASX Code: SRN

Auditors

Greenwich & Co Audit Pty Ltd Level 2 35 Outram Street WEST PERTH WA 6005

Share Registry

Advanced Share Registry 150 Stirling Highway NEDLANDS WA 6009 Phone: +61 8 9389 8033 Fax: + 61 8 9389 7871

CONTENTS

DIRECTORS' REPORT	2
AUDITOR'S INDEPENDENCE DECLARATION	7
CONSOLIDATED STATEMENTOFPROFIT OR LOSS AND OTHERCOMPREHENSIVE INCOME	8
CONSOLIDATED STATEMENT OF FINANCIAL POSITION	9
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY	10
CONSOLIDATED STATEMENT OF CASH FLOWS	11
NOTESTO THE FINANCIAL STATEMENTS	12
DIRECTORS' DECLARATION	16
INDEPENDENT AUDITOR'SREPORT	17

Your directors submit their report for the Company and its controlled entities ("the Consolidated Entity" or "Group") for the half year ended 31 December 2016.

DIRECTORS

The names of the directors of the company during the financial half-year and up to the date of this report, unless otherwise stated:

Mr Graeme Smith – Chairman

Mr Brett Clark – Non-Executive Director

Mr Don Valentino – Executive Director - Appointed 18 August 2016

Mr Vladimir Nikolaenko – Resigned 18 August 2016

PRINCIPAL ACTIVITIES

The principal activity during the period was mineral exploration including the exploration and evaluation of opportunities located domestically and internationally.

OPERATING RESULTS

As disclosed in the financial statements, the Company recorded a consolidated loss of $1,175,976 (2015: $164,077) for the half year to 31 December 2016.

REVIEW OF OPERATIONS

Surefire Resources NL (ASX: SRN or "the company") continued to assess and appraise various projects which came to the attention of the board.

Kooline Silver Lead Project

During the half year the Company entered into an option agreement to acquire the Kooline Silver-Copper-Lead Project.

The Project, located 55km south of the Paulsen's Gold Mine, within the Ashburton Province, produced a total of 3,600t of lead and 950kg (30,546oz) of silver over an eleven-year period (1948 and 1959). Much of the historical production came from three mines: The Gift, Jane-Audrey and Bilrose, which lie within the tenure. Many of the old workings at Kooline have demonstrated untested potential extensions both along strike and down dip. Thus, many prospects are drillready.

The Project includes an extensive 6km long auger soil geochemical anomaly, and is characterised by numerous high grade silver (up to 19oz/t Ag) and lead occurrences (10 – 70% galena) with historical workings distributed over a 5km length within the tenure.

Since announcing the Kooline option agreement, the Company has:

• Sourced all available geophysical datasets, including high resolution aeromagnetic and ground IP;
• Appointed a consultant geophysicist to reprocess and re-evaluate the datasets; and,
• Collated the limited historical drilling, geology and geochemistry into a relational database for review by BRD's technical consultants.

The Company has moved quickly to validate the legacy information and to generate new drill ready targets by considering the holistic nature of the technical information within a more evolved structural framework.

Project Geology

The Project geology has only been partially mapped by prior explorers and has been interpreted as being dominated by the Ashburton Formation and Quaternary cover consisting of laterite, colluvium and alluvium associated with relict and erosional regolith domains. Within the Project area, the Ashburton Formation is predominantly siltstone, thin to very thick bedded lithic quartz sandstone and minor pebble conglomerate to greywacke. No felsic volcanic lithologies have been noted within the Project area to date. This lithology has been metamorphosed to lower greenschist facies.

The structural complexity and implications with respect to mineralisation at Kooline is poorly understood. Structural mapping has confirmed multiple deformation events. Rodding or pencil slate caused by the intersection of cleavage planes was confirmed in both the June Audrey and Bilrose Prospect areas. Preliminary structural data from field reconnaissance suggests that gold, lead and silver mineralisation is bound within potential multiple, subtle dilation zones associated with common intersection lineation environment.

A field trip to the tenements yielded twenty-four rock chip samples across a wide area. Seven samples returned lead assays in excess of 40% lead. Ten samples produced assays over 3oz per tonne silver, and two samples assayed at greater than 1% copper. (ASX Release: 17 January 2017)

The resulting assays confirm the widespread occurrence of high grade silver and lead values in mineralised structures that crop out over a minimum 4.5km of strike at Kooline. The westnorthwest trending mineralised structures are buried in the west by sediments associated with the Ashburton River floodplain.

CORPORATE

During the half year the Company raised $500,000 from the issue of 250 million shares to sophisticated and professional investors.

Longstanding director Mr Vladimir Nikolaenko retired during the half year and was replaced by Mr Don Valentino.

Shareholder approval for the acquisition of the Kooline project was received on 9 February 2017 (see Note 8 – Events After the Reporting Date).

DIRECTORS' REPORT

Schedule of Tenements

Project	Tenement Details	Interest
Western Australia
Kooline	E08/2372	90%
Kooline	E08/2373	90%

Competent Persons Statement

The information in this announcement that relates to the Kooline Project Exploration Results is based on information compiled and fairly represented by Mr Jonathan King, who is a Member of the Australian Institute of Geoscientists and a consultant to Surefire Resources NL. Mr King has sufficient experience relevant to the style of mineralisation and type of deposit under consideration, and to the activity which he has undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr King consents to the inclusion in this report of the matters based on this information in the form and context in which it appears.

AUDITOR INDEPENDENCE DECLARATION

The auditor's independence declaration for the period ending 31 December 2016 has been given and is set out on the following page.

SIGNED in accordance with a resolution of the directors

Graeme Smith Director

Signed at Perth on 20 April 2017

Greenwich & Co Audit Pty Ltd | ABN 51 609 542 458 Level 2, 35 Outram Street, West Perth WA 6005 PO Box 983, West Perth WA 6872 T 08 6555 9500 | F 08 6555 9555 www.greenwichco.com

Auditor's Independence Declaration

To those charged with governance of Surefire Resources NL

As auditor for the review of Surefire Resources NL for the period ended 31 December 2016, I declare that, to the best of my knowledge and belief, there have been:

• i. no contraventions of the independence requirements of the Corporations Act 2001 in relation to the review; and
• no contraventions of any applicable code of professional conduct in relation to the review. ii.

Circennich & Co Andit Mz LtdGreenwich & Co Audit Pty Ltd

Andrew May Audit Director 20 April 2017 Perth

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2016

	Note	31 Dec 2016	31 Dec 2015
		$	$
Continuing operations
Revenue from ordinary activities
Other revenues	2	265	33
R&D Rebate		42,563	-
Total revenue		42,828	33
Expenses from ordinary activities
Share based payments		(39,500)	(110,000)
Directors fees		(45,000)	-
Exploration expenses		(145,243)	(33,413)
Administration expenses		(127,848)	(20,697)
Impairment of exploration assets	3	(840,000)	-
Depreciation		(21,213)	-
		(1,218,804)	(164,110)
Loss from ordinary activities before income taxexpense		(1,175,976)	(164,077)
Income tax expense		-	-
Net Loss for the period		(1,175,976)	(164,077)
Other comprehensive income for the period		-	-
Total comprehensive loss for the period		(1,175,976)	(164,077)
Earnings per share
Basic loss per share (cents per share)		0.07	0.02

The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2016

	Note	31 Dec 2016	30 Jun 2016
		$	$
ASSETS
Current assets
Cash and cash equivalents		476,202	148,225
Trade and other receivable		6,353	11,776
Total current assets		482,555	160,001
Non-current assets
Exploration expenditure	3	40,000	840,000
Plant & Equipment		70,859	91,522
Total non-current assets		110,859	931,522
TOTAL ASSETS		593,414	1,091,523
LIABILITIES
Current liabilities
Trade & Other payables		573,303	517,432
Interest bearing liabilities	4	1,008,362	1,008,362
Total current liabilities		1,581,665	1,525,794
TOTAL LIABILITIES		1,581,665	1,525,794
NET LIABILITIES		(988,251)	(434,271)
EQUITY
Issued Capital	5	22,647,664	22,025,668
Accumulatedlosses		(23,635,915)	(22,459,939)
DEFICIT IN SHAREHOLDERS FUNDS		(988,251)	(434,271)

The above statement of financial position should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2016

	Note	ContributedEquity	AccumulatedLosses	Total Equity
		$	$	$
Balance at 1 July 2015		20,443,107	(22,007,315)	(1,564,208)
Comprehensive Income
Loss for the period		-	(164,077)	(164,077)
Total Comprehensive Loss		-	(164,077)	(164,077)
Transactions with owners in theircapacity as owners and othertransfers
Shares issued during the year		1,408,061	-	1,408,061
Transactions with owners and other
transfers		1,408,061	-	1,408,061
Balance at 31 December 2015		21,851,168	(22,171,392)	(320,224)
Balance at 1 July 2016		22,025,668	(22,459,939)	(434,271)
Comprehensive Income
Loss for the year		-	(1,175,976)	(1,175,976)
Total Comprehensive IncomeTransactions with owners in theircapacity as owners and other		-	(1,175,976)	(1,175,976)
transfers
Shares issued during the yearCost of capital raising	55	653,640(31,344)	--	653,640(31,344)
Transactions with owners and other
transfers		622,296	-	622,296
Balance at 31 December 2016		22,647,664	(23,635,915)	(988,251)

The above statement of changes in equity should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF CASH FLOW FOR THE HALF YEAR ENDED 31 DECEMBER 2016

	Note	31 Dec 2016	31 Dec 2015
		$	$
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received		265	33
R&D Tax Offset		42,563	-
Payment to suppliers and employees		(73,841)	(63,407)
Net cash used in operating activities		(31,013)	(63,374)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of P,P&E		(550)	-
Advances to other entities		-	(132,222)
Exploration and evaluation expenditure incurred		(112,456)	(33,414)
Net cash used in investing activities		(113,006)	(165,636)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of ordinary shares		471,996	230,561
Net cash provided by financing activities		471,996	230,561
Net increase in cash held		327,977	1,551
Cash and cash equivalents at the beginning of period		148,225	14,593
Cash and cash equivalents at the end of period		476,202	16,144

The above statement of cash flows should be read in conjunction with the accompanying notes.

NOTES TO THE FINANCIAL STATEMENTS For the Half-Year Ended 31 December 2016

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation

This general purpose financial report for the interim reporting half year ended 31 December 2016 has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting, the Corporations Act 2001 and other authoritative pronouncements of the Australian Accounting Standards Board ('AASB'). Compliance with AASB 134 ensures compliance with IAS 34 Interim Financial Reporting.

The interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the Annual Financial Report for the year ended 30 June 2016 and any public announcements made by Surefire Resources NL during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

The interim report has been prepared on a historical cost basis. Cost is based on the fair value of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted.

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

Significant accounting policies

Apart from the changes in accounting policy noted below, the accounting policies and methods of computation are the same as those adopted in the most recent annual financial report.

Adoption of new and revised accounting standards

In the half year ended 31 December 2016, the Group has reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for annual reporting periods beginning on or after 1 July 2016.

As a result of this review the Directors have determined that there is no impact material, or otherwise, of the new and revised standards and interpretations on its business and therefore, no change is necessary to Group accounting policies.

Basis of Consolidation

The half year consolidated financial statements comprise the financial statements of Surefire Resources NL and its subsidiaries during the period to 31 December 2016.

Going concern

The financial report has been prepared on a going concern basis, which contemplates the continuity of the normal business activities and the realisation of assets and settlement of liabilities in the normal course of business.

For the half-year ended 31 December 2016, the Group incurred an operating loss of $1,175,976. The Group has recorded net liabilities of $988,251 as at 31 December 2016.

During the half-year, the company has raised cash of $478,740, net of costs of capital, via issue of share capital.

NOTES TO THE FINANCIAL STATEMENTS For the Half-Year Ended 31 December 2016

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

Entities related to former director Mr Vladimir Nikolaenko have resolved that they will not call the amounts owed to them by the Group until the earlier of 30 September 2017 or when the Group has ability to pay.

Based upon the Group's ability to modify expenditure outlays if required, and the directors' confidence of sourcing additional funds, the directors consider there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable for the next 12 months, and therefore the going concern basis of preparation to be appropriate for the preparation of the interim reporting half year ended 31 December 2016.

However, the Directors recognise that the ability of the Company to continue as a going concern and to pay its debts as and when they fall due is dependent on the continual financial support of entities related to former director Mr Vladimir Nikolaenko and ability of the Company to secure additional funding through either the issue of further shares and or options, convertible notes or a combination thereof.

Should the Company be unable to continue as a going concern, it may be required to realise its assets and extinguish its liabilities other than in the normal course of business and at amounts different from those stated in the financial report.

The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts nor to the amounts and classification of liabilities that may be necessary should the Company be unable to continue as a going concern

	Note	31 Dec 2016	31 Dec 2015
		$	$
NOTE 2: REVENUE FOR THE PERIOD
Financeincome		265	33
Total revenue from ordinary activities		265	33

NOTE 3: CAPITALISED EXPLORATION EXPENDITURE

Exploration and Evaluation Expenditure	$6 months to31 Dec 2016	$Year to30 June 2016
Balance at beginning of the period	840,000	927,000
Exploration expenditure incurred	40,000	-
Impairment(i)	(840,000)	(87,000)
Exploration expenditure expensed to income	-	-
Balance at end of the period	40,000	840,000

(i) Impairment relates to tenement E57/420 – Ref to Notes 7 and 8 for details.

NOTES TO THE FINANCIAL STATEMENTS For the Half-Year Ended 31 December 2016

NOTE 4: INTEREST BEARING LIABILITIES

	31 Dec 2016	30 June 2016
Loan –Fiji Holdings Pty Ltd	74,246	74,246
Loan –Mutual Holdings Pty Ltd	59,850	59,850
Loan –Plato Mining PtyLtd	874,000	874,000
Loan –Pyro HoldingsPty Ltd	266	266
	1,008,362	1,008,362

(i) Loan payable to Fiji Holdings (Company related to former director Mr Vladimir Nikolaenko) is unsecured. Interest is payable on this loan at 10% per annum.

(ii) Loans payable to Mutual Holdings, Pyro Holdings and Plato Mining Pty Ltd (Companies related to former director Mr Vladimir Nikolaenko) are unsecured and non-interest bearing.

NOTE 5: CHANGES IN EQUITY SECURITIES ON ISSUE

		6 months to
	31 Dec 2016	31 Dec 2016
	Shares	$
Balance at 1 July	1,655,353,481	22,025,668
Shares issued –Capital raise	250,000,000	500,000
Shares issued –Kooline Projectoption	26,666,666	40,000
Shares issued –Corporate Adviser	9,000,000	18,000
Shares issued –Directors and consultants	30,666,666	92,000
Options exercised	954,000	3,340
Cost of capital raising	-	(31,344)
Balance at balance date	1,972,640,813	22,647,664

On 30 November 2016, the company issued, pursuant to shareholder approval, a total of 30,666,666 ordinary shares to directors and consultants in lieu outstanding fees of $92,000.

NOTE 6: CONTRACTUAL AND LEASING COMMITMENTS

a. Exploration expenditure commitments

In order to maintain current rights of tenure to exploration tenements, the Company is required to outlay tenement lease rentals and perform minimum exploration work to meet minimum expenditure requirements specified by various government authorities. These obligations are subject to renegotiation when application for a mining lease is made and at various other times. These obligations are not provided for in the financial report and are payable:

	31 Dec 2016	31 Dec 2015
	$	$
- not later than 12 months	63,000	73,020
- between 12 months and 5 years	-	8,337
	60,000	81,357

NOTES TO THE FINANCIAL STATEMENTS For the Half-Year Ended 31 December 2016

NOTE 7: CONTINGENT LIABILITIES

As at 31 December 2016, the Group's contingent liabilities were the same as those disclosed in the Company's most recent financial report, which related to tenement E57/420. As outlined in Note 8 below, subsequent to half-year end, tenement E57/420 expired and was not renewed.

NOTE 8: EVENTS AFTER THE REPORTING PERIOD

On 4 January 2017, Trent Spry's contract with the Company ended and was not renewed.

On 18 January 2017 the Unaly Hill tenement (E57/420) expired and was not renewed. The tenement was being maintained, at the time, by a professional tenement management company and the Company believed the management company were responsible for its renewal. The Company does not consider the Unaly Hill tenement to be of any value and its carrying value was written off to zero at 31 December 2016.

On 9 February 2017 shareholder approval was received to approve and ratify a number of issues of securities in the Company being:

• The ratification of the issue of 26,666,666 shares at a deemed issue price of $0.0015 each;
• The ratification of the issue of 259,000,000 shares at an issue price of $0.002 each;
• Approval for the issue of 250,000,000 shares at a deemed issue price of $0.0015 each in consideration of the acquisition of the Kooline Silver-Lead-Copper project;
• Approval for the issue of 430,000,000 quoted options at an exercise price of $0.003 and an expiry date of 30 December 2017;
• Approval for the issue of 80,000,000 shares at a deemed issue price of $0.002 each; and
• Approval for the issue of 7,500,000 performance rights to a related party.

On 13 February 2017 the Company announced that it had elected to proceed with the acquisition of 90% equity in the Kooline Silver-Lead-Copper Project for consideration of 250 million fully paid ordinary shares.

The Company disposed of 51% of its subsidiary Oil & Gas SE Pty Ltd, which owned the Petrolocate Technology on 8 March 2017.

On 31 March 2017, the Company made a loan re-payment of $59,849.55 to Mutual Holdings Pty Ltd, an entity associated with former director Vladimir Nikolaenko.

NOTES TO THE FINANCIAL STATEMENTS For the Half-Year Ended 31 December 2016

In accordance with a resolution of the directors of Surefire Resources NL, the directors of the company declare that:

• 1. The financial statements and notes, as set out on pages 8 to 15, are in accordance with the Corporations Act 2001, including:
  • a. complying with Accounting Standard AASB 134: Interim Financial Reporting; and
  • b. giving a true and fair view of the consolidated entity's financial position as at 31 December 2016 and of its performance for the half-year ended on that date.
• 1. In the directors' opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

……………………………….. Graeme Smith Director

Independent Auditor's Review Report

To the members of Surefire Resources NL

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Surefire Resources NL, which comprises the consolidated statement of financial position as at 31 December 2016, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and the consolidated statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration.

Directors' Responsibility for the Half-Year Financial Report

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

Auditor's Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the company 's financial position as at 31 December 2016 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Surefire Resources NL, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

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

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Surefire Resources NL is not in accordance with the Corporations Act 2001 including:

giving a true and fair view of the Surefire Resource NL's financial position as at 31 December 2016 and of its performance for the half-year ended on that date: and complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001.

Emphasis of Matter - Inherent uncertainty regarding continuation as a going concern

Without modifying our conclusion, we draw attention to Note 1 to the financial statements which outlines that the ability of Surefire Resources NL to continue as a going concern is dependent on the continual financial support of entities related to former director Mr Vladimir Nikolaenko and the ability of the Company to secure additional funding through either the issue of further shares and or options, convertible notes or a combination thereof.

As a result there is a material uncertainty related to events or conditions that may cast significant doubt on Surefire Resources NL's ability to continue as a going concern, and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.

Our conclusion is not qualified in respect of this matter.

Crocennich & Co And it Mr. Ctd

Andrew May Audit Director 20 April 2017 Perth