TUNGSTEN MINING NL

==> picture [119 x 85] intentionally omitted <==

ABN 67 152 084 403

Half-Year Financial Report

31 December 2016

	Page
Corporate directory	2
Directors’ report	3
Consolidated statement of profit or loss and other comprehensive income	5
Consolidated statement of financial position	6
Consolidated statement of changes in equity	7
Consolidated statement of cash flows	8
Condensed notes to the financial statements	9
Directors’ declaration	14
Auditor’s independence declaration	15
Independent auditor’s review report	16

==> picture [39 x 33] intentionally omitted <==

Corporate directory

Board of directors:

Gary Lyons (Non-executive Chairman) Chew Wai Chuen (Non-executive Director) Kong Leng (Jimmy) Lee (Non-executive Director) Teck Siong Wong (Non-executive Director)

Auditors:

Stantons International Level 2, 1 Walker Avenue West Perth, WA 6005 Telephone: +61 8 9481 3188 Facsimile: +61 8 9321 1204

Chief executive officer:

Craig Ferrier

Company Secretaries:

Bankers:

National Australia Bank Limited 6/259 Bannister Road Canning Vale, WA 6155

Mark Pitts Simon Borck

Share registry:

Principal and registered office:

97 Outram Street West Perth, WA 6005

Telephone: +61 8 9486 8492 Facsimile: +61 8 9322 2370 Email: [email protected] Website: www.tungstenmining.com

Postal address:

PO Box 517 West Perth, WA 6872

Security Transfer Australia 770 Canning Highway Applecross, WA 6153 Telephone: +61 8 9315 2333 Facsimile: +61 8 9315 2233

Solicitors:

Bennett + Co Ground Floor, BGC Centre 28 The Esplanade Perth, WA 6000 Telephone: +61 8 6316 2200 Facsimile: +61 8 6316 2211

Issued capital as at 31 December 2016:

Fully paid ordinary shares: 326,187,157 Unlisted options: 47,267,227

Stock exchange:

Australian Securities Exchange Limited

ASX company code:

TGN

==> picture [39 x 33] intentionally omitted <==

Directors’ Report

Your directors submit their report for Tungsten Mining NL (‘the Company’ or ‘the Parent’) and for the Group, being the Company and its controlled entities, for the half year ended 31 December 2016.

Directors

The names of the Company’s Directors in office during the half-year and until the date of this report are set out below. Directors were in office for the entire period unless otherwise stated.

Gary Lyons Non-executive Chairman Kong Leng (Jimmy) Lee Non-executive Director Chew Wai Chuen Non-executive Director Teck Siong Wong Non-executive Director

Company Secretaries

Mark Pitts

Simon Borck (appointed as joint Company Secretary on 8 November 2016)

Dividends

No amounts have been paid or declared by way of dividend by the Company during the half year or in the period to the date of this report.

Principal activities

The principal activity of the Company and its subsidiaries during the course of the half year continued to be the exploration and evaluation of mining projects.

Operating results

The net loss of the Group for the half year to 31 December 2016 was $1,478,363 (31 December 2015: $682,591).

During the period net cash used in operating and investing activities totalled $1,458,114 (31 December 2015: $1,498,776). Net cash flow from financing activities was $3,223,656 for the period (31 December 2015: $2,676,964), this net amount principally included a $1,000,000 outflow for a loan repaid to associated entity, GWR Group Limited and proceeds of application monies for securities received under the non-renounceable entitlement offer announced by the Company on 8 November 2016 (“Entitlement Offer”).

Review of operations

The Company completed a fully underwritten Entitlement Offer to shareholders during the period. Following the final allotment of securities after period end on 4 January 2017, the Company had successfully raised $5,273,054 (before costs) under this offer. A total of 62.5 million fully paid shares were allotted on 19 December 2016 pursuant to initial acceptances from shareholders. A further 69.3m shares were allotted on 4 January 2017 to investors at the direction of the Underwriter.

Proceeds from the Entitlement Offer were applied to retire the Company’s $1,000,000 loan facility with associated entity, GWR Group Ltd. The facility had been made available in December 2015 to facilitate the acquisition of the Mt Mulgine and Big Hill projects and was repaid in full in accordance with the loan terms during the period.

==> picture [39 x 33] intentionally omitted <==

Directors’ Report

Exploration and evaluation expenditure for the period was $928,129 (31 December 2015: $204,032). The increase is predominately related to activity undertaken on the Mt Mulgine and Big Hill tungsten projects.

Events subsequent to balance date

On 4 January 2017, the Company issued a further 69,291,905 ordinary shares, being the shortfall in shares following initial acceptances under the Entitlement Offer. These shares had an issue price of $0.04 per share with proceeds of $2,771,676 before costs. In addition, in accordance with the terms of the Entitlement Offer 34,645,950 unlisted options, exercisable at 4 cents on or before 31 December 2019, were also issued. The total raised under the Entitlement Offer was $5,273,054 before costs.

In February 2017, the Company issued 9,250,000 unlisted employee options, following shareholder approval at the Annual General Meeting held on 29 November 2016. These unlisted options were granted in three tranches and have the following terms:

1,850,000 unlisted options vested on grant, exercisable at $0.04, expiring 6 February 2021.
1,850,000 unlisted options will vest on achievement of certain Key Performance Indicators and will have an exercise price of $0.05, expiring 6 February 2021.
5,550,000 unlisted options will vest on achievement of certain Key Performance Indicators and will have an exercise price of $0.06, expiring 6 February 2021.

Other than the above, there have been no matters or circumstances that have arisen since 31 December 2016 that have significantly affected or may significantly affect:

(a) the group’s operations in future years; or

(b) the results of those operations in future years; or

the group’s state of affairs in future years.

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 15.

Signed in accordance with a resolution of the Directors.

==> picture [130 x 80] intentionally omitted <==

Gary Lyons Chairman Perth, 8[th] March 2017

==> picture [39 x 33] intentionally omitted <==

Consolidated statement of profit or loss and other comprehensive income

For the half year ended 31 December 2016

Note Revenue 3 Administration expenses Exploration expenses 4 Occupancy expenses Remuneration expenses Loss on disposal of fixed asset Capitalised exploration and evaluation costs expensed Loss before income tax Income tax expense/benefit Loss for the period Other comprehensive income Items that will not be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss Other comprehensive income after tax Total comprehensive loss after tax Loss attributable to members of the Parent Total comprehensive loss attributable to members of the Parent Basic loss per share in cents Diluted loss per share in cents	Consolidated December 2016 December 2015 $ $ 8,168 30,420 (371,840) (299,572) (928,129) (204,032) (24,000) (24,000) (162,562) (71,624) - (13,783) - (100,000)
	(1,478,363) (682,591) - -
	(1,478,363) (682,591)
	- - - -
	- -
	(1,478,363) (682,591)
	(1,478,363) (682,591)
	(1,478,363) (682,591)
	(0.55) (0.32) (0.55) (0.32)

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

==> picture [39 x 32] intentionally omitted <==

Consolidated statement of financial position

As at 31 December 2016

Note Current assets Cash and cash equivalents Trade and other receivables Other financial assets 5 Total current assets Non-current assets Exploration and evaluation 6 Plant and equipment Total non-current assets Total assets Current liabilities Trade and other payables Interest bearing loan and borrowings 7 Total current liabilities Total liabilities Net assets Equity Issued capital 8 Shares to be issued 9 Reserves 10 Accumulated losses Total equity	Consolidated December 2016 June 2016 $ $ 1,586,839 1,558,657 68,497 43,494 1,737,360 -
	3,392,696 1,602,151
	2,352,171 2,352,171 90,912 98,154
	2,443,083 2,450,325
	5,835,779 4,052,476
	398,624 301,867 - 1,000,000
	398,624 1,301,867
	398,624 1,301,867

	5,437,155 2,750,609
	17,973,060 15,613,073 1,737,360 - 302,642 235,080 (14,575,907) (13,097,544)
	5,437,155 2,750,609

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

==> picture [39 x 32] intentionally omitted <==

Consolidated statement of changes in equity

For the half year ended 31 December 2016

Balance at 1 July 2016 Loss for the period Other comprehensive income Total comprehensive loss for the period Shares issued Shares to be issued Share issue transaction costs Options issued Balance as at 31 December 2016 Balance at 1 July 2015 Loss for the period Other comprehensive income Total comprehensive loss for the period Shares issued Shares to be issued Share issue transaction costs Balance as at 31 December 2015	Issued Capital Shares to be issued Reserves Accumulated Losses Total $ $ $ $ $ 15,613,073 - 235,080 (13,097,544) 2,750,609
	- - - (1,478,363) (1,478,363) - - - - -
	- - - (1,478,363) (1,478,363)
	2,501,378 - - - 2,501,378 - 1,737,360 - - 1,737,360 (141,391) - - - (141,391) - - 67,562 - 67,562
	17,973,060 1,737,360 302,642 (14,575,907) 5,437,155
	13,599,073 - 235,080 (11,541,596) 2,292,557
	- - - (682,591) (682,591) - - - - -
	- - - (682,591) (682,591)
	190,000 - - - 190,000 - 1,676,964 - - 1,676,964 - - - - -
	13,789,073 1,676,964 235,080 (12,224,187) 3,476,930

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

==> picture [39 x 33] intentionally omitted <==

Consolidated statement of cash flows

For the half year ended 31 December 2016

Note Cash flows from operating activities Payments to suppliers and employees R&D tax offset received Interest paid Interest received Net cash used in operating activities Cash flows from investing activities Payment for property, plant & equipment Payment for tenements and interests Proceeds from sale of property, plant & equipment Net cash used in investing activities Cash flows from financing activities Repayment of borrowings Proceeds from borrowings Proceeds from issue of shares Proceeds from shares yet to be issued Share issue costs Net cash from financing activities Net increase in cash Adjustment for restricted cash held at balance date 5 Cash and cash equivalents at the beginning of the period Cash and cash equivalents at end of period	Consolidated December 2016 December 2015 $ $ (1,400,928) (528,438) - 26,198 (69,699) - 13,269 4,222
	(1,457,358) (498,018)
	(756) - - (1,018,940) - 18,182
	(756) (1,000,758)
	(1,000,000) - - 1,000,000 2,501,378 - 1,737,360 1,676,964 (15,082) -
	3,223,656 2,676,964
	1,765,542 1,178,188 (1,737,360) (1,676,964) 1,558,657 775,535
	1,586,839 276,759

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

==> picture [39 x 32] intentionally omitted <==

Condensed notes to the financial statements

For the half year ended 31 December 2016

Note 1: Basis of preparation of the half-yearly financial report

The consolidated financial report is a general purpose condensed financial report for the half-year ended 31 December 2016, which has been prepared in accordance with AASB 134 Interim Financial Reporting and the Corporations Act 2001.

It is recommended that the half-year consolidated financial statements be read in conjunction with the annual financial report for the year ended 30 June 2016 and considered with any public announcements made by Tungsten Mining NL during the half-year ended 31 December 2016 in accordance with continuous disclosure obligations of the ASX Listing Rules .

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

The half-year consolidated financial statements have been prepared on the basis of accrual accounting and historical costs.

Changes in accounting standards

The Group has considered the implications of new and amended Accounting Standards effective for annual reporting periods beginning on or after 1 July 2016 but determined that their application to the financial statements is either not relevant or not material.

Note 2: Segment reporting

The Group has based its operating segments on the internal reports that are reviewed and used by the executive management team in assessing performance and in determining the allocation of resources.

The Group currently does not have production and is only involved in exploration. As a consequence, activities in the operating segment are identified by management based on the manner in which resources are allocated, the nature of the resources provided and the identity of the manager and country of expenditure. Information is reviewed on a whole of entity basis.

Based on these criteria the consolidated entity has only one operating segment, being exploration, and the segment operations and results are reported internally based on the accounting policies as described in Note 1 on a whole of entity basis.

Note 3: Revenue Interest received R&D tax offset	Consolidated December 2016 December 2015 $ $ 8,168 4,222 - 26,198
	8,168 30,420

==> picture [39 x 32] intentionally omitted <==

Condensed notes to the financial statements

For the half year ended 31 December 2016

Note 4: Exploration expenses	Consolidated	Consolidated
	December 2016	December 2015
	$	$
Exploration expenditure	928,129	204,032

The exploration expenditure in the current period predominately relates to the Mt Mulgine project.

Note 5: Other financial assets

Note 5: Other financial assets Restricted cash (note 9)	Consolidated December 2016 June 2016 $ $ 1,737,360 -

Share application monies received prior to allotment of securities under the non-renounceable entitlement offer announced by the Company on 8 November 2016. Allotment of these securities were included in the issue shares and unlisted options that occurred after balance date on 4 January 2017 (see note 13). On allotment of securities these monies will be reclassified to cash and cash equivalents.

Note 6: Exploration and evaluation

Note 6: Exploration and evaluation
Balance at the beginning of period Impairment Capitalised exploration and evaluation costs expensed Acquisition of Mt Mulgine and Big Hill projects Balance at end of period	Consolidated December 2016 June 2016 $ $ 2,352,171 1,610,079 - (510,079) - (100,000) - 1,352,171
	2,352,171 2,352,171

The Group capitalises the acquisition costs in accordance with its accounting policy for exploration and evaluation expenditure. The ultimate recoupment of acquisition costs carried forward in the exploration and evaluation phases are dependent on the successful development and commercial exploitation or sale of the respective areas.

==> picture [39 x 32] intentionally omitted <==

Condensed notes to the financial statements

For the half year ended 31 December 2016

Note 7: Loans Borrowings from associated entity	Consolidated December 2016 June 2016 $ $ - 1,000,000

In the prior year, GWR Group Limited, an associated entity and the Company, entered into a Funding Deed (“Deed”). The Deed provided for GWR Group Limited to advance the Principal amount of $1,000,000 by way of a 12% pa interest bearing unsecured loan to the Company to enable settlement of the acquisition of the Mt Mulgine and Big Hill tungsten projects. This loan was repaid by the Company in December 2016 pursuant to the terms of the Funding Deed.

Note 8: Issued capital Ordinary shares fully paid Movement in ordinary shares Balance at the beginning of period Shares issued under non-renounceable entitlement offer Costs incurred in issuing shares Balance at end of period	Consolidated December 2016 June 2016 $ $ 17,973,060 15,613,073
	$ Number 15,613,073 263,652,708 2,501,378 62,534,449 (141,391) -
	17,973,060 326,187,157

On 19 December 2016, the Group issued 62,534,449 ordinary shares with an issue price of $0.04 per share, being the initial acceptances of the non-renounceable entitlement offer announced to the ASX by the Company on 8 November 2016. In addition, in accordance with the terms of the entitlement offer 31,267,227 unlisted options, exercisable at $0.04 on or before 31 December 2019, were also issued (see note 10b).

Subsequent to period end on 4 January 2016, the Company pursuant to the terms of the entitlement offer issued a further 69,291,905 ordinary shares and 34,645,950 unlisted options, excerisable at $0.04 on or before 31 December 2019, representing proceeds of $2,771,676 before costs. The total funds raised under this entitlement offer was $5,273,054 before costs (see note 13).

Note 9: Shares to be issued Shares to be issued (note 5)	Consolidated December 2016 June 2016 $ $ 1,737,360 -

==> picture [39 x 32] intentionally omitted <==

Condensed notes to the financial statements

For the half year ended 31 December 2016

Note 10: Reserves Unlisted option reserve Movement in unlisted options Balance at the beginning of period Options issued to Directors (a) Options issued under entitlement offer (b) Balance at end of period	Weighted Average Exercise Price - $0.054 $0.040	Consolidated December 2016 June 2016 $ $ 302,642 235,080
		$ Number of options 235,080 - 67,562 16,000,000 - 31,267,227
	$0.045	302,642 47,267,227

(a) Directors options

16,000,000 unlisted options were issued to Directors during the period, following shareholder approval at the Annual General Meeting held on 29 November 2016. These unlisted options were granted in three tranches and have the following terms:

Tranche 1 - 3,200,000 unlisted options vested on grant, exercisable at $0.04 , expiring 23 December 2020.
Tranche 2 - 3,200,000 unlisted options, vesting 23 December 2017, exercisable at $0.05, expiring 23 December 2020.
Tranche 3 - 9,600,000 unlisted options, vesting 23 December 2018, exercisable at $0.06, expiring 23 December 2020.

(b) Pro-rata non-renounceable entitlement offer options

31,267,227 unlisted options exercisable at $0.04, expiring 31 December 2019 were issued during the period under the pro-rata non-renounceable entitlement offer described in note 8.

Note 11: Controlled entities

Tungsten Mining NL is the ultimate parent entity of the consolidated group. The following were controlled entities at balance date and have been included in the consolidated financial statements. All shares held are ordinary shares.

Subsidiaries	Country of Incorporation	Percentage Interest Held 31 December 2016	Percentage Interest Held 30 June 2016	Date Acquired/ Incorporated
BRL Exploration Pty Ltd	Australia	100	100	13/03/2012
SM3-W Pty Ltd	Australia	100	100	13/12/2012
Pilbara Tungsten Pty Ltd	Australia	100	100	30/11/2015
Mid-West Tungsten Pty Ltd	Australia	100	100	30/11/2015

==> picture [39 x 32] intentionally omitted <==

Condensed notes to the financial statements

For the half year ended 31 December 2016

Note 12: Contingent liabilities

The Group is not aware of any significant contingencies since the last annual reporting date.

Note 13: Events subsequent to balance date

1,850,000 unlisted options vested on grant, exercisable at $0.04, expiring 6 February 2021.
1,850,000 unlisted options will vest on achievement of certain Key Performance Indicators and will have an exercise price of $0.05, expiring 6 February 2021.
5,550,000 unlisted options will vest on achievement of certain Key Performance Indicators and will have an exercise price of $0.06, expiring 6 February 2021.

Other than the above, there have been no matters or circumstances that have arisen since 31 December 2016 that have significantly affected or may significantly affect:

(c) the group’s operations in future years; or
(d) the results of those operations in future years; or
(e) the group’s state of affairs in future years.

==> picture [39 x 32] intentionally omitted <==

Directors’ declaration

In accordance with a resolution of the directors of Tungsten Mining NL, I state that:

In the opinion of the Directors:

(a) The financial statements and notes of the Group are in accordance with the Corporations Act 2001, including:
i. Giving a true and fair view of the financial position as at 31 December 2016 and the performance for the half-year ended on that date of the Group; and
ii. Complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.
(b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

On behalf of the Board,

==> picture [130 x 79] intentionally omitted <==

Gary Lyons

Chairman Perth, 8[th] March 2017

==> picture [39 x 32] intentionally omitted <==

Auditor’s independence declaration

==> picture [497 x 706] intentionally omitted <==

==> picture [39 x 32] intentionally omitted <==

Independent auditor’s review report

==> picture [499 x 707] intentionally omitted <==

==> picture [39 x 32] intentionally omitted <==

Independent auditor’s review report

==> picture [496 x 707] intentionally omitted <==

==> picture [39 x 32] intentionally omitted <==

AI assistant

TUNGSTEN MINING NL — Interim / Quarterly Report 2017

65918_rns_2017-03-07_22bacd5e-c6eb-4f30-bbb5-79520c3b706e.pdf