TUNGSTEN MINING NL — Interim / Quarterly Report 2018

Mar 5, 2018

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TUNGSTEN MINING NL

ABN 67 152 084 403

Half-Year Financial Report

31 December 2017

Contents

	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

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Corporate directory

Board of directors:

Gary Lyons (Non-executive Chairman)

Tan Sri Dato' Tien Seng Law (Non-executive Deputy 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

Bankers:

Chief executive officer:

Craig Ferrier

National Australia Bank Limited Level 1, 1238 Hay Street West Perth WA 6005

Company Secretaries:

Mark Pitts Simon Borck

Principal and registered office:

97 Outram Street West Perth WA 6005

Telephone: +61 8 9486 8492 Facsimile: +61 8 9322 2370 Email: info@tungstenmining.com Website: www.tungstenmining.com

Postal address:

PO Box 517 West Perth, WA 6872

Share registry:

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 2017:

Fully paid ordinary shares: 555,581,527 Unlisted options: 73,542,500

Stock exchange:

Australian Securities Exchange Limited

ASX company code:

TGN

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2

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 2017.

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 Tan Sri Dato' Tien Seng Law Non-executive Deputy Chairman Kong Leng (Jimmy) Lee Non-executive Director Chew Wai Chuen Non-executive Director Teck Siong Wong Non-executive Director

Tan Sri Dato' Tien Seng Law was appointed to the Board as the Non-executive Deputy Chairman on 15 January 2018.

Company Secretaries

Mark Pitts Simon Borck

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 2017 was $1,597,627 (Dec 2016: $1,478,363).

During the period net cash used in operating and investing activities totalled $1,813,840 (Dec 2016: $1,458,114). Net cash flow from financing activities was $14,545,301 for the period (Dec 2016: $3,223,656), this net amount included $13,873,179 in proceeds from a successful non-renounceable entitlement issue.

Review of operations

During the period, the Group acquired a near new, dismantled modular processing plant for the Mt Mulgine Tungsten Project from Pilbara Minerals and relocated it from its location in the Pilbara to a secure laydown area adjacent to the Golden Dragon gold processing plant operated by Minjar Gold. The acquisition price for the processing plant was $600,000, comprising of $300,000 in cash and $300,000 in Company shares.

To accelerate project development activities at the Mt Mulgine Project, the Company launched a NonRenounceable Entitlement Offer during the period. This offer was the fully subscribed and raised $13,873,179 before costs.

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3

Directors’ Report

After the end of the period on 15 January 2018, Tan Sri Dato Tien Seng Law was appointed to the Board of the Company as a Non-executive Director and Deputy Chairman.

Events subsequent to balance date

There have been no matters or circumstances that have arisen since 31 December 2017 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

• (c) 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.

Gary Lyons Chairman Perth, 6[th] March 2018

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4

Consolidated statement of profit or loss and other comprehensive income

For the half year ended 31 December 2017

Note R&D tax offset Interest revenue Administration expenses Exploration expenses 3 Occupancy expenses Remuneration expenses Share-based payments 4 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	Consolidated December 2017 December 2016 $ $ 204,087 - 44,144 8,168 (428,460) (371,840) (969,154) (928,129) (24,000) (24,000) (104,622) (95,000) (319,622) (67,562)
	(1,597,627) (1,478,363) - -
	(1,597,627) (1,478,363)
	- - - -
	- -
	(1,597,627) (1,478,363)
	(1,597,627) (1,478,363)
	(1,597,627) (1,478,363)
	(0.37) (0.55)

Diluted loss per share is not shown as it would not reflect an inferior position.

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

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5

Consolidated statement of financial position

As at 31 December 2017

Note Current assets Cash and cash equivalents Trade and other receivables Total current assets Non-current assets Exploration and evaluation 5 Plant and equipment 6 Total non-current assets Total assets Current liabilities Trade and other payables Total current liabilities Total liabilities Net assets Equity Issued capital 7 Reserves 8 Accumulated losses Total equity	Consolidated December 2017 June 2017 $ $ 15,919,463 3,188,002 365,454 46,013
	16,284,917 3,234,015
	2,352,171 2,352,171 883,349 83,179
	3,235,520 2,435,350
	19,520,437 5,669,365
	682,981 220,085
	682,981 220,085
	682,981 220,085
	18,837,456 5,449,280
	35,254,248 20,588,067 747,949 428,327 (17,164,741) (15,567,114)
	18,837,456 5,449,280

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

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6

Consolidated statement of changes in equity

For the half year ended 31 December 2017

Balance at 1 July 2017 Loss for the period Other comprehensive income Total comprehensive loss for the period Shares issued Shares issued on exercise of share options Share issue transaction costs Share-based payments Balance as at 31 December 2017 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 Share-based payments Balance as at 31 December 2016	Issued Capital Shares to be issued Reserves Accumulated Losses Total $ $ $ $ $ 20,588,067 - 428,327 (15,567,114) 5,449,280
	- - - (1,597,627) (1,597,627) - - - - -
	- - - (1,597,627) (1,597,627)
	14,023,179 - - - 14,023,179 704,827 - - - 704,827 (61,825) - - - (61,825) - - 319,622 - 319,622
	35,254,248 - 747,949 (17,164,741) 18,837,456
	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

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

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7

Consolidated statement of cash flows

For the half year ended 31 December 2017

Cash flows from operating activities Payments to suppliers and employees Interest received Interest paid Net cash used in operating activities Cash flows from investing activities Payments for property, plant & equipment Net cash used in investing activities Cash flows from financing activities Proceeds from exercise of share options Proceeds from issue of shares Payments for share issue costs Repayment of borrowings Proceeds from shares yet to be issued Net cash from financing activities Net increase in cash Adjustment for restricted cash held at balance date Cash and cash equivalents at the beginning of the period Cash and cash equivalents at end of period	Consolidated December 2017 December 2016 $ $ (1,338,363) (1,400,928) 33,111 13,269 - (69,699)
	(1,305,252) (1,457,358)
	(508,588) (756)
	(508,588) (756)
	704,827 - 13,873,179 2,501,378 (32,705) (15,082) - (1,000,000) - 1,737,360
	14,545,301 3,223,656
	12,731,461 1,765,542 - (1,737,360) 3,188,002 1,558,657
	15,919,463 1,586,839

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

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8

Condensed notes to the financial statements

For the half year ended 31 December 2017

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 2017, 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 2017 and considered with any public announcements made by Tungsten Mining NL during and subsequent to the half-year ended 31 December 2017 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 2017 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 Group 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: Exploration expenses	Consolidated	Consolidated
	December 2017	December 2016
	$	$
Exploration expenditure	969,154	928,129

The exploration expenditure in the current and prior period predominately relates to exploration and evaluation activities undertaken in relation to the Mt Mulgine Tungsten project.

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9

Condensed notes to the financial statements

For the half year ended 31 December 2017

Note 4: Share-based payments Unlisted options issued to Directors (note 8) Unlisted options to employees, consultants and contractors (note 8) Total share-based payments for the period	Consolidated December 2017 December 2016 $ $ 148,898 67,562 170,724 -
	319,622 67,562

Details of options

Share-based payments are in relation to options granted to Directors, employees, consultants and contractors in the prior year.

Note 5: Exploration and evaluation Capitalised exploration and evaluation	Consolidated December 2017 June 2017 $ $ 2,352,171 2,352,171

Mineral acquisition costs

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.

Note	6: Plant and equipment	Consolidated
		December 2017	June 2017
		$	$
Plant	and equipment	883,349	83,179

The following table illustrates the movement in carrying value of Plant and equipment

Opening net carrying value Cost of additions Depreciation charge Closing net carrying value	Processing Plant Office Equipment Plant and Equipment Computer Software Total $ $ $ $ $ - 3,749 71,828 7,602 83,179 795,347 13,242 - - 808,589 - (2,114) (3,385) (2,920) (8,419)
	795,347 14,877 68,443 4,682 883,349

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10

Condensed notes to the financial statements

For the half year ended 31 December 2017

Note 6: Plant and equipment (continued)

Processing plant acquisition

During the period, the Group acquired a near new, dismantled modular processing plant from Pilbara Minerals Ltd and relocated it from its location in the Pilbara to storage in laydown area adjacent to the Golden Dragon gold processing plant operated by Minjar Gold. At period end, this dismantled plant remained in storage.

The cost of this plant includes the acquisition price of $600,000 payable to Pilbara Minerals, which comprised of:

• Cash paid on settlement of $300,000, and

• $300,000 in fully paid shares of the Company, to be issued in two tranches. The first tranche equating to $150,000 (3,750,000 shares) at a deemed price of $0.04 per share was issued on settlement (refer note 7). The second tranche, representing deferred consideration equating to $150,000, is required to be issued six months after settlement at an issue price being the lesser of $0.04 per share and the five-day volume weighted average price immediately preceding the date of issue.

At period end, the second tranche of shares equating to $150,000 remained payable but not due to Pilbara Minerals. This amount is accrued for in Trade and other payables at period end.

Note 7: Issued capital Ordinary shares fully paid The following table illustrates the movement in ordinary shares Balance at the beginning of period Shares issued at $0.04 to acquire processing plant (note 6) Shares issued at $0.04 and $0.03 on exercise of entitlement offer options Shares issued at $0.10 under non-renounceable entitlement issue Costs incurred in issuing shares Balance at end of period

Consolidated December 2017 June 2017 $ $ 35,254,248 20,588,067

$ Number 20,588,067 395,479,062 150,000 3,750,000 704,827 17,620,677 13,873,179 138,731,788 (61,825) - 35,254,248 555,581,527

Unlisted options exercised.

During the period, 17,620,677 fully paid shares were allotted on the exercise of unlisted options, raising $704,827 before costs. These shares were allotted on the exercise of 17,620,677 unlisted options, of which 17,348,802 were exercised at $0.04 and 271,875 at $0.03. These unlisted options were exercisable on or before 31 December 2019 (refer note 8).

Non-renounceable entitlement Issue

During the period, eligible shareholders were offered the opportunity to acquire additional fully paid ordinary shares in the Company through a 1-for-3 non-renounceable entitlement issue. Pursuant to applications and acceptances under this offer, or applications in respect of the short fall, the Company allotted 138,731,788 fully paid shares with an issue price of $0.10 per share raising $13,873,179 before costs.

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11

Condensed notes to the financial statements

For the half year ended 31 December 2017

Note 8: Reserves Unlisted option reserve The following table illustrates the movement in the reserve Balance at the beginning of period Share-based payments - Director options (note 4) Share-based payments - Employee options (note 4) Exercised non-renounceable entitlement offer free attaching options (note 7) Balance at period end	Consolidated December 2017 June 2016 $ $ 749,949 428,327 WAEP $ Number of options $0.044 428,327 91,163,177 148,898 - 170,724 - $0.040 - (17,620,677)	Consolidated December 2017 June 2016 $ $ 749,949 428,327
	$0.035 747,949 73,542,500

The following table illustrates outstanding options that have vested and are exercisable at period end:

Non-renounceable entitlement offer options Director options Tranche 1 Tranche 2 Tranche 3 Employee options Tranche 1 Tranche 2 Tranche 3 Outstanding at period end

Number outstanding Number vested and exercisable Exercise price Expiry date Remaining contractual life 48,292,500 48,292,500 $0.03 31 Dec 2019 2.00 years 3,200,000 3,200,000 $0.03 23 Dec 2020 2.98 years 3,200,000 3,200,000 $0.04 23 Dec 2020 2.98 years 9,600,000 - $0.05 23 Dec 2020 2.98 years 1,850,000 1,850,000 $0.03 6 Feb 2021 3.11 years 1,850,000 1,850,000 $0.04 6 Feb 2021 3.11 years 5,550,000 5,550,000 $0.05 6 Feb 2021 3.11 years

73,542,500 63,942,500

Change in Exercise Price of unlisted options

Following the allotment of fully paid shares under the Non-renounceable entitlement issue (refer note 7) and pursuant to ASX Listing Rules and the relevant terms of the Company’s unlisted options on issue, an adjustment was required to made to the exercise price of all outstanding unlisted options. This adjustment took effect during the period and reduced the exercise price of all outstanding options by $0.01.

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12

Condensed notes to the financial statements

For the half year ended 31 December 2017

Note 9: Controlled entities

Tungsten Mining NL is the ultimate parent entity of the consolidated group. The following were controlled entities at period end 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

Note 10: Contingent liabilities

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

Note 11: Events subsequent to balance date

There have been no matters or circumstances that have arisen since 31 December 2017 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

• (c) the group’s state of affairs in future years.

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13

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 2017 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,

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Gary Lyons Chairman Perth, 6[th] March 2018

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14

Auditor’s independence declaration

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15

Independent auditor’s review report

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16

Independent auditor’s review report

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17