Aura Biosciences, Inc. Annual Report 2016

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FY2016 Annual Report · Aura Biosciences, Inc.

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ACN: 115 927 681

ANNUAL REPORT

30 JUNE 2016

ANNUAL REPORT

30 JUNE 2016

CORPORATE DIRECTORY

DIRECTORS
Peter Reeve - Executive Chairman
Bob Beeson - Non-Executive Director
Brett Fraser - Non-Executive Director
Julian Perkins - Non-Executive Director

NOMINATED ADVISOR AND
AIM BROKER
WH Ireland Limited
24 Martin Land
London, England

AUDITOR
Bentleys London House
Level 3, 216 St Georges Tce
Perth, WA 6000

SOLICITORS
Steinepreis Paganin
Level 4, The Read Building
16 Milligan Street
Perth, WA 6000

COMPANY SECRETARY
John Madden

REGISTERED OFFICE
Aura Energy
Level 1, 34-36 Punt Road
Windsor VIC 3181
Telephone: +61 3 9516 6500
Facsimile: +61 3 9516 6565
Website: www.auraenergy.com.au

SHARE REGISTRY
Computershare Investor Services Pty Ltd
Level 2, Reserve Bank Building
45 St Georges Terrace
Perth, WA 6000
Telephone: 1300 557 010
Facsimile: 08 9323 2033
Email:
web.queries@computershare.com.au

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16AboUt Us / CoNtENts 1

ABOUT US

Aura Energy is an Australian based development company that has
major uranium projects in Europe and Africa also gold, lithium and
soda ash in Africa

Aura Energy Limited is a resource-
development Company building high
quality mineral projects for the future. Aura
is very positive about its uranium projects
and nuclear energy industry as 80 million
people are added to the world’s population
annually driving the world’s energy needs
exponentially. Aura intends to be part of
that solution by supplying uranium from
its projects to the nuclear industry.

Aura has an exceptionally strong technical
and management team with unparalleled
experience and exposure for a company
of Aura’s size. This experience has lead
Aura to broaden its mineral portfolio and
secure excellent gold, soda ash and lithium
projects in 2016. This balances Aura’s
strategy and will provide a depth
of projects to create cashflow from
different commodities.

Previously Aura has stated a strategy to
get its projects into production quickly
and with minimal dilution. Despite a
challenging uranium market Aura has
continued to progress this goal with a
successful listing on the London Stock
Exchange AIM market which has more
than trebled Aura’s market value during
September 2016. Additionally,
Aura has pursued corporate alliances,
closed the glaring valuation gap between
Aura and its peers, commenced the push
for offtake funding and maintained a
strong imperative to progress its Tiris
and Häggån projects.

2016 has seen Aura progress on a new
journey to sustainable development and
cashflow. We invite shareholders to stay
with the company for the 2017 financial
year and beyond, as Aura continues this
new path.

27
Financial statements
67 Directors’ Declaration
68
70
73

Independent Auditor’s Report
Additional Information
Tenement Report

CONTENTS

About Us
Our projects
Highlights in 2016
Chairman’s Letter
Operation’s Review

1
2
3
4
6
14 Directors’ report
26

Auditor’s Independence Declaration

OUR PROJECTS

100% OWNED URANIUM
DEVELOPMENT PROJECTS
IN MAURITANIA AND
SWEDEN
TIRIS MAURITANIA – POTENTIAL
PRODUCTION & CASHFLOW
• C1 Cash costs US$30/lb U3O8

• 49 Mlbs Indicated and Inferred

Resource

• US$45m capital cost

• Early stage exploration

HÄGGÅN SWEDEN –POTENTIAL
SCALE/LONG TERM VALUE

• C1 Cash costs US$13.50/lb U3O8

including credits

• 803 Mlbs Inferred Resource

• US$537m capital cost
• Gold, Soda Ash, Lithium

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16HigHtLigHts iN 2015/16 3

HIGHLIGHTS IN 2016

Aura advanced the company in 2016 by broadening its
portfolio, advancing its studies, establishing a new London
market place and increasing its market value

EXPANDED
PORFOLIO IN
GOLD
LITHIUM
SODA ASH

LISTED ON
AIM RAISED

£2.85m

(A$5.0M)

MANAGEMENT
HAS EXTENSIVE
RESOURCES
EXPERIENCE

583%

INCREASE IN
MARKET
CAPITALISATION
(OR VALUE)
$5M to $29.2M

ACTIVITY OVERVIEW
MAURITANIA
• Commenced Tiris project

Feasability Study

• Completed drilling and leach

testwork

SWEDEN
• Conducted drilling on Haggan

and Marby

• Planned for community
engagement program

• Refined understanding of Tiris

• Continued liasion with government

project mineralisation

• Secured excellent gold tenements
south of the giant Tasiast Gold
Mine

• Secured Soda Ash and Lithium

tenements

• Continued interaction in

local community

CHAIRMAN’S LETTER

Aura is developing two attractive, 100% owned, uranium
projects with resources totalling 852 million pounds U3o8
which the Aura board believes will position the company
as a major uranium producer in the future.

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16CHAirMAN's LEttEr 5

The new AIM listing and exceptionally
well funded position provides Aura
with a new platform from which to
develop its projects and search for new
opportunities. Aura’s focus remains the
creation of shareholder value as we
progress our projects to sustainable
cashflow.

Peter Reeve

Executive Chairman

Dated this Thursday, 29 September
2016

Aura Energy Limited (‘Aura’ or the
‘Company’) is developing two
attractive, 100% owned, uranium
projects with resources totalling
852 million pounds U3O8 which the
Aura Board believes will position the
company as a major uranium producer
in the future.

The Tiris project in Mauritania is in
Feasibility Study and with its low
capital cost has a potentially short
development time frame. The second
asset, the Häggån project, is a world
class, strategic European uranium
deposit located in Sweden.

Aura maintained a focus during 2016
on getting the Tiris project Feasibility
Study completed in order to achieve
production and cashflow from the
asset in the shortest timeframe. The
continued weakness in both the
uranium price and the junior mining
sector made funding difficult and
as such hampered Aura’s efforts to
progress the Feasibility Study.

To address this issue the Company
took the strategic step to review a
more relevant market to fund Aura’s
projects and commenced a programme
to list on the London Stock Exchange
owned AIM market. Subsequent to
year end, the Company successfully
completed that listing with the
following key outcomes:

• Completion of equity raising of
A$5 million (£2.85 million);

• Establishment of a presence

in a market knowledgeable of
African and European projects;
and

• support from new cornerstone

investors

Aura continued to pursue development
for both its uranium projects however
as new exploration opportunities
arose Aura took the opportunity to
broadened its portfolio into other
minerals and prospects aligned with
the existing business. The first of these
was two excellent gold tenements in
Mauritania just south of the giant 21
million ounce Tasiast gold mine and
the second a soda ash and lithium
prospects near the Tiris project.

Aura believes the new gold properties
to be particularly prospective on
a poorly explored belt and with
substantial previous expenditure by
previous owners Aura will be able
to commence exploration with a
distinct head start. Other explorers
on this belt such as Algold Resources
have recently had excellent results
and Aura has high expectations it
can match these outcomes. The soda
ash and lithium prospects are also
aligned with our business as soda
ash is the key chemical required to
leach the uranium ore in Tiris. If a
soda ash source could be identified
near to the project then the already
low cost of Tiris production would fall
even further. If a lithium credit was
also capable of being additionally
extracted then this would ensure
lower costs again.

The junior sector has been a difficult
place to operate over the past few
years and survival alone is a success.
Aura can now say it has thrived in
this environment and I would like
to thank shareholders, both old and
new, for their recent support as that
support has allowed Aura to prosper
and advance. I also like to thank our
staff and board for their efforts in our
recent success.

OPERATION’S REVIEW

2016 was a year of two halves with a slower than
expected level of activity initially followed a very
successful London AiM listing and financing which
allowed planning to commence for a restart of the
tiris project Feasibility study and a move into gold,
soda ash and lithium.

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16opErAtioN’s rEviEw 7

production rate of approximately 800,000
pound U3O8 over 15 years. Internal studies
suggest there is protential for Aura to
produce 3 million pounds U3O8 per annum.

Aura initially commenced the Feasibility
Study for its Tiris project in Mauritania in
2015 and continued activities during 2016.
However the weak funding environment
hampered Aura’s ability to progress the
Feasibility Study which resulted in work
programmes being slowed towards the
end of 2015.

Prior to this weak funding environment
Aura was focused on validation work to
tighten the grade/tonnage confidence
limits. This assessment is ongoing and
will require additional field testwork in
2017. Orebody models were constructed
in order for new resource estimates to be
quickly concluded when the validation
work programme on the 2015 drilling
programme is completed.

There are a number of natural attributes
of the Tiris project which derive from
the very fine nature of the uranium
mineral, carnotite. This allows a simple
beneficiation step of washing and
screening to achieve an upgrade of up to
700% to the leach feed U3O8 grade. This in
turn leads to a project that has:

• A very small physical footprint

• No grinding – reduced construction

and operating costs

• Easily scalable – modular, assembly

on-site

The resulting capital and operating costs
are US$45 million and US$30 per pound
U3O8 which are both extremely competitive
in this environment and compete well with
the in-situ leach uranium projects which
are also well known for low capital and
operating costs.

The key to low cash costs at the Tiris project
is the:

• Shallow mining at 1- 5 metres depth

• Ore upgrades by 500 - 700% - from
335 ppm to circa 2,500 ppm U3O8

• Excellent leach recovery and
resident rate - 94% in 4 hours

The project financial outcomes from the
Scoping Study were;

• Pre-tax cashflow (15 years) : A$360
million using US$65 pounds U3O8
@ 90 cents AUD

•

IRR of 78% before tax and royalties

Importantly, the Scoping Study financials
only account for approximately 20% of the
known resources, providing excellent upside
in the project economics and presenting
a strong case for further expansion. Initial
modelling of expansion cases has been
undertaken and indicate a potential for a
very robust financial outcome.

Two important aspects of work on the Tiris
project to be undertaken are:

• Modelling of expansion cases for
Tiris project including a 3 million
pounds U3O8 per annum

• Exploration of Hippolyte South to

provide a growth option for the Tiris
project

2016 was a year of two halves with a
slower than expected level of activity
initially followed a very successful London
AIM listing and financing which allowed
planning to commence for a restart of the
Tiris Feasibility Study. As the Tiris project
work programmes slowed during the year
under review, the AIM listing became the
major focus of the Company. However
more broadly Aura expanded its portfolio
to include a package of very prospective
gold tenements and also soda ash and
lithium prospects. On balance 2015-16 was
a frustrating year with weak commodity
and equity markets but ended well leaving
Aura in an excellent position for the
coming few years.

In the 2015 Report the Company
commented that;

Fundraising became central to the
company during the year as the push to
achieve project status is unrelenting and
expensive. The need to find a reliable
and sustainable source of funding to
continue on this development path is
very important to Aura and remained
unfulfilled at year end.

Significantly I am pleased to report that
Aura’s efforts since the end of the financial
year have resulted in the completion of a
$5 million financing and the establishment
of a new market place in the UK which
clearly has a strong appreciation of African
and European projects.

The completion of this task is important in
realising a sustainable funding path for all
of Aura’s projects but in particular the near
term Tiris project.

TIRIS PROJECT –
100% MAURITANIA

The Tiris project is an excellent near-
term development project and Aura’s key
opportunity to produce significant cash
flow and returns for shareholders in the
coming 2-3 years.

The Tiris project has progressed to the
Feasibility Study stage and this study
envisages a project with an initial
production profile up to 1 million
pound U3O8 per annum with preliminary
economics developed for the Scoping
Study indicating an average life of mine

Figure 1: Location of Tiris project Uranium Resources

Aura has highlighted the very fine nature
of the uranium-bearing mineral, carnotite,
is one of the key positive attributes of the
Tiris project as it is the basis of the low
cost beneficiation processes which are key
to the attractive economics of the project.
However, this fine-grained character,
together with the high short-range grade
variability inherent in deposits of this
type, presents challenges in sampling and
handling analogous to those in a nuggetty
high grade gold deposit.

The carnotite in calcrete deposits tends
to occur as small lenses, nuggets and
coatings in or on the calcrete. Their
distribution varies from deposit to deposit.
Calcrete uranium deposits are typically
lens-like in section, and hundreds of square
meters in plan view.

Aura has seen significant grade
variability in all its sampling programs,
a common feature of deposits of this
type. However, this inherent variability
requires understanding and management
in upgrading resources to Measured
and Indicated status where tight grade
tolerance is required. In general, variability
reduces as sample size increases, and for
that reason the 2015 drilling employed
a larger diameter drill bit to that used in
the earlier resource drilling programmes
resulting in a 50% greater sample size.
However, even with the larger sample
size grade variability has still been
relatively high.

During 2015-16 Aura continued to conduct
testwork and validation work aimed at
defining optimal protocols for the recovery
of adequately representative samples. This
work will continue in 2016-17 and whilst
it is time consuming and expensive, it is
important it is undertaken now so that
Aura can optimise its material handling
and sampling protocols to ensure the best
project outcomes during operation.

In order to attain the high level of
confidence required for the grade applied
in Measured Resources estimates, which
is generally considered to be around

+/- 10%, and given the inherent high grade
variability in calcrete deposits, further
verification/validation programmes are
under contemplation and planning.
These include:

• Downhole gamma logging

• Disequilibrium testwork

• Trenching of the mineralisation

• Detailed ground radiometric

surveying

Aura is continuing to progress the
Feasibility Study for the Tiris project with
a current date for completion by the end
of 2017.

TIRIS DEVELOPMENT STATEGY
SIMPLE PATH TO CASHFLOW – ‘Perfect World Scenario’

TIRIS POTENTIAL
PRODUCTION LATE 2018

TIRIS CONSTRUCTION
START END 2017

TIRIS FEASIBILITY
STUDY IN 12 MONTHS

CONTINUE TO ASSESS NEW OPPORTUNITIES

2016

2017

2018

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16opErAtioN’s rEviEw 9

HÄGGÅN PROJECT – 100% SWEDEN

The Häggån project is one of the world’s
largest undeveloped uranium deposits
and is strategically located within Western
Europe.

With an Inferred Resource of 803 million
pounds U3O8, the deposit is an important
source of uranium for Europe and
potentially Sweden, which is 50% nuclear
dependent for electricity, and therefore
provide energy self-sufficiency for many
decades.

Aura believes that whilst the Häggån
project is a large and relatively expensive
project undertaking it is also an extremely
valuable project which, in due course, will
be profitable long-life mine in one of the
most stable countries in the world.

During 2015-16 planning on the Häggån
Project was undertaken to commence a
programme of community engagement
on the project including presentations on
both the regional benefits of the project
and the operating aspects of the project.

TASIAST SOUTH GOLD PROSPECT
Given Aura’s strong technical team it has
maintained a readiness to purchasing
further assets which it considers to be
aligned with its existing business.

As a result towards the end of the financial
year Aura secured the rights to acquire
175 km2 of prospective gold tenements
covering two under-explored mineralised
greenstone belts in Mauritania. The areas
lie along strike from Kinross’ giant 21 Moz
Tasiast gold mine and also from Algold’s
Tijirit gold project. The two areas are
currently held under exploration permit
applications and are expected to be
granted in the near future.

These highly prospective gold areas
represent an excellent opportunity in
lightly explored Archean greenstone
belts and will leverage Aura’s extensive
operating experience in this part of the
world.

The tenements are favourably located
200 km from Nouakchott, 60 km
from the coast, and can be managed
efficiently within the company’s existing
management resources without distraction
from Aura’s core uranium focus.

The tenements cover portions of the
Tasiast and Tijirit greenstone belts and
have only been explored previously by
one other company which was forced to
suspend activities in the mineral industry
downturn in 2012, despite having located
zones of significant gold mineralisation.
Members of Aura’s current technical team
were involved in this previous work and
are well acquainted with the area.

Previous exploration for gold on these
permit areas also located strongly
anomalous nickel values in several areas,
associated with ultramafic rocks. In parts
of the tenements high nickel values
are associated with anomalous copper
highlighting potential for nickel-copper
sulphide mineralisation, as occurs in the
greenstone belts of Australia and Canada.
At this stage there has been no follow-up
work carried out on these nickel targets.

Aura’s Tasiast South project area has the
following attributes:

• Tenements over two lightly

explored greenstone belts covering
175 km2

• The 20 Moz Tasiast gold mine is
nearby on the same greenstone
belt and highlights the potential
for major deposits in the region
(See Fig 2)

• $3 million has been expended by
the previous explorer on airborne
geophysics, reverse circulation and
air-core drilling, and sampling

• Broad zones of gold mineralisation
have been identified with strong
similarities to the Tasiast gold mine
mineralisation and alteration

•

No testing deeper than 150m with
most previous holes less than
100m

• High grade drill intersections

have been reported by others in
the district from both past and
current programme, including
one programmes in progress with
Algold Resources (a TSX-listed
entity), which highlight the current
interest and potential in these
poorly tested belts

Next steps envisaged at the Tasiast South
project are:

• Ground electrical geophysics
to locate the strongest zones
of disseminated sulphide
development for drill targeting

• Additional bedrock sampling by

air-core or auger-drilling to better
define the high nickel ultramafics
and zones of copper/nickel for
follow up drilling

• Deep drill testing of targets defined

SODA ASH AND LITHIUM SABKHA
Similar to its gold acquisition a Sabkha
(salt pan) was identified during the
Competent Persons Review of Aura
Energy’s projects for the AIM listing by the
Independent Expert, Wardell Armstrong
International Limited (WAI).

Tenements covering two large Sabkhas
(salt pans) in the region of its Tiris project
have been applied for with a view to
exploring this formation for soda ash
and other minerals. Soda ash is the leach
agent proposed for the Tiris project and if
the source is confirmed it would provide
significant benefits to the Tiris project
economics. Importantly Sabkha’s are also
known sources of other minerals including
lithium.

The WAI review noted;

“On the return trip from the Tiris East
uranium project, the route crosses a very
wet clay-rich “pan” or Sabkha. The surface
and geological setting of the pan was
strongly reminiscent of pans known to Mr
Moseley in other parts of Africa that are
being investigated for lithium and other
valuable salts.”

The Sabkhas which are 165 km from
Hippolyte are large on a relative basis
covering an area of over 85 km2. Sabkha
is an Arabic name for a salt-flat that has
come into general use in sedimentology.
They are also known as “Salars” in South
America and generically as salt pans or
flats. The valuable salts can occur in the
Sabkha environment either in clays at or
near surface or in brine reservoirs deeper
in the lake sediments.

The location of the Sabkha between the
Tiris project’s east and west tenements
provides a favourable location should a
source of soda ash (Na2CO3) be identified.
The Tiris project 2014 Scoping Study
identified the need for up to 16,000 tonnes
of soda ash which, including transport,
would account for approximately 25% of
Tiris’ operating costs. Utilising a nearby
source of soda ash has the potential
to significantly reduce these costs.
Additionally potential for revenue from
other minerals such as lithium or back-
loading soda ash to port for export would
further reduce the Tiris project operating
cost.

Sabkha relative to the Aura Uranium Licences

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16opErAtioN’s rEviEw 11

CORPORATE
AIM LISTING
One of Aura’s key activities during the 2016
year was the pursuit of a London Stock
Exchange AIM listing and fund raising. On
Monday, 12th September Energy Limited
listed on AIM with the stockcode: AURA.
The listing has been an outstanding
success with the share price trading at a
premium since listing and large volumes
being traded in both markets. With
the increase in issued capital and the
increase in the price Aura’s share market
capitalisation has more than doubled as a
result of this listing.

The AIM listing and parallel Australian
Placement resulted in the Company
raising £2.85 million (AUD$5.0 million)
before expenses by way of a placing of
approximately 254 million new ordinary
shares at £0.0114 (AUD$0.02) per share.

Aura Energy has always believed that,
given our European and African focus,
dual listing on AIM was both an attractive
option for Aura and a natural marketplace
for the company. This decision has been
vindicated.

GPEC DEVELOPMENT MOU
Aura previously advised that it had entered
into a Development MoU with China
Energy Engineering Group Guangdong
Power Engineering Company Ltd (GPEC)
on 4th February 2016 which outlined that
GPEC would provide certain engineering,
equipment supply services and possible
finance for development of Tiris project in
Mauritania.

During the year Aura continued
negotiations with GPEC and supplied
them with a detailed engineering
contract covering all aspects of the GPEC’s
Engineering Procurement and Construction
Management (EPCM) role. Since this was
provided GPEC has undertaken active
review and the engineering contract
is in detailed evaluation with five
separate departments within GPEC and
is progressing through GPEC’s required

internal processes.

Aura continues to pursue several parallel
strategies to ensure development of
the Tiris project. The MoU with GPEC is
an important aspect of this search as it
not only provides a very cost effective
development option for the high margin
Tiris project but also provides Aura, and
the Tiris project broad exposure to the
extraordinary expansion of the Chinese
nuclear industry.

Aura’s Development MoU outlines for GPEC
to provide the following main elements:

• EPCM services for the Tiris project

• Equipment financing for service of

the Tiris project

• Procurement services for the Tiris

project’s major equipment

• Procurement of required power

infrastructure for the Tiris project

• Seek finance parties for completion
of the Production Finance Package

•

Introduction of further parties
for the purpose of investment,
project construction, processing,
engineering studies and product
marketing for the Tiris project

• Facilitate direct investment by

Chinese partners to assist with the
development of the Tiris project

• Endeavour to introduce parties to
negotiate offtake agreements for
the Tiris project

GPEC is an engineering firm based in
Guangdong China and operates within
a group of companies under the parent
company China Energy Engineering Group
Company Ltd (CEEC). GPEC’s main activities
are the engineering and construction
management within the power industry
having completed several nuclear, coal
and LNG gas fired power stations as well
as significant power related infrastructure
projects.

URANIUM MARKET
The World Nuclear Association has stated
that China presently has 30 nuclear
reactors in operation and another 24
under construction. By 2020-21 China will
generate 58 GWe from nuclear power and
150 GWe by 2030. The Chinese nuclear
power development programme is not
dependent on Chinese economic growth as
the development programme is a focused
government commitment to meet massive

base load energy demand and to do so in
an environmentally acceptable manner
with reduction in air pollution being the
public policy priority. This development
agreement with CEEC/GPEC place Aura
in the group of companies that can take
advantage of this growth.

As the chart below confirms the
requirement for new uranium supply is
significant over the coming years.

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16opErAtioN’s rEviEw 13

Aura’s project cash cost versus U308 price

US$/lb U₃O₈
70

$30/lb

Tiris
* Trade Tech Report June 2016

Aura Assumed SS Pricing U₃O₈ ~US$65/lb

Contract U₃O₈ Price – US$42/lb*

Spot U₃O₈ Price – US$26.10/lb*

$13.5/lb

Häggån

Historical Spot (grey) and LT Contract (blue) sales for U3O8. Note the very low level of contract sales in 2013 and 2014 –
A potential driver for U3O8 price recovery

DIRECTORS’ REPORT

Your Directors present their report
together with the financial statements
of the Group, being the company and its
controlled entities, for the financial year
ended 30 June 2016.

DIRECTORS

The names of Directors in office at
any time during or since the end of the
year are:

PETER REEVE
Executive Chairman and
Managing Director

Peter Reeve has been involved in
the Australian resources industry
for approximately 25 years and, as a
professional metallurgist, has held
positions with Rio Tinto, Shell-Billiton,
Newcrest Mining and Normet Consulting.
For seven years Peter worked at JB Were
as a Resource Specialist Fund Manager
and a Resource Corporate Finance Director.
He has been a management consultant in
South Africa and was involved in an African
iron ore start-up.

Peter was Managing Director and Chief
Executive Officer of Ivanhoe Australia,
which he co-founded with Robert
Friedland, and was a Director of both EXCO
Resources and Emmerson Resources.

Peter’s specialisation is the development
of company strategy and the
commercialisation of projects, and
alignment with the global investment
community and international resource
corporations.

DR. BOB BEESON
Non-Executive Director

Dr. Bob Beeson is a professional geologist
with over 35 years’ experience in mineral
exploration and development. He has
held senior management positions with
Billiton Australia, Acacia Resources, North
Limited and New Hampton Goldfields
and has extensive experience in leading
and managing teams in many regions of
the world. He was Managing Director of
Aura Energy Ltd since its listing in 2006
and in 2015 vacated the position and is
now Non-Executive Director. He is also a
Non-Executive Director of Drake Resources
Limited.

Highlights of Dr. Beeson’s specific uranium
exploration experience include:

• Led major geochemical exploration
programmes for sediment-hosted
and magmatic uranium deposits
throughout South Africa;

• Specialist geochemist in a multi-
national team in the Middle East;

• Conducted major review and
targeting programme of the
Alligator Rivers Uranium field for
Mobil Energy Minerals;

• Led Aura’s team that has made

greenfields uranium discoveries in
Sweden, West Africa and Western
Australia.

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16DirECtors' rEport 15

BRETT FRASER
Non-Executive Director

JULIAN PERKINS
Non-Executive Director

Mr Fraser is a qualified accountant with
more than 29 years’ experience in the
mining, finance and securities industry
Mr Fraser is an experienced company
executive having served as a director and
been involved in governance, negotiation,
finance, development, forensic accounting
and operation for a number of private and
ASX listed companies. As the founder or
officer of businesses in mining, securities
trading, the beverage industry, media,
leisure health and corporate finance Mr
Fraser has extensive knowledge and
skills in company operations. Mr Fraser
is the Non-Executive Chairman of Blina
Minerals, Non-Executive Chairman of
Drake Resources Limited, former Chairman
of Doray Minerals Ltd and the Securities
Institute Education, WA chapter, and also
a former director of Gage Roads Brewing
Co and Brainytoys Limited. Mr Fraser holds
a Bachelor of Business degree, is a Fellow
of Certified Practising Accountants, is a
Fellow of the Financial Services Institute
of Australasia and has completed post
graduate studies in finance and marketing.

Mr Julian Perkins has over 40 years’
experience in the global minerals industry.
He has held senior technical management
positions in Australia for AngloGold Ashanti
Ltd, Acacia Resources Ltd, Shell Australia, and
prior to that for Billiton International Metals
(part of the Shell Group) in the Netherlands.
He has degrees in mining and metallurgical
engineering, with operational experience in
underground mining in South Africa and the
metallurgical operations at Nchanga on the
Zambian Copperbelt. He is a Graduate of the
Australian Institute of Company Directors.

Mr Perkins has extensive experience in
research and development. He was head of
the mineral processing department at the
Arnhem metals research centre of Shell
Research in the Netherlands for three years.
In Australia he was Chairman of the Board
of Parker Centre Ltd, which managed the
A J Parker Cooperative Research Centre
(CRC) for Hydrometallurgy from 2006 to
2012, having been a director prior to that.
He has also been a director on the boards
of the Cooperative Research Centre for
Mining and the Australian Centre for Mining
Environmental Research. He designed and
managed the early metallurgical testwork
and flowsheet design for both of Aura’s
projects. He has been a non-executive
director of Aura Energy Limited since 2011.

Directors have been in office since the start
of the financial year to the date of this
report unless otherwise stated.

COMPANY SECRETARY

The following person held the position
of Company Secretary at the end of the
financial year:

JOHN MADDEN
Company Secretary (from 31 March 2016 to
30 June 2016)

John started his career with Rio Tinto
Limited (formerly CRA Limited) and held
a number of positions in accounting,
planning, business analysis and taxation
as well as the acquisitions group. Between
1996 and 2000, John was the Manager-
Finance for Rio Tinto at the Grasberg
copper-gold project in West Papua. On
leaving Rio Tinto in 2000, John worked in
Papua New Guinea for three years on the
Hidden Valley/Wafi gold projects feasibility
studies and for five years on the Tampakan
copper-gold project in the Philippines
where he was the General Manager-
Commercial & Company Secretary for
Indophil Resources NL.

John has provided strategic and
commercial advice as well as specialist
financial modelling services to OK Tedi
Mining Limited, Intrepid Mines Limited, the
Australian Iron Ore Joint Venture and Mesa
Minerals Limited from 2008 to 2011.

John has extensive commercial and legal
experience in Francophone Africa as he
co-founded Indian Pacific Resources
Limited, a Madagascar-based iron ore
explorer and served as an executive officer
from 2011 to 2015.

SF ZILLWOOD
Company Secretary (from 1 July 2015 to
31 March 2016)

NATURE OF OPERATIONS AND
PRINCIPAL ACTIVITIES

The principal activities of the Group during the financial year
were the exploration and evaluation of its projects in Sweden and
Mauritania.

REVIEW OF OPERATIONS
OPERATION REVIEW
A detailed review of the Group’s exploration activities is set out in
the section entitled Operations Review on page 6 in this annual
report.

CORPORATE GOVERNANCE
STATEMENT

Details of the Company’s corporate governance practices are
included in the Corporate Governance Statement set out on the
Company’s website at: www.auraenergy.com.au/governance.html

DIVIDENDS PAID OR RECOMMENDED

There were no dividends paid or recommended during the
financial year ended 30 June 2016.

OPERATING RESULTS
The consolidated loss for the year amounted to $1,625,775
(2015: $2,493,900). The decrease in the consolidated loss is
largely attributable no adjustment to the fair value of exploration
projects in Mauritania and Sweden (see Note 11 Exploration and
evaluation assets).

The financial statements have been prepared on a going concern
basis, which contemplates the continuity of normal business
activity and the realisation of assets and the settlement of
liabilities in the ordinary course of business. Details of the Groups
assessment in this regard can be found in Note 1. Statement of
significant accounting policies-Going concern. The auditor’s report
contains an emphasis on matter in this regard.

FINANCIAL POSITION
The net assets of the Group have increased by $78,881 from
30 June 2015 to $13,840,706 at 30 June 2016.

As at 30 June 2016, the Group’s cash and cash equivalent
decreased from 30 June 2015 by $625,253 (including foreign
exchange movements) to $317,758. The Group had a working
capital deficit of $297,004 (2015: $500,426 working capital
surplus). The deficit was negetively impacted by the accruing
of advisors and consultants costs at balance date which was
A$136,914.

SIGNIFICANT CHANGES IN STATE
OF AFFAIRS

There were no significant changes in the state of affairs of the
Group during the financial year.

EVENTS SUBSEQUENT TO REPORTING
DATE

On the 12 and 16 of September 2016, the Company completed the
listing of its shares on the AIM in London and raised $5 million
(before costs) at a share price of 2 cents per share.

LIKELY DEVELOPMENTS

Likely developments, future prospects and business strategies of
the operations of the Group and the expected results of those
operations have not been included in this report as the Directors
believe that the inclusion of such information would be likely to
result in unreasonable prejudice to the Group.

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16DirECtors' rEport 17

INFORMATION ON DIRECTORS

Peter Reeve

Qualifications

Executive Chairman and Managing Director

Bachelor of Applied Sciences.

Experience

Board member since 13 July 2015 with over 30 years’ experience positions with Rio Tinto, Billiton
Australia and Newcrest Mining as well as experience as a Resource Fund Manager and Resources
Corporate Finance Director at J B Were & Son. More recently Peter was Chief Executive Officer of Ivanhoe
Australia Ltd.

Interest in shares and options

9,718,304 ordinary shares in Aura Energy Limited and 35,000,000 options.

Directorships held in other
listed entities in last 3 years

Nil

Dr Robert Beeson

Director (Non-executive)

Qualifications

Bachelor of Science with Honours; PhD; Member of the Australian Institute of Geoscientists

Experience

Board member since 31 March 2006. Geologist with over 35 years of global experience in uranium and
other commodity management, exploration and development.

Interest in shares and options

5,636,937 ordinary shares in Aura Energy Limited.

Directorships held in other
listed entities in last 3 years

Managing Director of Drake Resources Limited from November 2004 until 31 January 2015. Non-executive
director or Drake Resources Limited since 1 February 2015. No other directorships in the past three years.

Brett Fraser

Director (Non-executive)

Qualifications

Experience

Fellow of Certified Practicing Accountants; Fellow of the Financial Services Institute of Australasia; Grad
Dip Finance, Securities Institute of Australia; Bachelor of Business (Accounting); International Marketing
Institute - AGSM Sydney.

Board member since 24 August 2005.

Interest in shares and options

3,957,600 ordinary shares in Aura Energy Limited.

Directorships held in other
listed entities in last 3 years

Current Non-executive director and Chairman of Drake Resources Limited since March 2004, and Non-
executive director and Chairman of Blina Diamonds NL since September 2008. Past director of Doray
Minerals Limited from October 2009 until November 2011. No other directorships in the past three years.

Julian Perkins

Director (Non-executive)

Qualifications

Master of Science (Imperial College of Science & Technology) 1972; Associate of the Camborne School
of Metalliferous Mining (Honours) 1967; Fellow of the Australasian Institute of Mining and Metallurgy;
Graduate of the Australian Institute of Company Directors.

Board member since 7 June 2011.

Mr. Perkins has over 40 years’ experience in operations and management with major companies in the
international minerals industry. He was Manager of Mining & Technology (Australia) for AngloGold
Ashanti Ltd, until 2006. His career includes operating and management roles on the Zambian Copperbelt,
leading the mineral processing at Shell Research in the Netherlands before returning to corporate
management in Australia. He was Chairman of Parker Centre Ltd for Hydrometallurgy from 2006 to 2012
and previously a director of the CRC Mining and the Australian Centre for Mining Environmental Research.

Experience

Interest in shares and options

2,861,990 ordinary shares in Aura Energy Limited.

Directorships held in other
listed entities in last 3 years

No other directorships held in other listed entities.

MEETINGS OF DIRECTORS

During the financial year the board of directors held six meetings (including committees of directors) with the remainder of meetings
conducted by way of written resolution. Attendances by each director during the year were as follows:

COMMITTEE MEETINGS

DIRECTORS’
MEETINGS

REMUNERATION
COMMITTEE

AUDIT
COMMITTEE

NUMBER ELIGIBLE
TO ATTEND

NUMBER
ATTENDED

NUMBER ELIGIBLE
TO
ATTEND

NUMBER
ATTENDED

NUMBER ELIGIBLE
TO
ATTEND

NUMBER
ATTENDED

PD Reeve

Dr R Beeson

BF Fraser

JC Perkins

ENVIRONMENTAL REGULATIONS

In the normal course of business, there are no environmental
regulations or requirements that the Company is subject to.

The directors have considered the enacted National Greenhouse
and Energy Reporting Act 2007 (the NGER Act) which introduced
a single national reporting framework for the reporting and
dissemination of information about the greenhouse gas emissions,
greenhouse gas projects, and energy use and production of
corporations. At the current stage of development, the directors
have determined that the NGER Act has no effect on the Company
for the current, nor subsequent, financial year. The directors will
reassess this position as and when the need arises.

NON-AUDIT SERVICES

During the year ended 30 June 2016, taxation consulting services
were provided to the Company by a party related to the auditors,
Bentleys. These services amounted to $22,085 (2015: $5,812).
Details of remuneration paid to the auditor can be found within
the financial statements at Note 4 Auditor’s remuneration.

The directors are satisfied that the provision of non-audit services
during the year by Bentleys (or by another person or firm on
Bentley’s behalf) is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001
(Cth).

INDEMNIFYING OFFICERS OR
AUDITOR

During or since the end of the financial year the Company has
given an indemnity or entered into an agreement to indemnify, or
paid or agreed to pay insurance premiums as follows:

• The Company has entered into agreements to indemnify
all directors and provide access to documents, against
any liability arising from a claim brought by a third party
against the Company. The agreement provides for the
Company to pay all damages and costs which may be
awarded against the directors.

• The Company has paid premiums to insure each of the

directors against liabilities for costs and expenses incurred
by them in defending any legal proceedings arising out
of their conduct while acting in the capacity of director of
the company, other than conduct involving a wilful breach
of duty in relation to the Company. The amount of the
premium was $9,092 (2015: $9,515).

• No indemnity has been paid to auditors of the Group.

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16DirECtors' rEport 19

OPTIONS

At the date of this report, the unissued ordinary shares of Aura Energy Limited under option (listed and unlisted) are as follows:

GRANT DATE

DATE OF EXPIRY

EXERCISE PRICE

NUMBER UNDER OPTION

4 December 2012

4 December 2016

8 March 2014

8 March 2017

12 November 2014

12 November 2018

17 June 2015

10 June 2015

25 November 2015

23 December 2015

5 February 2016

10 May 2016

17 June 2017

9 June 2018

9 February 2019

9 February 2020

9 February 2021

25 November 2017

23 December 2017

5 February 2018

9 May 2018

$0.200

$0.048

$0.070

$0.050

$0.100

$0.150

$0.025

200,000

2,600,000

12,500,000

27,226,166

8,750,000

6,250,000

2,500,000

8,750,000

62,111,801

8,163,265

19,979,593

22,943,877

190,724,702

No person entitled to exercise the option has or has any right by virtue of the option to participate in any share issue
of any other body corporate.

PROCEEDINGS ON BEHALF OF
COMPANY

No person has applied for leave of Court to bring proceedings
on behalf of the Company or 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 any part of
those proceedings.

The Company was not a party to any such proceedings during
the year.

AUDITOR’S INDEPENDENCE
DECLARATION

The lead auditor’s independence declaration for the year ended
30 June 2016 has been received and can be found in the annual
report.

REMUNERATION REPORT (AUDITED)
REMUNERATION POLICY
The remuneration policy of the Group has been designed to
align director and management objectives with shareholder
and business objectives by providing a fixed remuneration
component, and offering specific long-term incentives based on
key performance areas affecting the Group’s financial results.
The board of directors believes the remuneration policy to be
appropriate and effective in its ability to attract and retain the
best management and directors to run and manage the Group, as
well as create goal congruence between directors, executives and
shareholders.

The policy of the board of directors for determining the nature and
amount of remuneration for board members and senior executives
of the Group is described in the following paragraphs.

The remuneration policy of the Group sets the terms and
conditions for executive directors and other senior executives. Due
to the rapidly changing circumstances of the Group in recent years,
the policy is reviewed annually by the board of directors with the
purpose of maintaining alignment of the board and management
with the Group’s strategic objectives. Management is also entitled
to participate in employee share and option arrangements. All
executives receive a base salary which takes into account such
factors as length of service and experience, superannuation and
share based incentive such as options. The board of directors
reviews executive packages annually by reference to the
performance of the Group, individual executives and relevant
comparable remuneration data from similar listed companies and
appropriate industry sectors. Independent expert advice is sought
as required.

REMUNERATION REPORT (AUDITED) (CONT)
The total amount of non-executive directors’ remuneration is proposed by the board of directors from time to time at the Annual General
Meeting and is subject to formal approval by shareholders. Within this limit, the board of directors presently remunerates non-executive
directors at around the average of those obtained from relevant comparable data from similar listed companies and appropriate industry
sectors. A measure of longer-term incentive is provided by the allocation of options to non-executive directors. The board of directors
determines remuneration to individual non-executive directors, working within the limit set by shareholders, and taking into account any
special duties or accountability. Payments to non-executive directors are not linked to Company performance but in order to align their
interest with those of shareholders, non-executive directors are encouraged to hold shares in Aura Energy Limited.

Executives and non-executive directors have received a superannuation guarantee contribution as required by law, which increased to
9.5% on 1 July 2014, but do not receive any other retirement benefits.

All remuneration paid to non-executive directors and executives is valued at the cost to the Company and is expensed. Options over
ordinary shares granted to directors and employees are valued using the Black-Scholes methodology. Details of directors’ and executives’
interests in options as at 30 June 2016 are provided in the Remuneration Report of the financial statements.

Following the last AGM, the Company paid outstanding directors’ fees by way of the issues of fully paid shares on an average VWAP basis.
The Company proposes to put to shareholders at this year’s AGM a similar mechanism to extinguish outstanding obligations for directors
fees.

The Chairman became Executive Chairman and Managing Director of the Company with effect on 1 January 2015 and accordingly, is a
fulltime employee. The Executive Chairman and Managing Director has agreed to settle 20% of his salary by way of fully paid ordinary
shares in the Company.

REMUNERATION DETAILS FOR THE YEAR ENDED 30 JUNE 2016
There were no cash bonuses paid during the year and there are no set performance criteria for achieving cash bonuses.

The following table of benefits and payment details, in respect to the financial year, the components of remuneration for each member of
the key management personnel of the Group:

2016

GROUP KEY
MANAGEMENT
PERSONNEL

SHORT-TERM BENEFITS

SALARY,
FEES AND
LEAVE

PROFIT
SHARE AND
BONUSES

NON-
MONETARY

OTHER

POST-
EMPLOYMENT
BENEFITS

SUPER-
ANNUATION

LONG-TERM
BENEFITS

EQUITY-SETTLED SHARE-
BASED PAYMENTS

TOTAL

OTHER

EQUITY

OPTIONS

COMPEN-
SATION
CONSISTING
OF
OPTIONS

PD Reeve(1)

321,400

Dr R Beeson(2)

BF Fraser(2)

JC Perkins(2)

SF Zillwood(3)

JM Madden(4)

40,000

43,800

40,000

445,200

53,299

39,149

92,448

28,600

3,800

36,200

100,000

158,645

608,645

26.06%

43,800

53,299

39,149

100,000

158,645

832,493

19.06%

(1) Mr Reeve was issued 3,725,500 fully paid ordinary shares (net of tax) in the Company pursuant to his contract of employment.

(2) Emoluments for non-executive directors, Dr R Beeson and Messrs BF Fraser and JC Perkins, include 11 months of accrued entitlements for the financial year

ended 30 June 2016 pursuant to Letters of Appointment. The non-executive directors agreed to defer emoluments until such time as the Company had secured
significant long-term finance to advance its projects. The board of directors propose to put to shareholders at the 2016 Annual General Meeting a resolution for
the non-executive directors to be allotted fully paid ordinary shares in the Company, net of tax, in lieu of cash entitlements to emoluments. The superannuation
levy will be paid by way of cash settlement to the superannuation fund nominated by each non-executiv4e director.

(3) Mr SF Zillwood is employed by Foster Resources Pty Ltd, a company controlled by Mr SF Zillwood, which provided company secretarial and accounting services to

the Company for the period 1 July 2015 to 31 March 2016 pursuant to a consultancy contract, dated 30 December 2013.

(4) Mr JM Madden was appointed company secretary and chief financial officer on 31 March 2016 following the decision by Mr SF Zillwood to retire and accordingly,
terminate his contractual relationship with the Company. Mr Madden is retained as a contractor and his appointment to the position is subject to a month-by-
month arrangement until such time as the Company secures long-term finance to advance its projects.

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16DirECtors' rEport 21

REMUNERATION REPORT (AUDITED) (CONT)

2015

GROUP KEY
MANAGEMENT
PERSONNEL

SHORT-TERM BENEFITS

SALARY,
FEES AND
LEAVE

PROFIT
SHARE AND
BONUSES

NON-
MONETARY

OTHER

POST-
EMPLOYMENT
BENEFITS

SUPER-
ANNUATION

LONG-TERM
BENEFITS

EQUITY-SETTLED SHARE-
BASED PAYMENTS

TOTAL

OTHER

EQUITY

OPTIONS

COMPEN-
SATION
CONSISTING
OF OPTIONS

PD Reeve (1)(2)(10)

330,167

Dr R Beeson(3)(4)(10)

182,650

BF Fraser(5)(6)(10)

JC Perkins(7)(8)(10)

SF Zillwood(9)

58,333

53,750

624,900

102,816

26,833

17,369

5,542

5,106

54,850

50,000

96,704

503,704

19.20%

200,019

63,875

58,856

102,819

50,000

96,704

929,270

10.14%

(1) Mr Reeve was issued 4,612,380 fully paid ordinary shares in lieu of director’s emolument.

(2) Mr Reeve was appointed Executive Chairman and Managing Director on 1 January 2015 and as a result, the remuneration paid to Mr Reeve reflects his

appointment to his dual role.

(3) Mr Beeson was issued 2,566,315 fully paid ordinary shares in lieu of director’s emolument.

(4) Mr Beeson retired as Managing Director of Aura Energy Limited on 31 December 2014. As at balance date, 30 June 2015, Mr Beeson is entitled to accrued annual
leave and long service amounting to $122,122. At the date of this Remuneration Report the Company is in discussion with Mr Beeson over other matters relating
to his contract of employment.

(5) Mr Fraser was issued 729,290 fully paid ordinary shares in lieu of director’s emolument.

(6) Wolfstar Group Pty Ltd, a company controlled by Mr Fraser, provided financial services to Aura Energy Limited during the financial year. These services were

provided indirectly by Mr Fraser and have therefore not been included in remuneration.

(7) Mr Perkins was issued 1,936,042 fully paid ordinary shares in lieu of director’s emolument.

(8) RRI Trust, a company controlled by Mr Perkins, provided metallurgical consulting services to the Aura Energy Limited during the year.

(9) The Company Secretary and CFO, Stan Zillwood is employed by Foster Resources Pty Ltd, a company controlled by Mr Zillwood, to provide services to the Group

under a contract dated 30 December 2013.

(10) Amounts disclosed for Equity settled share-based payments exclude share-based payments accrued in 2014 but settled in the 2015 financial year.

(11) Other transactions with key management personnel are set out on page 25.

SERVICE AGREEMENTS
The Executive Chairman and Managing Director, Peter Reeve, is employed under a contract of employment, effective 1 January 2015.

The employment deed stipulates a four weeks’ resignation period. The Company may terminate the employment contract without cause
by providing four weeks’ written notice, or making payment in lieu of notice based on the individual’s annual salary component.

If employment is terminated other than for serious misconduct, and the employee is not then otherwise in default of this contract and his
employment, the Managing Director will, in connection with his retirement from the office, receive in addition to the required four weeks’
notice period, three months’ salary. An additional benefit may be paid in the amount of one month for every year of service. This is subject
to the provisions of the Corporations Act 2001 (Cth), which may require shareholder approval.

SHARE-BASED COMPENSATION

Incentive Option Scheme

Options are granted under the Aura Energy Limited Incentive Option Scheme. All staff who have been continuously employed by the
Company for a period of at least one year are eligible to participate in the plan. Options are granted under the plan for no consideration.

b. Director and Key Management Personnel Options

On 9 June 2015, the Company granted the Executive Chairman and Managing Director the following options over ordinary shares:

• 8,750,000 at an exercise price of $0.10 each. The options are exercisable on or before 9 June 2018.

• 6,250,000 at an exercise price of $0.10 each. The options are exercisable on or before 9 February 2019.

• 2,500,000 at an exercise price of $0.15 each. The options are exercisable on or before 9 June 2019.

• 8,750,000 at an exercise price of $0.15 each. The options are exercisable on or before 9 June 2020.

• 8,750,000 at an exercise price of $0.15 each. The options are exercisable on or before 9 June 2021.

As at the date of this report, all options over ordinary shares previously granted to non-executive directors have expired.

REMUNERATION REPORT (AUDITED) (CONT)

c. Share-based Payments

The terms and conditions relating to options granted as remuneration during the year to directors and key management personnel
are as follows:

2016

GROUP KEY
MANAGEMENT
PERSON

GRANT VALUE
$
(NOTE 1)

GRANT DATE

REASON FOR
GRANT

VESTING DATE

PD Reeve

10 Jun 2015

66,436

57,884

19,445

87,364

Note 1

9 Jun 2016

Note 1

9 Feb 2016

Note 1

9 Feb 2016

Note 1

9 Feb 2017

10 Jun 2015

103,555

Note 1

9 Feb 2018

PERCENTAGE
VESTED
DURING
YEAR
%

PERCENTAGE
FORFEITED
DURING YEAR
%

PERCENTAGE
REMAINING AS
UNVESTED
%

EXPIRY DATE

RANGE OF
POSSIBLE
VALUES
RELATING TO
FUTURE
PAYMENTS

100

9 Jun 2018

- 9 Feb 2019

100

9 Feb 2020

100

9 Feb 2021

Note 1. The options have been granted to the Executive Chairman and Managing Director as part of his remuneration and for future
performance. The vesting conditions of the options are as follows:

• Tranche 1: vest at immediately, exercisable at 10 cents, expire 9 June 2018.

• Tranche 2: vest at 8 months from issue, exercisable at 10 cents, expire 9 February 2019.

• Tranche 3 vest at 8 months from issue, exercisable at 15 cents, expire 9 February 2019.

• Tranche 4: vest at 20 months from issue, exercisable at 15 cents, expire 9 February 2020.

• Tranche 5 vest at 32 months from issue, exercisable at 15 cents, expire 9 February 2021.

Details of all Share-Based Payments in existence during the year can be found at Note 19 Share-Based Payments.

2015

GROUP KEY
MANAGEMENT
PERSON

GRANT VALUE
$
(NOTE 1)

GRANT DATE

REASON FOR
GRANT

VESTING DATE

PERCENTAGE
VESTED
DURING
YEAR
%

PERCENTAGE
FORFEITED
DURING YEAR
%

PERCENTAGE
REMAINING AS
UNVESTED
%

EXPIRY DATE

RANGE OF
POSSIBLE
VALUES
RELATING TO
FUTURE
PAYMENTS

PD Reeve

10 Jun 2015

66,436

57,884

19,445

87,364

Note 1

9 Feb 2016

Note 1

9 Feb 2016

Note 1

9 Feb 2017

Note 1

9 Jun 2016

100

10 Jun 2015

103,555

Note 1

9 Feb 2018

9 Jun 2018

100

9 Feb 2019

100

9 Feb 2019

100

9 Feb 2020

100

9 Feb 2021

Note 1. The options have been granted to the Executive Chairman and Managing Director as part of his remuneration and for future
performance. The vesting conditions of the options are as follows:

• Tranche 1: vest at immediately, exercisable at 10 cents, expire 9 June 2018.

• Tranche 2: vest at 8 months from issue, exercisable at 10 cents, expire 9 February 2019.

• Tranche 3 vest at 8 months from issue, exercisable at 15 cents, expire 9 February 2019.

• Tranche 4: vest at 20 months from issue, exercisable at 15 cents, expire 9 February 2020.

• Tranche 5 vest at 32 months from issue, exercisable at 15 cents, expire 9 February 2021.

Details of all Share-Based Payments in existence during the year can be found at Note 19 Share-Based Payments.

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16DirECtors' rEport 23

REMUNERATION REPORT (AUDITED) (CONT)

d. Description of Options Issued as Remuneration

Details of the options over ordinary shares granted as remuneration to those KMP listed in the previous tables are as follows:

GRANT DATE

ISSUER

ENTITLEMENT ON
EXERCISE

10 Jun 2015

DATES EXERCISABLE

From vesting date to

9 Jun 2018 (expiry)

9 Feb 2019 (expiry)

10 Jun 2015

Aura Energy Ltd

1:1 ordinary shares

9 Feb 2019 (expiry)

10 Jun 2015

9 Feb 2020 (expiry)

9 Feb 2021 (expiry)

EXERCISE PRICE
$

VALUE PER OPTION
AT GRANT DATE
$

AMOUNT PAID/
PAYABLE BY
RECIPIENT
$

0.10

0.15

0.0076

0.0093

0.0078

0.0100

0.0118

Options over ordinary shares values at grant date were determined using the Black-Scholes method.

Details relating to service and performance criteria required for the vesting of options over ordinary shares have been provided in the
within the financial statements at Note 19. Share-based payments.

KEY MANAGEMENT PERSONNEL (KMP) EQUITY HOLDINGS

a. Fully paid ordinary shares of Aura Energy Limited held by each KMP

2016

GROUP KEY MANAGEMENT PERSON

BALANCE AT
START OF YEAR
NO.

RECEIVED DURING
THE YEAR AS
COMPENSATION
NO.

RECEIVED DURING
THE YEAR ON THE
EXERCISE OF OPTIONS
NO.

OTHER CHANGES
DURING THE YEAR (1)
NO.

BALANCE AT
END OF YEAR
NO.

PD Reeve

RF Beeson

BF Fraser

JC Perkins

SF Zillwood

JM Madden

5,442,804

5,636,937

3,957,600

2,861,990

3,725,500

17,899,331

3,725,500

(1) During the financial year Mr PD Reeve purchased ordinary shares in the Company on the market.

2015

GROUP KEY MANAGEMENT PERSON

BALANCE AT
START OF YEAR
NO.

RECEIVED DURING
THE YEAR AS
COMPENSATION
NO.

RECEIVED DURING
THE YEAR ON THE
EXERCISE OF OPTIONS
NO.

PD Reeve

Dr R Beeson

BF Fraser

JC Perkins

SF Zillwood

664,830

2,730,216

2,676,310

740,758

4,611,766

2,566,315

729,290

1,936,042

6,812,114

9,843,413

550,000

9,718,304

5,636,937

3,957,600

2,861,990

550,000

22,174,831

OTHER CHANGES
DURING THE YEAR(1)
NO.

BALANCE AT
END OF YEAR
NO.

166,208

340,406

552,000

185,190

5,442,804

5,636,937

3,957,600

2,861,990

1,243,804

17,899,331

(1) Other changes during the year relate the participation of directors in equity raising initiatives as well as on-market purchases.

REMUNERATION REPORT (AUDITED) (CONT)

b. Options of Aura Energy Limited held by each KMP

2016

GROUP KEY MANAGEMENT
PERSON

BALANCE AT
START OF YEAR
NO.

GRANTED AS
REMUNERATION
DURING THE YEAR
NO.

EXERCISED
DURING THE YEAR
NO.

OTHER CHANGES
DURING THE YEAR
NO.

BALANCE AT
END OF YEAR
NO.

VESTED AND
EXERCISABLE
NO.

PD Reeve(1)

Dr R Beeson(2)

BF Fraser(3)

JC Perkins(4)

SF Zillwood

JM Madden

2015

39,333,104

2,295,205

901,000

1,392,595

43,921,904

GROUP KEY MANAGEMENT
PERSON

BALANCE AT
START OF YEAR
NO.

PD Reeve(1)

Dr R Beeson(2)

BF Fraser(3)

JC Perkins(4)

SF Zillwood

6,250,000

6,520,710

2,326,579

2,556,667

GRANTED AS
REMUNERATION
DURING THE YEAR
NO.

35,000,000

EXERCISED
DURING THE YEAR
NO.

17,653,956

35,000,000

(2,333,104)

37,000,000

19,500,000

(170,205)

(276,000)

(142,595)

2,125,000

625,000

1,250,000

2,125,000

625,000

1,250,000

(2,921,904)

41,000,000

23,500,000

OTHER CHANGES
DURING THE YEAR
NO.

BALANCE AT
END OF YEAR
NO.

VESTED AND
EXERCISABLE
NO.

(1,916,896)

39,333,104

13,000,000

(4,225,505)

(1,425,579)

(1,164,072)

2,295,205

901,000

1,392,595

2,295,205

901,000

1,392,595

(8,732,052)

43,921,904

17,588,800

(1) Mr Reeve was issued 83,104 options over ordinary shares pursuant to the non-renounceable rights issue on 5 September 2014 and 2,000,000 options over

ordinary shares previously granted to Mr Reeve expired during the financial year.

(2) Mr Beeson was issued 274,495 options over ordinary shares pursuant to the non-renounceable rights issue on 5 September 2014 and 4,500,000 options over

ordinary shares previously granted to Mr Beeson expired during the financial year.

(3) Mr Fraser was issued 74,421 options over ordinary shares pursuant to the non-renounceable rights issue on 5 September 2014 and 1,500,000 options over

ordinary shares previously granted to Mr Fraser expired during the financial year.

(4) Mr Perkins was issued 85,928 options over ordinary shares pursuant to the non-renounceable rights issue on 5 September 2014 and 1,250,000 options over

ordinary shares previously granted to Mr Perkins expired during the financial year.

LOANS TO KEY MANAGEMENT PERSONNEL
There are no loans made to directors of Aura Energy as at 30 June 2016 (2015: nil).

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16REMUNERATION REPORT (AUDITED) (CONT)

OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL

Wolfstar Group Pty Ltd

Financial services provided by Wolfstar Group

Drake Resources Limited

Amounts due to Drake Resources for other services.

Amounts due from Drake Resources for other services provided by
Aura Energy Limited staff

RRI Trust

Mr Perkins provides metallurgical consulting services to the Group that is charged through
the RRI Trust, being a trust associated with Mr Perkins

Amounts owing to KMP

Payable for unpaid fees

PD Reeve

Dr R Beeson

BF Fraser

JC Perkins

SF Zillwod

JM Madden

DirECtors' rEport 25

2016
$

40,150

18,840

2015
$

24,503

2,576

53,590

9,628

28,527

There have been no other transactions involving equity instruments other than those described in this Annual Report.

This Report of the Directors, incorporating the Remuneration Report, is signed in accordance with a resolution of directors made pursuant
to s.298(2) of the Corporations Act 2001 (Cth).

P D Reeve

Executive Chairman and Managing Director

Dated this Thursday, 29 September 2016

AUDITOR’S INDEPENDENCE
DECLARATION

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16FiNANCiAL stAtEMENts 27

FINANCIAL STATEMENTS

For tHE YEAr ENDED 30 JUNE 2016

CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2016

Continuing operations

Revenue

Other income

Project partnering and divestment

Accounting and audit fees

Business development

Computers and communications

Depreciation

Employee benefits

Finance Costs

Impairment of exploration expenditure previously capitalised

Insurance

Consulting fees and corporate advisory

Public relations

Rent and utilities

Share-based payments

Share registry and listing fees

Travel and accommodation

Write-off of exploration assets

AIM listing costs

Other expenses

Loss before income tax

Income tax benefit

Loss from continuing operations

Other comprehensive income, net of income tax

Items that will not be reclassified subsequently to profit or loss

Items that may be reclassified subsequently to profit or loss:

Foreign currency movement

Other comprehensive income for the year, net of tax

NOTE

2016
$

4,907

2015
$

19,159

3,064

22,223

(3,757)

(149,416)

(126,869)

(44,193)

(1,602)

(711,929)

(8,171)

(6,000)

(27,150)

(4,676)

(638,556)

(60,564)

(1,045,240)

(51,378)

(223,149)

(22,472)

(39,847)

(158,645)

(79,385)

(49,273)

(51,461)

(165,840)

(22,529)

(39,451)

(182,309)

(67,526)

(33,168)

(96,704)

(63,522)

(92,836)

(12,026)

(15,769)

(1,774,383)

(2,493,900)

148,608

(1,625,775)

(2,493,900)

31,563

13,327

Total comprehensive income attributable to members of the parent entity

(1,594,212)

(2,480,573)

Earnings per share:

Basic loss per share (cents per share)

(0.41)

(0.93)

The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the accompanying notes.

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016

Current assets

Cash and cash equivalents

Trade and other receivables

Financial assets

Total current assets

Non-current assets

Plant and equipment

Exploration and evaluation assets

Total non-current assets

Total assets

Current liabilities

Trade and other payables

Short-term provisions

Borrowings

Total current liabilities

Total liabilities

Net assets

Equity

Issued capital

Reserves

Accumulated losses

Total Equity

The consolidated statement of financial position is to be read in conjunction with the accompanying notes.

FiNANCiAL stAtEMENts 29

NOTE

2016
$

2015
$

317,758

57,708

43,625

419,091

943,011

96,282

44,157

1,083,450

1,602

14,137,710

13,259,797

13,261,399

14,556,801

14,344,849

550,844

165,251

716,095

401,345

138,639

43,040

583,024

13,840,706

13,761,825

32,784,203

31,311,988

1,029,542

901,252

(19,973,039)

(18,451,415)

13,840,706

13,761,825

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2016

Balance at 1 July 2014

27,935,558

(16,474,803)

749,118

489,001

12,698,874

ISSUED
CAPITAL
$

ACCUMULATED
LOSSES
$

OPTIONS
RESERVE
$

FOREIGN
EXCHANGE
TRANSLATION
RESERVE
$

TOTAL
$

Balance at 1 July 2015

31,311,988

(18,451,415)

398,924

502,328

13,761,825

Loss for the year attributable owners of the parent

Other comprehensive income for the year attributable
owners of the parent

Total comprehensive income for the year attributable
owners of the parent

Transaction with owners, directly in equity

Shares issued during the year

Transaction costs

Options expired during the year

Options exercised during the year

Options issued during the year

Balance at 30 June 2015

(2,493,900)

3,691,230

(314,800)

517,288

(517,288)

31,311,988

(18,451,415)

Loss for the year attributable owners of the parent

Other comprehensive income for the year attributable
owners of the parent

Total comprehensive income for the year attributable
owners of the parent

Transaction with owners, directly in equity

(1,625,775)

Shares issued during the year

Transaction costs

Options expired during the year

Options exercised during the year

Options issued during the year

Balance at 30 June 2016

1,579,816

(107,601)

104,151

(104,151)

200,878

495,651

32,784,203

(19,973,039)

The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes

167,094

398,924

(2,493,900)

13,327

(2,480,573)

3,691,230

(314,800)

167,094

502,328

13,761,825

(1,625,775)

31,563

(1,594,212)

1,579,816

(107,601)

200,878

533,891

13,840,706

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2016

Cash flows from operating activities

Receipts from customers

Interest received

Payments to suppliers and employees

Payments for exploration expenditure

Rebate received for Research and Development

Net cash used in operating activities

Cash flows from investing activities

Purchase of plant and equipment

Net cash used in investing activities

Cash flows from financing activities

Proceeds from issue of shares

Capital raising costs

Net cash provided by financing activities

Net increase/(decrease) in cash held

Cash at 1 July

Change in foreign currency held

Cash at 30 June

The statement of cash flows is to be read in conjunction with the accompanying notes.

FiNANCiAL stAtEMENts 31

NOTE

2016
$

4,907

2015
$

19,159

(892,505)

(1,074,840)

(1,190,561)

(1,438,205)

148,608

18a

(1,929,551)

(2,493,886)

(3,285)

1,365,639

(59,324)

1,306,315

(623,236)

943,011

(2,017)

317,758

3,065,806

(186,723)

2,879,083

381,912

570,478

(9,379)

943,011

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016

Since the end of the financial year, the Company has
completed its AIM listing as well as an Australian
Placement and has raised A$5,002,677 in new equity
(before costs).

The directors have prepared a cash flow forecast, which
indicates that the Group will have sufficient cash flows to
meet all commitments and working capital requirements
for the 12 month period from the date of signing this
financial report.

iv. Use of estimates and judgements

The preparation of financial statements requires
management to make judgements, estimates and
assumptions that affect the application of policies and
reported amounts of assets and liabilities, income and
expenses. These estimates and associated assumptions are
based on historical experience and various factors that are
believed to be reasonable under the circumstances, the
results of which form the basis of making the judgements
about carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may
differ from these estimates.

Estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised
and in any future periods affected.

Judgements made by management in the application of
Australian Accounting Standards that have significant
effect on the financial statements and estimates with a
significant risk of material adjustment in the next year
are discussed in Note 1r Critical accounting estimates and
judgments.

v. Comparative figures

Where required by Accounting Standards comparative
figures have been adjusted to conform with changes in
presentation for the current financial year.

NOTE1. STATEMENT OF SIGNIFICANT ACCOUNTING
POLICIES
These are the consolidated financial statements and notes of
Aura Energy Limited and controlled entities (“Consolidated Group”
or “Group”). Aura Energy Limited is a company limited by shares,
domiciled and incorporated in Australia.

The separate financial statements of the parent entity, Aura Energy
Limited, have not been presented with this financial report as
permitted by the Corporations Act 2001 (Cth).

a. Basis of preparation

i. Statement of compliance

The financial statements are general purpose financial
statements that have been prepared in accordance
with Australian Accounting Standards, including
Australian Accounting Interpretations, other authoritative
pronouncements of the Australian Accounting Standards
Board and the Corporations Act 2001 (Cth).

Australian Accounting Standards set out accounting
policies that the AASB has concluded would result
in a financial report containing relevant and reliable
information about transactions, events and conditions to
which they apply. Compliance with Australian Accounting
Standards ensures that the financial statements and
notes also comply with International Financial Reporting
Standards as issued by the IASB. Material accounting
policies adopted in the preparation of these financial
statements are presented below. They have been
consistently applied unless otherwise stated.

The financial statements were authorised for issue on 30
September 2016 by the directors of the Company.

ii. Financial position

The financial statements have been prepared on an
accruals basis and are based on historical costs modified,
where applicable, by the measurement at fair value of
selected non-current assets, financial assets and financial
liabilities.

iii. Going concern

The Group incurred a loss for the year of $1,625,775
(2015: $2,493,900 and a net cash out-flow from operating
activities of $1,929,551 (2015: $2,493,886)

As at 30 June 2016, the Group had working capital
deficit of $297,004 (2015: $500,426 working capital). The
Company has no debt component in its working capital
following the conversion by Australian Special Opportunity
Fund of its convertible notes into fully paid ordinary shares
(2015: $43,040 in convertible notes outstanding).

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16FiNANCiAL stAtEMENts 33

NOTE1. STATEMENT OF SIGNIFICANT ACCOUNTING
POLICIES (CONT)

b. Principles of consolidation

A controlled entity is any entity over which Aura Energy
Limited has the power to govern the financial and
operating policies so as to obtain benefits from its
activities. In assessing the power to govern, the existence
and effect of holdings of actual and potential voting rights
are considered. A list of controlled entities is contained in
Note 17 Controlled entities in the financial statements.

All inter-group balances and transactions between entities
in the Consolidated Group, including any unrealised
profits or losses, have been eliminated on consolidation.
Accounting policies of subsidiaries have been changed
where necessary to ensure consistency with those adopted
by the parent entity.

As at reporting date, the assets and liabilities of all
controlled entities have been incorporated into the
consolidated financial statements as well as their results
for the year then ended. Where controlled entities have
entered (left) the Consolidated Group during the year, their
operating results have been included (excluded) from the
date control was obtained (ceased).

i. Business combinations

Business combinations occur when an acquirer obtains
control over one or more businesses.

A business combination is accounted for by applying the
acquisition method, unless it is a combination involving
entities or businesses under common control. The
business combination will be accounted for from the
date that control is attained, whereby the fair value of
the identifiable assets acquire and liabilities (including
contingent liabilities) assumed is recognised (subject to
certain limited exemptions).

When measuring the consideration transferred in the
business combination, any asset or liability resulting from
a contingent consideration arrangement is also included.
Subsequent to initial recognition, contingent consideration
classified as an asset or liability is remeasured each
reporting period to fair value, recognising any change to
fair value in profit or loss, unless the change in value can
be identified as existing at acquisition date.

All transaction costs incurred in relation to the business
combination are expensed to the statement of profit or
loss and comprehensive income.

The acquisition of a business may result in the recognition
of goodwill or a gain from a bargain purchase.

c. Exploration and development expenditure

i. Recognition and measurement

Exploration, evaluation, and development expenditure
incurred is accumulated in respect of each identifiable
area of interest. These costs are only carried forward to
the extent that they are expected to be recouped through
the successful development of the area or where activities
in the area have not yet reached a stage that permits
reasonable assessment of the existence of economically
recoverable reserves.

ii. Subsequent measurement

Accumulated costs in relation to an abandoned area are
written off in full against profit in the year in which the
decision to abandon the area is made.

When production commences, the accumulated costs for
the relevant area of interest will be amortised over the
life of the area according to the rate of depletion of the
economically recoverable reserves.

A regular review is undertaken of each area of interest to
determine the appropriateness of continuing to capitalise
costs in relation to that area of interest.

iii. Site restoration and rehabilitation

Costs of site restoration will be provided over the life of
the project, when such costs are incurred or the Group
becomes liable pursuant to a development agreement with
government agencies. In the exploration and evaluation
phase, all drill holes are collared and any site disturbance
is restored with the costs incorporated in the costs of
exploration and evaluation. Site restoration costs will
include the dismantling and removal of mining plant,
equipment and building structures, waste removal, and
rehabilitation of the site in accordance with clauses of the
mining permits. Such costs have been determined using
estimates of future costs, current legal requirements and
technology on an undiscounted basis.

Any changes in the estimates for the costs are accounted
on a prospective basis. In determining the costs of site
restoration, there is uncertainty regarding the nature and
extent of the restoration due to community expectations
and future legislation. Accordingly the costs have been
determined on the basis that the restoration will be
completed within one year of abandoning the site.

d. Income tax

Current income tax expense charged to the profit or loss
is the tax payable on taxable income calculated using
applicable income tax rates enacted, or substantially
enacted, as at reporting date. Current tax liabilities (assets)
are therefore measured at the amounts expected to be
paid to (recovered from) the relevant taxation authority.

Deferred income tax expense reflects movements in
deferred tax asset and deferred tax liability balances
during the year as well as unused tax losses.

Current and deferred income tax expense (income) is
charged or credited outside profit or loss when the tax
relates to items recognised outside profit or loss.

Deferred tax assets and liabilities are ascertained based
on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in
the financial statements. Deferred tax assets also result
where amounts have been fully expensed but future tax
deductions are available. No deferred income tax will
be recognised from the initial recognition of an asset or
liability, excluding a business combination, where there is
no effect on accounting or taxable profit or loss.

Deferred tax assets and liabilities are calculated at the tax
rates that are expected to apply to the period when the
asset is realised or the liability is settled, based on tax rates
enacted or substantively enacted at reporting date.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT)34

NOTE1. STATEMENT OF SIGNIFICANT ACCOUNTING
POLICIES (CONT)

Their measurement also reflects the manner in which
management expects to recover or settle the carrying
amount of the related asset or liability.

Deferred tax assets relating to temporary differences and
unused tax losses are recognised only to the extent that
it is probable that future taxable profit will be available
against which the benefits of the deferred tax asset can be
utilised.

Where temporary differences exist in relation to
investments in subsidiaries, branches, associates, and
joint ventures, deferred tax assets and liabilities are
not recognised where the timing of the reversal of the
temporary difference can be controlled and it is not
probable that the reversal will occur in the foreseeable
future.

Current tax assets and liabilities are offset where a legally
enforceable right of set-off exists and it is intended that
net settlement or simultaneous realisation and settlement
of the respective asset and liability will occur. Deferred tax
assets and liabilities are offset where a legally enforceable
right of set-off exists, the deferred tax assets and liabilities
relate to income taxes levied by the same taxation
authority on either the same taxable entity or different
taxable entities where it is intended that net settlement or
simultaneous realisation and settlement of the respective
asset and liability will occur in future periods in which
significant amounts of deferred tax assets or liabilities are
expected to be recovered or settled.

Where the Group receives the Australian Government’s
Research and Development Tax Incentive, The Group
accounts for the refundable tax offset under AASB 112.
Funds are received as a rebate through the parent
company’s income tax return and disclosed as such in Note
5 Income tax.

e. Plant and equipment

i. Recognition and measurement

Each class of plant and equipment is measured at cost
or fair value less, where applicable, any accumulated
depreciation and impairment losses.

The carrying amount of plant and equipment is reviewed
annually by directors to ensure it is not in excess of the
recoverable amount from these assets. The recoverable
amount is assessed on the basis of the expected net cash
flows that will be received from the assets employment
and subsequent disposal. The expected net cash flows
have not been discounted to their present values in
determining recoverable amounts.

Items of property, plant and equipment are measured
at cost less accumulated depreciation (see below) and
impairment losses (see Note 1m Impairment of non-
financial assets and 1c Exploration and development
expenditure).

ii. Depreciation

The depreciable amount of all fixed assets including
building and capitalised lease assets, but excluding
freehold land, is depreciated on a straight line basis over
their useful lives to the Consolidated Group commencing
from the time the asset is held ready for use. Leasehold
improvements are depreciated over the shorter of either
the unexpired period of the lease or the estimated useful
lives of the improvements.

The depreciation rates used for each class of depreciable
assets are:

Plant and equipment

Computers

Motor Vehicles

20.00%

33.00%

25.00%

The assets’ residual values and useful lives are reviewed,
and adjusted if appropriate, at the end of each reporting
period. 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 the carrying amount. These gains
and losses are included in the statement of comprehensive
income. When re-valued assets are sold, amounts included
in the revaluation reserve relating to that asset are
transferred to retained earnings.

f. Employee benefits

For the period ending 30 June 2016 the Company has
three employees.

i. Defined contribution superannuation funds

A defined contribution plan is a post-employment benefit
plan under which an entity pays fixed contributions onto
a separate entity and will have no legal or constructive
obligation to pay further amounts. Obligations for
contributions to defined contribution superannuation
funds are recognised as an expense in the income
statement as incurred. Prepaid contributions are
recognised as an asset to the extent that a cash refund or a
reduction in future payments is available.

ii. Short-term benefits

Liabilities for employee benefits for wages, salaries and
annual leave that are expected to be settled within
12 months of the reporting date represent present
obligations resulting from employees’ services provided
to the reporting date and are calculated at undiscounted
amounts based on remuneration wage and salary rates
that the Company expects to pay at the reporting date
including related on-costs, such as workers compensation
insurance and payroll tax.

Non-accumulating non-monetary benefits, such as medical
care, housing, cars and free or subsidised goods and
services, are expensed based on the net marginal cost to
the Company as the benefits are taken by the employees.

iii. Other long-term benefits

Employee benefits payable later than one year have been
measured at the present value of the estimated future
cash outflows to be made for those benefits.

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16FiNANCiAL stAtEMENts 35

NOTE1. STATEMENT OF SIGNIFICANT ACCOUNTING
POLICIES (CONT)

g. Equity-settled compensation

The Group operates an employee share ownership scheme.
Share-based payments to employees are measured at the
fair value of the instruments issued and amortised over the
vesting periods. Share-based payments to non-employees
are measured at the fair value of goods or services
received or the fair value of the equity instruments issued,
if it is determined the fair value of the goods or services
cannot be reliably measured, and are recorded at the date
the goods or services are received. The corresponding
amount is recorded to the option reserve. The fair value
of options is determined using the Black-Scholes pricing
model. The number of shares and options expected to
vest is reviewed and adjusted at the end of each reporting
period such that the amount recognised for services
received as consideration for the equity instruments
granted is based on the number of equity instruments that
eventually vest.

h. Revenue and other income

Interest revenue is recognised on a proportional basis
taking into account the interest rates applicable to the
financial assets.

Management fees are recognised on portion of completion
basis.

Gain on disposal of tenements, and revenue from
equipment chargebacks, are recognised on receipt of
compensation.

All revenue is stated net of the amount of value added
taxes (see Note 1i Value-added taxes).

i. Value-added taxes

Value-added taxes (VAT) is the generic term for the
broad-based consumption taxes that the Group is exposed
to such as: Australia (GST); Sweden (MOMS); and in
Mauritanian (VAT).

Revenues, expenses, and assets are recognised net of the
amount of VAT, except where the amount of VAT incurred
is not recoverable from the relevant country’s taxation
authority. In these circumstances the VAT is recognised
as part of the cost of acquisition of the asset or as part of
an item of the expense. Receivables and payables in the
statement of financial position are shown inclusive of VAT.

Cash flows are presented in the statement of cash flows on
a gross basis, except for the VAT component of investing
and financing activities, which are disclosed as operating
cash flows.

Commitments and contingencies are disclosed net of the
amount of VAT recoverable from, or payable to, the taxation
authority.

j. Leases

Leases of fixed assets where substantially all the risks
and benefits incidental to the ownership of the asset, but
not the legal ownership, are transferred to entities in the
Group are classified as finance leases.

Leased assets are depreciated on a straight-line basis
over their estimated useful lives where it is likely that the
Group will obtain ownership of the asset or over the term
of the lease.

Lease payments for operating leases, where substantially
all the risks and benefits remain with the lessor, are
charged as expenses in the periods in which they are
incurred.

Lease incentives under operating leases are recognised as
a liability and amortised on a straight-line basis over the
life of the lease term.

k. Financial instruments

Initial recognition and measurement

Financial instruments, incorporating financial assets
and financial liabilities, are recognised when the entity
becomes a party to the contractual provisions of the
instrument. Trade date accounting is adopted for financial
assets that are delivered within timeframes established by
marketplace convention.

Financial instruments are initially measured at fair value
plus transactions costs where the instrument is not
classified as at fair value through profit or loss. Transaction
costs related to instruments classified as at fair value
through profit or loss are expensed to profit or loss
immediately.

The Group does not designate any interests in subsidiaries,
associates or joint venture entities as being subject to
the requirements of accounting standards specifically
applicable to financial instruments.

ii. Non-derivative financial instruments

Non-derivative financial instruments comprise investments
in equity securities, trade and other receivables, cash and
cash equivalents and trade and other payables.

Non-derivative financial instruments are recognised
initially at fair value plus, for instruments not at fair value
through profit or loss, any directly attributable transactions
costs. Subsequent to initial recognition non-derivative
financial instruments are measured as described below.

iii. Classification and subsequent measurement

(1) Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits
held at call with banks, other short-term highly liquid
investments with original maturities of three months or
less, and bank overdrafts. Bank overdrafts are shown within
short-borrowings in current liabilities on the Statement of
financial position.

(2) Loans
Loans are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active
market and are subsequently measured at amortised cost.
Gains or losses are recognised in profit or loss through
the amortisation process and when the financial asset is
derecognised.

Loans are included in current assets, except for those
which are not expected to mature within 12 months after
the end of the reporting period.

(3) Trade and other receivables
Trade and other receivables are stated at amortised cost.
Receivables are usually settled within 30 to 90 days.

Collectability of trade and other debtors is reviewed on
an ongoing basis. An impairment loss is recognised for
debts which are known to be uncollectible. An impairment
provision is raised for any doubtful amounts.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT)36

NOTE1. STATEMENT OF SIGNIFICANT ACCOUNTING
POLICIES (CONT)

(4) Trade and other payables
Trade payables and other payable are recognised when
the Group becomes obligated to make future payments
resulting from the purchase of goods and services which
are unpaid and stated at their amortised cost. The amounts
are unsecured and are generally settled on 30 day terms.

(5) Financial liabilities
Non-derivative financial liabilities (excluding financial
guarantees) are subsequently measured at amortised cost.

(6) Share capital
Ordinary issued capital is recorded at the consideration
received. Incremental costs directly attributable to the
issue of ordinary shares and share options are recognised
as a deduction from equity, net of any related income tax
benefit. Ordinary issued capital bears no special terms or
conditions affecting income or capital entitlements of the
shareholders.

iv. Amortised cost

Amortised cost is calculated as the amount at which
the financial asset or financial liability is measured at
initial recognition less principal repayments and any
reduction for impairment, and adjusted for any cumulative
amortisation of the difference between that initial amount
and the maturity amount calculated using the effective
interest method.

v. Fair value

Fair value is determined based on current bid prices for
all quoted investments. Valuation techniques are applied
to determine the fair value for all unlisted securities,
including recent arm’s length transactions, reference to
similar instruments and option pricing models.

vi. Effective interest method

The effective interest method is used to allocate interest
income or interest expense over the relevant period and
is equivalent to the rate that discounts estimated future
cash payments or receipts (including fees, transaction costs
and other premiums or discounts) over the expected life
(or when this cannot be reliably predicted, the contractual
term) of the financial instrument to the net carrying
amount of the financial asset or financial liability. Revisions
to expected future net cash flows will necessitate an
adjustment to the carrying amount with a consequential
recognition of an income or expense item in profit or loss.

vii. Impairment

A financial asset is assessed at each reporting date to
determine whether there is any objective evidence that it
is impaired. A financial asset is considered to be impaired if
objective evidence indicates that one or more events have
had a negative effect on the estimated future cash flows of
that asset.

An impairment loss in respect of a financial asset
measured at amortised cost is calculated as the difference
between its carrying amount, and the present value of the
estimated future cash flows discounted at the original
effective interest rate.

Individually significant financial assets are tested for
impairment on an individual basis. The remaining financial
assets are assessed collectively in Groups that share
similar credit risk characteristics.

All impairment losses are recognised in the income
statement.

An impairment loss is reversed if the reversal can be
related objectively to an event occurring after the
impairment loss was recognised. For financial assets
measured at amortised cost the reversal is recognised in
the income statement.

viii. Derecognition

Financial assets are derecognised where the contractual
rights to cash flow expires or the asset is transferred
to another party whereby the entity no longer has any
significant continuing involvement in the risks and
benefits associated with the asset. Financial liabilities are
derecognised where the related obligations are either
discharged, cancelled or expired. The difference between
the carrying value of the financial liability extinguished
or transferred to another party and the fair value of
consideration paid, including the transfer of non-cash
assets or liabilities assumed, is recognised in profit or loss.

ix. Financial income and expenses

Finance income comprises interest income on funds
invested (including available-for-sale financial assets),
gains on the disposal of available-for-sale financial assets
and changes in the fair value of financial assets at fair
value through profit or loss. Interest income is recognised
as it accrues in profit or loss, using the effective interest
method.

Financial expenses comprise interest expense on
borrowings calculated using the effective interest method,
unwinding of discounts on provisions, changes in the fair
value of financial assets at fair value through profit or loss
and impairment losses recognised on financial assets. All
borrowing costs are recognised in profit or loss using the
effective interest method.

Borrowing costs directly attributable to the acquisition,
construction or production of assets that necessarily take
a substantial period of time to prepare for their intended
use or sale, are added to the cost of those assets, until such
time as the assets are substantially ready for their intended
use or sale. All other borrowing costs are recognised in
income in the period in which they are incurred.

Foreign currency gains and losses are reported on a net
basis.

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16FiNANCiAL stAtEMENts 37

NOTE1. STATEMENT OF SIGNIFICANT ACCOUNTING
POLICIES (CONT)

l. Earnings per share

i. Basic earnings per share

Basic earnings (or loss) per share is determined by dividing
the profit or loss attributable to equity holders of the
parent company, excluding any costs of service 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 (or loss) per share is determined by
adjusting the profit or loss attributable to ordinary
shareholders and the weighted average number of
ordinary shares outstanding for the effects of all dilutive
potential ordinary shares which comprise share options
granted as share-based payments.

The Group does not report diluted earnings per share, as
dilution is not applied to annual losses generated by the
Group.

Impairment losses recognised in prior periods are assessed
at each reporting date for any indications that the loss
has decreased or no longer exists. An impairment loss is
reversed if there has been a change in the estimates used
to determine the recoverable amount. An impairment loss
is reversed only to the extent that the asset’s carrying
amount does not exceed the carrying amount that
would have been determined, net of depreciation and
amortisation, if no impairment loss had been recognised.

n. Provisions

Provisions are recognised when the Group has a legal or
constructive obligation, as a result of past events, for which
it is probable that an outflow of economic benefits will
results and that outflow can be reliably measured.

o. Foreign currency transactions and balances

i. Functional and presentation currency

The functional currency of each of the Group’s entities
is measured using the currency of the primary economic
environment in which that entity operates. The
consolidated financial statements are presented in
Australian dollars which is the parent entity’s functional
and presentation currency.

m. Impairment of non-financial assets

ii. Transaction and balances

The carrying amounts of the Company’s non-financial
assets, other than deferred tax assets (Note 1d Income
tax) and exploration and evaluation assets (Note 1c
Exploration and development expenditure) are reviewed
at each reporting date to determine whether there is any
indication of impairment. If any such indication exists then
the asset’s recoverable amount is estimated.

An impairment loss is recognised if the carrying amount
of an asset or its cash-generating unit exceeds its
recoverable amount. A cash-generating unit is the smallest
identifiable asset Group that generates cash flows that
largely are independent from other assets and Groups.
Impairment losses are recognised in the income statement,
unless the asset has previously been revalued, in which
case the impairment loss is recognised as a reversal to
the extent of that previous revaluation with any excess
recognised through the income statement. Impairment
losses recognised in respect of cash-generating units
are allocated first to reduce the carrying amount of any
goodwill allocated to the units and then to reduce the
carrying amount of the other assets in the unit on a pro
rata basis.

The recoverable amount of an asset or cash-generating
unit is the greater of its fair value less costs to sell and
value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks
specific to the asset. For an asset that does not generate
largely independent cash inflows, the recoverable amount
is determined for the cash-generating unit to which the
asset belongs.

Foreign currency transactions are translated into functional
currency using the exchange rates prevailing at the date
of the transaction. Foreign currency monetary items are
translated at the year-end exchange rate. Non-monetary
items measured at historical cost continue to be carried
at the exchange rate at the date of the transaction.
Non-monetary items measured at fair value are reported
at the exchange rate at the date when fair values were
determined.

Exchange differences arising on the translation of
monetary items are recognised in the profit or loss except
where deferred in equity as a qualifying cash flow or net
investment hedge.

Exchange differences arising on the translation of
non-monetary items are recognised directly in other
comprehensive income to the extent that the gain or loss
is directly recognised in other comprehensive income,
otherwise the exchange difference is recognised in the
profit or loss.

iii. Group companies

The financial results and position of foreign operations
whose functional currency is different from the Group’s
presentation currency are translated as follows:

Assets and liabilities are translated at year-end exchange
rates prevailing at that reporting date.

Income and expenses are translated at average exchange
rates for the period.

Retained earnings are translated at the exchange rates
prevailing at the date of the transaction.

Exchange differences arising on translation of foreign
operations are transferred directly to the Group’s foreign
currency translation reserve in the statement of financial
position. These differences are recognised in the profit or
loss in the period in which the operation is disposed.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT)38

NOTE1. STATEMENT OF SIGNIFICANT ACCOUNTING
POLICIES (CONT)

p. Fair value estimation

A number of the Group’s accounting policies and
disclosures require the determination of fair value, for
both financial and non-financial assets and liabilities.
Information about the assumptions made in determining
fair values of assets and liabilities is disclosed in the notes
specific to that asset or liability.

q. Fair value of assets and liabilities

The Group measures some of its assets and liabilities
at fair value on either a recurring or non-recurring
basis, depending on the requirements of the applicable
Accounting Standard.

Fair value is the price the Group would receive to sell
an asset or would have to pay to transfer a liability in an
orderly
(i.e. unforced) transaction between independent,
knowledgeable and willing market participants at the
measurement date.

As fair value is a market-based measure, the closest
equivalent observable market pricing information is used
to determine fair value. Adjustments to market values may
be made having regard to the characteristics of the specific
asset or liability. The fair values of assets and liabilities
that are not traded in an active market are determined
using one or more valuation techniques. These valuation
techniques maximise, to the extent possible, the use of
observable market data.

To the extent possible, market information is extracted
from either the principal market for the asset or liability
(i.e. the market with the greatest volume and level of
activity for the asset or liability) or, in the absence of such
a market, the most advantageous market available to the
entity at the end of the reporting period (i.e. the market
that maximises the receipts from the sale of the asset or
minimises the payments made to transfer the liability, after
taking into account transaction costs and transport costs).

For non-financial assets, the fair value measurement also
takes into account a market participant’s ability to use the
asset in its highest and best use or to sell it to another
market participant that would use the asset in its highest
and best use.

The fair value of liabilities and the entity’s own equity
instruments (excluding those related to share-based
payment arrangements) may be valued, where there is no
observable market price in relation to the transfer of such
financial instruments, by reference to observable market
information where such instruments are held as assets.
Where this information is not available, other valuation
techniques are adopted and, where significant, are detailed
in the respective note to the financial statements.

i. Valuation techniques

In the absence of an active market for an identical asset or
liability, the Group selects and uses one or more valuation
techniques to measure the fair value of the asset or

liability, the Group selects a valuation technique that is
appropriate in the circumstances and for which sufficient
data is available to measure fair value. The availability
of sufficient and relevant data primarily depends on
the specific characteristics of the asset or liability being
measured. The valuation techniques selected by the Group
are consistent with one or more of the following valuation
approaches:

(1) Market approach: valuation techniques that use prices
and other relevant information generated by market
transactions for identical or similar assets or liabilities.

(2) Income approach: valuation techniques that convert
estimated future cash flows or income and expenses
into a single discounted present value.

(3) Cost approach: valuation techniques that reflect the
current replacement cost of an asset at its current
service capacity.

Each valuation technique requires inputs that reflect the
assumptions that buyers and sellers would use when
pricing the asset or liability, including assumptions about
risks. When selecting a valuation technique, the Group
gives priority to those techniques that maximise the use of
observable inputs and minimise the use of unobservable
inputs. Inputs that are developed using market data (such
as publicly available information on actual transactions)
and reflect the assumptions that buyers and sellers
would generally use when pricing the asset or liability are
considered observable, whereas inputs for which market
data is not available and therefore are developed using
the best information available about such assumptions are
considered unobservable.

ii. Fair value hierarchy

AASB 13 requires the disclosure of fair value information
by level of the fair value hierarchy, which categorises fair
value measurements into one of three possible levels
based on the lowest level that an input that is significant
to the measurement can be categorised into as follows:

(1) Level 1

Measurements based on quoted prices (unadjusted) in
active markets for identical assets or liabilities that the
entity can access at the measurement date.

(2) Level 2

Measurements based on inputs other than quoted
prices included in Level 1 that are observable for the
asset or liability, either directly or indirectly.

(3) Level 3

Measurements based on unobservable inputs for the
asset or liability.

The fair values of assets and liabilities that are not
traded in an active market are determined using one or
more valuation techniques. These valuation techniques
maximise, to the extent possible, the use of observable
market data. If all significant inputs required to
measure fair value are observable, the asset or liability
is included in Level 2. If one or more significant inputs
are not based on observable market data, the asset or
liability is included in Level 3.

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16FiNANCiAL stAtEMENts 39

NOTE1. STATEMENT OF SIGNIFICANT ACCOUNTING
POLICIES (CONT)

The Group would change the categorisation within
the fair value hierarchy only in the following
circumstances:

if a market that was previously considered active
(Level 1) became inactive (Level 2 or Level 3) or
vice versa or

if significant inputs that were previously
unobservable (Level 3) became observable (Level 2)
or vice versa.

When a change in the categorisation occurs, the Group
recognises transfers between levels of the fair value
hierarchy (i.e. transfers into and out of each level of the
fair value hierarchy) on the date the event or change in
circumstances occurred.

r. Critical accounting estimates and judgements

The directors evaluate estimates and judgements
incorporated into the financial report based on historical
knowledge and best available current information.
Estimates assume a reasonable expectation of future
events and are based on current trends and economic data,
obtained both externally and within the Group.

i. Key Judgements – Exploration and evaluation expenditure

Exploration and evaluation costs are carried forward where
right of tenure of the area of interest is current. These costs
are carried forward in respect of an area that has not at
reporting date reached a stage that permits reasonable
assessment of the existence of economically recoverable
reserves, refer to the accounting policy stated in Note 1c
Exploration and development expenditure.

The carrying value of capitalised expenditure at reporting
date is $14,137,710 (2015: $13,259,797).

During the financial year, the Group undertook assessment
of its tenement assets, as a result of this assessment, the
Group decided to impair some of its exploration assets.
Refer to Note 11 Exploration and evaluation assets.

ii. Key Judgements – Environmental issues

Balances disclosed in the financial statements and notes
thereto are not adjusted for any pending or enacted
environmental legislation, and the directors understanding
thereof. At the current stage of the Company’s development
and its current environmental impact, the directors believe
such treatment is reasonable and appropriate.

iii. Key Estimate – Taxation

Balances disclosed in the financial statements and the
notes thereto, related to taxation, are based on the
best estimates of directors. These estimates take into
account both the financial performance and position of
the Company as they pertain to current income taxation
legislation, and the directors understanding thereof.
No adjustment has been made for pending or future
taxation legislation. The current income tax position
represents that directors’ best estimate, pending an
assessment by tax authorities in relevant jurisdictions.
Refer to Note 5 Income tax.

iv. Key Estimate — Impairment

The Group assesses impairment at each reporting date by
evaluating conditions specific to the Group that may lead to
impairment of assets. Where an impairment trigger exists,
the recoverable amount of the asset is determined. Value-
in-use calculations performed in assessing recoverable
amounts incorporate a number of key estimates.

v. Key Estimate – Share-based payments

The Group measures the cost of equity-settled transactions
with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The
fair value is determined by an internal valuation using a
Black-Scholes option pricing model, using the assumptions
detailed in Note 19 Share-based payments.

s. Application of new, revised and amending Accounting

Standards and Interpretations adopted

The Group 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. The adoption
of these Accounting Standards and Interpretations did not
have any significant impact on the financial performance or
position of the Group during the financial year.

Any new, revised or amending Accounting Standards or
Interpretations that are not yet mandatory have not been
early adopted.

New Accounting Standards and Interpretations not yet
mandatory or early 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 group for
the annual reporting period ended 30 June 2016. The
Group’s assessment of the impact of these new or amended
Accounting Standards and Interpretations, most relevant to
the group, are as follows:

i. AASB 9 Financial Instruments

This standard is applicable to annual reporting periods
beginning on or after 1 January 2018. The standard replaces
all previous versions of AASB 9 and completes the project
to replace IAS 39 ‘Financial Instruments: Recognition and
Measurement’. AASB 9 introduces new classification and
measurement models for financial assets. A financial asset
shall be measured at amortised cost, if it is held within a
business model whose objective is to hold assets in order
to collect contractual cash flows, which arise on specified
dates and solely principal and interest. All other financial
instrument assets are to be classified and measured at fair
value through profit or loss unless the entity makes an
irrevocable election on initial recognition to present gains
and losses on equity instruments (that are not held-for-
trading) in other comprehensive income (‘OCI’). For financial
liabilities, the standard requires the portion of the change
in fair value that relates to the entity’s own credit risk to
be presented in OCI (unless it would create an accounting
mismatch). New simpler hedge accounting requirements are
intended to more closely align the accounting treatment
with the risk management activities of the entity. New
impairment requirements will use an ‘expected credit loss’
(‘ECL’) model to recognise an

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT)40

NOTE1. STATEMENT OF SIGNIFICANT ACCOUNTING
POLICIES (CONT)

allowance. Impairment will be measured under a 12-month
ECL method unless the credit risk on a financial instrument
has increased significantly since initial recognition in
which case the lifetime ECL method is adopted. The
standard introduces additional new disclosures. The Group
will adopt this standard from 1 July 2018 but the impact of
its adoption is yet to be assessed by the Group.

ii. AASB 15 Revenue from Contracts and Customers

This standard is applicable to annual reporting periods
beginning on or after 1 January 2018. The standard
provides a single standard for revenue recognition.
The core principle of the standard is that an entity will
recognise revenue to depict the transfer of promised goods
or services to customers in an amount that reflects the
consideration to which the entity expects to be entitled
in exchange for those goods or services. The standard
will require: contracts (either written, verbal or implied)
to be identified, together with the separate performance
obligations within the contract; determine the transaction
price, adjusted for the time value of money excluding credit
risk; allocation of the transaction price to the separate
performance obligations on a basis of relative stand-alone
selling price of each distinct good or service, or estimation
approach if no distinct observable prices exist; and
recognition of revenue when each performance obligation
is satisfied. Credit risk will be presented separately as
an expense rather than adjusted to revenue. For goods,
the performance obligation would be satisfied when the
customer obtains control of the goods. For services, the
performance obligation is satisfied when the service has
been provided, typically for promises to transfer services to
customers. For performance obligations satisfied over time,
an entity would select an appropriate measure of progress
to determine how much revenue should be recognised
as the performance obligation is satisfied. Contracts with
customers will be presented in an entity’s statement of
financial position as a contract liability, a contract asset,
or a receivable, depending on the relationship between
the entity’s performance and the customer’s payment.
Sufficient quantitative and qualitative disclosure is
required to enable users to understand the contracts with
customers; the significant judgements made in applying
the guidance to those contracts; and any assets recognised
from the costs to obtain or fulfil a contract with a customer.
The Group will adopt this standard from 1 July 2018 but
the impact of its adoption is yet to be assessed by the
Group.

iii. AASB 16 Leases

This standard is applicable to annual reporting periods
beginning on or after 1 January 2019. The standard
replaces AASB 117 ‘Leases’ and for lessees will eliminate
the classifications of operating leases and finance
leases. Subject to exceptions, a ‘right-of-use’ asset will be
capitalised in the statement of financial position, measured
as the present value of the unavoidable future lease
payments to be made over the lease term. The exceptions
relate to short-term leases of 12 months or less and leases
of low-value assets (such as personal computers and
small office furniture) where an accounting policy choice
exists whereby either a ‘right-of-use’ asset is recognised or
lease payments are expensed to profit or loss as incurred.
A liability corresponding to the capitalised lease will
also be recognised, adjusted for lease prepayments, lease
incentives received, initial direct costs incurred and an
estimate of any future restoration, removal or dismantling
costs. Straight-line operating lease expense recognition
will be replaced with a depreciation charge for the leased
asset (included in operating costs) and an interest expense
on the recognised lease liability (included in finance costs).
In the earlier periods of the lease, the expenses associated
with the lease under AASB 16 will be higher when
compared to lease expenses under AASB 117. However
EBITDA (Earnings Before Interest, Tax, Depreciation and
Amortisation) results will be improved as the operating
expense is replaced by interest expense and depreciation
in profit or loss under AASB 16. For classification within
the statement of cash flows, the lease payments will
be separated into both a principal (financing activities)
and interest (either operating or financing activities)
component. For lessor accounting, the standard does not
substantially change how a lessor accounts for leases. The
Group will adopt this standard from 1 July 2019 but the
impact of its adoption is yet to be assessed by the Group.

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16NOTE 2. REVENUE AND OTHER INCOME

Revenue

Interest received from financial institutions

Management fees

Total Revenue

Other income

Interest received from financial institutions

Total Other Income

NOTE 3. LOSS BEFORE INCOME TAX

The following significant expense items are relevant in explaining the financial performance:

Superannuation expense

NOTE 4. AUDITOR’S REMUNERATION

Remuneration of the auditor of the Group for:

Auditing or reviewing the financial reports

Taxation services provided by a related practice of the auditor

Other services

FiNANCiAL stAtEMENts 41

2016
$

4,907

2015
$

19,159

3,064

2016
$

2015
$

36,200

49,362

2016
$

37,000

2,085

20,000

59,085

2015
$

38,000

5,812

43,812

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT)
42

NOTE 5. INCOME TAX

Income tax expense/(benefit)

Current tax

Deferred tax

Tax rebate for research and development

Deferred income tax expense included in income tax expense comprises:

Increase/(decrease) in deferred tax assets

(Increase)/decrease in deferred tax liabilities

NOTES

2016
$

(148,608)

2015
$

Reconciliation of income tax expense to prima facie tax payable

The prima facie tax payable/(benefit) on loss from ordinary activities before income tax is
reconciled to the income tax expense as follows:

Prima facie tax on operating loss at 30% (2015: 30%)

(487,733)

(748,170)

Add/(less)

Tax effect of:

Capital-raising costs deductible

Impairment of exploration expenditure previously capitalised

Share-based payments

Write-off of exploration assets

Other

Deferred tax asset not brought to account

Income tax expense/(benefit) attributable to operating loss

Less rebates:

Tax rebate for research and development

Income tax expense/(benefit)

The applicable weighted average effective tax rates attributable to operating profit are as
follows

Balance of franking account at year end

(24,749)

47,594

15,438

2,451

(72,468)

313,572

29,011

20,408

17,251

446,999

440,396

(148,608)

Nil

nil

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16
NOTE 5. INCOME TAX (CONT)

Deferred tax assets

Tax losses

Provisions and accruals

Other

Set-off deferred tax liabilities

Net deferred tax assets

Less deferred tax assets not recognised

Net tax assets

Deferred tax liabilities

Exploration expenditure

Set-off deferred tax assets

Net deferred tax liabilities

Tax losses

Unused tax losses for which no deferred tax asset has been recognised, that may be
utilised to offset tax liabilities:

Revenue losses

Capital losses

FiNANCiAL stAtEMENts 43

NOTE

2016
$

2015
$

3,895,970

3,330,219

41,173

15,019

57,543

100,245

3,951,970

3,488,007

3,951,970

(3,951,970)

3,488,007

(3,488,007)

12,482,130

11,100,731

691,104

13,173,234

11,791,835

Potential deferred tax assets attributable to tax losses and exploration expenditure carried forward have not been brought to account
at 30 June 2016 because the directors do not believe it is appropriate to regard realisation of the deferred tax assets as probable at this
point in time. These benefits will only be obtained if:

i. The Group derives future assessable income of a nature and of an amount sufficient to enable the benefit from the deductions for the

loss and exploration expenditure to be realised.

ii. The Group continues to comply with conditions for deductibility imposed by law.

iii. No changes in tax legislation adversely affect the Group in realising the benefit from the deductions for the loss and exploration

expenditure.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT)44

NOTE 6. EARNINGS PER SHARE

a. Loss from continuing operations for the year

NOTE

2016
$

2015
$

(1,625,775)

(2,493,900)

2016
NO.

2015
NO.

b. Weighted average number of ordinary shares outstanding during the year used

in calculation of basic EPS

398,625,406

266,928,484

c. Basic and diluted earnings per share (cents per share)

2016
¢

(0.41)

2015
¢

(0.93)

i. The Group is in a loss making position and it is unlikely that the conversion to, calling of, or subscription for, ordinary share capital in
respect of potential ordinary shares would lead to diluted earnings per share that shows an inferior view of the earnings per share.
Therefore in the event the Company has dilutionary equity instruments on issue, the diluted loss per share for the year ended 30 June
2016 is the same as basic loss per share, whilst the Company remains loss making.

ii. There are 177,249,702 (2015: 74,635,171) options over ordinary shares that have vested.

NOTE 7. CASH AND CASH EQUIVALENTS

Cash at bank

Short-term bank deposits

NOTE

2016
$

317,758

2015
$

926,987

16,024

943,011

a. The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in Note 24

Financial risk management.

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16NOTE 8. TRADE AND OTHER RECEIVABLES

Current

Value-added tax receivable

Trade debtors

Other

Less: Provision for impairment

FiNANCiAL stAtEMENts 45

NOTE

2016
$

43,346

18,782

648

(5,068)

57,708

2015
$

72,169

24,261

4,890

(5,038)

96,282

a. Value-added tax (VAT) is a generic term for the broad-based consumption taxes that the Group is exposed to such as: Australia (GST);

Sweden (MOMS); and in Mauritanian (VAT).

b. The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in Note 24

Financial risk management.

NOTE 9. FINANCIAL ASSETS

Current

Bonds and prepayments

NOTE 10. PLANT AND EQUIPMENT

Non-current

Plant and equipment

Accumulated depreciation

Motor vehicles

Accumulated depreciation

Total plant and equipment

Movements in carrying amounts

Balance at the beginning of year

Additions

Depreciation expense

Carrying amount at the end of year

2016
$

43,625

2015
$

44,157

2016
$

2015
$

160,102

(160,102)

1,602

(1,602)

160,102

(158,500)

1,602

2,994

3,284

(4,676)

1,602

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT)46

NOTE 11. EXPLORATION AND EVALUATION ASSETS

Non-current

Exploration expenditure capitalised:

Exploration and evaluation phase at cost

Add:

Effect of exchange rate changes on exploration and evaluation assets

Less: Exploration expenditure impairment

Net carrying value

a. The value of the Group interest in exploration expenditure is dependent upon:

• The continuance of the Group’s rights to tenure of the areas of interest.

• The results of future exploration.

NOTE

11b

11a,b

2016
$

2015
$

14,099,992

37,718

14,137,710

14,347,295

(42,258)

(1,045,240)

13,259,797

• The recoupment of costs through successful development and exploitation of the areas of interest, or alternatively,

by their sale.

The Group’s exploration properties may be subjected to claim(s) under Native Title (or jurisdictional equivalent), or contain sacred
sites, or sites of significance to the indigenous people of Sweden and Mauritania.

As a result, exploration properties or areas within the tenements may be subject to exploration restrictions, mining restrictions and/or
claims for compensation. At this time, it is not possible to quantify whether such claims exist, or the quantum of such claims.

b. The Group has not recorded any impairment to the carrying value of its Mauritanian and Swedish tenements for the

financial year ended 30 June 2016.

In the previous year, the Group recorded an impairment of $1,045,240. This impairment arose from the unsuccessful appeal of a
decision made by the Swedish mining authorities not to grant an extension to one of the Group’s tenements. As a result, the Group
recognised during the financial year, an impairment against the carrying value of the tenement for $243,086. In addition, the Group
relinquished the Oued El Foule Nord and Saabia tenements in Mauritania as not being required for the Tiris project. As a result the
Group recognised during the financial year, an impairment against the carrying value of the tenements of $802,154.

NOTE 12. TRADE AND OTHER PAYABLES

Current

Unsecured

Trade payables

Accrued expenses

Other taxes payable

NOTE

12a

2016
$

2015
$

242,496

257,527

50,821

550,844

232,876

102,223

66,246

401,345

a. Trade payables are non-interest bearing and arise from the usual operating activities of the Group. Trade payables and other payables

and accruals, except directors’ fees, are usually settled within the lower of terms of trade or 30 days.

b. The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in Note 24

Financial risk management.

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16

NOTE 13. SHORT-TERM PROVISIONS

Current

Employee benefits

Number of employees at year end

NOTE 14. BORROWINGS

Current

Convertible notes

FiNANCiAL stAtEMENts 47

2016
$

165,251

2016
NO.

2016
$

2015
$

138,639

2015
NO.

2015
$

43,040

a. Short-term borrowings comprise premium funding for insurance policies, repayable within 12 months.

b. On 28 February 2014, Aura Energy Limited entered into a financing arrangement to provide up to $3,775,000 over 24 months. Under
the agreement with The Australian Special Opportunity Fund, LP, managed by The Lind Partners, LLC, Aura Energy Limited received
$325,000, in the form of a $250,000 convertible note and $75,000 as a prepayment for placement of ordinary shares in Aura Energy
Limited. Lind will further invest in tranches of $75,000, in monthly share subscriptions, over the next two years. The convertible notes
and shares will be issued at a 10% discount to a specified three day volume weighted share price.

Further key terms of the agreement are as follows:

• The $250,000 convertible note is secured by the issue of 2,200,000 shares. Aura Energy Limited has the ability to repurchase the

Note at a premium to the issue price during the first 90 days of the agreement.

• An issue of 2,946,378 shares as a commencement fees for the provision of the funding facility.

The issue of 2,600,000 options with an exercise price of 4.8 cents and the three year expiration date.

The convertible note liability is measured at its present value.

During the financial ended 30 June 2015, Lind converted $200,000 of the $250,000 convertible note into 11,111,111 fully paid
ordinary shares of the Company.

On 11 February 2016, Lind converted $15,000 of its convertible notes into shares under the terms of the Share Placement approved
by shareholders at the general meeting on 5 November 2015.

Lind was issued 1,224,500 fully paid shares at 1.225 cents per share and 1,224,500 options over ordinary shares at an exercise price
of 2.5 cents per option over ordinary share

On 18 February 2016, Lind converted the remaining balance, $35,000, of the convertible notes into ordinary shares of the Company
in accordance with the financing agreement executed on 28 February 2014. Under the terms of the financing agreement, Lind
was entitled to 2,916,667 fully paid ordinary shares of the Company, net of 2,200,000 collateral shares previous issued to Lind in
accordance with the financing agreement.

The Company issued Lind 716,667 fully paid shares at 1.2 cents per share to extinguish its obligations under the financing agreement.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT)

NOTE 15. ISSUED CAPITAL

The Company has issued share capital amounting to 457,048,412
(2015: 335,065,783 fully paid ordinary shares at no par value.

a. Equity raised during the financial year

At the beginning of the reporting period

Shares issued during the year:

4,166,667 Shares issued on 9 July 2014

9,722,222 Shares issued on 24 July 2014

52,428,510 Shares issued on 9 September 2014

1,527,303 Shares10 October 2014

292 Shares issued on 13 October 2014

3,571,429 Shares issued on 20 October 2014

355,104 Shares issued on 5 December 2014

6,874,752 Shares issued on 19 December 2014

40,762,340 Shares issued on 22 April 2015

9,440,000 Shares issued on 12 June 2015

1,055,174 Shares issued on 12 June 2015

1,388,889 Shares issued on 12 June 2015

3,697,952 Shares issued on 29 June 2015

4,250,000 Shares issued on 29 June 2015

48,660,000 Shares issued on 29 September 2015

851,442 Shares issued on 15 October 2015

13,451,801 Shares issued on 25 November 2015

1,008,004 Shares issued on 9 December 2015

3,267,311 Shares issued on 14 December 2015

8,163,265 Shares issued on 15 December 2015

18,755,093 Shares issued on 12 February 2016

1,224,500 Shares issued on 12 February 2016

716,667 Shares issued on 18 February 2016

22,943,877 Shares issued on 10 May 2016

1,074,615 Shares issued on 10 May 2016

1,099,578 Shares issued on 10 May 2016

766,476 Shares issued on 10 May 2016

Transaction costs relating to share issues

At reporting date

NOTE

15a

15a.i

15a.ii

15a.iii

15a.iv

15a.v

15a.vi

15a.vii

15a.viii

15a.ix

15a.x

15a.xi

15a.xii

15a.xiii

15a.xiv

15a.xv

15a.xvi

15a.xvii

15a.xviii

15a.xix

15a.xx

15a.xxi

15a.xxii

15a.xxiii

15a.xxiv

15a.xxv

15a.xxvi

15a.xxvii

2016
$

2015
$

32,784,203

31,311,988

27,935,558

596,085

18,253

164,785

18,253

60,000

100,000

229,750

15,000

35,000

281,062

30,000

18,253

13,375

75,000

175,000

1,572,855

60,250

75,000

11,358

204,244

1,019,059

236,000

30,000

25,000

101,196

106,250

(107,601)

32,784,203

(314,800)

31,311,988

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16
NOTE 15. ISSUED CAPITAL (CONT)

At the beginning of the reporting period

Ordinary shares issued during the financial year:

4,166,667 Shares issued on 9 July 2014

9,722,222 Shares issued on 24 July 2014

52,428,510 Shares issued on 9 September 2014

1,527,303 Shares issued on 10 October 2014

292 Shares issued on 13 October 2014

3,571,429 Shares issued on 20 October 2014

355,104 Shares issued on 5 December 2014

6,874,752 Shares issued on 19 December 2014

40,762,340 Shares issued on 22 April 2015

9,440,000 Shares issued on 12 June 2015

1,055,174 Shares issued on 12 June 2015

1,388,889 Shares issued on 12 June 2015

3,697,952 Shares issued on 29 June 2015

4,250,000 Shares issued on 29 June 2015

48,660,000 Shares issued on 29 September 2015

851,442 Shares issued on 15 October 2015

13,451,801 Shares issued on 25 November 2015

1,008,004 Shares issued on 9 December 2015

3,267,311 Shares issued on 14 December 2015

8,163,265 Shares issued on 15 December 2015

18,755,093 Shares issued on 12 February 2016

1,224,500 Shares issued on 12 February 2016

716,667 Shares issued on 18 February 2016

22,943,877 Shares issued on 10 May 2016

1,074,615 Shares issued on 10 May 2016

1,099,578 Shares issued on 10 May 2016

766,476 Shares issued on 10 May 2016

FiNANCiAL stAtEMENts 49

2016
NO.

2015
NO.

335,065,783

195,825,149

48,660,000

851,442

13,451,801

1,008,004

3,267,311

8,163,265

18,755,093

1,224,500

716,667

22,943,877

1,074,615

1,099,578

766,476

4,166,667

9,722,222

52,428,510

1,527,303

292

3,571,429

355,104

6,874,752

40,762,340

9,440,000

1,055,174

1,388,889

3,697,952

4,250,000

NOTE

15a.i

15a.ii

15a.iii

15a.iv

15a.v

15a.vi

15a.vii

15a.viii

15a.ix

15a.x

15a.xi

15a.xii

15a.xiii

15a.xiv

15a.xv

15a.xvi

15a.xvii

15a.xviii

15a.xix

15a.xx

15a.xxi

15a.xxii

15a.xxiii

15a.xxiv

15a.xxv

15a.xxvi

15a.xxvii

At reporting date

457,048,412

335,065,783

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT)50

NOTE 15. ISSUED CAPITAL (CONT)

ii.

iii.

iv.

vi.

vii.

viii.

ix.

xi.

xii.

xiii.

xiv.

xv.

xvi.

Issued under financing agreement with ASOF.

Issued on conversion by ASOF of $175,000 in convertible notes into fully paid ordinary shares.

Issued pursuant to rights issue to shareholders.

Issued to settle amounts due to consultants for services rendered.

Issued on conversion of options over ordinary shares into fully paid ordinary shares.

Issued under financing agreement with ASOF.

Issued to settle amounts due to consultants for services rendered.

Issued to directors in lieu of entitlement to cash emoluments.

Issued pursuant to share placement.

Issued pursuant to share purchase plan to shareholders.

Issued to corporate advisor under capital raising agreement.

Issued on conversion by ASOF of $25,000 in convertible notes into fully paid ordinary shares.

Issued to directors in lieu of entitlement to cash emoluments.

Issued pursuant to shortfall under share purchase plan.

Issued pursuant to Share Placement (through WH Ireland Limited).

Issued to Executive Chairman/Managing Director pursuant to Contract of Employment.

xvii.

Issued pursuant to Share Placement (through WH Ireland Limited).

xviii.

Issued to Executive Chairman/Managing Director pursuant to Contract of Employment.

xix.

xx.

xxi.

Issued pursuant to Engagement Letter between the Company and Hartley Limited.

Issued pursuant to Share Placement to ASOF.

Issued pursuant to Share Placement.

xxii.

Issued pursuant to conversion By ASOP of convertible notes into fully paid ordinary shares.

xxiii.

Issued pursuant to conversion by ASOP of convertible notes into fully paid ordinary shares.

xxiv.

Issued of shares to sophisticated and professional investors for working capital.

xxv.

Issued pursuant to Engagement Letter between Company and Hartley Limited.

xxvi.

Issued to Executive Chairman/Managing Director pursuant to Contract of Employment.

xxvii.

Issued to Executive Chairman/Managing Director pursuant to Contract of Employment.

b. Options

For information relating to the Aura Energy Limited employee options scheme, including details of options issued, issued and
lapsed during the financial year, and the options outstanding at balance date, refer to Note 19 Share-based payments. The total
number of options on issue is as follows:

Listed options

Unlisted options

2016
NO.

27,226,166

170,123,536

2015
NO.

27,226,166

86,159,005

197,349,702

113,385,171

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16FiNANCiAL stAtEMENts 51

NOTE 15. ISSUED CAPITAL (CONT)

c. Capital Management

i. Capital management policy

The directors’ objectives when managing capital are to ensure that the Group can fund its operations and continue as a going
concern, so that they may continue to provide returns for shareholders and benefits for other stakeholders.

Due to the nature of the Group’s activities, being mineral exploration, the Group does not have ready access to credit facilities,
with the primary source of funding being equity raisings. Therefore, the focus of the Group’s capital risk management is the current
working capital position against the requirements of the Group to meet exploration programmes and corporate overheads.
The Group’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to
initiating appropriate capital raisings as required.

ii. Current ratio

The current ratio the Group at 30 June 2016 and 30 June 2015 was as follows:

Current ratio

iii. Working capital position

The working capital position of the Group at 30 June 2016 and 30 June 2015 was as follows:

NOTE

Cash and cash equivalents

Trade and other receivables

Financial assets

Trade and other payables

Short-term borrowings

Short-term provisions

Working capital position / (deficit)

NOTE 16. RESERVES

Option reserve

Foreign exchange reserve

a. Option reserve

NOTE

16a

16b

2016
NO.

0.58

2016
NO.

317,758

57,708

43,625

(550,844)

(165,251)

(297,004)

2016
$

495,651

533,891

1,029,542

2015
NO.

1.86

2015
NO.

943,011

96,282

44,157

(401,345)

(43,040)

(138,639)

500,426

2015
$

398,924

502,328

901,252

The option reserve records items recognised as expenses on the value of employee and consultant share options.

b. Foreign exchange translation reserve

The foreign exchange reserve records exchange differences arising on translation of foreign controlled subsidiary.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT)52

NOTE 17. CONTROLLED ENTITIES

CONTROLLED ENTITIES

Aura Energy Sweden AB

GCM Africa Uranium Limited

COUNTRY OF
INCORPORATION

Sweden

United Kingdom

CLASS OF
SHARES

Ordinary

PERCENTAGE OWNED

2016

100%

2015

100%

Investments in subsidiaries are accounted for at cost.

NOTE 18. CASH FLOW INFORMATION

a. Reconciliation of cash flow from operations to loss after income tax

Loss after income tax

Cash flows excluded from profit attributable to operating activities

Non-cash flows in profit from ordinary activities:

Share-based payments expense

Payments to employees and corporate advisor by way of shares

Net interest on convertible notes

Depreciation

Effects of foreign exchange on translation

Impairment of exploration expenditure previously capitalised

Reclassification of insurance funding

2016
$

(1,625,775)

(2,493,900)

158,645

158,134

6,960

1,602

2,017

96,704

305,441

57,304

4,676

9,379

1,045,240

(32,416)

Capitalised exploration expenditure included in cash flows from operations

(1,110,965)

(1,438,205)

Other

Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries:

(Increase)/decrease in receivables and prepayments

Increase/(decrease) in trade and other payables

Increase/(decrease) in provisions

Cash flow from operations

b. Credit standby facilities

The Group has no credit standby facilities.

c. Non-Cash Investing and Financing Activities

The Group has no non-cash investing and financing activities.

1,152

14,845

438,374

26,612

11,377

(93,196)

32,558

(1,929,551)

(2,493,886)

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16NOTE 19. SHARE-BASED PAYMENTS

FiNANCiAL stAtEMENts 53

2016
$

2015
$

Share-based payment expense

158,645

96,704

a. The above share-based payment expense is comprised of the following arrangements in place at 30 June 2016:

On 9 June 2015, the following options over ordinary shares were granted to the Executive Chairman and Managing Director of the
Company in the following tranches:

• 8,750,000 at an exercise price of $0.10 each. The options are exercisable on or before 9 June 2018.

• 6,250,000 at an exercise price of $0.15 each. The options are exercisable on or before 9 February 2019.

• 2,500,000 at an exercise price of $0.15 each. The options are exercisable on or before 9 June 2019.

• 8,750,000 at an exercise price of $0.15 each. The options are exercisable on or before 9 June 2020.

• 8,750,000 at an exercise price of $0.15 each. The options are exercisable on or before 9 June 2021.

$158,645 was the deemed cost of the options over ordinary shares for the financial year.

The options over ordinary shares hold no voting or dividend rights and are not transferable. At balance date, no options over
ordinary shares have been exercised or forfeited and the 35,000,000 options over ordinary shares remain.

b. The above share-based payment expense is comprised of the following arrangements in place at 30 June 2015:

On 24 November 2013, the following options over ordinary shares were granted to directors of the Company:

• 2,000,000 at an exercise price of $0.15 each. The options are exercisable on or before 13 January 2016.

• 2,250,000 at an exercise price of $0.20 each. The options are exercisable on or before 13 January 2016.

• 2,000,000 at an exercise price of $0.20 each. The options are exercisable on or before 13 July 2016.

• 4,625,000 at an exercise price of $0.15 each. The options are exercisable on or before 13 January 2016.

• 4,625,000 at an exercise price of $0.20 each. The options are exercisable on or before 13 July 2016.

On 9 June 2015, the following options over ordinary shares were granted to the Executive Chairman and Managing Director of the
Company in the following tranches:

• 8,750,000 at an exercise price of $0.10 each. The options are exercisable on or before 9 June 2018.

• 6,250,000 at an exercise price of $0.15 each. The options are exercisable on or before 9 February 2019.

• 2,500,000 at an exercise price of $0.15 each. The options are exercisable on or before 9 June 2019.

• 8,750,000 at an exercise price of $0.15 each. The options are exercisable on or before 9 June 2020.

• 8,750,000 at an exercise price of $0.15 each. The options are exercisable on or before 9 June 2021.

The options over ordinary shares hold no voting or dividend rights and are not transferable. At balance date, 6,625,000 lapsed and
the remaining 8,875,000 options have not been exercised or forfeited and remain.

c. Share-based payments recognised directly in equity and in place at 30 June 2016:

On 11 November 2014, the Company granted 12,500,000 options over ordinary shares to its corporate advisors pursuant to a
capital raising agreement at an exercise price of $0.07 each. The options over ordinary shares are exercisable on or before 11
November 2018. $42,233 (2015: $70,389) was deemed transaction costs for the financial year under the capital raising agreement
and has been recognized as such in the consolidated statement of changes in equity.

d. Share-based payments recognised directly in equity and in place at 30 June 2015:

On 8 March 2014, 2,600,000 options over ordinary shares were issued under an agreement with The Australian Special
Opportunity Fund, LP, managed by The Lind Partners, LLC, to take up ordinary shares at an exercise price of $0.048 each. The
options over ordinary shares expire 6 March 2017. $56,661 was deemed a transaction costs under the agreement and has been
recognised as such in the consolidated statement of changes in equity.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT)54

NOTE 19. SHARE-BASED PAYMENTS (CONT)

a. Movement in share-based payment arrangements during the period

A summary of the movements of all Company options issued as share-based payments is as follows:

2016

2015

NUMBER OF OPTIONS

WEIGHTED AVERAGE
EXERCISE PRICE

NUMBER OF OPTIONS

WEIGHTED AVERAGE
EXERCISE PRICE

Outstanding at the beginning of the year

59,745,000

Issued

Exercised

Expired

Outstanding at year-end

Exercisable at year-end

(2,820,000)

56,925,000

36,825,000

$0.1940

$0.1132

26,745,000

47,500,000

($0.2505)

(14,500,000)

$0.1206

$0.1117

59,745,000

20,995,000

$0.1940

$0.1132

($0.2013)

$0.1267

$0.1463

The weighted average remaining contractual life of options outstanding at year end is 2.5226 years (2015: 1.8874 years). The
weighted average exercise price of outstanding shares at the end of the reporting period is $0.1206 (2015: $0.1267).

b. Fair value of options grants during the period

The Company did not grant any options over ordinary shares during the financial year ended 30 June 2016.

In the previous financial year, the fair value of the options granted to employees is deemed to represent the value of the
employee services received over the vesting period.

The weighted average fair value of options over ordinary shares granted during the previous financial year was $0.1132. These
values were calculated using the Black-Scholes option pricing model, applying the following inputs to options issued this year:

Grant date:

Grant date share price:

Option exercise price:

Number of options issued:

Remaining life (years):

Expected share price volatility:

Risk-free interest rate:

$0.10

15,000,000

3.28

10 June 2015

$0.021

107%

2.0%

$0.15

20,000,000

4.98

Historical volatility has been the basis for determining expected share price volatility as it is assumed that this is indicative of
future movements.

The life of the options is based on the historical exercise patterns, which may not eventuate in the future.

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16NOTE 20. KEY MANAGEMENT PERSONNEL COMPENSATION

a. Key management personnel (“KMP”)

The names are positions of KMP are as follows:

PD Reeve

Executive Chairman and Managing Director

Dr R Beeson

Non-executive director

BF Fraser

JC Perkins

SF Zillwood

JM Madden

b. KMP compensation

Non-executive director

Company Secretary (from 1 July 2015 to 31 March 2016)

Company Secretary (from 31 March 2016 to 30 June 2016)

The totals of remuneration paid to KMP during the year are as follows:

Short-term employee benefits

Post-employment benefits

Share-based payments in equity

Share-based payments in options

Other long term benefits

Termination benefits

Payments to contractors for accounting and secretarial services

Total

FiNANCiAL stAtEMENts 55

2016
$

445,200

36,200

100,000

158,645

92,448

832,493

2015
$

624,900

54,850

50,000

96,704

102,816

929,270

Refer to the Remuneration Report contained in the Director’s Report for details of the remuneration paid to each member of the
Group’s KMP for the year ended 30 June 2016.

NOTE 21. RELATED PARTY TRANSACTIONS

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to
other parties unless otherwise stated.

Other transactions with key management personnel are set out in the Remuneration Report, there are no other related party
transactions.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT)

NOTE 22. COMMITMENTS

a. Exploration expenditure commitments:

Exploration tenement minimum expenditure requirements

335,996

101,482

2016
$

2015
$

Payable:

not later than 12 months

between 12 months and 5 years

greater than 5 years

The Group has no contracted exploration expenditure, however the Group has accounted for
core asset tenement renewals as expenditure the Group is committed to.

b. Operating lease commitments:

Operating leases contracted for or committed to but not capitalised in the financial statements

Payable:

not later than 12 months

between 12 months and 5 years

greater than 5 years

296,418

39,578

335,996

53,460

87,740

141,200

52,947

48,535

101,482

16,636

The Group shares premises with a number of companies. Balances stated represent the maximum gross amount payable, prior to
reimbursement from other parties.

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16FiNANCiAL stAtEMENts 57

NOTE 23. OPERATING SEGMENTS

Identification of reportable segments

The Group operates predominantly in the mining industry. This comprises exploration and evaluation of uranium projects. Inter-
segment transactions are priced at cost to the Consolidated Group.

The Group has identified its operating segments based on the internal reports that are provided to the Board of Directors on a
monthly basis. Management has identified the operating segments based on the two principal locations of its projects – Sweden
and Mauritania. The Group also maintains a corporate function primarily responsible for overall management of the operating
segments, raising capital and distributing funds to operating segments.

Corporate expenses include administration and regulatory expenses arising from operating an ASX listed entity.

Segment assets include the costs to acquire tenements and the capitalised exploration costs of those tenements Financial assets
including cash and cash equivalents, and investments in financial assets, are reported in the Treasury segment.

b. Basis of accounting for purposes of reporting by operating segments

i. Accounting policies adopted

Unless stated otherwise, all amounts reported to the board of directors, being the chief decision maker with respect to operating
segments, are determined in accordance with accounting policies that are consistent to those adopted in the annual financial
statements of the Group.

ii.

Inter-segment transactions

An internally determined transfer price is set for all inter-segment sales. This price is reset quarterly and is based on what
would be realised in the event the sale was made to an external party at arm’s length. All such transactions are eliminated on
consolidation of the Group’s financial statements.

Corporate charges are allocated to reporting segments based on the segments’ overall proportion of revenue generation within
the Group. The board of directors believes this is representative of likely consumption of head office expenditure that should be
used in assessing segment performance and cost recoveries.

Inter-segment loans payable and receivable are initially recognised at the consideration received/to be received net of transaction
costs. If inter-segment loans receivable and payable are not on commercial terms, these are not adjusted to fair value based on
market interest rates. This policy represents a departure from that applied to the statutory financial statements.

iii. Segment assets

Where an asset is used across multiple segments, the asset is allocated to that segment that receives majority economic value
from that asset. In the majority of instances, segment assets are clearly identifiable on the basis of their nature and physical
location.

iv. Segment liabilities

Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the operations
of the segment. Borrowings and tax liabilities are generally considered to relate to the Group as a whole and are not allocated.
Segment liabilities include trade and other payables and certain direct borrowings.

v. Unallocated items

The following items of revenue, expenses, assets and liabilities are not allocated to operating segments as they are not considered
part of the core operations of any segment:

• Non-exploration impairment of assets and other non-recurring items of revenue or expense

•

Income tax expense

• Deferred tax assets and liabilities

• Current tax liabilities

• Other financial liabilities

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT)58

NOTE 23. OPERATING SEGMENTS (CONT)

FOR THE YEAR TO 30 JUNE 2016

Segment revenue

Segment results

Amounts not included in segment results but reviewed by Board:

Expenses not directly allocable to identifiable segments or areas of interest

SWEDEN
EXPLORATION
$

MAURITANIA
EXPLORATION
$

(51,461)

CORPORATE
$

4,907

TOTAL
$

4,907

(46,554)

Accounting and audit fees

Computers and communications

Depreciation

Employee benefits expense

Finance costs

Impairment

Insurance

Consulting fees and corporate advisory

Public relations

Rent and utilities

Share-based payment expenses

Share registry and listing fees

Travel and accommodation

AIM listing costs

Other expenses

Tax rebate for research and development

Loss after income tax

AS AT 30 JUNE 2016

Segment assets

Unallocated assets:

Trade and other receivables

Plant and equipment

Other non-current assets

Total assets

Segment asset increases for the period:

Capital expenditure-exploration

Less: Write-off of exploration assets

Segment liabilities

Unallocated liabilities:

Trade and other payables

Short-term provisions

Short-term borrowings

Total liabilities

(149,416)

(44,193)

(1,602)

(711,929)

(8,171)

(51,378)

(223,149)

(22,472)

(39,847)

(158,645)

(79,385)

(49,273)

(165,840)

(22,529)

148,608

(1,625,775)

6,484,992

7,647,916

366,185

14,459,093

173,898

704,014

173,898

704,014

30,474

57,708

14,556,801

877,912

30,474

520,370

165,251

716,095

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16FiNANCiAL stAtEMENts 59

NOTE 23. OPERATING SEGMENTS (CONT)

FOR THE YEAR TO 30 JUNE 2015

Segment revenue

Segment results

Amounts not included in segment results but reviewed by Board:

Expenses not directly allocable to identifiable segments or areas of interest

SWEDEN
EXPLORATION
$

MAURITANIA
EXPLORATION
$

CORPORATE
$

TOTAL
$

22,223

(264,389)

(802,155)

22,223

(1,044,321)

Accounting and audit fees

Business development

Computers and communications

Depreciation

Employee benefits expense

Finance costs

Insurance

Consulting fees and corporate advisory

Public relations

Rent and utilities

Share-based payment expenses

Share registry and listing fees

Travel and accommodation

Other expenses

Loss after income tax

AS AT 30 JUNE 2015

Segment assets

Unallocated assets:

Trade and other receivables

Plant and equipment

Other non-current assets

Total assets

Segment asset increases for the period:

Capital expenditure-exploration

Less: Write-off of exploration assets

Segment liabilities

Unallocated Liabilities:

Trade and other payables

Short term provisions

Short-term borrowings

Total liabilities

(126,869)

(6,000)

(27,150)

(4,676)

(638,556)

(60,564)

(39,451)

(182,309)

(67,526)

(33,168)

(96,704)

(63,522)

(92,836)

(10,248)

(2,493,900)

6,311,094

6,943,902

991,969

14,246,965

252,046

1,326,688

(243,085)

(802,155)

8,961

524,533

5,032

115,793

96,282

1,602

14,344,849

1,578,734

(1,045,240)

533,494

120,825

280,520

138,639

43,040

583,024

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT)60

NOTE 24. FINANCIAL RISK MANAGEMENT

a. Financial risk management policies

This note presents information about the Group’s exposure to each of the above risks, its objectives, policies and procedures for
measuring and managing risk, and the management of capital.

The Group’s financial instruments consist mainly of deposits with banks, short-term investments, and accounts payable and
receivable.

The Group does not speculate in the trading of derivative instruments.

A summary of the Group’s financial assets and liabilities is shown below:

FLOATING
INTEREST
RATE
$

FIXED
INTEREST
RATE
$

NON-
INTEREST
BEARING
$

2016
TOTAL
$

FLOATING
INTEREST
RATE
$

FIXED
INTEREST
RATE
$

NON-
INTEREST
BEARING
$

2015
TOTAL
$

Financial assets

Cash and cash equivalents

317,758

Trade and other receivables

Financial assets

Total financial assets

Financial liabilities

Financial liabilities at amortised cost

Trade and other payables

Short-term borrowings

Total financial liabilities

317,758

Net financial assets

317,758

943,011

57,708

43,625

943,011

96,282

16,024

28,133

44,157

101,333

419,091

943,011

16,024

124,415 1,083,450

550,844

401,345

43,040

401,345

444,385

(449,511)

(131,753)

943,011

(27,016)

(276,930)

639,065

b. Specific financial risk exposures and management

The main risk the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk consisting of
interest rate, foreign currency risk and equity price risk.

The board of directors has overall responsibility for the establishment and oversight of the risk management framework. The board
of directors has adopted practices designed to identify significant areas of business risk and to effectively manage those risks in
accordance with the risk profile. This includes assessing, monitoring and managing risks for the Group and setting appropriate risk
limits and controls. The Group is not of a size nor is its affairs of such complexity to justify the establishment of a formal system for
risk management and associated controls. Instead, the Board approves all expenditure, is intimately acquainted with all operations
and discuss all relevant issues at the Board meetings. The operational and other compliance risk management have also been
assessed and found to be operating efficiently and effectively.

i. Credit risk

Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract
obligations that could lead to a financial loss to the Group

The Group does not have any material credit risk exposure to any single receivable or Group of receivables under financial
instruments entered into by the Group.

Credit risk exposures

The maximum exposure to credit risk is that to its alliance partners and that is limited to the carrying amount, net of any
provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the financial
statements.

Credit risk related to balances with banks and other financial institutions is managed by the Group in accordance with
approved Board policy. Such policy requires that surplus funds are only invested with financial institutions residing in
Australia, where ever possible.

Impairment losses

Group’s financial assets that are past due total $nil (2015: $nil).

There has been no allowance for impairment in respect of the financial assets of the Group during this year.

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16FiNANCiAL stAtEMENts 61

NOTE 24. FINANCIAL RISK MANAGEMENT (CONT)

ii. Liquidity risk

Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its
obligations related to financial liabilities.

The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring sufficient cash and
marketable securities are available to meet the current and future commitments of the Group. Due to the nature of the Group’s
activities, being mineral exploration, the Group does not have ready access to credit facilities, with the primary source of funding
being equity raisings. The board of directors constantly monitor the state of equity markets in conjunction with the Group’s current
and future funding requirements, with a view to initiating appropriate capital raisings as required. Any surplus funds are invested
with major financial institutions.

The financial liabilities of the Group are confined to trade and other payables as disclosed in the statement of financial position.
All trade and other payables are non-interest bearing and due within 30 days of the reporting date.

iii. Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the
Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and
control market risk exposures within acceptable parameters, while optimising the return.

The Board meets on a regular basis and considers the Group’s exposure currency and interest rate risk.

(1) Interest rate risk

Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting period
whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments. The
Group is also exposed to earnings volatility on floating rate instruments.

Interest rate risk is not material to the Group as no debt arrangements have been entered into, and movement in interest rates
on the Group’s financial assets is not material.

(2) Foreign exchange risk

Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial instrument fluctuating due to
movement in foreign exchange rates of currencies in which the Group holds financial instruments which are other than the
Australian dollars functional currency of the Group.

With instruments being held by overseas operations, fluctuations in foreign currencies may impact on the Group’s financial
results. The Group’s exposure to foreign exchange risk is minimal; however the Board continues to review this exposure
regularly.

(3) Price risk

Price risk relates to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in market prices.

The Group is exposed to securities price risk on investments held for trading or for medium to longer terms.

The investment in listed equities has been valued at the market price prevailing at balance date. Management of this
investment’s price risk is by ongoing monitoring of the value with respect to any impairment.

At balance date, the Group does not hold financial instruments that would give rise to price risk.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT)62

NOTE 24. FINANCIAL RISK MANAGEMENT (CONT)

iv. Sensitivity analyses

(1) Interest rates

The following table illustrates sensitivities to the Group’s exposures to changes in interest rates. The table indicates
the impact on how profit and equity values reported at balance sheet date would have been affected by changes in
the relevant risk variable that management considers to be reasonably possible. These sensitivities assume that the
movement in a particular variable is independent of other variables.

A change of 100 basis points in the interest rates at the reporting date would have increased/(decreased) equity and profit
or loss by the amounts shown below. The analysis was performed on a change of 100 basis points for 2016.

Year ended 30 June 2016

± 100 basis points change in interest rates

Year ended 30 June 2015

± 100 basis points change in interest rates

(2) Foreign exchange

PROFIT
$

EQUITY
$

±6,576

±9,929

±7,788

The Group main exposure to foreign currency risk is to Swedish Krona (SEK) for assets the Group holds through its
Swedish subsidiary, Aura Energy Sweden AB. The following table illustrates sensitivities to the Group’s exposures to
changes in the SEK rate. The table indicates the impact on how profit and equity values reported at balance sheet date
would have been affected by changes in the relevant risk variable that management considers to be reasonably possible.
These sensitivities assume that the movement in a particular variable is independent of other variables.

Year ended 30 June 2016

± 10% of Australian dollar strengthening/weakening against the SEK

Year ended 30 June 2015

± 10% of Australian dollar strengthening/weakening against the SEK

v. Net fair values

(1) Fair value estimation

PROFIT
$

EQUITY
$

Nil

+65,849

-59,118

+75,050

-105,458

The fair values of financial assets and financial liabilities are presented in the table below and can be compared to their
carrying values as presented in the statement of financial position. Fair values are those amounts at which an asset could
be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.

Cash and cash equivalents, trade and other receivables, and trade and other payables are short-term investments in nature
whose carrying value is equivalent to fair value.

The methods and assumptions used in determining the fair values of financial instruments are disclosed in the accounting
policy notes specific to the asset or liability.

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16FiNANCiAL stAtEMENts 63

NOTE 24. FINANCIAL RISK MANAGEMENT (CONT)

vi. Financial liability and asset maturity analysis

Financial liabilities due for payment

Trade and other payables

Short-term borrowings

Total contractual outflows

Financial assets

Cash and cash equivalents

Trade and other receivables

Financial assets

Total anticipated inflows

Net (outflow)/inflow on financial instruments

WITHIN 1 YEAR

2016
$

2015
$

TOTAL

2016
$

550,844

317,758

57,708

43,625

419,091

(131,753)

401,345

43,040

444,385

943,011

96,282

44,157

1,083,450

639,065

550,844

317,758

57,708

43,625

419,091

(131,753)

2015
$

401,345

43,040

444,385

943,011

96,282

44,157

1,083,450

639,065

NOTE 25. EVENTS SUBSEQUENT TO REPORTING DATE
On 12 September 2016 and 16 September 2016, the Company completed listing of its shares on the Alternative Investment Market in
London and an Australian Placement which raised $5,002,677 (before costs).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT)64

NOTE 26. PARENT ENTITY DISCLOSURES

a. Financial position of Aura Energy Limited

Current assets

Cash and cash equivalents

Trade and other receivables

Financial assets

Total current assets

Non-current assets

Plant and equipment

Financial assets

Other assets

Total non-current assets

Total assets

Current liabilities

Trade and other payables

Short-term provisions

Short-term borrowings

Total current liabilities

Total liabilities

Net assets

Equity

Issued capital

Option reserve

Accumulated losses

Total equity

b. Financial assets

NOTE

26b

2016
$

299,974

24,227

43,625

367,826

8,317,554

5,871,421

14,188,975

14,556,801

520,370

165,264

685,634

2015
$

910,881

57,242

44,157

1,012,280

1,602

8,158,529

5,167,407

13,327,538

14,339,818

396,314

138,639

43,040

577,993

13,871,167

13,761,825

32,784,203

599,802

31,311988

398,924

(19,512,838)

(17,949,087)

13,871,167

13,761,825

Loans to subsidiaries

Shares in controlled entities at cost

Net carrying value

26b.i

6,410,654

1,906,900

8,317,554

6,251,629

1,906,900

8,158,529

i. Loans are provided by the parent entity to its controlled entities to fund their activities. The eventual recovery of loans and investments will be dependent upon

the successful commercial application of these projects or their sale to third parties.

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16NOTE 26. PARENT ENTITY DISCLOSURES (CONT)

c. Financial performance of Aura Energy Limited

Loss for the year

Other comprehensive income

Total comprehensive income

FiNANCiAL stAtEMENts 65

2016
$

2015
$

(1,433,556)

(2,853,498)

(1,433,556)

(2,853,498)

d. Guarantees entered into by Aura Energy Limited for the debts of its subsidiaries

There are no guarantees entered into by Aura Energy Limited for the debts of its subsidiaries as at 30 June 2016
(2015: none).

e. Contingent liabilities of Aura Energy Limited

There are no contingent liabilities as at 30 June 2016, other than as detailed in Note 27 Contingent liabilities (2015: none).

f. Commitments by Aura Energy Limited

Exploration expenditure commitments:

Exploration tenement minimum expenditure requirements

335,996

101,482

2016
$

2015
$

Payable:

not later than 12 months

between 12 months and 5 years

greater than 5 years

The Group has no contracted exploration expenditure, however the Group has
treatment core asset tenement renewals as expenditure the Group is committed to.

Operating lease commitments:

Operating leases contracted for or committed to but not capitalised in the financial
statements

Payable:

not later than 12 months

between 12 months and 5 years

greater than 5 years

296,418

39,579

335,996

53,460

87,740

141,200

52,947

48,535

101,482

13,618

The Group shares premises with a number of companies. Balances stated represent the maximum gross amount payable, prior to
reimbursement from other parties.

The amounts presented above are applicable for both Aura Energy Limited (the parent) and the Consolidated Group.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT)66

NOTE 27. CONTINGENT LIABILITIES
On 15 October 2010, the Company and Global Coal Management plc entered into a Share Sale and Purchase Agreement which resulted in
the Company acquiring all the shares on issue in GCM Africa Uranium, the entity which held the beneficial interest of GCM in the above-
mentioned research permits in Mauritania.

The Company paid GCM US$100,000 on execution of the Share Sale and Purchase Agreement; US$472,183 in cash plus 2,000,000 fully
paid ordinary shares in the Company on completion (due diligence); and, US$500,000 on the first anniversary of completion.

The Company also agreed to pay a contingent consideration:

i. US$2,000,000 (in cash and shares as determine by the Company) on the delineation of 75 million pounds or more Initial Resource

(not defined in the Letter Agreement) under the Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore
Reserves; and

ii. US$400,000 in cash and 400,000 fully paid ordinary shares in the Company for each Subsequent Resource of 6,500,000 pounds up to

a maximum of US$4,000,000 in cash and 4,000,000 in fully paid ordinary shares.

The obligations to make the contingent consideration payments are held by the Company and the contingent consideration is only
payable if the Initial Resource and Subsequent Resource are achieved within 10 years of the date of the Share Sale and Purchase
Agreement. Accordingly, the obligation to pay the contingent consideration expires on 15 October 2020.

There are no other contingent liabilities as at 30 June 2016.

NOTE 28. COMPANY DETAILS
The registered office and principal place of the Company is:

Address:

Level 1, 34-36 Punt Road, Windsor Victoria 3181

Telephone:

+61 (0)3 9516 6500

Facsimile:

+61 (0)3 9516 6565

Website:

www.auraenergy.com.au

E-mail:

info@auraenergy.com.au

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16DirECtors' DECLArAtioN 67

DIRECTORS’ DECLARATION

The directors of the Company declare that:

1. The financial statements and notes to the accounts are in accordance with the Corporations Act 2001 (Cth) and:

(a) Comply with Accounting Standards.

(b) Are in accordance with International Financial Reporting Standards issued by the International Accounting

Standards Board, as stated in note 1 to the financial statements.

on that date of the Company and Consolidated Group.

2. The Chief Executive Officer and Chief Finance Officer have each declared that:

(a) The financial records of the Company for the financial year have been properly maintained in accordance with

s.286 of the Corporations Act 2001 (Cth).

(b) The financial statements and notes for the financial year comply with the Accounting Standards.

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

This declaration is made in accordance with a resolution of the Board of Directors pursuant to s.295(5) and is signed for and
on behalf of the directors by:

Peter Reeve
Chairman

Dated this Thursday 29 September 2016

INDEPENDENT AUDITOR’S REPORT

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16DirECtors' DECLArAtioN 69

ADDITIONAL INFORMATION

As of 27 SepTember 2016

The following additional information is required by the Australian Securities Exchange in respect of listed public companies.

a. Distribution of Shareholders

CATEGORY (SIZE OF HOLDING)

1 – 10,000

10,001 – 100,000

100,001 – 1,000,000

1,000,001 – 1,000,000,000

TOTAL

b. Unmarketable Parcels

Minimum $ 500.00 parcel at $ 0.0410 per unit

c. Voting Rights

TOTAL HOLDERS

NUMBER
ORDINARY

% HELD OF ISSUED
ORDINARY CAPITAL

109

196

152

695

14,226

625,625

1,258,983

28,298,892

0.00

0.09

0.18

3.98

1,574

711,319,938

100.00

MINIMUM
PARCEL SIZE

12,196

HOLDERS

UNITS

498

2,400,778

The voting rights attached to each class of equity security are as follows:

• Ordinary shares: Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a

meeting or by proxy has one vote on a show of hands.

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16ADDitioNAL iNForMAtioN 71

d. 20 Largest Shareholders — Ordinary Shares as at 27 September 2016.

RANK

NAME

FITEL NOMINEES LIMITED

UNITS

% OF UNITS

173,280,699

24.36

BNP PARIBAS NOMINEES PTY LTD

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED

PRE-EMPTIVE TRADING PTY LTD

HARGREAVES LANSDOWN (NOMINEES) LIMITED

CITICORP NOMINEES PTY LIMITED

SAMBOLD PTY LTD

PASAGEAN PTY LIMITED

ABN AMRO CLEARING SYDNEY NOMINEES PTY LTD

MR PETER DESMOND REEVE

BARCLAYSHARE NOMINEES LIMITED

GOLDMAN SACHS SECURITIES (NOMINEES) LIMITED

J P MORGAN NOMINEES AUSTRALIA LIMITED

ONE MANAGED INVESTMENT FUNDS LIMITED

MERRIWEE PTY LTD

MR MICHAEL BUSHELL

MS MICHELLE ANNE PAINE

YARANDI INVESTMENTS PTY LTD

MRS LINDA YE + MR DAVID XIAO DONG YE

"ONE MANAGED INVESTMENT FUNDS LIMITED

63,064,268

60,285,060

35,650,000

14,687,245

13,918,654

13,764,895

12,180,612

11,843,258

9,718,304

8,855,430

8,750,000

7,656,040

7,376,875

6,750,000

5,474,903

3,750,000

3,568,800

3,530,919

8.87

8.48

5.01

2.06

1.96

1.94

1.71

1.66

1.37

1.24

1.23

1.08

1.04

0.95

0.77

0.53

0.50

Top 20 shareholders

Remaining shareholders

Total shares on issue

467,855,962

243,463,976

65.77

34.23

711,319,938

100.00

SHAREHOLDING AS AT 24 SEPTEMBER 2016 (CONT)

e. 20 Largest Option holders — as at 27 September 2016.

RANK

NAME

UNITS

% OF UNITS

10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

20.

FIRST INVESTMENT PARTNERS PTY LTD

M & K KORKIDAS PTY LTD

YARANDI INVESTMENTS PTY LTD

PASAGEAN PTY LIMITED

BNP PARIBAS NOMINEES PTY LTD

MR JONATHAN GREGORY QUINLIVAN

ALCARDO INVESTMENTS LIMITED

MRS KERRYN PATRICIA DELEN

UBS NOMINEES PTY LTD

MR HENDRIK JACOBUS DELEN + MRS KERRYN PATRICIA DELEN

MR LUKE KUKULJ

MR MARTIN MUSIC

MR NEIL FRANCIS STUART

MARTIN PLACE SECURITIES STAFF SUPERANNUATION FUND PTY LTD

SPINNAKER INVESTMENT MANAGEMEN T PTY LTD

MAGNA EQUITIES II LLC

MR JOHN CHRISTOPHER BRIDGES + MS LEANNE BEVERLEY DONALD

CRX INVESTMENTS PTY LIMITED

MR ROBERT ANTHONY GENTILE + MRS MICHAELA MAREE GENTILE

MR KONSTANTINOS KORKIDAS

5,300,000

2,150,000

1,800,000

1,600,000

1,500,000

1,495,012

1,249,999

1,236,170

1,055,000

888,830

500,000

487,500

450,000

400,000

300,000

19.47

7.90

6.61

5.88

5.51

5.49

4.59

4.54

3.87

3.26

1.84

1.79

1.65

1.47

1.10

Top 20 listed option holders

Remaining listed option holders

Total listed options

22,312,511

4,913,655

81.95

18.05

27,226,166

100.00

COMPANY SECRETARY
The name of the Company Secretary is JM Madden.

UNQUOTED SECURITIES
Options over Unissued Shares

PRINCIPAL REGISTERED OFFICE
As disclosed in Note 28 Company Details of this Annual Report.

A total of 163,498,536 (2015: 86,159,005) unlisted options are
on issue of which 35,000,000 (2015: 44,645,000) options are
issued to directors as at 27 September 2016.

REGISTERS OF SECURITIES ARE HELD AT THE
FOLLOWING ADDRESSES
As disclosed in the Corporate Directory of this Annual Report.

USE OF FUNDS
The Company has used its funds in accordance with its initial
business objectives.

STOCK EXCHANGE LISTING
Quotation has been granted for all the ordinary shares of the
Company on all Member Exchanges of the Australian Securities
Exchange Limited, as disclosed in the Corporate Directory of
this Annual Report.

AURA ENERGY LIMITED: ANNUAL REPORT 2015/16
TENEMENT REPORT

COUNTRY

Mauritania

TENEMENT
NUMBER

NAME

ORIGINAL
DATE OF GRANT

EXPIRY
DATE

SQ KMS HOLDER

561

563

564

961

1482

2002

2366

2479

Oum Ferkik

16-Apr-08

20-Nov-17

60 Aura Energy Limited

Oued El Foule Est

16-Apr-08

24-Mar-18

Ain Sder

16-Apr-08

09-Jun-18

313 Aura Energy Limited

330 Aura Energy Limited

Oued El Merre

09-Mar-10

(To be relinquished)

140 Aura Energy Limited

Oum Ferkik Sud

30-May-11

(Application)

476 Aura Energy Limited

Aguelet

Agouyame

Amare

08-May-13

(Application)

100 Aura Energy Limited

20-May-15

(Application)

34 Aura Energy Limited

21-Jun-16

(Application)

150 Aura Energy Limited

Sweden

2007:243

Haggan nr 1

28-Aug-07

28-Aug-17

18.3 Aura Energy Sweden AB

2007:244

Marby nr 1

30-Aug-07

30-Aug-17

22.4 Aura Energy Sweden AB

2009:23

Koborgsmyren nr 1

23-Jan-09

23-Jan-19

5.4 Aura Energy Sweden AB

2016:7

2016:9

Skallbole nr 1

20-Jan-16

20-Jan-19

7.8 Aura Energy Sweden AB

Mockelasen nr 1

21-Jan-16

21-Jan-19

17.6 Aura Energy Sweden AB

EQUITY
INTEREST

100%

ACN: 115 927 681

ANNUAL REPORT

30 JUNE 2016

ANNUAL REPORT

30 JUNE 2016