Cullen Resources Limited
Annual Report 2015

Plain-text annual report

For personal use only1 Cullen Resources Limited CORPORATE DIRECTORY CONTENTS Chairman's Report Company Profile Highlights Exploration Review Directors' Report Corporate Governance Statement Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Comprehensive Income Consolidated Statement of Cash Flows Notes to the Financial Statements Directors' Declaration Independent Audit Report Shareholder Information 2 3 4 5 17 27 30 31 32 33 34 56 57 59 ABN: 46 006 045 790 Directors Denis Clarke (Non-executive Chairman) Chris Ringrose (Managing Director) John Horsburgh (Non-executive) Grahame Hamilton (Non-executive) Wayne Kernaghan (Non-executive) Secretary Wayne Kernaghan Registered and Principal Office Unit 4 7 Hardy Street South Perth WA 6151 Telephone +61 (8) 9474 5511 Facsimile +61 (8) 9474 5588 Auditors Ernst & Young 11 Mounts Bay Road Perth WA 6000 Solicitors HWL Ebsworth Level 11 Westralia Plaza 167 St Georges Terrace Perth WA 6000 Bankers Westpac Sydney NSW 2000 Securities Quoted Australian Stock Exchange Limited Home Exchange - Sydney ASX Code: CUL Share Registry Computershare Investor Services Level 3, 60 Carrington Street Sydney NSW 2000 Telephone (02) 8234 5000 www.computershare.com Email cullen@cullenresources.com.au Company Website www.cullenresources.com.au For personal use onlyChairman’s Report 2 DEAR FELLOW SHAREHOLDER During the past year Cullen has responded to the on-going difficult market conditions for junior explorers and the commodity price collapse by prioritising management of capital and optimising our property portfolio. We have focussed on maintaining our participating interest in the advanced Mt Stuart Iron Ore Joint Venture and on exploring for nickel sulphide and gold deposits in our wholly owned Mt Eureka project, both projects being located in Western Australia. The most significant developments in regards to the company's iron ore assets in the West Pilbara during the last year have been the sharp decline in the iron ore price and the takeover of one of our joint venture parties, Aquila Resources Limited, by Baosteel Resources Australia Pty Ltd (Baosteel) and Aurizon Operations Limited (Aurizon) in July 2014. Baosteel is one of China's largest steel producers and Aurizon is a well-established logistics operator across Australia with expertise in rail transportation. Despite the drop in prices, all parties have pushed forward with the proposed major long life iron ore project. Work has progressed on a Feasibility Study (“FS”) update (to JORC 2012 reporting standards) for the West Pilbara Iron Ore Project (WPIOP), to include the Mt Stuart Iron Ore Joint Venture's (MSIOJV) deposits (owned 30% by Cullen). During the year ~13,000m of drilling was completed by the MSIOJV at the Catho Well Channel Iron Deposit (CID) , and the resource estimate tonnage was increased by 64% to 161 Mt at 54.4% Fe (see Cullen's ASX announcement 10 March 2015). During the year the MSIOJV expended approximately $2.9 million (Cullen $900,000) to advance the project. A feasibility study relating to a port and rail solution for the WPIOP is being undertaken by Aurizon and a project progress decision is expected in December 2015. Cullen considers its iron ore interest to be of substantial value. Cullen's 450 square kilometre Mt Eureka Project is a first class nickel and gold exploration project. It covers ultramafic rocks extending northward for ~40 kilometres from a group of new nickel sulphide discoveries by Rox Resources Limited immediately south of our property boundary in such rocks. The region may be a new nickel province. Cullen has completed ground EM surveying which has highlighted new bedrock conductors to be drill tested for nickel sulphides. Gold prospectivity at Mt Eureka has also been highlighted and targets advanced. A 6km long zone of favourable structures and geological settings for gold has been selected for drill testing. Our intentions are to advance the Mt Eureka Project as fast as our finances allow. Cullen also has two newly-granted tenements in the Dundas and Fraser Range region of south east Western Australia, which is currently a “hot -spot” exploration target region for deposits of nickel-copper and gold. As reflected by such acquisition of new properties, we retain our project generation opportunism. Despite the prolonged downturn in the exploration sector we have steadfastly persisted over the past several years remaining optimistic and committed to mineral deposit discovery. I thank shareholders for their continued support in providing $1.75 million of new capital over the year. Our dedicated team of fellow directors, staff, consultants and contractors are also thanked for their valuable contributions. Dr. Denis Clarke, Chairman For personal use only 3 Company Profile Company Profile Perth-based minerals explorer with: - iron ore deposit, West Pilbara - multi-commodity portfolio - multiple JV partnerships - innovative approaches - motivated management - experienced board - new project in Dundas-Fraser Range West Pilbara Wyloo Hardey Junction Paraburdoo Mt Eureka Cue Killaloe Dundas Forrestania Perth Minter Gold Tungsten Nickel Iron Copper, gold For personal use only4 Highlights Highlights 2014/2015 Mt STUART JV, WA IRON MT EUREKA, WA NICKEL & GOLD Mineral Resource Estimate for the Catho Well Channel Iron Deposit (CID) increased by 64% in tonnage to 161Mt @ 54.4% Fe, Baosteel's successful takeover of Aquila in July 2014 has increased project momentum. 2 ~450m project area in North Eastern Goldfields - prospective for gold and nickel. New ground EM surveys completed, with drill testing planned of conductor plates for nickel sulphides, and shear zones with geochemical anomalies to be drill tested for gold. WYLOO JV, WA IRON Maiden Inferred Resource in Bedded Iron Deposit (BID) of 16.9Mt @ 57.11% Fe. Tenements now sold to FMG Pilbara Pty Ltd as of 31 July 2015. MURCHISON, WA GOLD & BASE METALS Project area ~30km east of Cue, covering the northern part of the Tuckabianna - Webbs Patch greenstone sequence. Exploration targets for gold and VMS-style base metal mineralisation in this underexplored area. Some EM anomalies drilled, others remain untested. KILLALOE JV GOLD & COPPER Targeting nickel sulphide and gold deposits. Project area located south side of Lake Cowan along strike from “Taipan” nickel and “Baloo” gold discoveries of Sirius Resources Limited. LACHLAN , NSW TUNGSTEN Diamond drilling completed at Minter in July 2012 tested for cupola- related, tungsten-bearing vein system. Interpretation of vein orientation indicates further drilling required to more correctly evaluate. NEW PROJECTS GOLD, COPPER-NICKEL New, approved tenements – Dundas/Fraser Range Region (nickel, copper, gold). For personal use only 5 Exploration Review ASHBURTON/PILBARA, WA MT STUART JV - IRON The Mt Stuart Iron Ore Joint Venture (ELs 08/1135, 1292, 1330, 1341 and MLA's 08/481,482) is between Cullen Exploration Pty Ltd - 30% and contributing, and API Management Pty Ltd (“API”) - 70%. The shareholders of API are the parties to the unincorporated joint venture known as the Australian Premium Iron Joint Venture (APIJV). The participants in the APIJV are: Aquila Steel Pty Ltd 50% (the ultimate owners of which are Baosteel Resources Australia Pty Ltd (85%) and Aurizon Operations Limited (15%)); and AMCI (IO) Pty Ltd 50% (the ultimate owners of which are AMCI Investments Pty Ltd (51%) and Posco WA Pty Ltd (49%)). Baosteel and Posco are subsidiaries of major steel producers in China and Korea respectively. API is managing the proposed development of the 40 Mtpa WPIOP. A Feasibility Study (“FS”) update (to JORC 2012 reporting standards) for the WPIOP, to include the MSIOJV deposits, was previously proposed for 2015. The Manager has now indicated that a “draft MSIOJV FS” is scheduled for delivery by May 2016 (and, subject to MSIOJV management committee approval, scheduled to be finalised in July 2016). A feasibility study relating to a port and rail solution for the WPIOP is being undertaken by project partner, Aurizon - a well-established logistics operator across Australia. The MSIOJV Feasibility Study is being completed on the basis that a mine gate sales arrangement will be entered in with Cullen. The MSIOJV owns the Catho Well channel iron ore deposit (CID) -161 Mt @ 54.40% Fe (JORC 2012 compliant) and Cullen is contributing funds and maintaining its 30% participating interest. MINERAL RESOURCE ESTIMATE CATHO WELL CHANNEL IRON DEPOSIT (CULLEN 30%) Deposit Classification Mt Fe % SiO2 % AI O2 3 % Mn % LOI % MgO % P % S % Measured 3 55.31 6.45 3.56 0.06 9.98 0.19 0.042 0.022 Catho Well Indicated 139 54.37 7.60 3.42 0.08 10.36 Inferred 19 54.47 7.70 3.18 0.10 10.28 0.19 0.20 0.036 0.016 0.039 0.016 TOTAL 161 54.40 7.59 3.40 0.08 10.35 0.19 0.037 0.016 The Catho Well Mineral Resource estimate is reported at a 52% Fe cut-off. The resource estimate has been compiled in accordance with the guidelines defined in the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code, 2012 Edition). An Ore Reserve Estimate will be generated from this new Resource Estimate, anticipated in September, 2015 TUNNEL CREEK JV The Company has a Joint Venture agreement with Element 92 Pty Ltd, a wholly-owned subsidiary of Thundelarra Exploration Ltd (Thundelarra) and Lion One Metals Ltd (ASX: LLO). The last two joint venture tenements (ELs 52/1890, 1892) were surrendered during the year, and in due course it is anticipated that the Joint Venture will be formally terminated. HARDEY JUNCTION JV - GOLD Northern Star Resources Ltd completed regional targeting work, which included acquisition of airborne multispectral images and a University of WA/Centre for Exploration Targeting study, over a large area including the Hardey Junction JV tenement in 2103-2104, but no fieldwork was completed in 2014-2015. For personal use only Exploration Review 6 WYLOO AND PARABURDOO JVs - IRON The Wyloo JV project lies just south east of the MSIOJV's Catho Well Channel Iron Deposit. Fortescue has previously provided a maiden Resource Estimate of 16.9 Mt @ 57.11% Fe, for the Wyloo South Bedded Iron deposit, classified as Inferred and JORC 2004 Compliant. During the year, the Joint Venture Manager, Fortescue Metals Group Limited (Fortescue) reported a number of significant drill intersections including: 75m @ 61.3% Fe from 24m at the Wyloo South Prospect; and 66m @ 60.3% Fe from 0m at the Wyloo North Prospect. Also during 2015, Cullen Exploration Pty Limited (“Cullen”), a wholly-owned subsidiary of Cullen Resources Limited, entered into an agreement to sell 100% of its interests in the Wyloo JV group of tenements, namely EL08/1393, EL47/1154, EL47/1649, EL47/1650, PL 08/556, MLA08/502 and MLA 47/1490, to FMG Pilbara Pty Ltd, a wholly- owned subsidiary of Fortescue. Completion of the sale took place on the date of execution of the agreement, being 31 July 2015. In consideration for the sale, Cullen received: - $50,000 cash at completion; - $900,000 cash, if and when a decision is made to commence extraction of ore on a commercial basis on any part of the land the subject of the Royalty Tenements being the sale tenements together with M47/1488 and M47/1489, which are held 100% by Fortescue and are contiguous with the sale tenement); and, - A Royalty of 1.5% of Gross Revenue on up to 15Mt of any iron ore produced from the land the subject of the sale tenements. Fortescue can earn up to an 80% interest in the iron ore rights on Cullen's E52/1667 (Snowy Mountain), located ~25km south east of Paraburdoo in the Pilbara Region of Western Australia. The tenement includes potential for bedded iron deposits within the Brockman Iron Formation, along strike from the Paraburdoo and Channar Groups of iron deposits. I n d i a n O c e a n Port Hedland API JV's proposed railway and port Dampier ANKETELL POINT Iron ore deposits Fortescue iron ore deposit Existing railway Existing Fortescue railway Proposed railway (APIJV) Marble Bar Pannawonica Solomon Mt MacLeod MT STUART JV CATHO WELL CID Tom Price Hardey Paraburdoo Channar WYLOO JV Cullen/Fortescue PARABURDOO JV Cullen/Fortescue Cloudbreak Christmas Creek Nyudunghu N 50 kilometres Newman Mt Whaleback Competent Persons Statement – Wyloo JV - Resource Mr. Stuart Robinson is a full-time employee of Fortescue Metals Group Ltd and Mr. Mark Glassock has since resigned from the company. Both people provided geological interpretations for Mineral Resource calculations and compiled the exploration results. Mr. Robinson, who is a Fellow of The Australian Institute of Mining and Metallurgy, and Mr. Glassock, who is a Member of The Australian Institute of Mining and Metallurgy have sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and the activity which they are undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr. Robinson and Mr. Glassock consent to the inclusion in this report of the matters based on this information and in the form and context in which it appears. For personal use only7 Exploration Review NORTH EASTERN GOLDFIELDS, WA MT EUREKA - GOLD, NICKEL Cullen holds 100% of ~450km of approved tenure in the Mt Eureka Greenstone Belt in the North Eastern Goldfields 2 of Western Australia which includes multiple targets for nickel sulphides and gold. The high nickel prospectivity of Cullen's ground is confirmed by the discovery of nickel sulphides by Rox Resources Limited (Rox) at Camelwood (Fisher East Project) which is located ~3km on strike to the south of Cullen's tenement boundary and at the AK47 prospect discovered by the WMC-Cullen Joint Venture in 2002. PRIORITY TARGETS - NICKEL The Mt Eureka project area includes a wide variety of targets for massive nickel sulphide deposits. Some targets have been drill-tested by WMC/BHPB Limited in joint venture with Cullen in 2002-2006, generally by 1 or 2 diamond drill holes. However, several targets have received very limited follow-up, with no ground EM and/or deeper drill testing. These targets include unresolved down hole EM (DHEM) and/or ground EM anomalies, as well as geochemical and lithological targets along strike of known mineralisation for further evaluation. During 2013/2014 Cullen completed various phases of RC drilling to test EM conductors and geological/geochemical targets for nickel sulphide mineralisation, Other holes tested ultramafics and below anomalous geochemistry in ultramafics, and a magnetic anomaly. On-going exploration in 2014/2015 included geological mapping and prospecting of nickel sulphide targets at Mt Eureka which underlined the AK47 prospect area, the Central Ultramafics basal contact, and the Silverbark North BIF contacts – both east and west as the priorities for further exploration and drill testing. In addition a ground EM survey was completed at the AK47 prospect druing the year, and two new bedrock conductors are now modelled and ready for drilling. For personal use only Exploration Review 8 MT EUREKA PROJECT AMONGST REGION OF ACTIVE EXPLORATION AND DISCOVERIES HORSE WELL Wiluna AK 47 SOUTHERN JULIUS CULLEN’S Mt EUREKA PROJECT GRUYERE (Au) ROSIE (Ni) CAMELWOOD (Ni) JULIUS (Au) HORSE WELL (Au) ASX: GOR ASX: DKM ASX: RXL ASX: EAR ASX: AYR/DRM CAMEL- WOOD COLLURABBIE AK47 (Ni) Nickel Prospect (Massive nickel sulphide in drill hole GBD 2) SOUTHERN (Au) 7m@ 9.0g/t Au 9m@ 6.2g/t Au GALWAY (Au) 7m@ 6.7g/t Au GRUYERE Proterozoic ROSIE Yilgarn Craton (Archean) N 40 km Leonora Laverton / Granitoid rocks Greenstone belt Sediments Ultramafics / Nickel / Gold occurence and prospects For personal use only9 Exploration Review MT EUREKA PROJECT, NICKEL: Aeromagnetic Image of AK47 Prospect Area and Extension 353,000 mE 354,000 mE 355,000 mE Area of historic drilling - (GBD2-7) at AK47 Area of ground EM survey VTEM anomalies /”picks” – 2009 survey Target trend of ultramafics and VTEM anomalies Two bedrock conductors from new ground EM survey LAG sample – 57 ppb Pt, 12 ppb Pd 7,061,000 mN 7,060,000 mN 7,059,000 mN 7,058,000 mN For personal use only Exploration Review 10 MT EUREKA - SOUTHERN GOLD PROSPECT Cullen completed one vertical hole to a depth of 234m (MERC110) at the Southern gold prospect, which intersected a thick (~30m) sulphidic (visually estimated: pyrite, pyrrhotite, arsenopyrite at ~1-10%) zone (ASX announcement of 28 August 2013). Assays from this hole included a best intersection of 8m @ 1.71 g/t Au in 4m composite samples from 184m, within a 20m thick zone with anomalous arsenic averaging 1360ppm. Cullen also completed a further 5 RC holes on two drill fences 150m apart (MERC111-115). These holes tested the down plunge/dip, deeper portions of the gold mineralisation in the regolith at Southern, seeking to demonstrate continuity and higher grade. This drilling confirmed the geological model based on a gas-in-soil anomaly and structural interpretation, which predicts that gold mineralised structures (low-angle faults/thrusts/shears) strike east-west and dip to the north where drill-tested to date. Mineralisation was intersected in all five holes drilled and comprises disseminated and semimassive pyrite (visually estimated 30-40% over 1m), and arsenopyrite associated with quartz veining. The host rocks are mafic volcanics, felsic intrusives and meta-sediments, variably affected by alteration and metasomatism. The intersected quartz-sulphide mineralisation correlates well with previously intersected high-grade gold mineralisation in the regolith (2m @ 10.0 g/t Au from 50m and 7m @ 9 g/t Au from 116m in MERC 74; and 9m @ 6 g/t Au from 98m in MERC 75) and shows excellent continuity between individual drill holes and the two drill fences completed. Cullen has received a grant of $60,000 under the WA Department of Mines and Petroleum’s Exploration Drilling Incentive Scheme for the year to June 2016 to test the gold mineralisation at the Southern Prospect at depth with two diamond drillholes. MT EUREKA - OTHER GOLD TARGETS The Southern gold prospect was discovered by RAB/air core drilling across a gold-in-lag geochemical anomaly. A review of the tenor and position of this anomaly on Cullen's aeromagnetic interpretation and regolith maps shows a major NW-SE alluvial channel lying south of Southern which overlies a number of interpreted intersecting structures. It is notable that a number of gold-in-lag gold anomalies sit at the margin of this channel and are controlled by structures, suggesting that other such geochemical anomalies may have been “stripped out”. The position of Southern and other truncated geochemical anomalies suggests that numerous north and NW-SE trending shear zones and thrusts mapped beneath the alluvial channel are prime targets for gold. Although there have been some previous RAB and aircore traverses drilled in the channel, most holes are too shallow and too widely spaced to have effectively tested this area. It is notable that the Garden Well gold deposit in the Duketon greenstone belt sits on the margin of a Tertiary palaeochannel, and that the Bronzewing gold deposit in the Yandal greenstone belt was discovered beneath thick, transported overburden. Cullen proposes to prioritise its targets from the multiple structural settings by using its gas- in-soil geochemical technique, which it believes will indicate sulphide-bearing zones at depth, and/or reconnaissance air core drilling. For personal use only11 Exploration Review MT EUREKA PROJECT, GOLD: Solid Geology - Interp From Airmag + + + + 355,000 mE + + + + + + + + + + + + + + + + + + + + + + + SOUTHERN + + + + 7m @ 9.0 g/t Au, & 9m @ 6.2 g/t Au + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + 352,500 mE + + + + + + + + GALWAY + + + 7m @ 6.7 g/t Au + + + + + + + + + + + + + + + + + + + + + + + + + + + + + MT EUREKA PROJECT + Tenement Layout + + + + + + + + + + + + + + + + + + + + + + Map Area + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + GRAF’S FIND + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + 7,055,000 mN + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + 7,050,000 mN + + + + + + + + N + + + + + 1 kilometre + + + + + + + + + + Predominately mafics and dolerite Ultramafics BIF + Non -magnetic greenstone - significant felsics Weakly to non-magnetic granite Late intrusive - +/- alteration Major and minor and thrust faults Mylonite or fracture zone Nugget patches Gold prospects (previous drilling) For personal use onlyExploration Review 12 NORTH WEST YILGARN, WA NORTH TUCKABIANNA - GOLD AND BASE METALS The felsic Eelya Complex hosts the high-grade Hollandaire copper discovery of Silver Lake Resources Ltd (ASX: SLR – 10 November 2011) as well as several other EM conductor targets, explored by Silver Lake Resources Ltd, including the Colonel and Mt Eelya prospects . In April 2012, Cullen completed 7 holes, ~1000m, of scout RC drilling at its North Tuckabianna copper/gold project which targeted three conductors (NT1-NT3) identified by a helicopter-borne EM survey (VTEM,100-200m line spacing). The VTEM survey was flown across the Eelya Complex and the northern section of the Tuckabianna greenstone belt in March 2012. This drilling intersected disseminated sulphide (mainly pyrite and pyrrhotite, 1-20% visually identified over intervals of 1-20m downhole) in mafic and felsic rocks at or near the modelled conductor plates from the VTEM survey in all holes drilled. However, downhole surveys completed at each VTEM anomaly redefined the position of the conductor plates and showed that the conductive targets had been narrowly missed by the first pass drilling and therefore had not been adequately tested. These redefined conductor plates were tested in August 2012 with four RC holes (TNRC15-18) and intersected zones of disseminated sulphide but with only geochemically anomalous assay results (maximum Cu - 0.20%). Several low-order VTEM anomalies remain to be investigated and tested, initially using A/C and/or RAB drilling. EASTERN GOLDFIELDS, WA KILLALOE JV - GOLD AND NICKEL Matsa has earned a 70% interest in the Killaloe Project and Cullen has exercised its option to convert its 30% participating interest into a 20% Free Carried Interest (FCI) to a Decision to Mine. During the year Matsa conducting drilling to test the Hanging Wall Gossan (HWG) and intersected narrow zones of semi-massive, and disseminated sulphides in komatiite . Matsa is currently reviewing all aspects of the Western Ultramafic Belt including the HWG prospect. Matsa has also reported that further gold exploration will be undertaken with soil sampling surveys, and reviewing data from a trend of gold prospects in the Eastern Ultramafic Belt, (in light of the gold discovery at “Baloo” by Sirius Resource located on Lake Cowan ~ 25 km to the north west of the Killaloe JV tenements). In addition, Cullen suggests there is significant nickel sulphide prospectivity along the western contact of the Eastern Ultramafic Belt. Cullen interprets this contact is the southern strike extent of the basal contact of ultramafics which host the Taipan nickel sulphide discovery of Sirius Resources Limited (SIR: ASX announcement of 16 July, 2014) in their Polar Bear Project. FORRESTANIA JV - GOLD Cullen is a 20% holder of the gold rights on M77/544 via the Forrestania Joint Venture with Hannans Reward Ltd, and has sold its 20% share to Mine Builder Pty Ltd. Cullen will receive $200,000 cash as consideration via four instalments to be paid before the end of 2015. Title to the gold rights will be transferred on receipt of the final instalment. No payment under this agreement has been received to date. For personal use only13 CENTRAL LACHLAN FOLD BELT, NSW MINTER - TUNGSTEN A combined RC percussion-diamond drilling programme totalling 536.8 metres in three holes was undertaken on the Minter project in June/July 2012 testing selected geological/geochemical targets at the Doyenwae and Orr Trig prospects. Holes were designed to test beneath zones of anomalous tungsten and tin geochemistry outlined by earlier soil sampling and shallow percussion/aircore/RAB drilling. At the Doyenwae Prospect, RC percussion hole MRC005 averaged 0.045% tungsten over the full 111 metre length of the hole with localised two-metre zones of quartz-scheelite veining assaying up to 0.35% tungsten. Diamond drill hole CMDD001, drilled to 258.0 metres at the Doyenwae prospect, intersected significant quartz + sulphide veining throughout much of the hole. Examination of the core with an ultraviolet lamp detected widespread scheelite mineralisation occurring both within quartz veins and as disseminations/aggregates in silica-altered sandstone units; particularly in the interval from 130 metres to the end of the hole. The true width of potential mineralisation in both MRC005 and CMDD001 is uncertain as preliminary observations of vein orientations in the CMDD001 drill core indicate that the holes may have been drilled at a low angle to some of the mineralised quartz veins. At the Orr Trig Prospect, diamond core hole CMDD002; drilled to 267.8 metres, intersected scattered zones of narrow quartz veining and localised silicification over much of the hole with scheelite being observed as disseminations in sandstone and within quartz veins in the interval between 100m and 250m. Although it would appear that hole CMDD002 has been drilled in an appropriate direction with respect to the orientation of the quartz veins, the amount of observable scheelite mineralisation is less than that noted in CMDD001. The results included: 1m @ 0.7% WO (from 131.45m) and 4.05m @ 0.58% WO from 185m in CMDD001. Further drilling is required to 3 3 test the dominant vein orientation as inferred from a mapping programme completed at a quarrying site near the Doyenwae prospect. For personal use only Exploration Review 14 SCHEDULE OF TENEMENTS (as at 30 June 2015) REGION TENEMENTS TENEMENT APPLICATIONS CULLEN INTEREST COMMENTS WESTERN AUSTRALIA ASHBURTON / PILBARA Mt Stuart JV E08/1135, E08/1330, E08/1341, E08/1292 MLA08/481, MLA08/482 30 -100% API has earned 70% of iron ore rights; Cullen 100% other mineral rights Hardey Junction JV E08/1145, 1166, 20% Northern Star Resources Limited Wyloo JV 1189,1763, P08/546 E08/1393, E47/1154 E47/1649, 1650 P08/556 Paraburdoo JV E52/1667 Wyloo SE E08/2145 NE GOLDFIELDS Gunbarrel E53/1299,1300 +/ * E53/1630,1635 Irwin Well Irwin Bore Wonganoo DUNDAS FRASER RANGE E53/1637 E53/1209 E53/1611 E63/1673 E28/2470 MURCHISON Cue E20/714 EASTERN GOLDFIELDS Killaloe E63/1018, E63/1199, P63/1672 P63/1331 FORRESTANIA Forrestania JV M77/544 NEW SOUTH WALES Minter EL6572 Fortescue has earned 51%, can iron ore rights earn 80% of Cullen 100% other mineral rights Fortescue can earn up to 80% of iron ore rights; Cullen 100% other mineral rights +2.5% NPI Royalty to Pegasus on Cullen's interest (parts of E1299); *1.5% NSR Royalty to Aurora (other parts of E1299 and parts of 1300) MLA47/1490 49 -100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 20% Matsa Resources Limited 80% Hannans Reward Ltd 80% Gold rights only 20% 100% For personal use only 15 Exploration Review JOINT VENTURES - SUMMARY TABLE (as at 30 June 2015) Joint Venture (farm out) Commodity Focus JV Partner Paraburdoo Iron Ore Fortescue Metals Group Ltd JV Partner Earning (Earned) Cullen’s FCI to DTM Actual or (Available) Cullen’s NSR (possible) 80% (20%) - Comment 1.5% FOB Royalty capped to 20Mt. May earn 51% by defining Inferred Resource, 80% by defining Indicated Resource. Hardey Junction Gold Northern Star Resources Ltd (80%) 20% 2% Mt. Stuart Iron Ore API JV (70%) ∞ - - Cullen contributing at 30% in Mt Stuart JV. Tunnel Creek Uranium Wyloo Iron Ore Thundelarra/ Lion One Metals Fortescue Metals Group Ltd 70% or 80% 80% (51%) (20%) 2% (20%) - 1.5% FOB Royalty capped to 15Mt. Has earned 51% with Inferred Resource Estimate, can earn 80% Forrestania Nickel, Gold Hannans Reward Ltd (80%) Killaloe Nickel, Gold Matsa Resources Limited (80%) 20% 20% 2.5% Gold Rights on M77/544 only 2% DTM = Decision to Mine FOB = Free on Board FCI = Free Carried Interest NSR = Net Smelter Return ∞ = Iron ore rights only ATTRIBUTION: Competent Person Statement The information in this report that relates to exploration activities is based on information compiled by Dr. Chris Ringrose, Managing Director, Cullen Resources Limited who is a Member of the Australasian Institute of Mining and Metallurgy. Dr. Ringrose is a full-time employee of Cullen Resources Limited. He has sufficient experience which is relevant to the style of mineralisation and types of deposits under consideration, and to the activity which has been undertaken, to qualify as a Competent Person as defined by the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Dr. Ringrose consents to the report being issued in the form and context in which it appears. Information in this report may also reflect past exploration results, and Cullen’s assessment of exploration completed by past explorers, which has not been updated to comply with the JORC 2012 Code. The Company confirms it is not aware of any new information or data which materially affects the information included in this announcement. - For personal use only Exploration Review 16 MINERAL RESOURCES and ORE RESERVES (MROR) statement The company’s annual review of mineral resources and ore reserves is given below. There has been a change in the entity’s Mineral Resources and Ore Reserves since last reported to June 30, 2014 as follows. MINERAL RESOURCE ESTIMATE CATHO WELL CHANNEL IRON DEPOSIT: (CULLEN 30%) Deposit Classification Mt Fe % P % SiO2 % AI O2 3 % S % Mn % MgO % LOI % Measured 3 55.31 0.042 6.45 3.56 0.022 0.06 0.19 9.98 Catho Well Indicated 139 54.37 0.036 7.60 3.42 Inferred 19 54.47 0.039 7.70 3.18 0.016 0.016 0.08 0.10 TOTAL 161 54.40 0.037 7.59 3.40 0.016 0.08 0.19 0.20 0.19 10.36 10.28 10.35 The Catho Well Mineral Resource estimate is reported at a 52% Fe cut-off. The resource estimate has been compiled in accordance with the guidelines defined in the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code, 2012 Edition). Competent Persons Statement Resource The information in this report that relates to Mineral Resources has been supervised by Mr Stuart Tuckey and Mr Richard Gaze who are members of the Australian Institute of Mining and Metallurgy. Mr Tuckey is a full-time employee of API Management Pty Ltd. Mr Gaze is a full time employee of Golder Associates Pty Ltd. Messrs Tuckey and Gaze have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2012 Edition of the 'Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Tuckey and Mr Gaze consent to the inclusion in the report of the matters based on their information in the form and context in which it appears. WYLOO SOUTH INFERRED RESOURCE (CULLEN 49%) Category Inferred Tonnes Mt 16.9 Fe % 57.11 AI O2 3 % 3.55 SiO2 % 7.91 P % 0.102 LOI % 6.12 Competent Persons Statement – Wyloo JV - Resource Mr. Stuart Robinson is a full-time employee of Fortescue Metals Group Ltd and Mr. Mark Glassock has since resigned from the company. Both people provided geological interpretations for Mineral Resource calculations and compiled the exploration results. Mr. Robinson, who is a Fellow of The Australian Institute of Mining and Metallurgy, and Mr. Glassock, who is a Member of The Australian Institute of Mining and Metallurgy have sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and the activity which they are undertaking to qualify as a Competent Person as defined in the 2004 Edition of the “Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr. Robinson and Mr. Glassock consent to the inclusion in this report of the matters based on this information and in the form and context in which it appears. Competent Person Statements The information in this report that relates to Exploration Results is based on information compiled by Dr Chris Ringrose, Managing Director, Cullen Resources Limited who is a Member of the Australasian Institute of Mining and Metallurgy. Dr. Ringrose is a full-time employee of Cullen Resources Ltd. He has sufficient experience which is relevant to the style of mineralisation and types of deposits under consideration, and to the activity which has been undertaken, to qualify as a Competent Person as defined by the 2004 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Dr. Ringrose consents to the report being issued in the form and context in which it appears. The information in this report may also include review and interpretation of historical and previous exploration by Cullen. The Company confirms that it is not aware of any new information or data which materially affects the information included in this report. For personal use only CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  DIRECTORS' REPORT  Your Directors submit their report for the year ended 30 June 2015.  Directors  The names and details of the company’s directors in office during the financial year and until the date of this  report are as follows. Directors were in office for this entire period unless otherwise stated.  Dr Denis Clarke BSc, BA, PhD, FAIMM (Non‐Executive Chairman) (Appointed 1 April 1999)  •  Dr Denis Clarke has more than 40 years’ experience in exploration and mining operations. Over 15 years with  Plutonic  Resources  (“Plutonic”),  he  contributed  significantly  at  the  General  Manager  level  to  its  success  as  it  developed from a small explorer in 1983 to one of Australia’s largest gold miners prior to its take‐over in 1998 in  a transaction which valued Plutonic at $1 billion. Dr Clarke at various times managed the exploration, finance,  administration  and  corporate  divisions.  He  subsequently  was  a  director  and  consultant  to  Troy  Resources  Limited for eleven years as it developed from explorer to a successful international gold miner.  During the past  three years Dr Clarke has been Chairman or Non‐Executive Director of the following listed companies:  ‐ LionGold Corp Ltd (from 1 October 2012 to present)  ‐ Hill End Gold Limited (from 25 February 2010 to present)  ‐ Signature Metals Limited (from 14 September 2012 to present)  Dr Chris Ringrose BSc, PhD, MBA, MAIMM, MAICD (Managing Director) (Appointed 19 June 2003)  •  Dr Chris Ringrose has been an exploration geologist based mainly in Western Australia since he completed his  geology degrees in Scotland in 1982. His career has included experience with EZ, Chevron and Aztec, and prior to  joining  Cullen,  he  was  Exploration  Manager  with  Troy  Resources  Limited  for  nine  years.  Dr  Ringrose  has  also  completed  an  MBA  at  Deakin  University  and  brings  to  the  Company  significant  management,  exploration  and  project evaluation experience gained both in Australia and overseas. Dr Ringrose has had no other directorships  of listed companies in the last three years.  Grahame Hamilton BSc, MSc, MAIG (Non‐Executive Director) (Appointed 1 April 1999)  •  Mr  Grahame  Hamilton,  a  graduate  of  the  University  of  NSW,  has  extensive  experience  over  40  years  in  exploration, corporate and project management. He has wide ranging expertise in project evaluation. Between  1994  and  1996  he  managed  the  Brocks  Creek  exploration,  environmental  impact  statement,  feasibility  study,  mine  development  and  construction  for  Solomon  Pacific  Resources  NL.  Before  Solomon,  Mr  Hamilton  worked  with Getty Oil Development Co. ‐ Minerals Division as Queensland Manager.   John Horsburgh BSc, MSc, FAIMM (Non‐Executive Director) (Appointed 1 April 1999)  •  Mr John Horsburgh, a graduate of the Royal School of Mines, has over 40 years industry experience including 11  years with Solomon Pacific Resources NL. Prior to this he gained extensive experience in Australia and overseas  with Getty Oil Development Co., Billiton and RTZ Group. Mr Horsburgh is Non‐Executive Chairman of AIM‐listed  public company Mariana Resources Limited.  •  Wayne John Kernaghan BBus, ACA, FAICD, ACIS (Non‐Executive Director and Company Secretary)  (Appointed 11 November 1997)  Mr Wayne Kernaghan is a member of the Institute of Chartered Accountants in Australia with a number of years  experience  in  various  areas  of  the  mining  industry.  He  is  also  a  Fellow  of  the  Australian  Institute  of  Company  Directors. During the past three years Mr Kernaghan has held, and is currently a director and holds, the following  listed company directorships:  ‐  ‐  Gulf Industrials Limited (from 30 June 2005 to present) South American Ferro Metals Limited (from 26 June 2013 to 24 April 2015) ‐ 17 ‐ For personal use only                              CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  Principal Activities  The principal activity for the Consolidated Entity comprising Cullen Resources Limited ("the Company") and its  controlled  entities  (together  "the  Consolidated  Entity")  during  the  course  of  the  financial  year  was  mineral  exploration. There was no significant change in the nature of the Consolidated Entity's activities during the year.  Results  The loss attributable to the Consolidated Entity for the financial year was $ 1,414,969 [2014: loss $1,880,593].  No income tax was attributable to this result [2014: Nil].  Dividends  The  directors  do  not  recommend  the  payment  of  a  dividend  for  this  financial  year.  No  dividend  has  been  declared or paid by the Company since the end of the previous financial year.  Significant Changes in the State of Affairs  In the opinion of the directors there were no significant changes in the state of affairs of the Consolidated Entity  that occurred during the financial year under review not otherwise disclosed in this report or the consolidated  financial statements.  Review of Operations  Cullen is a mineral exploration company seeking deposits of gold, nickel, copper, uranium and iron ore either in  its own right, or managed by other partners in Joint Ventures.  During  the  year  under  review,  the  Company  continued  its  mineral  exploration  activities  including:  project  generation,  database  reviews,  field  mapping,  geochemical  surveying,  and  drilling  programmes.   Company   exploration  activities,  including  Joint  Venture  managed  projects,  were  focused  in  Western  Australia  with  additional activities in New South Wales as follows:   Ashburton  Province,  WA  (Hardey  Junction  JV,  Mt  Stuart  JV,  Wyloo  JV,  Paraburdoo  JV  and  Tunnel  Creek  /Saltwater Pool JV ‐ gold, uranium and /or iron ore projects)   North Eastern Goldfields, WA (Gunbarrel/Mt Eureka and Irwin Bore, gold and nickel projects)   Eastern Goldfields, WA (Killaloe, gold and nickel project)   Murchison,WA (North Tuckabianna , copper and gold project)   Forrestania, WA (Forrestania JV, gold and nickel project)   Central Lachlan Fold Belt, NSW (Minter tungsten project)  Drilling by Cullen during the year to 30 June 2015 focussed on programmes for nickel sulphide and gold deposits  in the Mt Eureka project area, and for iron ore in the Wyloo Iron Ore JV and the Mt Stuart Iron Ore JV. Other  exploration  field  work  has  included:  field  reconnaissance,  geological  mapping,  geochemical  and  geophysical  surveys  in  the  Mt  Eureka  project,  and  evaluations  of  new  project  opportunities  and  project  generation.   The   Company continued to market projects as potential farm‐out opportunities.  The Company has ceased exploration activities overseas in response to its tight capital position.   Cullen withdrew from Namibia and Scandinavia, and terminated the TL property JV in Canada.   A total of $ 1,490,268  (2014: $1,530,372) was spent on exploration by Cullen during the year, with Joint Venture  Partners contributing further exploration funds on Cullen tenements.  Cullen will continue to identify and evaluate both advanced and "grass roots" opportunities throughout Australia  and in selected overseas locations. Cullen’s portfolio is under continual evaluation to focus on projects likely to  result in discovery of an economic mineral deposit.  Corporate  At 30 June 2015 available cash totalled $ 867,152 (2014: $1,073,739).  ‐ 18 ‐ For personal use only                                CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  After Balance Date Events  There has not arisen in the interval between the end of the financial year and the date of this report any item,  transaction  or  event  of  a  material  and  unusual  nature  likely,  in  the  opinion  of  the  directors,  to  affect  the  operations of the Consolidated Entity, the results of those operations or the state of affairs of the Consolidated  Entity in the subsequent financial years other than the following:   The Group have sold its interest in the tenements which form the Wyloo Iron Ore Rights Joint Venture  to its partner Fortescue Metals Limited for $50,000 together with a further $950,000 on a decision to  mine and a royalty of 1.5% FOB for the first 15 million tonnes mined.  Likely Developments and Future Results  Other than as referred to in this report, further information as to likely developments in the operations of the  Consolidated  Entity  and  the  expected  results  of  those  operations  would,  in  the  opinion  of  the  directors,  be  speculative and not in the best interests of the Consolidated Entity.  Environmental Regulation  The exploration activities of the Consolidated Entity in Australia are subject to environmental regulation under  the  laws  of  the  Commonwealth  and  the  States  in  which  those  exploration  activities  are  conducted.  The  environmental laws and regulations generally address the potential impact of the Consolidated Entity's activities  in  the  areas  of  water  and  air  quality,  noise,  surface  disturbance  and  the  impact  upon  flora  and  fauna.  The  directors  are  not  aware  of  any  environmental  matter  which  would  have  a  materially  adverse  impact  on  the  overall business of the Consolidated Entity.  Options  As at the date of this report the Company has 26,000,000 (2014: 6,000,000) options which were outstanding.  During the year 20,000,000 (2014: 6,000,000) options were issued and nil (2014: 22,000,000) options expired.  Refer to Note 11 of the financial statements for further details of the options outstanding.  During the year no fully paid ordinary shares were issued by virtue of the exercise of options (2014: Nil). Since  the end of the financial year no shares have been issued by virtue of the exercise of options (2014: Nil).  Directors’ Interest  At the date of this report, the interest of the directors in the shares and options of the company were:  2015  D. Clarke  C. Ringrose  G. Hamilton  J. Horsburgh  W. Kernaghan        Direct Fully Paid Shares ‐   7,890,227 228,571 3 2,285,714 Options 2,500,000 10,000,000 2,500,000 2,500,000 2,500,000                           Indirect  Fully Paid Shares  11,619,008  ‐  23,455,803  25,337,144  9,516,942  Options ‐ ‐ ‐ ‐ ‐ Directors' Meetings  During the year the Company held eleven meetings of directors.  The attendance of the directors at meetings of  the Board were:  D. Clarke  C. Ringrose  G. Hamilton  J. Horsburgh  W. Kernaghan  Maximum possible eligible to attend  11  11  11  11  11  Board of Directors Attended  11 11 11 9 11 ‐ 19 ‐ For personal use only                                              CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  Indemnification and insurance of Directors and Officers   The  Company  has  entered  into  deeds  of  indemnity  with  the  Directors  indemnifying  them  against  certain  liabilities and costs to the extent permitted by law.  The  Company has paid premiums totalling $10,892 (2014:  $10,448)  in  respect  of  Directors  and  Officers  Liability  Insurance  and  Company  reimbursement  policies,  which  covers all Directors and Officers of the Company. The policy conditions preclude the Company from any detailed  disclosures.  Indemnification of Auditors  To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the  terms of its audit engagement agreement against claims by third parties arising from the audit (for an  unspecified amount).  No payment has been made to indemnify Ernst & Young during or since the financial year.  Employees  The Consolidated Entity employed two employees as at 30 June 2015 (2014: 2).  Corporate Governance  In  recognising  the  need  for  the  highest  standard  of  corporate  behaviour  and  accountability,  the  directors  of  Cullen  Resources  Limited  support  and  have  adhered  to  the  principles  of  good  corporate  governance.  The  Company’s corporate governance statement is on page 27.  Auditor Independence  The directors have received the auditor’s independence declaration for the year ended 30 June 2015 which is on  page 26 and forms part of this directors’ report.  For the year Ernst & Young have provided non‐audit services to  the Consolidated Entity in the amount of $10,872(2014: $8,353).  The directors are satisfied that non‐audit services are compatible with the independence requirements of the  Corporations  Act  2001.  The  nature  and  scope  of  the  non‐audit  services  provided  has  meant  that  auditor  independence was not compromised.  ‐ 20 ‐ For personal use only                      CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  REMUNERATION REPORT (AUDITED)  This report details the nature and amount of remuneration for each director of Cullen Resources Limited.  This  remuneration  report  outlines  the  director  and  executive  remuneration  arrangements  of  the Consolidated  Entity in accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purposes of  this report, key management personnel (KMP) of the Consolidated Entity are defined as those persons having  authority and responsibility for planning, directing and controlling the major activities of the Consolidated Entity,  directly  or  indirectly,  including  any  director  (whether  executive  or  otherwise)  of  the  parent  company.  Only  directors of the Consolidated Entity meet the definition of key management personnel as the executive role is  performed by the executive director.  Details of key management personnel:  Directors  D. Clarke  C. Ringrose  G. Hamilton  J. Horsburgh  W. Kernaghan  Chairman (Non‐Executive)  Managing Director  Director (Non‐Executive)  Director (Non‐Executive)  Director (Non‐Executive)  Remuneration Policy  The  remuneration  policy  of  Cullen  Resources  Limited  has  been  designed  to  align  director  objectives  with  shareholder  and  business  objectives  by  providing  a  fixed  remuneration  component  and  offering  specific  long‐ term incentives. The board of Cullen Resources Limited believes the remuneration policy to be appropriate and  effective in its ability to attract and retain the best executives and directors to run and manage the Company as  well as create goal congruence between directors and shareholders.  The Board’s policy for determining the nature and amount of remuneration for Board members is as follows.  The  remuneration  policy,  setting  the  terms  and  conditions  for  the  executive  director  was  developed  by  the  Board. The executive receives a base salary on factors such as length of service and experience, superannuation,  options and incentives. The Board reviews executive packages annually by reference to executive performance  and comparable information from industry sectors and other listed companies in similar industries.  The Board policy is to remunerate non‐executive directors at market rates for comparable companies for time,  commitment and responsibilities. The Board determines payments to the non‐executive directors and reviews  their remuneration annually, based on market practice, duties and accountability. Independent external advice is  sought when required. The maximum aggregate amount of fees that can be paid to non‐executive directors is  subject  to  approval  by  shareholders  at  the  Annual  General  Meeting.  Fees  for  non‐executive  directors  are  not  linked  to  either  long  term  or  short  term  performance  of  the  Consolidated  Entity.  However,  to  align  directors’  interest  with  shareholder  interests,  the  directors  are  encouraged  to  hold  shares  in  the  Company.  There  is  a  specified aggregate directors fees of $250,000 for non‐executive directors which was approved by shareholders  at a general meeting of the Company. The $250,000 excludes other services outside of non‐executive directors'  fees.  Remuneration Incentives  Director  and  executive  remuneration  is  currently  not  linked  to  either  long  term  or  short  term  performance  conditions. The Board feels that the expiry date and exercise price of options when issued to the directors and  executives  are  sufficient  to  align  the  goals  of  the  directors  and  executives  with  those  of  the  shareholders  to  maximise  shareholder  wealth,  and  as  such,  has  not  set  any  performance  conditions  for  the  directors  or  the  executives of the Company. The Board will continue to monitor this policy to ensure that it is appropriate for the  Company in future years.  ‐ 21 ‐ For personal use only                                    CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  Group performance and shareholder wealth  Below is a table summarising key performance and shareholder wealth statistics for the Consolidated Entity over  the last five years.  Financial Year  30 June 2011  30 June 2012  30 June 2013  30 June 2014  30 June 2015  Loss After Tax  $  1,640,087  2,649,846  2,078,566  1,880,593  1,414,969  EPS Cents  (0.27) (0.41) (0.28) (0.21) (0.13) Share Price Cents  3.0 1.8 0.8 1.7 0.4 Employment Contract ‐ Managing Director  Pursuant to an agreement Dr Ringrose will provide managing director services to the Company. The term of this  arrangement  is  from  1  November  2006  and  will  continue  thereafter  unless  terminated  on  not  less  than  three  months' notice given at any time. Effective from 1 April 2011 Dr Ringrose’s salary is $265,000pa. The position of  the director will become redundant under this agreement in the limited circumstances where the employment  of the Managing Director is terminated as a result of a takeover or merger of the Company. The Company will  pay the Managing Director the equivalent of four weeks per year of service or part thereof of his base salary as a  redundancy payment.  As part of Dr Ringrose's employment package he was issued with 10,000,000 options on 1 December 2014 with  the following terms. The options will expire on the earlier of the date which is one month after the Director to  whom the options are issued ceases to be a Director of the Company (or such longer period as determined by  the Board of Directors) or at 5.00 pm on 30 November 2017 ("the Expiry Date") with an exercise price of $0.016.  This is contained in the notice of meeting which was approved by shareholders.   During the year the Board paid a discretionary bonus of Nil (2014: Nil) to Dr Ringrose.   Non Executive Directors  The non executive directors have been issued with 2,500,000 options each on 1 December 2014 with an exercise  price of $0.016 each. The options will expire on the earlier of the date which is one month after the Director to  whom the options are issued ceases to be a Director of the Company (or such longer period as determined by  the Board of Directors) or at 5.00 pm on 30 November 2017 ("the Expiry Date"). This is contained in the notice of  meeting which was approved by shareholders.   Directors’ and Executives’ Remuneration  Details of remuneration provided to directors for the year ended 30 June 2015 are as follows:  Directors  Short Term  Director  Fees  $  35,000  Salary/  Consulting  $  Bonus  $ ‐  ‐  265,000  30,000  30,000  ‐  ‐  D. Clarke  C. Ringrose  G. Hamilton  J. Horsburgh  W. Kernaghan  30,000  Total  125,000  42,875  307,875  Post  Employ‐ ment  Super‐ annuation $  3,325  Long  Term  Long   Service  Leave  $ ‐  Non  Monetary  Benefits  $ ‐  * 5,417  25,175  5,097  ‐  ‐  ‐  2,850  2,850  2,850  ‐  ‐  ‐  Share  Based  Payments  Options  $  15,250  61,000  15,250  15,250  15,250  Total  $  53,575  361,689  48,100  48,100  90,975  5,417  37,050  5,097  122,000  602,439  Perfor‐ mance  Related %  ‐ ‐ ‐ ‐ ‐ ‐ ‐  ‐  ‐  ‐  ‐  ‐  * This relates to the provision of a motor vehicle.  ‐ 22 ‐ For personal use only                                CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  Details of remuneration provided to directors for the year ended 30 June 2014 are as follows:  Directors  Short Term  Director  Fees  $  35,000  Salary/  Consulting  $  ‐  ‐  265,000  30,000  30,000  30,000  ‐  ‐  37,750  D. Clarke  C. Ringrose  G. Hamilton  J. Horsburgh  W. Kernaghan  Total  125,000  302,750  Bonus  $  ‐  ‐  ‐  ‐  ‐  ‐  * This relates to the provision of a motor vehicle.  Post  Employ‐ ment  Super‐ annuation  $  Long  Term  Long   Service  Leave  $  3,237  ‐  24,512  4,988  Non  Monetary  Benefits  $  ‐  * 6,836  ‐  ‐  ‐  2,775  2,775  2,775  ‐  ‐  ‐  6,836  36,074  4,988  Share  Based  Payments  Options  $  ‐  ‐  ‐  ‐  ‐  ‐  Perfor‐ mance  Related  %  ‐ ‐ ‐ ‐ ‐ ‐ Total  $  38,237  301,336  32,775  32,775  70,525  475,648  Shares issued on exercise of remunerated options  During  the  financial  year  nil  (2014:  Nil)  remunerated  options  were  exercised.  During  the  financial  year  nil  (2014: 16,000,000) options expired. The directors exercised nil (2014: Nil) options during the year.  Options granted as part of remuneration for the year ended 30 June 2015  There were 20,000,000 options granted as a part of remuneration for the year ended 30 June 2015.  Directors  D. Clarke  C. Ringrose  G. Hamilton  J. Horsburgh  W. Kernaghan  Value of options  granted during the  year  $  15,250  61,000  15,250  15,250  15,250  Value of options  exercised during the  year  $  ‐  ‐  ‐  ‐  ‐  Value of options  expired during the year  $  ‐  ‐  ‐  ‐  ‐  Total value of options  granted, exercised and  expired during the year  $  15,250  61,000  15,250  15,250  15,250  Options granted as part of remuneration for the year ended 30 June 2014  There were no options granted as a part of remuneration for the year ended 30 June 2014.  Directors  D. Clarke  C. Ringrose  G. Hamilton  J. Horsburgh  W. Kernaghan  Value of options  granted during the  year  $  ‐  ‐  ‐  ‐  ‐  Value of options  exercised during the  year  $  ‐  ‐  ‐  ‐  ‐  Value of options  expired during the year  $  (55,400)  (221,600)  (55,400)  (55,400)  (55,400)  Total value of options  granted, exercised and  expired during the year  $  (55,400)  (221,600)  (55,400)  (55,400)  (55,400)  ‐ 23 ‐ For personal use only                                                    CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  Option holdings of directors  Balance at  beginning of  year 1 July 2014  Number  Options  issued  Number  Options  lapsed  Number  ‐  2,500,000  ‐  10,000,000  2,500,000  ‐  2,500,000  ‐  2,500,000  ‐  ‐  20,000,000  ‐  ‐  ‐  ‐  ‐  ‐  Balance at end  of year  30 June 2015  Number  2,500,000  10,000,000  2,500,000  2,500,000  2,500,000  Vested and  exercisable at  30 June 2015  Number  2,500,000  10,000,000  2,500,000  2,500,000  2,500,000  Total  Number  2,500,000  10,000,000  2,500,000  2,500,000  2,500,000  20,000,000  20,000,000  20,000,000  Directors  D Clarke  C Ringrose  G Hamilton  J Horsburgh  W Kernaghan  Total  The outstanding options are exercisable at $0.016 and have an expiry date of 30 November 2017.   These options had a weighted average exercise price of $0.016 and a weighted average remaining contractual  life of 2.42 years.  Balance at  beginning of  year  1 July 2013  Number  Options  issued  Number  Options  lapsed  Number  Balance at end  of year  30 June 2014  Number  Total  Number  Vested and  exercisable at  30 June 2014  Number  Directors  D Clarke  C Ringrose  G Hamilton  J Horsburgh  W Kernaghan  Total  ‐  ‐  ‐  ‐  ‐  ‐  The outstanding options were exercisable at $0.075 and had an expiry date of 30 November 2013.  These options have expired  (2,000,000)  (8,000,000)  (2,000,000)  (2,000,000)  (2,000,000)  (16,000,000)  2,000,000  8,000,000  2,000,000  2,000,000  2,000,000  16,000,000  ‐  ‐  ‐  ‐  ‐  ‐  ‐  ‐  ‐  ‐  ‐  ‐  ‐  ‐  ‐  ‐  ‐  ‐  Shareholdings of directors  Directors  D Clarke  C Ringrose  G Hamilton  J Horsburgh  W Kernaghan  Total  Directors  D Clarke  C Ringrose  G Hamilton  J Horsburgh  W Kernaghan  Total  Balance  1 July 2014  Number  7,864,000  3,450,000  18,391,004  19,952,124  6,873,376  56,530,504  Balance  1 July 2013  Number  5,364,000  950,000  15,891,004  17,452,124  4,373,376  44,030,504  Options Exercised  Number  ‐ ‐ ‐ ‐ ‐ ‐ Options Exercised  Number  ‐ ‐ ‐ ‐ ‐ ‐ Net Change  Purchase  Number  3,755,008  4,440,227  5,293,370  5,385,021  4,929,280  23,802,908  Net Change  Purchase  Number  2,500,000  2,500,000  2,500,000  2,500,000  2,500,000  12,500,000  Balance 30 June 2015  Number  11,619,008 7,890,227 23,684,374 25,337,147 11,802,656 80,333,412 Balance 30 June 2014  Number  7,864,000 3,450,000 18,391,004 19,952,124 6,873,376 56,530,504 The directors' shareholdings are held directly and indirectly.   End of Remuneration Report  ‐ 24 ‐ For personal use only                                                CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  Signed in accordance with a resolution of the directors  C. Ringrose  Director  Perth, WA  18 September 2015             ‐ 25 ‐ For personal use only                      Ernst & Young 11 Mounts Bay Road Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Auditor’s Independence Declaration to the Directors of Cullen Resources Limited In relation to our audit of the financial report of Cullen Resources Limited for the financial year ended 30 June 2015, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct. Ernst & Young V L Hoang Partner 18 September 2015 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation MH:JH:CULLEN:003 For personal use only CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015    CORPORATE GOVERNANCE STATEMENT  In  recognising  the  need  for  the  highest  standards  of  corporate  behaviour  and  accountability,  the  directors  of  Cullen Resources Limited have adhered to the principles of corporate governance and this statement outlines  the main corporate governance practices in place throughout the financial year. The ASX Corporate Governance  Council  released  revised  Corporate  Governance  Principles  and  Recommendations  on  27  March  2014.  Having  regard to the size of the Company and the nature of its enterprise, it is considered that the Company complies  as  far  as  possible  with  the  spirit  and  intentions  of  the  ASX  Corporate  Governance  Council's  Corporate  Governance  Principles  and  Recommendations.  Unless  otherwise  stated,  the  practices  were  in  place  for  the  entire year.  Board of Directors  The Board of Directors of the Company is responsible for the corporate governance of the Company. The Board  guides and monitors the business and affairs of the Company on behalf of the shareholders by whom they are  elected and to whom they are accountable.  As  the  Board  acts  on  behalf  of  shareholders,  it  seeks  to  identify  the  expectations  of  shareholders,  as  well  as  other  ethical  expectations  and  obligations.  In  addition,  the  Board  is  responsible  for  identifying  areas  of  significant business risk and ensuing arrangements are in place to adequately manage those risks.  The primary responsibility of the Board includes:   formulation and approval of the strategic direction, objectives and goals of the Company;   monitoring  the  financial  performance  of  the  Company,  including  approval  of  the  Company’s  financial  statements;      ensuring  that  adequate  internal  control  systems  and  procedures  exists  and  that  compliance  with  these  systems and procedures is maintained;  the identification of significant business risks and ensuring that such risks are adequately managed;  the review of performance and remuneration of executive directors; and   the establishment and maintenance of appropriate ethical standards.  The  responsibility  for  the  operation  and  administration  of  the  Company  is  carried  out  by  the  directors,  who  operate  in  an  executive  capacity,  supported  by  senior  professional  staff.  The  Board  ensures  that  this  team  is  suitably  qualified  and  experienced  to  discharge  their  responsibilities,  and  assesses  on  an  ongoing  basis  the  performance of the management team, to ensure that management’s objectives and activities are aligned with  the expectations and risks identified by the Board.  The Directors of the Company are as follows:  Dr Denis Clarke  Dr Chris Ringrose  Grahame Hamilton  John Horsburgh  Wayne Kernaghan  For information in respect to each director refer to the Directors' Report.  ‐ 27 ‐ For personal use only                            CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  Independent Directors  Under ASX guidelines, four of the current Board of five directors are considered to be independent directors.  Dr Ringrose is the executive director and under the ASX guidelines deemed not to be independent by virtue of  his position. The Board is satisfied that the structure of the Board is appropriate for the size of the Company and  the nature of its operations and is a cost effective structure for managing the Company.  Board Composition  When the need for a new director is identified, selection is based on the skills and experience of prospective  directors, having regard to the present and future needs of the Company. Any director so appointed must then  stand for election at the next Annual General Meeting of the Company.  Terms of Appointment as a Director  The  constitution  of  the  Company  provides  that  a  Director,  other  than  the  Managing  Director,  may  not  retain  office  for  more  than  three  calendar  years  or  beyond  the  third  annual  general  meeting  following  his  or  her  election,  whichever  is  longer,  without  submitting  for  re‐election.  One  third  of  the  Directors  must  retire  each  year and are eligible for re‐election. The Directors who retire by rotation at each annual general meeting are  those with the longest length of time in office since their appointment or last election.  Board Committees  In view of the size of the Company and the nature of its activities, the Board has considered that establishing  formally constituted committees for audit, board nominations and remuneration would contribute little to its  effective management. Accordingly audit matters, the nomination of new Directors and the setting, or review,  of remuneration levels of Directors and senior executives are reviewed by the Board as a whole and approved  by  resolution  of  the  Board  (with  abstentions  from  relevant  Directors  where  there  is  a  conflict  of  interest).  Where  the  Board  considers  that  particular  expertise  or  information  is  required,  which  is  not  available  from  within  their  number,  appropriate  external  advice  may  be  taken  and  reviewed  prior  to  a  final  decision  being  made by the Board.  Remuneration  Remuneration  and  other  terms  of  employment  of  executives,  including  executive  directors,  are  reviewed  periodically  by  the  Board  having  regard  to  performance,  relevant  comparative  information  and,  where  necessary, independent expert advice. Remuneration packages are set at levels that are intended to attract and  retain executives capable of managing the Company’s operations.  The terms of engagement and remuneration of executive directors is reviewed periodically by the Board, with  recommendations  being  made  by  the  non‐executive  directors.  Where  the  remuneration  of  a  particular  executive director is to be considered, the director concerned does not participate in the discussion or decision  making.  Make Timely and Balanced Disclosure  The  board  has  in  place  written  policies  and  procedures  to  ensure  the  Company  complies  with  its  obligations  under the continuous disclosure rule 3.1 and other ASX Listing Rule disclosure requirements.  Independent Professional Advice   Directors have the right, in connection with their duties and responsibilities as directors, to seek independent  professional  advice  at  the  Company’s  expense.  Prior  approval  of  the  Chairman  is  required,  which  will  not  be  unreasonably withheld.  ‐ 28 ‐ For personal use only                      CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  Code of Conduct In view of the size of the Company and the nature of its activities, the Board has considered that an informal  code of conduct is appropriate to guide executives, management and employees in carrying out their duties and  responsibilities.  Diversity Policy  The Company is in the process of establishing a diversity policy having regard to the size of the company and the  nature of its business.  As at 30 June 2015, 50 % (2014: 0.0%) of the workforce is female with no females at board or senior  management level. There are only two employees, one female and one male.  Communication to Market & Shareholders  The Board of Directors aims to ensure that the shareholders, on behalf of whom they act, are informed of all  information  necessary  to  assess  the  performance  of  the  directors  and  the  Company.  Information  is  communicated to shareholders and the market through:       the Annual Report which is available to all shareholders;  other periodic reports which are lodged with ASX and available for shareholder scrutiny;  other announcements made in accordance with ASX Listing Rules;  special purpose information memoranda issued to shareholders as appropriate;   the Annual General Meeting and other meetings called to obtain approval for board action as appropriate;  and,   The Company's website.  Share Trading  Dealings  are  not  permitted  at  any  time  whilst  in  the  possession  of  price  sensitive  information  not  already  available to the market. In addition, the Corporations Act 2001 prohibits the purchase or sale of securities whilst  a person is in possession of inside information.  External Auditors  The external auditor is Ernst and Young. The external auditors are invited to attend the annual general meeting  and  be  available  to  answer  shareholder  questions  about  the  conduct  of  the  audit  and  the  preparation  and  content of the auditor's report.  Full details of the company’s corporate governance practices can be viewed at its website  www.cullenresources.com.au.  ‐ 29 ‐ For personal use only                          CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  Consolidated Statement of Financial Position  as at 30 June 2015  Current Assets  Cash and cash equivalents Receivables  Total Current Assets  Non Current Assets  Other financial assets  Plant & Equipment  Exploration & Evaluation Total Non Current Assets Total Assets  Current Liabilities  Trade and other payables Provisions  Total Current Liabilities  Total Liabilities  Net Assets  Equity  Issued Capital  Share based payment reserve  Accumulated Losses  Total Equity  Note 21(i) 5 6 7 8 9 10 11 12 13             Consolidated  2015 $ 867,152  93,804  960,956  10,000  ‐  5,329,287  5,339,287  6,300,243  299,480  111,171  410,651  2014  $  1,073,739 89,020 1,162,759 12,400 963 4,483,886 4,497,249 5,660,008 145,939 121,829 267,768 410,651  267,768 5,889,592  5,392,240 42,276,087  1,459,725  (37,846,220)  5,889,592  40,521,766 1,301,725 (36,431,251) 5,392,240 These financial statements should be read in conjunction with the accompanying notes. ‐ 30 ‐ For personal use only                                                       CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  Consolidated Statement of Changes in Equity  for the year ended 30 June 2015  Note  Issued  Capital  $  Share Based  Payment  Reserve  $  Accumulated  Losses  $  Total  Equity  $  At 1 July 2013  39,201,266 1,280,125 (34,550,658)  5,930,733 Loss for the year  Other comprehensive income  Total comprehensive   income/(expense) for the year  ‐ ‐ ‐ Issue of share capital  1,320,500 Share issue costs   Share based payments  12  ‐ ‐ ‐ ‐ ‐ ‐ ‐ 21,600 (1,880,593)  (1,880,593) ‐  ‐ (1,880,593)  (1,880,593) ‐  ‐  ‐  1,320,500 ‐ 21,600 At 30 June 2014  40,521,766 1,301,725 (36,431,251)  5,392,240 Note  Issued  Capital  $  Share Based  Payment  Reserve  $  Accumulated  Losses  $  Total  Equity  $  At 1 July 2014  40,521,766 1,301,725 (36,431,251)  5,392,240 Loss for the year  Other comprehensive income  Total comprehensive   income/(expense) for the year  Issue of share capital  Share issue costs   ‐ ‐ ‐ 1,793,201 (38,880) ‐ ‐ ‐ ‐ ‐ Share based payments  12  ‐ 158,000 (1,414,969)  (1,414,969) ‐  ‐ (1,414,969)  (1,414,969) ‐  ‐  ‐  1,793,201 (38,880) 158,000 At 30 June 2015  42,276,087 1,459,725 (37,846,220)  5,889,592 These financial statements should be read in conjunction with the accompanying notes. ‐ 31 ‐ For personal use only                                                                                                                                                                                               CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  Consolidated Statement of Comprehensive Income  for the year ended 30 June 2015  Revenues  Rent  Salaries and Consultants' fees  Compliance expenses  Impairment of exploration expenditure  Share based payments  Depreciation  Other expenses  Loss before income tax  Income tax   Net Loss attributable to members of   Cullen Resources Limited after tax  Other Comprehensive Income:  Total comprehensive (loss)   for the period  Basic (loss) per share   (cents per share)  Diluted (loss) per share  (cents per share)  Note 3 8 12 4 22  22  Consolidated  2015  $ 2014 $ 130,816  116,211 (37,359)  (409,590)  (156,633)  (644,867)  (158,000)  (963)  (138,373)  (41,966) (387,822) (147,392) (1,258,108) (21,600) (2,209) (137,707) (1,414,969)  (1,880,593) ‐  ‐ (1,414,969)  (1,880,593)  ‐  ‐ (1,414,969)  (1,880,593)   (0.13)  (0.21)  (0.13)  (0.21)  These financial statements should be read in conjunction with the accompanying notes. ‐ 32 ‐ For personal use only                                                                       CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  Consolidated Statement of Cash Flows  for the year ended 30 June 2015  Note Consolidated 2015  $  2014 $ Cash flows from operating activities  Research and development grant  Cash payments in the course of operations GST refunded  Interest received  99,529  (682,784)  81,328  8,560  83,527 (841,845) 108,668 29,223 Net operating cash flows 21(ii) (493,367)  (620,427) Cash flows from investing activities  Refund of security deposits  Proceeds from sale plant & equipment Payments for exploration & evaluation Net investing cash flows Cash flows from financing activities  Proceeds from issue of shares  Share issue costs  Net financing cash flows  Net decrease in cash   and cash equivalents  Cash  and cash equivalents at the   beginning of the financial year  Cash and cash equivalents at the end   of the financial year  ‐  22,727  (1,490,268)  20,000 ‐ (1,530,372) (1,467,541)  (1,510,372) 1,793,201  (38,880)  1,320,500 ‐  1,754,321  1,320,500  (206,587)  (810,299)  1,073,739  1,884,038  21(i)  867,152  1,073,739  These financial statements should be read in conjunction with the accompanying notes. ‐ 33 ‐ For personal use only                                                                     CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  Notes to the Financial Statements  1.      STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES  Basis of preparation  (a)  The financial statements are general purpose financial statements, which have been prepared in accordance with the requirements  of  the  Corporations  Act  2001,  and  Australian  Accounting  Standards.  The  financial  statements  have  also  been  prepared  in  accordance with the historical cost convention using the accounting policies described below.  Statement of compliance  (b)  The financial statements comply with Australian Accounting Standards as issued by the Australian Accounting Standards Board and  International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).  Accounting policies and disclosures  (c)  The  Consolidated  Entity  has  adopted  all  new  and  amended  Australian  Accounting  Standards  and  AASB  interpretations  which  were  applicable as of 1 July 2014. Adoption of other new and amended Australian Accounting Standards and AASB interpretations did not  have any effect on the financial position or performance of the Consolidated Entity.  The Consolidated Entity has not elected to early adopt any new standards or amendments.  Going Concern  The accounts have been prepared on the going concern basis, which contemplates continuity of normal business activities and the  realisation of assets and liabilities in the normal course of business.  The Consolidated Entity had cash assets of $867,112 at 30 June 2015. The directors acknowledge that continued exploration and  development of the consolidated group’s mineral exploration projects will necessitate further capital raisings.  The Consolidated Entity remains dependent on its ability to raise funding in volatile capital markets. However, the directors  continue to believe that the going concern basis of accounting by the Consolidated Entity is appropriate as the Company and  Consolidated Entity have successfully completed capital raisings during the year to 30 June 2015, notwithstanding the challenging  conditions in equity markets.  In consideration of the above matters, the directors have determined that it is reasonably foreseeable that the Consolidated Entity will  continue as going concern and that it is appropriate that the going concern method of accounting be adopted in the preparation of the  financial statements. In the event that the Consolidated Entity is unable to continue as a going concern (due to inability to raise future  funding requirements), it may be required to realise its assets at amounts different to those currently recognised, settle liabilities other  than in the ordinary course of business and make provisions for other costs which may arise as a result of cessation or curtailment of  normal business operations.    Accordingly, the financial statements do not include adjustments relating to the recoverability and classification of assets amount  or to the amounts and classification of liabilities that might be necessary if the Consolidated Entity does not continue a going  concern.  Principles of consolidation  (d)  The  consolidated  financial  statements  include  the  financial  statements  of  Cullen  Resources  Limited  and  the  results  of  all  of  its  controlled entities which are referred to collectively throughout these financial statements as the “Consolidated Entity”. The results  of controlled entities are prepared for the same reporting period as the parent, using consistent accounting policies. All inter‐entity  balances and transactions, and unrealised profits arising from intra‐economic entity transactions, have been eliminated in full.  Taxes  (e)  Income tax  Deferred  income  tax  is  provided  on  all  temporary  differences  at  the  balance  sheet  date  between  the  tax  bases  of  assets  and  liabilities and their carrying amounts for financial reporting purposes.  Deferred income tax liabilities are recognised for all taxable temporary differences, except:   where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction  that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or  loss; or  34 For personal use only                                     CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015   in respect of taxable temporary differences associated with investments in subsidiaries, associates and interest in joint venture,  where  the  timing  of  the  reversal  of  the  temporary  differences  can  be  controlled  and  it  is  probable  that  the  temporary  differences will not reverse in the foreseeable future.  Deferred income tax assets are recognised for all deductible temporary differences, carry‐forward of unused tax assets and unused  tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences,  and the carry‐forward of unused tax credits and unused tax losses can be utilised, except:    where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an  asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the  accounting profit nor taxable profit or loss; or  in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint  ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse  in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.  The  carrying  amount  of  deferred  income  tax  assets  is  reviewed  at  each reporting  date  and  reduced  to  the  extent  that  it  is  no  longer  probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.  Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is  realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance  sheet date.  Income  taxes  relating  to  items  recognised  directly  in  equity  are  recognised  in  equity  and  not  in  the  Consolidated  Statement  of  Comprehensive Income.  Goods and Services Tax (GST)  Revenues, expenses and assets are recognised net of the amount of GST except:   where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST  is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and  receivables and payables are stated with the amount of GST included.   The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the  Consolidated Statement of Financial Position. Cash flows are included in the Consolidated Statement of Cash Flows on a gross basis  and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the  taxation authority are classified as operating cash flows.  Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.  Provision for employee benefits  (f)  Provision has been made in the financial statements for benefits accruing to employees in relation to annual leave and long service  leave. Annual leave provisions expected to be settled within twelve months are measured at their nominal amounts. Long service  leave provisions are measured at the present value of the estimated future cash outflow to be made in respect of services provided  by employees up to the reporting date. In determining the present value of future cash outflows, the interest rates attaching to  Australian corporate bond securities which have terms to maturity approximating the terms of the related liabilities are used.  Investments in controlled entities   (g)  Investments in controlled entities are carried in the company’s financial statements at the lower of cost and recoverable amount.  Dividends and distributions are brought to account when they are proposed by the controlled entities.  Exploration and Evaluation Expenditure  Expenditure is deferred  (h)  (i)  Expenditure  on  exploration  and  evaluation  is  accounted  for  in  accordance  with  the  'area  of  interest'  method.  Exploration  and  evaluation expenditure is capitalised provided the rights to tenure of the area of interest is current and either:    the exploration and evaluation activities are expected to be recouped through successful development and exploitation of the  area of interest or, alternatively, by its sale; or  exploration  and  evaluation  activities  in  the  area  of  interest  have  not  at  the  reporting  date  reached  a  stage  that  permits  a  reasonable  assessment  of  the  existence  or  otherwise  of  economically  recoverable  reserves,  and  active  and  significant  operations in, or relating to, the area of interest are continuing.  35 For personal use only                                       CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  When  the  technical  feasibility  and  commercial  viability  of  extracting  a  mineral  resource  have  been  demonstrated  then  any  capitalised  exploration  and  evaluation  expenditure  is  reclassified  as  capitalised  mine  development.  Prior  to  reclassification,  capitalised exploration and evaluation expenditure is assessed for impairment.  Impairment  The  carrying  value  of  capitalised  exploration  and  evaluation  expenditure  is  assessed for  impairment  at  the area  of  interest  level  whenever facts and circumstances suggest that the carrying amount of the asset may exceed its recoverable amount.  An  impairment  exists  when  the  carrying  amount  of  an  area  of  interest  exceeds  its  estimated  recoverable  amount.  The  area  of  interest is then written down to its recoverable amount. Any impairment losses are recognised in the Consolidated Statement of  Comprehensive Income.  (i)  Both the functional and presentation currency of Cullen Resources Limited and its Australian subsidiaries is Australian dollars ($A).  Foreign currency  Foreign currency transactions are translated to Australian currency at the rate of exchange ruling at the date of the transactions.  Monetary items in foreign currencies at balance date are translated at the rates of exchange ruling on that date.  Exchange differences relating to amounts payable and receivable in foreign currencies are brought to account in the Consolidated  Statement of Comprehensive Income in the financial year in which the exchange rates change, as exchange gains or losses.  (j)  Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses.   Plant and equipment  Depreciation is calculated on a straight‐line basis over the estimated useful life of the assets as follows:  Plant and equipment – over 3 to 8 years.  The assets residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate at each financial year  end.  Revenue  (k)  Other  revenue  includes  interest  revenue  on  short  term  deposit  received  from  other  persons.  It  is  brought  to  account  using  the  effective  interest  rate  method. This  is  a  method  of  calculating  the  amortised  cost  of  a financial  asset  and  allocating  the  interest  income  over  the  relevant  period  using  the  effective  interest  rate,  which  is  the  rate  that  exactly  discounts  estimated  future  cash  receipts through the expected life of the financial asset to the net carrying amount of the financial asset.  Joint Operations  (l)  The Consolidated Entity recognises in relation to its joint operations:  ‐ Assets, including its share of any assets held jointly  ‐ Liabilities, including its share of any liabilities incurred jointly  ‐ Revenue from the sale of its share of the output arising from the joint operation  ‐ Share of the revenue from the sale of the output by the joint operation  ‐ Expenses, including its share of any expenses incurred jointly    Payables  (m)  Liabilities for trade creditors and other amounts are carried at cost which is the fair value of the consideration to be paid in the  future for goods and services received, whether or not billed to the Consolidated Entity.  Cash and cash equivalents  (n)  Cash  and  cash  equivalents  in  the  balance  sheet  comprise  cash  at  bank  and  in  hand  and  short‐term  deposits  with  an  original  maturity of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant  risk of changes in value. For the purposes of the Consolidated Statement of Cash Flows, cash includes cash on hand and in banks,  and money market investments readily convertible to cash within 2 working days.  Leases  (o)  The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an  assessment  of  whether  the  fulfilment  of  the  arrangement  is  dependent  on  the  use  of  a  specific  asset  or  assets  and  the  arrangement conveys a right to use the asset.  Operating lease payments are recognised as an expense in the Consolidated Statement of Comprehensive Income on a straight‐line  basis over the lease term.  36 For personal use only                                     CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  Issued capital  (p)  Issued and paid up capital is recognised at the fair value of the consideration received by the Consolidated Entity. Any transaction  costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.  Earnings per share (EPS)  (q)  Basic  EPS  is  calculated  as  net  profit/(loss)  attributable  to  members,  adjusted  to  exclude  costs  of  servicing equity,  divided  by  the  weighted  average  number  of  ordinary  shares,  adjusted  for  any  bonus  element.  Diluted  EPS  is  calculated  as  net  profit/  (loss)  attributable to members, adjusted for:      costs of servicing equity;  the  after  tax  effect  of  interest  associated  with  dilutive  potential  ordinary  shares  that  have  been  recognised  as  expenses;  and  other non‐discretionary changes in revenues or expenses during the period that would result from the dilution of potential  ordinary shares;  divided by the weighted average number of ordinary shares, adjusted for any bonus element.  (r)  The accounting policies adopted are consistent with those of the previous year, except as noted at Note 1(c).  Change in accounting policies  Share based payments  (s)  At each subsequent reporting date until vesting, the cumulative charge to the Consolidated Statement of Comprehensive Income is  the product of:   (i)  (ii)  (iii)  The grant date fair value of the option.   The  current  best  estimate  of  the  number  of  options  that  will  vest,  taking  into  account  such  factors  as  the  likelihood  of  employee turnover during the vesting period and the likelihood of non‐market performance conditions being met.  The expired portion of the vesting period.  The charge to the Consolidated Statement of Comprehensive Income for the period is the cumulative amount as calculated above  less the amounts already charged in previous periods. There is a corresponding entry to equity.  The company may also issue options that do not have any vesting conditions.  Until  an  option  has  vested,  any  amounts  recorded  are  contingent  and  will  be  adjusted  if  more  or  fewer  options  vest  than  were  originally anticipated to do so. Any option subject to a market condition is considered to vest irrespective of whether or not that  market condition is fulfilled, provided that all other conditions are satisfied.   If  the  terms  of  an  equity‐settled  option  are  modified,  as  a  minimum  an  expense  is  recognised  as  if  the  terms  had  not  been  modified. An additional expense is recognised for any modification that increases the total fair value of the share‐based payment  arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.   If  an  equity‐settled  option  is  cancelled,  it  is  treated  as  if  it  had  vested  on  the  date  of  cancellation,  and  any  expense  not  yet  recognised  for  the  option  is  recognised  immediately.  However,  if  a  new  option  is  substituted  for  the  cancelled  option  and  designated  as  a  replacement  option  on  the  date  that  it  is  granted,  the  cancelled  and  new  option  are  treated  as  if  they  were  a  modification of the original option, as described in the previous paragraph.   The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of diluted earnings per  share.  Investment and other financial assets  (t)  Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as either financial assets  at  fair  value  through  profit  or  loss,  loans  and  receivables,  held‐to‐maturity  investments,  or  available‐for‐sale  investments,  as  appropriate. When financial assets are recognised initially, they are measured at fair value, plus, in the case of assets not at fair value  through  profit  or  loss,  directly  attributable  transactions  costs.  The  Consolidated  Entity  determines  the  classification  of  its  financial  assets after initial recognition and, when allowed and appropriate, re‐evaluates this designation at each financial year‐end.  Subsequent measurement of available‐for‐sale financial assets  Available‐for‐sale  financial  assets  are  non‐derivative  financial  assets  that  are  designated  as  available‐for‐sale.  After  initial  measurement,  available–for‐sale  financial  assets  are  measured  at  fair  value  with  unrealised  gains  or  losses  recognised  as  other  comprehensive income in the available‐for‐sale reserve until the investment is derecognised, at which time the cumulative gain or  loss recorded is recognised in the income statement, or determined to be impaired, at which time the cumulative loss recorded is  recognised in the Consolidated Statement of Comprehensive Income.  37 For personal use only                                     CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  Impairment of non‐financial assets  (u)  Non‐financial assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may  not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable  amount. Recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing  impairment,  assets  are  grouped  at  the  lowest  levels  for  which  there  are  separately  identifiable  cash  inflows  that  are  largely  independent  of  the  cash  inflows  from  other  assets  or  groups  of  assets  (cash‐generating  units).  Non‐financial  assets  other  than  goodwill that suffered impairment are tested for possible reversal of the impairment whenever events or changes in circumstances  indicate that the impairment may have reversed.         New accounting standards and interpretations   (v)  International Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective have  not been adopted by the Group for the annual reporting period ended 30 June 2015.  These are outlined in the table below.  38 For personal use only                   CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  Application  date of  standard  Application  date for Group  1 January 2018  1 July 2018  Accounting  Standard  Title  Summary  AASB 9  Financial  Instruments  AASB 9 (December 2014) is a new Principal standard  which replaces AASB 139. This new Principal version  supersedes AASB 9 issued in December 2009 (as  amended) and AASB 9 (issued in December 2010) and  includes a model for classification and measurement, a  single, forward‐looking ‘expected loss’ impairment model  and a substantially‐reformed approach to hedge  accounting.  AASB 9 is effective for annual periods beginning on or  after 1 January 2018. However, the Standard is available  for early application. The own credit changes can be early  applied in isolation without otherwise changing the  accounting for financial instruments.  The final version of AASB 9 introduces a new expected‐ loss impairment model that will require more timely  recognition of expected credit losses. Specifically, the  new Standard requires entities to account for expected  credit losses from when financial instruments are first  recognised and to recognise full lifetime expected losses  on a more timely basis.  Amendments to  AASB 9  (December 2009 & 2010  editions and AASB 2013‐9)  issued in December 2013  included the new hedge accounting requirements,  including changes to hedge effectiveness testing,  treatment of hedging costs, risk components that can be  hedged and disclosures.  AASB 9 includes requirements for a simpler approach for  classification and measurement of financial assets  compared with the requirements of AASB 139.  The main changes are described below.  a.  classified based on (1) the objective of the entity's  business model for managing the financial assets; (2) the  characteristics of the contractual cash flows.  b.  recognition to present gains and losses on investments in  equity instruments that are not held for trading in other  comprehensive income. Dividends in respect of these  investments that are a return on investment can be  recognised in profit or loss and there is no impairment or  recycling on disposal of the instrument.  c.  Financial assets can be designated and measured  at fair value through profit or loss at initial recognition if  doing so eliminates or significantly reduces a  measurement or recognition inconsistency that would  arise from measuring assets or liabilities, or recognising  the gains and losses on them, on different bases.  d.  Where the fair value option is used for financial  liabilities the change in fair value is to be accounted for  as follows:  ►  are presented in other comprehensive income (OCI)  ►  loss  Financial assets that are debt instruments will be  The change attributable to changes in credit risk  The remaining change is presented in profit or  Allows an irrevocable election on initial  ‐ 39 ‐ For personal use only       CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  Application  date of  standard  Application  date for Group  1 January 2018  1 July 2018  1 January 2016  1 July 2016  1 January 2016  1 July 2016  Accounting  Standard  Title  Summary  AASB 9  (continued)  Financial  Instruments  AASB 14  Regulatory deferral  accounts  AASB 2014‐3  Amendments to  Australian  Accounting  Standards –  Accounting for  Acquisitions of  Interests in Joint  Operations   [AASB 1 & AASB 11]  AASB 9 also removes the volatility in profit or loss that  was caused by changes in the credit risk of liabilities  elected to be measured at fair value. This change in  accounting means that gains caused by the deterioration  of an entity’s own credit risk on such liabilities are no  longer recognised in profit or loss.  Consequential amendments were also made to other  standards as a result of AASB 9, introduced by AASB  2009‐11 and superseded by AASB 2010‐7, AASB 2010‐10  and AASB 2014‐1 – Part E.  AASB 2014‐7 incorporates the consequential  amendments arising from the issuance of AASB 9 in Dec  2014.  AASB 2014‐8 limits the application of the existing  versions of AASB 9 (AASB 9 (December 2009) and AASB 9  (December 2010)) from 1 February 2015 and applies to  annual reporting periods beginning on after 1 January  2015.  AASB 14 permits first‐time adopters to continue to  account for amounts related to rate regulation in  accordance with their previous GAAP when they adopt  Australian Accounting Standards. However, to enhance  comparability with entities that already apply Australian  Accounting Standards and do not recognise such  amounts, AASB 14 requires that the effect of rate  regulation must be presented separately from other  items. An entity that is not a first‐time adopter of  Australian Accounting Standards will not be able to apply  AASB 14.   AASB 2014‐1 Part D makes amendments to AASB 1 First‐ time Adoption of Australian Accounting Standards, which  arise from the issuance of AASB 14 Regulatory Deferral  Accounts in June 2014.  AASB 2014‐3 amends AASB 11 to provide guidance on  the accounting for acquisitions of interests in joint  operations in which the activity constitutes a business.  The amendments require:   (a) the acquirer of an interest in a joint operation in  which the activity constitutes a business, as defined in  AASB 3 Business Combinations, to apply all of the  principles on business combinations accounting in AASB 3  and other Australian Accounting Standards except for  those principles that conflict with the guidance in AASB  11; and   (b) the acquirer to disclose the information required by  AASB 3 and other Australian Accounting Standards for  business combinations.   This Standard also makes an editorial correction to AASB  11  ‐ 40 ‐ For personal use only             CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  Application  date of  standard  Application  date for Group  1 January 2016  1 July  2016  1 January 2016  1 July  2016  1 January 2017  1 July 2017  Accounting  Standard  AASB 2014‐4  AASB 2014‐6  AASB 15  Title  Summary  Clarification of  Acceptable  Methods of  Depreciation and  Amortisation  (Amendments to  AASB 116 and AASB  138)  Amendments to  Australian  Accounting  Standards –  Agriculture: Bearer  Plants  [AASB 101, AASB  116, AASB 117,  AASB 123, AASB  136, AASB 140 &  AASB 141]    Revenue from  Contracts with  Customers  AASB 116 and AASB 138 both establish the principle for  the basis of depreciation and amortisation as being the  expected pattern of consumption of the future economic  benefits of an asset.   The IASB has clarified that the use of revenue‐based  methods to calculate the depreciation of an asset is not  appropriate because revenue generated by an activity  that includes the use of an asset generally reflects factors  other than the consumption of the economic benefits  embodied in the asset.  The amendment also clarified that revenue is generally  presumed to be an inappropriate basis for measuring the  consumption of the economic benefits embodied in an  intangible asset. This presumption, however, can be  rebutted in certain limited circumstances.  The amendments require that bearer plants such as  grape vines, rubber trees and oil palms, should be  accounted for in the same way as property, plant and  equipment in AASB 116 Property, Plant and Equipment,  because their operation is similar to that of  manufacturing.   The produce growing on bearer plants will remain within  the scope of AASB 141.   This Standard also makes various editorial corrections to  other Australian Accounting Standards.  In May 2014, the IASB issued IFRS 15 Revenue from  Contracts with Customers, which replaces IAS 11  Construction Contracts, IAS 18 Revenue and related  Interpretations (IFRIC 13 Customer Loyalty Programmes,  IFRIC 15 Agreements for the Construction of Real Estate,  IFRIC 18 Transfers of Assets from Customers and  SIC‐31  Revenue—Barter Transactions Involving Advertising  Services).   The core principle of IFRS 15 is that an entity recognises  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. An entity  recognises revenue in accordance with that core principle  by applying the following steps:  (a) Step 1: Identify the contract(s) with a customer  (b) Step 2: Identify the performance obligations in the  contract  (c) Step 3: Determine the transaction price  (d) Step 4: Allocate the transaction price to the  performance obligations in the contract  (e) Step 5: Recognise revenue when (or as) the entity  satisfies a performance obligation  Early application of this standard is permitted.  AASB 2014‐5 incorporates the consequential  amendments to a number Australian Accounting  Standards (including Interpretations) arising from the  issuance of AASB 15.  ‐ 41 ‐ For personal use only       Accounting  Standard  AASB 15  (continued)  AASB 2015‐1  CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  Title  Summary  Application  date of  standard  Application  date for Group  1 January 2016  1 July 2016  Revenue from  Contracts with  Customers  Amendments to  Australian  Accounting  Standards – Annual  Improvements to  Australian  Accounting  Standards 2012– 2014 Cycle  The IASB has decided to defer the effective date of IFRS  15 to 1 January 2018.  The amendment to give effect to  the new effective date for IFRS 15 is expected to be  issued in September 2015.  At this time, it is expected  that the AASB will make a corresponding amendment to  AASB 15, which will mean that the application date of  this standard for the Group will move from 1 July 2017 to  1 July 2018.  The subjects of the principal amendments to the  Standards are set out below:  AASB 5 Non‐current Assets Held for Sale and  Discontinued Operations:    Changes in methods of disposal – where an entity  •  reclassifies an asset (or disposal group) directly from  being held for distribution to being held for sale (or visa  versa), an entity shall not follow the guidance in  paragraphs 27–29 to account for this change.   AASB 7 Financial Instruments: Disclosures:   Servicing contracts  ‐ clarifies how an entity  •  should apply the guidance in paragraph 42C of AASB 7 to  a servicing contract to decide whether a servicing  contract is ‘continuing involvement’ for the purposes of  applying the disclosure requirements in paragraphs 42E– 42H of AASB 7.  Applicability of the amendments to AASB 7 to  •  condensed interim financial statements ‐ clarify that the  additional disclosure required by the amendments to  AASB 7 Disclosure–Offsetting Financial Assets and  Financial Liabilities is not specifically required for all  interim periods. However, the additional disclosure is  required to be given in condensed interim financial  statements that are prepared in accordance with AASB  134 Interim Financial Reporting when its inclusion would  be required by the requirements of AASB 134.  AASB 119 Employee Benefits:  Discount rate: regional market issue ‐ clarifies  •  that the high quality corporate bonds used to estimate  the discount rate for post‐employment benefit  obligations should be denominated in the same currency  as the liability. Further it clarifies that the depth of the  market for high quality corporate bonds should be  assessed at the currency level.  AASB 134 Interim Financial Reporting:   •  Disclosure of information ‘elsewhere in the  interim financial report’ ‐amends AASB 134 to clarify the  meaning of disclosure of information ‘elsewhere in the  interim financial report’ and to require the inclusion of a  cross‐reference from the interim financial statements to  the location of this information. The adoption of these new and revised Standards and Interpretations will not be expected to have a material impact on the  financial position or performance of the Group.  2.  SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS  In  applying  the  Consolidated  Entity’s  accounting  policies  management  continually  evaluates  estimates  and  assumptions  based on experience and other factors, including expectations of future events that may have an impact on the Consolidated  Entity. All estimates and assumptions made are believed to be reasonable based on the most current set of circumstances  available  to  management.  Actual  results  may  differ  from  the  estimates  and  assumptions.  Significant  estimates  and  assumptions made by the management in the preparation of these financial statements are outlined below:  ‐ 42 ‐ For personal use only                    CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  Significant accounting estimates and assumptions  The  carrying  amounts  of  certain  assets  and  liabilities  are  often  determined  based  on  estimates  and  assumptions  of  future  events.  The  key  estimates  and  assumptions  that  have  a  significant  risk  of  causing  a  material  adjustment  to  the  carrying  amounts of certain assets and liabilities within the next annual reporting period are:   Impairment of capitalised exploration and evaluation expenditure  (a)  The future recoverability of capitalised exploration expenditure is dependent on a number of factors, including whether the  Consolidated  Entity  decides  to  exploit  the  related  lease  itself  or,  if  not,  whether  it  successfully  recovers  the  related  exploration  and  evaluation  asset  through  sale.  Factors  that  could  impact  the  future  recoverability  include  the  level  of  reserves and resources, future technological changes, which could impact the cost of mining, future legal changes (including  changes  to  environmental  restoration  obligations)  and  changes  to  commodity  prices.  To  the  extent  that  capitalised  exploration  and  evaluation  expenditure  is  determined  not  to  be  recoverable  in  the  future,  profits  and  net  assets  will  be  reduced in the period in which this determination is made. In addition, exploration and evaluation is capitalised if activities in  the  area  of  interest  have  not  yet  reached  a  stage  that  permits  a  reasonable  assessment  of  the  existence  or  otherwise  of  economically recoverable reserves. To the extent it is determined in the future that this capitalised expenditure should be  written off, profits and net assets will be reduced in the period in which this determination is made.  Share‐based payment transactions  (b)  The Consolidated Entity 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 external valuer using either a  binomial  or  Black‐Scholes  model,  with  the  assumption  detailed  in  Note  16.  The  accounting  estimates  and  assumptions  relating to equity‐settled share‐based payments would have no impact on the carrying amount of assets and liabilities within  the next annual reporting period but may impact expenses and equity.  ‐ 43 ‐ For personal use only           CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  3.  REVENUE AND EXPENSES  (Loss) after crediting the following revenues: Other Revenues  Interest received  Research and development grant  Sale of plant and equipment  Royalty  Loss after charging the following expenses:  Consolidated 2015  $  2014 $ 8,560  99,529  22,727  ‐  130,816  29,223 83,527  ‐ 3,461 116,211 Auditors remuneration in respect of the Audit of the financial statements          45,731         54,877  Operating lease payments Superannuation  4.  INCOME TAX  The  major  components  of  income  tax  expenses are:  Income Statement  Current Income Tax  Current income tax charge/(benefit)  Deferred Income Tax  Relating to origination and reversal of  temporary differences  Income  tax  expense/(benefit)  reported  in  the statement of comprehensive income  Operating loss before income tax  Prima facie income tax (benefit)   calculated at 30% (2014: 30%)   Non‐deductible expenses Non‐assessable income  Income tax losses carried forward/(utilised)  37,359  41,966 49,482  58,149 ‐  ‐  ‐  ‐ ‐  ‐  (1,414,969)  (1,880,593)  (424,491)  (564,178)  57,240  6,769 (29,859)   ‐  397,110  557,409  Total income tax (expense)/benefit  ‐  ‐  Cullen Resources Limited and its 100% owned Australian subsidiaries have entered the tax consolidation regime  from 1 July 2002. The head entity of the tax consolidation group is Cullen Resources Limited.  The  entity  has  adopted  the stand  alone  taxpayer  method  for  measuring  current  and  deferred  tax  amounts.  The  members of the income tax consolidated group have entered into a tax funding agreement.  ‐ 44 ‐ For personal use only                                                                                                   CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  Consolidated  Deferred Tax Liabilities  Statement of Financial  Position  Statement of Comprehensive  Income  2015 $  2014 $  2015  $  2014 $  Exploration  (1,598,786)  (1,345,166) 253,620  81,679 Deferred Tax Assets  Provisions  Accruals  Deferred tax assets used to offset deferred tax liabilities (i)  Net Deferred Tax Recognised   in the Statement of Financial Position  33,351  9,150 36,549  10,500 (3,198)  (1,350)  (2,607)  ‐ 1,556,285  1,298,117  (258,168)  (84,286)  ‐  ‐  ‐  ‐  (i) As  at  30  June  2015  future  income  tax  benefits  were  available  to  the  Consolidated  Entity  in  respect  of  operating  losses  and  prospecting  and  exploration  expenditure  incurred.  The  directors  estimate  the  potential income tax benefit at 30 June 2015 in respect of tax losses not brought to account is $9,286,534  (2014: $8,871,883)  and  there  is  no  expiry  date.  The  benefit  of  these  losses  has  only  been  brought  to  account to the extent needed to offset deferred tax liabilities. The remaining benefit will only be obtained  if:  (a)  (b)  the Consolidated Entity derives future assessable income of a nature and of sufficient amount to  enable the benefit to be realised.  the Consolidated Entity continues to comply with the conditions for deductibility imposed by the  law;  and   (c)  no changes in tax legislation adversely affect the Consolidated Entity in realising the benefit.  5.   RECEIVABLES  Current  Other debtors  Other debtors includes GST receivable which is non‐interest bearing.  6.   OTHER FINANCIAL ASSETS  Non current  Security deposits  The security deposits are non‐interest bearing and relate to mining tenements.  Consolidated 2015  $  2014 $ 93,804  89,020 10,000  10,000  12,400 12,400 ‐ 45 ‐ For personal use only                                                                                                                   CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  7.     PLANT & EQUIPMENT Plant & Equipment at cost Opening balance  Disposals  Closing balance  Plant & Equipment – Accumulated depreciation Opening balance  Depreciation  Disposals  Closing balance  Total written down amount  (a)  Reconciliation  Plant & Equipment   Carrying amount at beginning  Disposals  Depreciation expense  8.  EXPLORATION & EVALUATION  Costs carried forward in respect of   areas of interest in the exploration   and evaluation phase  Opening balance  Expenditure incurred during the year  Less  Impairment (a)  Closing balance net of impairment  Consolidated 2015  $  2014 $ 164,153  (55,791)  108,362  (163,190)  (963)  55,791  (108,362)  164,153 ‐ 164,153 (160,981)  (2,209)  ‐  (163,190)  ‐  963  963  ‐  (963)  ‐  3,172 ‐ (2,209) 963 4,483,886  1,490,268  5,974,154  4,211,622 1,530,372 5,741,994 (644,867)  (1,258,108)  5,329,287  4,483,886  Mining tenements are carried forward in accordance with the accounting policy set out in Note 1.  The  ultimate  recoupment  of  the  book  value  of  deferred  costs  relating  to  areas  of  interest  in  the  exploration  and  evaluation phase is dependent upon the successful development and commercial exploitation or, alternatively, sale  of the respective areas of interest and the Consolidated Entity’s ability to continue to meet its financial obligations to  maintain the areas of interest.  (a)  Impairment  The  Directors  have  reviewed  all  exploration  projects  for  indicators  of  impairment  in  light  of  approved  budgets.   Where substantive expenditure is neither budgeted nor planned the area of interest has been written down to its  fair  value  less  costs  to  sell.    In  determining  fair  value  less  cost  of  disposal  the  Directors  had  regard  to  the  best  evidence  of  what  a  willing  participant  would  pay  in  an  arms  length  transaction.    Where  no  such  evidence  was  available, areas of interest were written down to nil pending the outcome of any future farm‐out arrangement.  The  Company  will  continue  to  look  to  attract  farm‐in  partners  and/or  recommence  exploration  should  circumstances  change.  ‐ 46 ‐ For personal use only                                                                       CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  9.  TRADE AND OTHER PAYABLES  Current  Trade creditors ‐ unsecured Trade creditors are non‐interest bearing and are normally settled on 30 day terms.  299,480  145,939 Consolidated 2015  $  2014 $ 111,171  121,829 42,276,087  40,521,766  10.  PROVISIONS  Current  Employee benefits  11.   CONTRIBUTED EQUITY  Issued capital   1,378,469,841 ordinary shares   (2014: 1,038,472,843)  Movement in issued shares for the year:  Beginning of the financial year:  Issued at 0.6 cents each (iii) Issued at 1.2 cents each (i) Issued at 0.6 cents each (ii)  Issued at 0.38 cents each(ii) Issued at 0.38 cents each(iii)  Less share issue expenses End of financial year:            2015            2014  Number of  Shares  1,038,472,843 ‐ 44,891,671 60,500,000  75,000,000 159,605,327 ‐ 1,378,469,841 $ Number of       $ Shares  818,389,431  220,083,412  ‐  ‐  ‐  ‐  ‐  1,038,472,843  39,201,266 1,320,500 ‐ ‐  ‐ ‐ ‐ 40,521,766 40,521,766 ‐ 538,701 363,000  285,000 606,500 (38,880) 42,276,087 Ordinary shares have the right to receive dividends as declared and, in the event of winding up the company, to  participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid  upon shares held.  Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.  (i) Issued under a rights issue to shareholders  (ii) Issued under a placement   (ii) Issued under a Share Purchase Plan to shareholders.   Options  As at 30 June 2015 there are 26,000,000 (2014: 6,000,000) unissued shares in respect of which options were  outstanding and the details of these are as follows:          Number  Grant Date      Vesting Date   6,000,000  20,000,000    26,000,000  9/06/14  1/12/14  Various Nil       Exercise    Price  0.023  0.016  Expiry Date 31 May 2017 30 November 2017 ‐ 47 ‐ For personal use only                                                                                       CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  The options have no rights until they are exercised and become ordinary shares.  During the year Nil (2014: 22,000,000) options lapsed.  During the year 20,000,000 options were issued to Directors to align their interest with shareholders.   Since the end of the financial year no shares have been issued by virtue of the exercise of options.  12.  SHARE BASED PAYMENT RESERVE  The  share  based  payment  reserve  represents  the  cost  of  share‐based  payments  to  directors,  employees  and  third parties.  Beginning of the year  Share based payments  End of the year  13.  ACCUMULATED LOSSES  Accumulated losses at the beginning of the year  Net loss  Accumulated losses at the end of the year  Consolidated 2015  $  2014 $ 1,301,725  158,000  1,280,125  21,600  1,459,725  1,301,725  (36,431,251)  (1,414,969)  (37,846,220)  (34,550,658)  (1,880,593)  (36,431,251)  14.  PARTICULARS IN RELATION TO CONTROLLED ENTITIES  The  consolidated  financial  statements  at  30  June  2015  include  the  following  controlled  entities.  The  financial  years of all controlled entities are the same as that of the parent entity.  Place of Incorporation  Interest %  Investment $  Name  Cullen Minerals Pty Limited  Cullen Exploration Pty Ltd Montrose Resources Pty Limited*  Bearmark Investments  Pty Ltd   Cullen Resources Namibia Pty Ltd  Cullen Exploration Inc*  ARCTEX OY  ARCTEX AB  Australia Australia Australia Botswana  Namibia Canada Finland Sweden    *During the year this company was de‐registered.  June 2015  June 2014  100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 June  2015  ‐  ‐  ‐  ‐  15  ‐  4,072  7,975  June 2014  ‐ ‐ 1 ‐ 15 1 4,072 7,975 ‐ 48 ‐ For personal use only                                                                                         CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  15.  KEY MANAGEMENT PERSONNEL  Compensation for key management personnel  Short‐term employee benefits  Post‐employment benefits  Other long‐term benefits Termination benefits  Share‐based payments  Total compensation  16. SHARE BASED PAYMENTS  (a)  Recognised share based payment expenses  Director options  Employee options  Consolidated 2015  $  2014 $ 438,292  37,050  5,097  ‐  122,000  602,439  434,586 36,074 4,988 ‐ ‐ 475,648 2015  $  2014  $               122,000                    36,000                     21,600                     158,000                     21,660     ‐  Employee Options  (b)  For details/movements around the director options, please refer to the Remuneration Report.   (i) Options held at the beginning of the reporting period – 1 July 2014  Number  Grant Date  Vest Date Expiry Date Weighted  Average  Exercise Price  6,000,000  9/6/14  Various* 31/5/17 $0.023  (ii)(a)  Options lapsed during the year ‐ 2015  Number  Grant Date  ‐  ‐  Vest Date  ‐ Expiry Date  ‐ Weighted Average  Exercise Price  ‐  (ii)(b)  Options lapsed during the previous year ‐ 2014  Number  Grant Date  Vest Date  Expiry Date  6,000,000  14/3/11  14/3/11 13/3/14 Average  Weighted  Exercise Price  $0.06  (iii)(a)  Options issued during the year ‐ 2015  Number  Grant Date  Vest Date Expiry Date ‐  ‐  ‐ ‐ ‐ 49 ‐ Weighted Average  Exercise  Price  ‐ Weighted Average  Share Price  ‐  For personal use only                                                                                                   CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  (iii)(b)  Options issued during the previous year ‐ 2014  Number  Grant Date  Vest Date Expiry Date 6,000,000  9/6/14  Various* 31/5/17 (iv)  Options held at the end of the reporting period ‐30 June 2015  Number  Grant Date  Vest Date Expiry Date Weighted Average  Exercise  Price  $0.023 Exercise  Price  6,000,000  9/6/14  Various* 31/5/17 $0.023  These options vest in three separate 2,000,000 tranches as follows:  ‐ ‐ ‐  2m vested immediately  2m vested on 1 June 2015  2m vest from 1 June 2016  Weighted Average  Share Price  $0.013  Weighted Average Fair Value  of Options  $0.0096 These options had a weighted average exercise price of $0.023 and a weighted average remaining contractual  life of 1.92 years.  The  fair  value  of  the  equity  settled  share  options  granted  are  estimated  as  at  the  date  of  allocation  using  a  Binomial Model taking into account the terms and conditions upon which they were granted.   (c) Weighted average remaining contractual life  Options  ‐ Employee  Options  ‐ Directors  (d) Range of exercise prices  Options  ‐ Employee  Options  ‐ Directors  (e) Weighted average fair value at date of issue  Options  ‐ Employee  Options  ‐ Directors  2015  Years  1.92  2.42  2015  cents  2.3  1.6  2015  cents  ‐  0.61  2014  Years  2.92  ‐  2014  cents  2.3  ‐  2014  cents  0.96  ‐  Option pricing model  (f) The fair value  of the equity settled share options granted are estimated as at the date of allocation using a  Binomial Model taking into account the terms and conditions upon which they were granted.  The following table lists the inputs to the models used at the date of allocation for employee and directors’  options:  Expected volatility  Risk free interest rate  Exercise price  Share price at measurement date  ‐ 50 ‐ 2015  155.19%  2.135%  $0.016  $0.008  2014    145.31%  2.855%  0.023  0.013  For personal use only                                                                                                                                                   CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  17.  JOINT OPERATIONS  The Consolidated Entity has interests in the following joint operations:   Principal Activity  Other Participant  (a)  Hardey Junction  Exploration  Northern Star Resources Ltd (Northern Star)  (b)  Mt Stuart   Exploration  Australian Premium Iron Management Pty Limited (API)  (c)  Wyloo  Exploration  Fortescue Mining Group Limited (Fortescue)  (d)  Tunnel Creek/Saltwater Pool    Exploration  Thundelarra Exploration / Lion One Metals Limited  (e)  Paraburdoo  Exploration  Fortescue Mining Group Limited (Fortescue)  (f)  Forrestania  Exploration  Hannans Reward Limited (Hannans)  (g)  Killaloe  Exploration  Matsa Resources Limited (Matsa)  a) b) c) d) e) f) Northern Star has an 80% interest, Cullen is 20% free carried.  API has earned a 70% interest in the iron ore rights and Cullen is contributing at 30% for its interest.  Fortescue has a 51% interest and can earn up to 80% in the iron ore rights.  Thundelarra Exploration/ Lion One Metals can earn 70%, Cullen has a 100% interest.  Fortescue can earn up to 80% in the iron ore rights, Cullen has a 100% interest.  Hannans has an 80% interest; Cullen is 20% free carried.  g) Matsa has an 80% interest; Cullen is 20% free carried.  The  joint  operations  are  not  separate  legal  entities.  They  are  contractual  arrangements  between  the  participants  for  the  sharing of costs and any outputs and do not, in themselves, generate revenue and profit.  The net contribution of any jointly  controlled assets to the operating profit before income tax is $Nil (2014: $Nil). The Consolidated Entity’s assets employed in  the jointly controlled assets, are included in the balance sheet of the Consolidated Entity as follows:  Current Assets  Receivables  Non‐Current Assets  Exploration and expenditure  Current Liabilities  Trade and other payables  18.  COMMITMENTS  (a) Minimum exploration work  Consolidated  2015  $  2014  $  75,610  44,124  5,329,287  4,457,944  85,132  ‐  The  Consolidated  Entity  has  certain  obligations  to  perform  minimum  exploration  work  and  expend  minimum  amounts  of  money  on  mineral  exploration  tenements.  The  Consolidated  Entity  has  committed  to  expend  a  minimum  of  $1,569,260  (2014: $1,857,838) over the next year to keep its current tenements in good standing.  Approximately 61% (2014: 64%) of  this expenditure will be met by our joint operations partners.  ‐ 51 ‐ For personal use only                                                                                                                                                         CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  (b) Joint Operation commitment  The Consolidated Entity has certain obligations in respect to the Mt Stuart joint operation and maybe required to expend  further funds over the next year being its share of the joint operation’s expenditure. The Consolidated Entity’s share of the  joint operation’s total budgeted expenditure over the next year is $684,000.   (c) Lease expenditure commitments  Lease expenditure commitment  Operating leases (non‐cancellable) for premises  Minimum lease payments  ‐  ‐  not later than one year  later than one year and not later than five years  Aggregate lease expenditure contracted for at reporting  date but not provided for  Consolidated  2015  $  2014  $  30,969  ‐  36,598  31,508  30,969  68,106  A new lease for the premises was entered into for the period 1 May 2014 to 30 April 2016 with an option for a further two  years.  There are no contingent rentals or restrictions imposed by the lease arrangements.  19.  RELATED PARTIES  Payments to director related companies  Transactions  between  related  parties  are  on  normal  commercial  terms  and  conditions  no  more  favourable  than  those  available to other parties unless otherwise stated. Consultancy payments were made to Mosman Corporate Services Pty  Ltd totalling $42,875(2014:$37,750) which is a company controlled by Mr W Kernaghan. There was $3,125 (2014: $3,000)  outstanding at 30 June 2015.   20.  OPERATING SEGMENTS  Identification of Reportable Segments  The Consolidated Entity has based its operating segment on the internal reports that are reviewed and used by the executive  management team in assessing performance and in determining the allocation of resources.  The Consolidated Entity currently does not have production and is only involved in exploration. As a consequence, activities  in the operating segment are identified by management based on the manner in which resources are allocated, the nature of  the  resources  provided  and  the  identity  of  the  manager  and  country  of  expenditure.  Discrete  financial  information  about  each of these areas is reported to the executive management team on a monthly basis.  Based  on  this  criteria,  the  Consolidated  Entity  has  only  one  operating  segment,  being  exploration,  and  the  segment  operations and results are the same as the Consolidated Entity’s results.  Non Current Assets by Geographical regions:  Australia  Canada   21.  STATEMENT OF CASH FLOWS  Consolidated  2015  $  2014  $  5,339,287  ‐  5,339,287  4,494,849  2,400  4,497,249  (i)  Reconciliation of cash  For the purposes of the Consolidated Statement of Cash Flows, cash includes cash at bank and short term deposits at call.   Cash at the end of the financial year as shown in the Consolidated Statement of Cash Flows is reconciled to the related items  in the Consolidated Statement of Financial Position as follows:  Cash on hand  ‐ 52 ‐ Consolidated  2015  $  2014  $  867,152  1,073,739  For personal use only                                                                                                                                           CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  (ii)  Reconciliation of operating (loss)          after income tax to net cash used in operating activities  Operating (loss) after income tax  Add/(less) non cash items  Profit on sale of plant & equipment  Depreciation  Security deposit written off  Share based payments  Provisions for employee benefits  Impairment exploration expenditure  (Decrease) / Increase in trade and other payables  Decrease / (Increase) in receivables  Net operating cashflows  (1,414,969)  (1,880,593)  (22,727)  963  2,400  158,000  (10,658)  644,867  153,541  (4,784)  ‐  2,209  ‐  21,600  (8,690)  1,258,108  37,673  (50,734)  (493,367)  (620,427)  Share based payments  During  the  year  the  Consolidated  Entity  made  share  based  payments  of  $158,000  (2014:  $21,600)  to  directors  and  an  employee of the Consolidated Entity.  22.  EARNINGS/(LOSS)PER SHARE  Basic (loss) per share (cents per share)  Diluted (loss) per share (cents per share)  The following reflects the income and share data used   in the calculations of basic and diluted (loss) per share  Net (loss)  Weighted average number of ordinary shares used in   the calculation of basic and diluted earnings per share  Options on issue at year end are not dilutive and hence   not used in the calculation of diluted EPS  23.  FINANCIAL INSTRUMENTS                             Consolidated  2015  2014  (0.13)  (0.13)  (0.21)  (0.21)  (1,414,969)  (1,880,593)  1,111,569,227  880,495,161  26,000,000  6,000,000  The Group's financial instruments comprise receivables, payables, and cash and short‐term deposits.  The Group manages its exposure to key financial risks, including interest rate risk in accordance with the Group's financial risk  management policy. The objective of the policy is to support the delivery of the Group's financial targets whilst protecting  future financial security.  The Board reviews and agrees policies for managing each of these risks as summarised below.  Primary responsibility for identification and control of financial risks rests with the Board of Directors. Due to the size and  nature of the company's operations, and as the company does not use derivative instruments or debt, the directors do not  believe the establishment of a risk management committee is warranted.  Interest Rate Risk  (a)  The Group's exposure to market interest rates relates primarily to the Group's cash and cash equivalents.  The Group's exposure to interest rate risk for each class of financial assets and financial liabilities is set out below.  ‐ 53 ‐ For personal use only                                                                                                                                                                         CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  Financial Instruments  Financial Assets  Cash and cash equivalents  Total Financial Assets  Consolidated  Floating  interest rate  Floating  interest rate  2015  $  2014  $  867,152  1,073,739  867,152  1,073,739  Cash gives rise to interest rate risk because the interest rate is variable.  The  following  summarises  the  effect  on  loss  and  equity  of  financial  instruments  held  at  balance  date  as  a  result  of  a  1%  movement in interest rates, with all other variables remaining constant.  Interest rate +1%  Interest rate ‐1%  Consolidated  (Decrease)/Increase in loss/equity  2015  $  (8,671)  8,671  2014  $  (10,737)  10,737  The selection of 1% sensitivity check was based on recent interest rate adjustments. The same basis was adopted in 2014.   (b)  Currency Risk  The  Consolidated  Entity  has  limited  exposure  to  foreign  currency  risk  as  it  pays  for  its  overseas  exploration  activities  from  Australia in various overseas currencies.  (c)  Credit Risk  Credit  risk  arises  from  the  financial  assets  of  the  Consolidated  Entity,  namely  trade  and  other  receivables.  The  Consolidated  Entity's  exposure  to  credit  risk  arises  from  potential  default  of  the  counter  party,  with  a  maximum  exposure  equal  to  its  carrying amount.  Exposure at balance date is addressed in each applicable note.  The Consolidated Entity does not hold any credit derivatives to offset its credit exposure.  Receivable balances are monitored on an ongoing basis with the result that the Consolidated Entity's exposure to bad debts is  not  significant.  Receivables  are  due  from  the  Australian  Taxation  Office  and  other  government  bodies  which  have  very  low  default risk.  There are no significant concentrations of credit risk within the Consolidated Entity and cash and cash equivalents are spread  amongst two of the big four Australian Banks.  (d)  Liquidity Risk  The  liquidity  position  of  the  Consolidated  Entity  is  managed  to  ensure  sufficient  liquid  funds  are  available  to  meet  the  Consolidated Entity's financial commitments in a timely and cost‐effective manner. The Consolidated Entity funds its activities  through capital raisings in order to limit its liquidity risk which is monitored on a monthly basis.  Contractual maturity of the trade payables is within 30 day terms.  The Consolidate Entity manages its liquidity risk by monitoring the total cash inflows and outflows expected on a monthly basis.  The  Consolidated  entity  has  established  comprehensive  risk  reporting  covering  its  business  units  that  reflect  expectations  of  management of the expected statement of financial assets and liabilities.  (e)    Capital Management  Management controls the capital of the Consolidated Entity in order to provide the shareholders with adequate returns and  ensure that the group can fund its operations and continue as a going concern.  There are no externally imposed capital requirements.  Management  effectively  manages  the  group's  capital  by  assessing  the  Consolidated  Entity's  financial  risks  and  adjusting  its  capital structure in responses to include the management of debt levels, distributions to shareholders and share issues.  ‐ 54 ‐ For personal use only                                                                                                                               CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  The Consolidated Entity uses cash flow forecasts to manage and adjust its capital management.  There have been no changes in the strategy adopted by management to control the capital of the Consolidated Entity since the  prior year.  Capital managed by the Consolidated Entity consists of shareholders equity.  Shareholders equity  24.  AUDITOR'S REMUNERATION  Amounts received or due and receivable  by Ernst and Young  ‐ ‐ an audit or review of the financial report  of the entity and any other entity in the  Consolidated Entity  taxation services provided to the Consolidated Entity 25.  PARENT ENTITY INFORMATION   Information relating to Cullen Resources Limited.  Current assets  Total assets  Current liabilities  Total liabilities  Issued capital  Accumulated losses  Share based payment reserve  Total shareholders' equity  Loss of the parent entity  Total comprehensive income of the parent entity  Consolidated  2015  $  2014  $  5,889,592  5,392,240       Consolidated  2015  $  2014  $  45,731  10,872  56,603  54,877  8,353   63,230  2015  $  2014  $  794,431  5,956,773  55,119  55,119  42,276,087  37,834,148  1,459,725  5,901,654  1,414,969  1,414,969  1,053,435  5,480,120  75,818  75,818  40,521,766  36,419,189  1,301,725  5,404,302  1,880,418  1,880,418  The parent entity has no contingent liabilities, nor does it have any contractual commitments for the acquisition of property,  plant or equipment.  26.  SUBSEQUENT EVENTS  There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or  event of a material and unusual nature likely, in the opinion of the directors, to affect the operations of the Consolidated  Entity,  the  results  of  those  operations  or  the  state  of  affairs  of  the  Consolidated  Entity  in  the  subsequent  financial  years  other than the following:   The  Group  have  sold  its  interest  in  the  tenements  which  form  the  Wyloo  Iron  Ore  Rights  Joint  Venture  to  its  partner Fortescue Metals Limited for $50,000 together with a further $950,000 on a decision to mine and a royalty  of 1.5% FOB for the first 15 million tonnes mined.  27.  CORPORATE INFORMATION  The financial report of Cullen Resources Limited for the year ended 30 June 2015 was authorised for issue in accordance with  a resolution of the directors on 18 September 2015.  Cullen Resources Limited is a for profit company limited by shares incorporated in Australia whose shares are publicly traded  on the Australian Stock Exchange.  ‐ 55 ‐ For personal use only                                                                                                                                                                               CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  DIRECTORS' DECLARATION  In accordance with a resolution of the directors of Cullen Resources Limited, I state that:  In the opinion of the directors:  (a) the  financial  statements  and  notes  of  the  Consolidated  Entity  are  in  accordance  with  the  Corporations Act 2001, including:  (i) giving  a  true  and  fair  view  of  the  Consolidated  Entity’s  financial  position  as  at  30 June  2015  and of its performance for the year ended on that date; and  (ii) complying  with  Australian  Accounting  Standards  (including  the  Australian  Accounting  Interpretations) and the Corporations Regulations 2001; and  the financial statements and notes also comply with International Financial Reporting Standards as  disclosed in Note 1(b).  subject to the achievement of the matters in Note 1(c), there are reasonable grounds to believe  that  the  Consolidated  Entity  will  be  able  to  pay  its  debts  as  and  when  they  become  due  and  payable.  this  declaration  has  been  made  after  receiving  the  declaration  required  to  be  made  to  the  directors  in  accordance  with  section  295A  of  the  Corporations  Act  2001  for  the  financial  year  ended 30 June 2015.  (b) (c) (d) On behalf of the Board  C. Ringrose  Director  Perth, WA  18 September 2015  ‐ 56 ‐ For personal use only                                                 Ernst & Young 11 Mounts Bay Road Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Independent auditor's report to the members of Cullen Resources Limited We have audited the accompanying financial report of Cullen Resources Limited, which comprises the consolidated statement of financial position as at 30 June 2015, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration of the consolidated entity comprising the company and the entities it controlled at the year's end or from time to time during the financial year. Directors' responsibility for the financial report The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal controls as the directors determine are necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards. Auditor's responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entity's preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independence In conducting our audit we have complied with the independence requirements of the Corporations Act 2001. We have given to the directors of the company a written Auditor’s Independence Declaration, a copy of which is included in the directors’ report. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation MH:JH:CULLEN:004 For personal use only Opinion In our opinion: a. the financial report of Cullen Resources Limited is in accordance with the Corporations Act 2001, including: i. ii. giving a true and fair view of the consolidated entity's financial position as at 30 June 2015 and of its performance for the year ended on that date; and complying with Australian Accounting Standards and the Corporations Regulations 2001; and b. the financial report also complies with International Financial Reporting Standards as disclosed in Note 1. Report on the remuneration report We have audited the Remuneration Report included in the directors' report for the year ended 30 June 2015. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Opinion In our opinion, the Remuneration Report of Cullen Resources Limited for the year ended 30 June 2015, complies with section 300A of the Corporations Act 2001. Emphasis of matter Without qualifying our opinion, we draw attention to Note 1 in the financial report, which describes the principal conditions that raise doubt about the consolidated entity’s ability to continue as a going concern. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the consolidated entity’s ability to continue as a going concern and therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business. Ernst & Young V L Hoang Partner Perth 18 September 2015 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation MH:JH:CULLEN:004 For personal use only CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015    SHAREHOLDER INFORMATION  CAPITAL STRUCTURE  As at 16 September 2015, the company had the following securities on issue:  Issued Capital  Top 20 Shareholders  Total holding of twenty largest shareholders  % of total shares on issue  Distribution of shareholders  1 ‐ 1,000 shares  1,001 ‐ 5,000 shares  5,001 ‐ 10,000 shares  10,001 ‐ 100,000 shares  100,001 and over  Total  Fully paid  Ordinary shares  1,378,469,841  609,300,538  44.2%  168  174  345  1,484  840  3,011  Unmarketable Parcels as at 16 September 2015  Minimum $500.00                  2,237  OPTIONS   As at 16 September 2015, 26,000,000 unissued shares in respect of options were outstanding.  These are as follows:  Number    6,000,000  20,000,000  Exercise Price  $0.023  $0.016  Expiry Date  31 May 2017  30 November 2017  SUBSTANTIAL SHAREHOLDERS  The company has two Substantial Shareholders as at 16 September 2015  Name  Perth  Capital  Pty  Ltd,   Wythenshawe   Pty Ltd & Associates  Baosteel Group Corporation & Aurizon  Holdings Limited  %  20.84  No. of shares  282,246,839  7.4  102,343,426  ‐ 59 ‐ For personal use only                                               CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2015  TWENTY LARGEST SHAREHOLDERS   The names of the twenty holders of the fully paid shares at 16 September 2015 are listed below:  Name  Perth Capital Pty Ltd  Penoir Pty Ltd  Glyde Street Nominees Pty Ltd   Perth Capital Pty Ltd  Warramboo Holdings Pty Ltd  Rojo Nero Capital Pty Ltd  Brisbane Investments  I Ltd  Brisbane Investments II Ltd  Mr Nan Ze Xu  Kitchsmith Pty Ltd  Innerleithen Pty Ltd  Warramboo Holdings Pty Ltd  Chiatta Pty Ltd  CM Super Fund Pty Ltd  Bellarine Gold Pty Ltd  A N Superannuation Pty Ltd  Wythenshawe Pty Ltd  Aquila Resources Limited  Lindglade Enterprises Pty Ltd  W L Houghton Pty Ltd  Total  No. of Shares  118,440,797  72,000,000  41,661,655  41,465,084  38,955,385  30,063,898  25,411,350  25,411,349  24,395,377  23,166,658  21,662,499  21,606,395  20,947,370  20,000,000  19,805,000  17,947,370  11,947,370  11,846,603  11,619,008  10,947,370  % Held  Rank  8.59  5.22  3.02  3.01  2.83  2.18  1.84  1.84  1.77  1.68  1.57  1.57  1.52  1.45  1.44  1.30  0.87  0.86  0.84  0.79  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  609,300,538  44.20  VOTING RIGHTS  Every  member  present  in  person  or  by  representative  shall  on  a  show  of  hands  have  one  vote,  and  on  a  poll  every member present in person or by representative, proxy or attorney shall have one vote in respect of each  fully paid share held by him.  ‐ 60 ‐ For personal use only                                                   For personal use only

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