Equus Mining Limited Annual Report 2018

FY2018 Annual Report · Equus Mining Limited

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19 October 2018

The Manager Companies
ASX Limited
20 Bridge Street
SYDNEY NSW 2000

Dear Sir/Madam

(81 pages by email)

ANNUAL REPORT AND NOTICE OF AGM

In accordance with Listing Rule 4.7 and 3.17, I attach the Company’s Annual Report for the year ended 30
June 2018 and the Company’s Notice of Annual General Meeting to be held at 11 am on 28 November 2018.

Yours sincerely

Marcelo Mora
Company Secretary

pjn9633

Equus Mining Limited ABN 44 065 212 679
Level 2, 66 Hunter Street, Sydney NSW 2000, Australia T +61 2 9300 3366 F +61 2 9221 6333
E: info@equusmining.com W: www.equusmining.com

2018 Annual Report

EQUUS MINING LIMITED
and its controlled entities

ABN 44 065 212 679

Contents

Corporate Directory

Chairman’s Letter

Review of Operations

Corporate Governance Statement

Directors’ Report

Lead Auditor’s Independence Declaration

Consolidated Statement of Profit or Loss and Other Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Financial Statements

Directors’ Declaration

Independent Auditor’s Report

Additional Stock Exchange Information

Corporate Directory

Non-Executive Chairman
Managing Director
Non-Executive Director
Non-Executive Director

Share Registry
Advanced Share Registry Limited
110 Stirling Highway
Nedlands, Western Australia 6009
Telephone:
Facsimile:

(61 8) 9389 8033
(61 8) 9262 3723

Directors
Mark Lochtenberg
Edward Leschke
Juerg Walker
Robert Yeates

Company Secretary
Marcelo Mora

Principal Place of Business and Registered Office
Level 2
66 Hunter Street
Sydney NSW 2000
Australia
Telephone:
Facsimile:
Email address:
Web site:

(61 2) 9300 3366
(61 2) 9221 6333
info@equusmining.com
www.equusmining.com

Auditors
KPMG
Level 16, Riparian Plaza
71 Eagle Street
Brisbane QLD 4000

Stock Exchange Listings
Australian Securities Exchange
(Code – EQE)
Berlin and Frankfurt Securities Exchanges
(Third Market Segment)

2018 Annual ReportTo that end, Equus continues to assess new and
prospective opportunities within Chile, in particular
those opportunities where the entry costs are minimal
for a quality project. Unlike Australia, Chile’s secure
licencing system with no minimum exploration
expenditure requirements means there is not the same
time pressure to spend large amounts of capital.

Equity markets for the junior resources sector have
continued to be subdued throughout most of the
2018 fiscal year. Reasonable world growth coupled
with an absence of new metal supply (stemming from
a dearth of new mining projects across the globe) did
see an improvement in commodity prices throughout
the year however macro demand factors such as trade
protectionism initiatives have seen commodity price
paired back.

With Los Domos shaping up to be a high quality project
and the anticipated eventual return of improving
commodity prices and investor sentiment, I am
optimistic about what lies ahead for our growing
Company.

Finally, on behalf of the Board of Directors I would like
to thank our many shareholders for their continued
support as we look forward to what promises to be a
highly exciting next 12 months.

Mark H. Lochtenberg
Chairman

Chairman’s Letter

Dear Fellow Shareholders,

Equus Mining’s focus during the year was exploration
drilling of the Los Domos polymetallic project and early
stage surface exploration work at the newly acquired
Cerro Diablo polymetallic project, both located in Chile’s
XI Region and adjacent to the Cerro Bayo silver-gold mine.

In addition to the Los Domos and Cerro Diablo project’s
significant prospectivity, the position of these projects
is consistent with the Company’s focus on developing
natural resource projects strategically located near
existing mines and other infrastructure.

Approximately half of the 8,000m drilled to date at Los
Domos has been on the T7 Target where significant and
continuous high-grade polymetallic mineralisation has
been defined and, with additional drilling, should lead
to an inaugural JORC resource being defined as well as
testing for extensions. The 9 other defined structures at
Los Domos remain very attractive targets having either
returned initial high-grade gold and silver mineralisation
and base metal values in initial drilling and surface
sampling, or anomalous gold and silver values and
elevated epithermal pathfinder metals typically found
above targe epithermal precious metal zones.

The surface exploration activities at Cerro Diablo
has resulted in excellent and encouraging high grade
precious and base metals results with several targets
having been defined. This project is now ready for
preliminary drilling.

The Republic of Chile ranks as one of the leading
destinations globally for mineral explorers and miners
due to the country’s sound licensing system and high
mineral prospectivity. Despite Chile’s leading position
in the global minerals industry the paucity of previous
modern exploration in many areas close to existing
mining activities demonstrates what Chile has to
offer in terms of attractive mineral exploration and
development opportunities.

Equus Mining LimitedReview of Operations

MANAGING DIRECTOR’S REVIEW OF
OPERATIONS

Corporate Activities

Los Domos and Cerro Diablo Au-Ag-Zn-Pb-Cu Projects

The Los Domos gold-silver project is well located 15km
south of the township of Chile Chico and adjacent to
the Cerro Bayo gold-silver mine. The Cerro Diablo project
is located 25 kilometres north-northwest of the mine.
See Figure 1 & 2. This mine was until recently producing
approximately 2 Mozpa of silver and 20 Kozpa gold
or approximately two thirds nominal flotation plant
capacity of 500ktpa throughput. Production has been
suspended indefinitely and force majeure declared
following a mine flooding event in June 2017. Resulting
in crippling unemployment throughout the region
(>50% unemployment in Chile Chico). Unlike Australia,
the system of unemployment benefits is very limited.
For these reasons, the Chilean Ministry of the Economy
has identified Los Domos as a sustainable investment
project and one that is key for generating economic
growth in Chile’s XI region (see www.economia.gob.cl/
oficina-de-gestion-de-proyectos-sustentables). With an
altitude range of 800m to 1,200m and a dry, moderate
climate, the Los Domos Project is able to be explored
year-round. Cerro Diablo has a similar altitude range
with slightly higher precipitation.

During the first half of the year ended 30 June 2018, the
Group completed a systematic surface sampling and
2,091 metres drilling program and earned the rights to
51% interest in Los Domos Gold-Silver project located in
Chile’s XI region, adjacent to the Cerro Bayo gold-silver
mine.

During February 2018, the Group was granted the
exploration licences over the prospective Cerro Diablo
precious and base metal project. The Cerro Diablo
project was secured through making relatively low cost
Exploration Licence applications over an area of 4,554
hectares. The project is located near existing mine
and other infrastructure and augments the potential
synergies with the Company’s nearby Los Domos project.

On 20 September 2017, the Company issued 6,974,618
new ordinary shares by the exercise of 6,974,618
unlisted options at an exercise price of $0.02 per option
raising $139,492 before costs.

On 27 October 2017, the Company issued 64,549,828
new ordinary shares under a placement at an issue
price of $0.037 per share for a total consideration of
$2,388,344 before costs.

On 15 November 2017, the Company issued 7,054,054
new ordinary shares under a placement at an issue price
of $0.037 per share for a total consideration of $261,000
before costs.

On 15 December 2017, the Company issued 4,554,054
new ordinary shares under a placement at an issue price
of $0.037 per share for a total consideration of $168,500
before costs.

On 18 December 2017, the Company issued 1,743,655
new ordinary shares by the exercise of 1,743,655
unlisted options at an exercise price of $0.02 per option
raising $34,873 before costs.

On 1 May 2018, the Company issued 1,281,727 new
ordinary shares by the exercise of 1,281,727 unlisted
options at an exercise price of $0.02 per option raising
$25,634 before costs.

2018 Annual ReportReview of Operations

Los Domos and Cerro Diablo – located within a world
class mineral province

The Cerro Diablo precious and base metal project, like
Los Domos, is located within the world class Deseado
Massif mineral province. See Figure 1. This mineral
province includes the Santa Cruz Province mining
district in Argentina and the Cerro Bayo mine district
in Chile, the latter of which is where EQE’s projects
are located, and throughout which mineralisation is
dominantly hosted by Jurassic age volcanic rocks.

The Deseado Massive hosts large gold and silver deposits
in Argentina including Cerro Vanguardia, Cerro Negro,
San Jose & Cerro Moro and has a current combined 29.8
Moz AuEq known resource endowment. See Table 1.

Gold
(Moz)

Silver
(Moz)

Gold Eq.
(Moz)

Cerro Vanguardia

Cerro Negro

San Jose (Huevos Verdes)

Cerro Moro

Cap Oeste-Cose

Manantial Espejo

Cerro Bayo

Joaquin

Las Calandrias

Martha

Virginia-Santa Rita

Don Nicolas

Lomada de Leiva

8.0

6.7

1.4

1.2

0.8

0.7

0.0

0.8

0.0

0.3

0.1

100

9.5

7.4

2.9

2.3

1.7

0.9

0.8

0.4

0.2

0.1

Table 1. Projects Located in the Deseado Massif

21.2

585

29.8

Figure 1. Cerro Diablo and Los Domos projects are both located within the Deseado Massif

Equus Mining LimitedReview of Operations

Figure 2. Los Domos and Cerro Diablo Projects Location in Chile’s Region XI

2018 Annual ReportReview of Operations

Los Domos is a High-Grade Discovery

EQE carried out reconnaissance work from mid-
2016 to mid-2017 and identified at least 10 major
target structures with a cumulative strike length
approximately 12km. These structures host epithermal
sheeted and stockwork veins and hydrothermal breccias

and show classic epithermal vertical zonation. A total
of 8,000 has been drilled to date of which just over half
has focussed on the T7 Target where a significant Au-Ag-
Zn-Pb mineralised body has been discovered. Numerous
high-grade drill intercepts include:

LDD-035 intercepted down hole 44.85m @ 6.37 g/t AuEq
Including 23.30m @ 10.84 g/t AuEq
Including 9.70m @ 17.92 g/t AuEq

LDD-001 intercepted down hole 25.89m @ 9.82 g/t AuEq
Including 18.94m @ 13.28 g/t AuEq
Including 8.39m @ 27.43 g/t AuEq

LDD-031 intercepted down hole 24.80m @ 1.96 g/t AuEq

Including 2.90m @ 12.97g/t AuEq

LDD-040 intercepted down hole 20.90m @ 1.96 g/t AuEq

Including 7.50m @ 4.19 g/t AuEq
Including 3.95m @ 7.29 g/t AuEq

LDD-012 intercepted down hole 26.05m @ 1.40 g/t AuEq

LDD-032 intercepted down hole 14.80m @ 4.80 g/t AuEq

Including 5.80m @ 3.56g/t AuEq

Including 6.90m @ 9.45g/t AuEq
Including 2.70m @ 23.46g/t AuEq

LDD-033 intercepted down hole 8.25m @ 5.99 g/t AuEq
Including 2.35m @ 17.91g/t AuEq

Los Domos in Detail

Drilling to date at the Los Domos T7 Target has defined
significant and continuous mineralisation over a
strike length of 600m and an average true width of
approximately 7m for the main intercepts. Importantly,
the higher-grade mineralised interval is contained within
a 15-30m wide, true width interval of strongly anomalous
precious and base metal rich mineralisation. This indicates
the potential for significant magnitude, particularly at
depth and along strike of portions of the host structure,
which remains untested. Several significantly mineralised,
parallel structures were also intersected.

The majority of drilling completed at the target,
has been in the upper levels of the T7 structure,
predominately less than 100m depth below surface, with
the deepest intercept to date recorded at approximately
250m below surface. Average weighted grade to date of
the main intercepts in all T7 drill holes is 5.3g/t AuEq.
See T7 Target long section in Figure 3 and intercept
assay detail in Table 2.

The T7 target structure hosts a polymetallic multiphase,
Intermediate Sulphidation epithermal style of
mineralisation with significant values of Au, Ag, Pb, Zn
and Cu, and in more recent deeper drill holes, increasing
proportions of Zn and Cu. Preliminary interpretations
of metal zonation from the more recent results suggest
that a Au and Zn rich mineralisation phase is becoming

LDD-039 intercepted down hole 40.18m @ 0.90 g/t AuEq

Including 16.50m @ 1.32g/t AuEq

LDD-029 intercepted down hole 21.51m @ 1.62 g/t AuEq

Including 4.55m @ 4.05g/t AuEq

increasingly dominate to the northwest, towards an
anticlinal hinge zone, and at depth along the T7 target
structure in more competent lithologies which are more
favourable for hosting wider, high grade mineralisation.

Assay results to date have intercepted mineralisation
where either Au or Zn (previously Pb) is the dominant
metal by value. This, together with recently completed
flotation tests, allows assays to be reported in both Au
and Zn equivalents so as to more simply demonstrate
overall metal values. See T7 Target mineral intensity
long section in Figure 4 and intercept assay equivalent
detail in Table 2.

The T7 target structure is a major west-northwest
trending, steeply north east dipping fault structure that
has been mapped over an approximate strike length
of 1,000m. The T7 target structure remains open along
strike in both directions, and particularly at depth down
plunge towards north-west.

The T7 target structure is one of at least 10 major
structures defined throughout the Los Domos project
that host a cumulative strike length of mapped
epithermal veining of approximately 12km. To date,
these structures have returned wide, highly anomalous
mineralised intervals from scout drilling (individual
intervals of up to 3.46 g/t Au and 318 g/t Ag) which were

Equus Mining Limited
Review of Operations

intersected at relatively higher elevations as compared
to those at T7. The understanding of the zonation of
high grade mineralisation at T7 will be used to guide
future drilling at optimum elevations throughout these
structures. This exploration methodology has been
successfully executed recently at the Silica Cap prospect
of Goldcorp´s Cerro Negro Mine, Argentina. (www.
goldcorp.com/English/investors/news-releases/news-

release-details/2018/Goldcorp-Provides-Second-Quarter-
2018-Exploration-Update/default.aspx).

The broad dimensions of the mineralisation outlined to
date at Los Domos is becoming increasingly analogous to
a number of other well known, large epithermal deposits
such as the La Blanca epithermal vein deposit (Palmarejo
project, Mexico).

Figure 3. Long section of T7 Target with interpreted true widths and Au equivalent grades

2018 Annual ReportReview of Operations

Figure 4. Long Section Mineral Intensity of T7 Target, Los Domos project – preliminary Au equivalent grade x m distribution

Image 1. Drilling action at Los Domos

Equus Mining LimitedHole ID

7A
7B
7C
LDD-001
incl
incl

LDD-003
incl
and

LDD-009

incl
incl
LDD-010

LDD-011

incl
LDD-012
incl
incl

LDD-028
LDD-029
incl
incl
LDD-030
incl

incl

LDD-031

incl
incl
LDD-032
incl
incl
LDD-033
incl
incl
LDD-035
incl.
incl.
incl.
LDD-036
incl
LDD-037
incl
LDD-038
incl
LDD-039

incl
incl
LDD-040

incl
incl
LDD-041

incl
and

From
m
0.00
0.00
0.00
30.16
35.20
45.75
130.72
68.00
68.00
73.50
138.75
5.45
20.15
47.50
50.75
50.75
9.00
25.20
29.60
44.25
75.90
85.00
89.90
93.60
104.20
104.20
104.20
116.00
128.90
237.65
324.09
340.45
342.50
23.90
24.90
68.70
68.70
91.55
130.65
89.70
100.00
113.10
113.10
39.10
39.10
42.70
48.50
48.50
50.55
129.90
151.45
151.45
151.45
61.75
66.45
81.55
87.55
57.75
63.55
101.50
111.90
167.65
205.00
225.60
245.00
245.00
30.39
81.00
106.05
120.00
122.00
10.25
79.30
79.30
86.80
175.25
217.60

To
m
6.00
7.70
7.00
56.05
54.14
54.14
137.00
76.45
70.20
76.45
140.05
6.85
24.70
54.60
54.60
52.25
9.60
26.30
31.35
49.15
78.80
86.60
97.35
97.35
130.25
110.00
106.90
117.45
130.25
242.50
345.60
345.00
344.40
30.30
27.60
72.15
70.15
94.20
135.50
90.70
124.80
116.00
114.40
53.90
46.00
45.40
56.75
55.90
52.90
174.75
174.75
164.40
161.15
72.50
71.75
92.65
91.65
c
67.30
102.90
113.70
169.60
209.00
265.78
261.50
253.60
33.50
81.86
126.95
127.50
125.95
10.80
95.00
81.75
93.95
178.00
220.30

Intercept True Width

m
6.00
6.00
6.00
25.89
18.94
8.39
6.28
8.45
2.20
2.95
1.30
1.40
4.55
7.10
3.85
1.50
0.60
1.10
1.75
4.90
2.90
1.60
7.45
3.75
26.05
5.80
2.70
1.45
1.35
4.85
21.51
4.55
1.90
6.40
2.70
3.45
1.45
2.65
4.85
1.00
24.80
2.90
1.30
14.80
6.90
2.70
8.25
7.40
2.35
44.85
23.30
12.95
9.70
10.75
5.30
11.10
4.10
11.70
3.75
1.40
1.80
1.95
4.00
40.18
16.50
8.60
3.11
0.86
20.90
7.50
3.95
0.55
15.70
2.45
7.15
2.75
2.70

m
6.00
6.00
6.00
25.01
18.29
8.10
6.07
7.94
2.07
2.77
1.22
1.35
4.39
6.86
3.72
1.45
0.52
0.95
1.52
4.24
2.80
1.55
7.20
3.62
25.16
5.60
2.61
1.40
4.24
4.68
15.73
3.22
1.34
4.53
1.91
2.44
1.03
1.87
3.43
0.71
17.54
2.05
0.92
10.47
4.88
1.91
5.83
5.23
1.66
31.71
16.48
9.16
6.86
5.38
2.65
6.37
2.35
6.71
2.15
0.59
0.76
0.82
1.69
16.98
6.97
3.63
2.20
0.61
14.78
5.30
2.79
0.19
5.37
0.84
2.45
0.94
0.92

Table 2. T7 Target Drill Intercepts

Review of Operations

AuEq(x)
g/t
5.56
3.62
3.44
9.82
13.28
27.43
1.05
3.17
10.17
1.26
2.16
2.13
0.78
1.44
1.80
2.97
2.63
1.40
1.35
2.54
1.40
0.86
1.22
1.82
1.40
3.56
6.52
2.61
2.39
0.80
1.62
4.05
6.31
2.77
5.74
1.04
2.03
1.87
1.96
0.89
1.96
12.97
28.42
4.80
9.45
23.46
5.99
6.61
17.91
6.37
10.84
14.96
17.92
2.47
3.95
2.82
6.31
1.99
5.35
0.89
1.11
0.79
1.16
0.90
1.32
1.49
2.00
1.19
1.96
4.19
7.29
4.23
0.68
1.06
1.00
1.46
1.61

ZnEq(x)
%
5.44
3.54
3.36
9.60
12.99
26.82
1.17
3.10
9.94
1.23
2.12
2.09
0.76
1.41
1.76
2.90
2.57
1.37
1.32
2.49
1.37
0.84
1.19
1.78
1.37
3.48
6.38
2.55
2.33
0.78
1.59
3.96
6.17
2.72
2.72
1.02
1.98
1.83
1.91
0.87
1.91
12.68
27.79
4.69
9.24
22.94
5.86
6.46
17.52
6.23
10.60
14.63
17.52
2.41
3.86
2.76
6.17
1.94
5.23
0.87
1.08
0.77
1.14
0.88
1.19
1.32
1.96
1.16
1.91
4.10
7.13
4.13
0.66
1.03
0.97
1.43
1.58

Au
g/t
2.52
1.18
0.82
0.38
0.48
0.71
0.58
0.32
0.19
0.62
0.62
0.56
0.30
0.49
0.65
0.75
0.26
0.12
0.11
0.11
0.26
0.12
0.11
0.11
0.38
0.09
0.12
1.04
2.14
0.35
0.45
1.85
3.37
0.92
1.96
0.59
1.16
0.85
0.84
0.30
1.64
12.45
27.42
0.26
0.54
1.32
0.25
0.28
0.67
1.00
1.49
2.18
2.58
0.49
0.78
0.63
1.34
0.37
0.96
0.49
0.74
0.25
0.09
0.08
0.12
0.19
0.05
0.73
0.39
0.66
1.14
0.69
0.29
0.22
0.48
0.98
0.20

Ag
g/t
123
42
18
87
117
248
9
15
48
6
11
12
4
9
10
13
7
6
12
19
7
6
12
19
8
21
36
12
6
6
14
35
45
22
44
9
18
7
9
2
4
16
32
26
53
132
35
38
104
64
109
157
181
9
14
18
44
23
66
5
4
11
23
9
14
14
6
11
13
32
56
45
4
5
7
8
39

Pb
%
1.32
2.21
1.40
7.10
9.65
20.72
0.36
1.18
4.37
0.12
0.26
1.20
0.23
0.45
0.64
1.31
0.58
0.38
0.68
1.17
0.58
0.38
0.68
1.17
0.19
0.54
0.82
0.17
0.07
0.20
0.39
0.72
0.81
0.32
0.69
0.20
0.42
0.09
0.33
0.06
0.06
0.02
0.04
2.23
4.62
11.42
1.31
1.44
3.85
1.38
2.41
3.49
4.15
0.47
0.69
1.42
3.63
0.31
0.80
0.05
0.18
0.02
0.06
0.17
0.18
0.14
1.28
0.08
0.37
0.86
1.58
0.51
0.12
0.10
0.21
0.02
0.01

Zn
%
0.08
0.11
1.26
2.68
3.62
7.07
0.19
1.68
5.82
0.44
1.14
0.47
0.24
0.47
0.50
1.01
0.58
0.35
0.39
0.51
0.58
0.35
0.39
0.51
0.74
2.67
5.10
1.22
0.10
0.15
0.48
0.54
0.70
0.68
1.39
0.12
0.19
0.70
0.61
0.50
0.15
0.11
0.21
2.29
4.30
10.71
3.92
4.33
11.87
2.90
5.22
6.95
8.48
1.37
2.25
0.67
1.13
0.58
1.49
0.22
0.10
0.03
0.06
0.37
0.55
0.65
0.87
0.14
0.98
2.18
3.74
2.34
0.16
0.58
0.13
0.04
0.03

Cu
%

s
e
d
a
r
g
u
C
t
n
a
c
i
f
i
n
g
i
s
o
N

0.03
0.11
0.35
0.57
0.35
0.72
0.03
0.05
0.08
0.06
0.00
0.03
0.09
0.15
0.07
0.13
0.32
0.13
0.14
0.35
0.21
0.30
0.34
0.41
0.05
0.08
0.10
0.24
0.27
0.76
0.04
0.04
0.21
0.38
0.11
0.17
0.19
0.02
0.04
0.86
0.71
0.61
0.03
0.04
0.06
0.07
0.19
0.48

2018 Annual Report

Review of Operations

Figure 5. Plan map showing multiple epithermal vein structures at Los Domos

Equus Mining LimitedReview of Operations

Cerro Diablo Cu-Au-Ag-Zn-Pb Project

The Cerro Diablo project was secured via strategic open
ground staking of a 4,554-hectare area hosting zones
of extensive hydrothermal alteration during late 2017.
Mapping and sampling has discovered significant
widespread high-grade mineralisation at the Cerro
Diablo precious and base metal project. See Figures 6 &
7 and Table 3.

Mineralisation at Cerro Diablo is interpreted to be of a
largely structurally controlled intermediate sulphidation
epithermal precious and base metal style. The project
area features extensive hydrothermal argillic alteration
and hosts outcropping precious–base metal veins within
Jurassic aged felsic domes and volcanics (See Images 2,
3 & 4). The project is interpreted to be located within
a NNW trending structural corridor featuring dextral
strike slip faulting which has resulted in preferentially
orientated NNE dilational structures hosting precious
and base metal mineralisation.

Cerro Diablo has not received any modern-day exploration
despite numerous, metallic mineral occurrences having
been recorded historically. Individual veins up to 10m
wide have been mapped over +300m strike extensions.
Recent sampling and mapping has focussed on an area
with dimensions 2,000m x 1,000m where widespread
outcropping primary high grade mineralisation has never
been exploited. There are two small historic mines, namely
Mina Alón and Mina Las Cáscaras, located within the
southern area of the Cerro Diablo project.

Access to the Cerro Diablo project is via 10km of
established roads and tracks from the township of
Puerto Ibanez located on the north shore of Lake General
Carrera across which mine concentrates were historically
transported from the Cerro Bayo Mine to the export
port facilities at Puerto Aysen. Field work including
detailed mapping and rock chip sampling is continuing in
preparation for 1st phase drill testing in Q3/2018.

Image 2 & 3. Outcropping high grade copper mineralisation and high-grade silver- lead mineralisation

Image 4. Extensive hydrothermal argillic/FeOx alteration at Mineralised Zone 6, Cerro Diablo

2018 Annual ReportReview of Operations

Figure 6. Cerro Diablo project mineralised zones

Equus Mining LimitedReview of Operations

Mineralised Zone 1

Mineralised Zone 4

Sample
Number

D00071

D00024

D00082

D10114

D10119

D00072

D00074

D10123

D00070

D10043

Sample
Number

D10041

D10088

D10087

D00084

D10100

D00083

D10042

D10040

D00085

D10004

Sample
Number

D10049

D00026

D10048

D10039

D10050

D10035

D10038

D00030

D10046

D10036

Au ppm Ag ppm Cu %

Pb %

Zn %

5.40

3.93

2.51

0.01

2.16

0.07

0.09

0.67

0.36

0.00

6.2

12.2

1.6

10.4

1.9

14.6

32.7

2.6

4.1

3.0

0.00

1.33

0.00

0.05

0.17

0.01

0.02

0.06

0.02

0.09

0.03

1.97

0.20

0.22

0.35

0.27

0.00

0.01

0.00

0.01

0.00

0.29

0.02

0.00

0.01

0.23

Mineralised Zone 2

Au ppm Ag ppm Cu %

Pb %

Zn %

0.01

100.0

0.01

112.0

0.03

0.07

54.7

84.8

0.05

136.0

0.14

0.00

0.01

86.7

38.6

10.8

5.3

9.2

1.12

0.35

0.33

0.78

0.96

2.02

0.03

0.19

0.09

0.06

20.79

35.01

7.00

5.66

5.46

3.58

2.23

1.10

0.19

0.12

19.01

7.95

9.74

7.21

3.98

1.67

0.64

1.10

0.08

0.01

Mineralised Zone 3

Au ppm Ag ppm Cu %

Pb %

Zn %

0.53

0.03

1.76

0.12

1.73

0.04

0.07

0.01

0.04

11.7

34.1

33.7

7.1

13.7

5.0

5.2

25.9

26.4

2.5

6.79

0.64

2.20

2.37

1.10

1.70

0.97

0.70

0.20

0.40

0.01

8.18

0.24

0.01

0.04

0.00

0.01

0.02

2.31

0.07

0.01

0.02

0.01

Sample
Number

D10102

D10103

D10138

D10093

D10020

D10023

D00093

D10146

D10134

D10017

Sample
Number

D10143

D10148

D00089

D10030

D10027

D10012

D00063

D10014

D10142

D00068

Sample
Number

D10151

D00060

D00061

D10156

D10155

D10150

D00062

D00066

D10006

Au ppm Ag ppm Cu %

Pb %

Zn %

0.26

0.15

1.47

1.35

0.00

0.21

0.19

0.01

0.13

0.03

30.8

24.6

31.1

0.2

8.3

0.4

1.5

0.7

0.5

1.6

20.06

16.20

2.69

0.00

0.06

0.01

0.07

0.02

0.05

0.17

0.11

0.06

0.00

0.36

0.01

0.00

0.01

0.38

0.18

0.00

0.01

0.03

0.00

0.01

0.00

0.01

Mineralised Zone 5

Au ppm Ag ppm Cu %

Pb %

Zn %

0.01

0.12

0.02

0.03

0.05

0.02

0.00

0.01

0.02

5.2

25.5

4.3

11.6

17.1

2.8

4.0

0.3

1.1

3.0

0.32

0.00

0.01

0.04

0.03

0.01

0.00

0.06

0.00

0.01

0.08

0.52

0.19

0.02

0.07

0.01

0.06

0.00

0.02

0.20

0.17

0.02

0.01

0.13

0.00

0.01

Mineralised Zone 6

Au ppm Ag ppm Cu %

Pb %

Zn %

0.02

4.91

1.36

1.14

0.97

0.38

0.10

0.11

0.07

9.2

3.8

2.7

2.2

0.5

4.0

2.4

3.3

6.9

0.05

0.01

0.00

0.01

0.00

0.01

0.02

1.45

0.06

0.01

0.07

0.01

0.10

0.25

0.14

0.10

8.47

0.00

0.01

0.00

0.02

0.01

0.00

D00058

0.13

1.8

0.01

0.00

Table 3. Cerro Diablo surface rock chip sample results – precious-base metal values from key mineralised zones

2018 Annual ReportReview of Operations

Figure 7. Cerro Diablo project

Equus Mining LimitedReview of Operations

Mina Rica Thermal Coal Project

No Material Changes

Equus Mining has continued to maintain a presence
in the Magallanes coal basin, both through existing
exploration licences and making new exploration
licence applications. Equus Mining is assessing its
options in progressing its thermal coal assets. While
this assessment takes place the Group has impaired the
carrying value of its exploration asset relating to the
Carbones del Sur project.

Compliance statement

The information in this report that relates to
Exploration Results for the Los Domos Gold-Silver
project is based on information compiled by Damien
Koerber. Mr Koerber is a geological consultant to the
Company. Mr Koerber is a Member of the Australian
Institute of Geoscientists and has sufficient experience
which is relevant to the style of mineralisation and
type of deposits under consideration and to the
activities which he is undertaking to qualify as a
Competent Person as defined in the 2012 Edition of the
‘Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves’. Mr Koerber has
a beneficial interest as shareholder and Director of
Terrane Minerals SpA (‘vendor’) in Los Domos Gold-Silver
project and consents to the inclusion in this report of
the matters based on his information in the form and
context in which it appears.

The information in this report that relates to
Exploration Results for the Cerro Diablo precious and
base metal project is based on information compiled by
Jason Beckton. Mr Beckton is a geological consultant to
the Company. Mr Beckton is a Member of the Australian
Institute of Geoscientists and has sufficient experience
which is relevant to the style of mineralisation and
type of deposits under consideration and to the
activities which he is undertaking to qualify as a
Competent Person as defined in the 2012 Edition of the
‘Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves’. Mr Beckton has
a beneficial interest as shareholder of Equus Mining
Limited and consents to the inclusion in this report of
the matters based on his information in the form and
context in which it appears.

Equus Mining Limited confirms that it is not aware of
any new information or data that materially affects the
information included in this Annual Report and that all
information continues to apply.

(i) All the material assumptions underpinning exploration
results for sample numbers LD00001 to LD00102 are
outlined in Table 1 and Appendix 1 in the initial public
report titled Los Domos Gold-Silver project (see ASX
release dated 25 October 2016) and continue to apply and
have not materially changed.

(ii) All the material assumptions underpinning exploration
results for sample numbers LD00103 to LD00205 are
outlined in Table 1 and Appendix 1 in the December 2016
Quarterly Activities Report (see ASX release dated 31
January 2017) continue to apply and have not materially
changed.

(iii) All the material assumptions underpinning
exploration results for sample numbers LD00206 to
LD00382 are outlined in Table 1 and Appendix 1 in the
report titled Los Domos Gold-Silver Project High Grade
Assay Results (see ASX release dated 3 March 2017)
continue to apply and have not materially changed.

(iv) All the material assumptions underpinning
exploration results for sample numbers LD00283 to
LD00400 are outlined in Table 1 and Appendix 1 in the
report titled Los Domos Gold-Silver Project Yields Further
High-Grade Assay Results (see ASX release dated 31
March 2017) continue to apply and have not materially
changed.

(v) All the material assumptions underpinning exploration
results for sample numbers LDD0001 to LDD00050 are
outlined in Table 1 in the report titled Significant High-
Grade Assays From Shallow Depth Intercept In First Drill
Hole At Los Domos Gold-Silver Project (see ASX release
dated 12 July 2017) continue to apply and have not
materially changed.

(vi)Metallurgical recoveries for Intermediate Sulphidation
epithermal mineralisation are based on initial
metallurgical tests as outlined in a report titled Initial
Metallurgical Tests Show Potential for High Recoveries
and Grades of Silver, Lead and Zinc in Concentrates (see
ASX release dated 7 August 2017).

2018 Annual ReportReview of Operations

(vii) All the material assumptions underpinning exploration results for sample numbers LDD0051 to LDD00572 are
outlined in Table 1 in the report titled First Phase Drilling Confirms Potential For Large Scale Intermediate Sulphidation
Mineralised System At Los Domos Precious And Base Metal Project (see ASX release dated 10 October 2017) continue to
apply and have not materially changed.

(viii) All the material assumptions underpinning exploration results for sample numbers LDD0620 to LDD00789 are
outlined in Table 1 in the report titled 400M Mineralised Structure Defined at T7 Target and Commencement of 7,500M
Phase 2 Drill Programme at Los Domos Project (see ASX release dated 20 November 2017) continue to apply and have not
materially changed.

(ix) All the material assumptions underpinning exploration results for sample numbers LDD0791 to LDD01251 are
outlined in Table 1 in the report titled Significant Drill Defined Extensions of Ag, Pb, Zn, Au Mineralisation at T7 Target, Los
Domos Project (see ASX release dated 16 April 2018) continue to apply and have not materially changed.

(x) Gold and Zinc Equivalent Calculation Formulae & Assumptions – Intermediate Sulphidation Epithermal

AuE q ( g /t) =Au( g /t) + Pb(%) x

+Ag( g /t) x

+Zn(%) x

+Cu(%) x

Price per 1 Pb(%) x Pb Recovery(%)

Price per 1 Au(g/t) x Au Recovery(%)

Price per 1 Ag(g) x Ag Recovery(%)

Price per 1 Au(g/t) x Au Recovery(%)

Price per 1 Zn(%) x Zn Recovery(%)

Price per 1 Au(g/t) x Au Recovery(%)

Price per 1 Cu(%) x Cu Recovery(%)

Price per 1 Au(g/t) x Au Recovery(%)

ZnEq(%) = Zn(%) + Au( g/t) x

+Ag( g/t) x

+Pb(%) x

+Cu(%) x

Price per 1 Au(%) x Pb Recovery(%)

Price per 1 Zn(g/t) x Zn Recovery(%)

Price per 1 Ag(g) x Ag Recovery(%)

Price per 1 Zn(g/t) x Zn Recovery(%)

Price per 1 Pb(%) x Pb Recovery(%)

Price per 1 Zn(g/t) x Zn Recovery(%)

Price per 1 Cu(%) x Cu Recovery(%)

Price per 1 Zn(g/t) x Zn Recovery(%)

Price *

Recovery

Metal

Gold
Silver

Lead

Zinc

US$1200 per ounce
US$18 per ounce

US$2700 per tonne

US$3700 per tonne

Copper

US$6300 per tonne

93.2%
99.6%

99.7%

99.4%

90.0%

Recovery weighted 1 Au g/t : 1 Ag g/t price ratio = 1 : 62.4

Recovery weighted 1 Au g/t : 1 Pb% price ratio = 1 : 1.34

Recovery weighted 1 Au g/t : 1 Zn% price ratio = 1 : 0.98

Recovery weighted 1 Au g/t : 1 Cu% price ratio = 1 : 0.63

Recovery weighted 1 Zn% : 1 Ag g/t price ratio = 1 : 63.8

Recovery weighted 1 Zn% : 1 Au g/t price ratio = 1 : 1.02

Recovery weighted 1 Zn% : 1 Pb% price ratio = 1 : 1.37

Recovery weighted 1 Zn% : 1 Cu% price ratio = 1 : 0.65

*Metal prices are of July 2018

Metallurgical recoveries Au, Ag, Pb and Zn are based on
initial metallurgical tests as outlined in a report titled Initial
Metallurgical Tests Show Potential for High Recoveries and
Grades of Silver, Lead and Zinc in Concentrates (see ASX
release dated 7 August 2017). Quantitative evaluation of
minerals by scanning electron microscopy has determined
that Cu is contained within chalcopyrite which is readable
recovered by standard floatation techniques and a
relative lower 90% recovery factor has been assumed. It is
EQE’s opinion that all the elements included in the metal
equivalents calculation have a reasonable potential to be
recovered and sold. Drilling intercepts across the T7 Target
structure shows differing dominant metal bearing zones.
The varying distribution of the different dominant metals
is interpreted to be both a function of the differing vertical
depth within the epithermal system and differing time phases
of mineralisation emplacement. As such, management have
opted to report results on both an Au and Zn equivalent basis
as those two metals are currently the most dominant at
the T7 target in accordance with JORC reporting standards.
If subsequent drilling intersects mineralization whereby a
new dominant metal emerges for a target, equivalent metal
reporting will change to reflect that new dominant metal.

Equus Mining LimitedReview of Operations
Directors’ Report

(xi) www.mandalayresources.com

CORPORATE GOVERNANCE STATEMENT

(xii) All the material assumptions underpinning
exploration results for sample numbers LDD01447 to
LDD01585 and LDD01630 to LDD01687 are outlined in
Table 1 in the report titled Significant Drill Results from
T7 Target, Los Domos Project (see ASX release dated 10
May 2018) continue to apply and have not materially
changed.

(xiii) All the material assumptions underpinning
exploration results for sample numbers LDD01586
to LDD1629, LDD1699 to LDD1751 and LDD1769 to
LDD1830 are outlined in Table 1 in the report titled
Further High-Grade Drill Results from T7 Target, Los
Domos Project (see ASX release dated 5 June 2018)
continue to apply and have not materially changed.

(xiv) All the material assumptions underpinning exploration
results for sample numbers LDD01831 to LDD1869 and
LDD1930 to LDD2337 are outlined in Table 1 in the report
titled Latest Drill Results Extend Defined Mineralisation at
Los Domos (see ASX release dated 6 August 2018) continue
to apply and have not materially changed.

(xv) All the material assumptions underpinning
exploration results for historical samples D00001 –
D00157 as outlined in Table 1 and Appendix 1 in the
report titled Newly Acquired Cerro Diablo Project
Augments Equus Mining’s Strategy at Los Domos (see ASX
release dated 19 February 2018) continue to apply and
have not materially changed.

(xvi) All the material assumptions underpinning
exploration results for historical samples D10001 –
D10085 as outlined in Table 1 and Appendix 1 in the
report titled Widespread Mineralisation Confirmed At
Newly Acquired Cerro Diablo Project (see ASX release
dated 18 April 2018) continue to apply and have not
materially changed.

(xvii) All the material assumptions underpinning
exploration results for historical samples D10087 – D10156
as outlined in Table 1 and Appendix 1 in the report titled
Further Widespread High-Grade Mineralisation Discovered
at Cerro Diablo Project (see ASX release dated 18 June
2018) continue to apply and have not materially changed.

Yours sincerely

Ted Leschke
Managing Director
Dated this 24th day of September 2018

The Board is committed to maintaining the highest
standards of Corporate Governance. Corporate
Governance is about having a set of core values and
behaviours that underpin the Company’s activities and
ensure transparency, fair dealing and protection of the
interests of stakeholders. The Company has reviewed its
corporate governance practices against the Corporate
Governance Principles and Recommendations (3rd
edition) published by the ASX Corporate Governance
Council.

The 2018 corporate governance statement is dated 24
September 2018 and reflects the corporate governance
practices throughout the 2018 financial year. The
board approved the 2018 corporate governance on
11 September 2018. A description of the Company’s
current corporate governance practices is set out in the
Company’s corporate governance statement, which can
be viewed at http://www.equusmining.com/corporate-
governance/.

2018 Annual ReportDirector’s Report

The Directors present their report, together with the consolidated financial statements of the
Group, comprising of Equus Mining Limited (‘Equus’ or ‘the Company’) and its controlled entities
for the financial year ended 30 June 2018 and the auditor’s report thereon.

Edward Jan Leschke, Managing Director
Director since 5 September 2012

Mr. Leschke graduated with a Bachelor of Applied
Science – Applied Geology degree from the Queensland
University of Technology. During a 23 year professional
career Mr Leschke initially worked as a mine geologist
at the Elura zinc-lead-silver mine in central New South
Wales as well as holding geological positions in a number
of locations such as the Central Queensland coal fields,
South Australia and Papua New Guinea.

Mr Leschke made the transition to the financial
sector specialising in mining investment, analysis
and corporate finance and has worked for a number
of financial institutions including BZW Stockbroking,
Aberdeen Asset Management and Shaw Stockbroking.
Mr Leschke has been responsible for the inception
of Equus Resources Ltd and the two wholly owned
subsidiaries in the Republic of Chile.

He has not served as a director of any other listed
company during the past three years.

Juerg Marcel Walker, Non-Executive Director
Director appointed 20 May 2002

Juerg Walker is a European portfolio manager and
investor. He has over 30 years’ experience in the
Swiss banking industry, operating his own portfolio
management company after leaving his position as
senior vice president of a private bank in Zurich.

He has not served as a director of any other listed
company during the past three years.

DIRECTORS

The names and details of the Directors in office during
or since the end of the previous financial year are as
follows. Directors were in office for the entire year
unless otherwise stated.

Mark Hamish Lochtenberg, Non-Executive Chairman
Director since 10 October 2014

Mr Lochtenberg graduated with a Bachelor of Law
(Hons) degree from Liverpool University, U.K. and has
been actively involved in the coal industry for more than
30 years.

Mark Lochtenberg is Non Executive Director of recently
listed Nickel Mines Limited and is the former Executive
Chairman and founding Managing Director of ASX-listed
Baralaba Coal Company Limited (formerly Cockatoo
Coal Limited). He was a principal architect of Cockatoo’s
inception and growth from an early-stage grassroots
explorer through to an emerging mainstream coal
producer. He was also formerly the co-head of Glencore
International AG’s worldwide coal division, where he
spent 13 years overseeing a range of trading activities
including the identification, due diligence, negotiation,
acquisition and aggregation of the coal project portfolio
that would become Xstrata Coal.

Prior to this Mark established a coal “swaps” market for
Bain Refco, (Deutsche bank) after having served as a
senior coal trader for Hansen Neuerburg AG and as coal
marketing manager for Peko Wallsend Limited.

He was Managing Director of Pacific American Coal
Limited and has previously been a Director of ASX-listed
Cumnock Coal Limited and of privately held United
Collieries Pty Limited and is currently a Director of
Australian Transport, Energy Corridor Pty Limited,
(ATEC).

He has not served as a director of any other listed
company during the past three years.

Equus Mining LimitedDirectors’ Report
Director’s Report

Robert Ainslie Yeates, Non-Executive Director
Director since 20 July 2015

DIRECTORS’ MEETINGS

Rob Yeates is a graduate of the University of NSW,
completing a Bachelor of Engineering (Honours 1) in
1971 and a PhD in 1977 and then an MBA in 1986 from
Newcastle University. He began his career with Peko
Wallsend working in a variety of roles including mining
engineering, project management, mine management
and marketing.

He became General Manager Marketing for Oakbridge
Pty Limited in 1989 following a merger with the Peko
Wallsend coal businesses and went on to become
Managing Director of Oakbridge, which was the largest
coal mining company in NSW at that time, operating one
open cut and five underground coal mines.

Dr Yeates also has gained operating, business
development and infrastructure experience as a
director of Port Waratah Coal Services (Newcastle
Port), Port Kembla Coal Terminal, Great Northern
Mining Corporation NL and Cyprus Australia Coal and
for the past 20 years has been principal of his own mine
management consultancy, providing a wide range of
technical, management and strategic planning services
to the mining industry. Until 2014 he was also Project
Director then CEO of Newcastle Coal Infrastructure
Group, which has developed and is operating coal export
facilities in Newcastle.

Dr Yeates was until 2015 and for the prior ten years a
director in ASX-listed Baralaba Coal Company Limited
(formerly Cockatoo Coal Limited), and since 2016 he
has been a director of Watagan Mining Ltd and in 2018
became a director of Montem Resources Limited.

He has not served as a director of any other listed
company during the past three years.

COMPANY SECRETARY

Marcelo Mora
Company Secretary since 16 October 2012

Marcelo Mora holds a Bachelor of Business degree and
Graduate Diploma of Applied Corporate Governance.
Mr Mora has been an accountant for more than 30 years
and has experience in resources and mining companies
both in Australia and internationally, providing financial
reporting and company secretarial services to a range of
publicly listed companies.

The number of Directors’ meetings and number of
meetings attended by each of the Directors (while they
were a Director) of the Company during the year are:

Director

Mark H. Lochtenberg

Edward J. Leschke

Juerg M. Walker

Robert A. Yeates

Enquiry

Board Meetings

Held

Attended

DIRECTORS’ INTERESTS

Directors’ beneficial shareholdings at the date of this
report are:

Director

Mark H. Lochtenberg

Edward J. Leschke

Juerg M. Walker

Robert A. Yeates

OPTION HOLDINGS

Fully Paid
Ordinary
Shares
31,360,781

Options
over ordinary
shares
-

34,768,889

8,297,861

2,590,909

Options granted to directors’ and officers’

The Company did not grant any options over unissued
ordinary shares during or since the end of the financial
year to directors as part of their remuneration. The
Directors do not hold any options over unissued shares
at the date of this report nor did they hold any at the
reporting date.

The Company has not granted any options over unissued
ordinary shares during or since the end of the financial
year to officers as part of their remuneration.

Unissued shares under option

At the date of this report, the Company does not have
options on issue over ordinary shares (2017: 8,718,273
options)

2018 Annual ReportDirectors’ Report

CORPORATE INFORMATION

Corporate Structure

Equus Mining Limited is a limited liability company that is incorporated and domiciled in Australia. It has prepared
a consolidated financial report incorporating the entities that it controlled during the financial year. The Group’s
structure at 30 June 2018 is outlined below.

EQUUS MINING LIMITED – GROUP STRUCTURE AT 30 JUNE 2018

Equus
Resources
Pty Ltd

Southern
Gold
SpA

0.1%

100%

Andean Coal
Pty Ltd

Minera
Carbones Del
Sur Limitada

The Companies referred above comprise the “Consolidated Entity” for the purposes of the Financial Statements
included in this report.

Equus Mining LimitedPRINCIPAL ACTIVITIES

The principal activity of the Group during the course
of the financial year was the drilling program at the
Company’s Los Domos gold-silver project located in
Chile’s XI region and earned the rights to 51% interest
in the project. The Company expects to complete the
formal transfer of the exploration licences for the Los
Domos project to the Group under the terms of the
farm-in agreement during the year ending 30 June 2019.
During the second half of the year, the Company was
granted the prospective exploration project over the
Cerro Diablo project over an area of 4,554 hectares.

FINANCIAL RESULTS

The consolidated loss after income tax attributable to
members of the Company for the year was $1,997,302
(2017: $899,548 loss).

REVIEW OF OPERATIONS

A review of the Group’s operations for the year ended
30 June 2018 is set out on pages 2 to 17 of this Annual
Report.

DIVIDENDS

The Directors do not recommend the payment of a
dividend in respect of the financial year ended 30 June
2018. No dividends have been paid or declared during
the financial year (2017 - $nil).

CHANGES IN STATE OF AFFAIRS

In the opinion of the Directors, significant changes in
the state of affairs of the Group that occurred during
the year ended 30 June 2018 were as follows:

•

The Group completed a systematic surface sampling
and 2,091 metres drilling program and earned the
rights to 51% interest in Los Domos Gold-Silver
project located in Chile’s XI region, adjacent to the
Cerro Bayo gold-silver mine.

Equus applied and was granted exploration licences
over the prospective Cerro Diablo precious and base
metal project over an area of 4,554 hectares and
the project is located in Chile’s XI region nearby the
Company’s Los Domos project.

• On 20 September 2017, the Company issued

6,974,618 new ordinary shares by the exercise of
6,974,618 unlisted options at an exercise price of
$0.02 per option raising $139,492 before costs.

Directors’ Report

• On 27 October 2017, the Company issued

64,549,828 new ordinary shares under a placement
at an issue price of $0.037 per share for a total
consideration of $2,388,344 before costs.

• On 15 November 2017, the Company issued

7,054,054 new ordinary shares under a placement
at an issue price of $0.037 per share for a total
consideration of $261,000 before costs.

• On 15 December 2017, the Company issued

4,554,054 new ordinary shares under a placement
at an issue price of $0.037 per share for a total
consideration of $168,500 before costs.

• On 18 December 2017, the Company issued

1,743,655 new ordinary shares by the exercise of
1,743,655 unlisted options at an exercise price of
$0.02 per option raising $34,873 before costs.

• On 18 April 2018, the Company issued 1,281,727
new ordinary shares by the exercise of 1,281,727
unlisted options at an exercise price of $0.02 per
option raising $25,634 before costs.

ENVIRONMENTAL REGULATIONS

The Group’s operations are not subject to any significant
environmental regulations under either Commonwealth
or State legislation.

The Group’s exploration activities in Chile are subject to
environmental laws, regulations and permit conditions
as they apply in the country of operation. There have
been no breaches of environmental laws or permit
conditions while conducting operations in Chile during
the year.

The Board believes that the Group has adequate systems
in place for the management of its environmental
requirements and is not aware of any breach of those
environmental requirements as they apply to the Group.

EVENTS SUBSEQUENT TO BALANCE DATE

No other matters or circumstances have 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 or unusual nature likely, in the opinion of the
Directors of the Company, to affect significantly the
operations of the Group, the results of those operations,
or the state of affairs of the Group, in future financial
years.

2018 Annual ReportDirectors’ Report

LIKELY DEVELOPMENTS

Equus considers growth as a vital strategy for the
Company taking into consideration its existing
operations in southern Chile. The addition of Cerro
Diablo precious and base metal project during 2018
augments the potential synergies with the Company’s
Los Domos gold-silver project adding substantial value
to the Company in addition to the coal exploration
licences in the Magellan Basin.

During the course of 2019 financial year, the Company
will focus on its drilling program at Los Domos, fieldwork
at Cerro Diablo and its ongoing strategic assessment
of its coal assets in the Magellan basin. The Directors
expect to receive results of future exploration programs
at Los Domos gold-silver project and Cerro Diablo, which
they will make public in accordance with ASX listing
rules once the information is received.

REMUNERATION REPORT - Audited

Principals of compensation - Audited

Further information as to likely developments in the
operations of the Group and the expected results of
those operations in subsequent years has not been
included in this report because disclosure of this
information would be likely to result in unreasonable
prejudice to the Group.

INDEMNIFICATION AND INSURANCE OF
OFFICERS AND AUDITORS

During or since the end of the financial, the Company
has not indemnified or made a relevant agreement to
indemnify an officer or auditor of the Company against
a liability incurred as such by an officer or auditor.
The Group has not paid or agreed to pay, a premium in
respect of a contract insuring against a liability incurred
by an officer or auditor.

Key management personnel have authority and responsibility for planning, directing and controlling the activities of
the Group. Key management personnel comprise the directors of the Company. No other employees have been deemed
to be key management personnel.

The remuneration policy of Directors and senior executives is to ensure the remuneration package properly reflects
the persons’ duties and responsibilities, and that remuneration is competitive in attracting, retaining and motivating
people of the highest quality. The Board is responsible for reviewing its own performance. The evaluation process is
designed to assess the Group’s business performance, whether long-term strategic objectives are being achieved, and
the achievement of individual performance objectives.

The Constitution and ASX Listing Rules specify that the aggregate remuneration of Non-Executive Directors shall be
determined from time to time by a general meeting. The latest determination was at a shareholders meeting on 29
November 2005 when the shareholders approved an aggregate remuneration of $200,000 per year.

Remuneration generally comprises of salary and superannuation. Long-term incentives are able to be provided
through the Company’s share option program, which acts, to align the Director’s and senior executive’s actions with
the interests of the shareholders, no options were granted or outstanding to key management personnel for the year
ended 30 June 2018, or in the prior year. The remuneration disclosed below represents the cost to the Group for services
provided under these arrangements.

Edward Leschke and Mark Lochtenberg are paid through the Company’s payroll. All other Directors services are paid by
way of arrangement with related parties.

There were no remuneration consultants used by the Company during the year ended 30 June 2018, or in the prior year.

Equus Mining LimitedDirectors’ Report

REMUNERATION REPORT – Audited (Con’t)

Consequences of performance on shareholders’ wealth - Audited

In considering the Group’s performance and benefits for shareholders’ wealth, the Board has regard to the following
indices in respect of the current financial year and the previous four financial years.

2018
$

2017
$

2016
$

2015
$

2014
$

Net loss attributable to equity holders of the parent

1,997,302

899,548

3,573,850

1,048,648

9,856,444

Dividends paid

Change in share price

0.02

(0.01)

0.01

(0.02)

The overall level of key management personnel’s compensation has been determined based on market conditions,
advancement of the Group’s projects and the financial performance of the Group.

Details of the nature and amount of each major element of the remuneration of each Director of the Company and
other key management personnel of the Company and Group are:

Primary
Salary / Fees
$

Superannuation
$

Share Based
Payments
Options
$

Other Long
Term
$

Executive Directors

Edward Leschke

Non-Executive Directors

Robert Yeates

Juerg Walker

Mark Lochtenberg

Total all directors

Year

2018

2017

2018

2017

2018

2017

2018

2017

2018

2017

157,437

150,000

30,000

247,437

240,000

14,250

2,850

17,100

Total
$

173,989

164,250

30,000

32,850

(1)2,302

2,302

266,839

257,100

(1) Represents amounts accrued for long service leave entitlements.

Remuneration Structure

In accordance with best practice corporate governance, the structure of Executive Director and Non-Executive Director
remuneration is separate and distinct.

Service contracts

In accordance with best practice corporate governance the company provided each key management personnel with a
letter detailing the terms of appointment, including their remuneration.

2018 Annual ReportDirectors’ Report

REMUNERATION REPORT – Audited (Con’t)

Executive Directors

During the financial year ended 30 June 2018, only Edward Leschke was considered an Executive Director. His salary
comprised of fixed remuneration plus 9.5% statutory superannuation paid through the Company’s payroll.

Non Executive Directors

During the financial year ended 30 June 2018, the following Directors were considered Non-Executive Directors:

• Mark Lochtenberg;
Juerg Walker;
•
Robert Yeates.
•

The salary component of Non-Executive Directors was made up of:

•
•
•

fixed remuneration;
9.5% statutory superannuation for Australian resident directors pay through the Company’s payroll; and
an entitlement to receive options, subject to shareholders’ approval.

The services of non-executive directors who are not paid through the Company’s payroll system are provided by way of
arrangements with related parties.

Options granted as compensation

There are no options held by Directors over ordinary shares.

Modification of terms of equity-settled share-based payment transactions

No terms of equity-settled share-based payment transactions (including options granted as compensation to a key
management person) have been altered or modified by the issuing entity during the 2018 and 2017 financial years.

Exercise of options granted as compensation

There were no shares issued to Directors on the exercise of options previously granted as compensation during the
2018 and 2017 financial years.

Options and rights over equity instruments

Directors or Key management personnel do not hold any options over unissued shares at the date of this report nor did
they hold any at the reporting date.

Loans to key management personal and their related parties

There were no loans made to key management personnel or their related parties during the 2018 and 2017 financial
years and no amounts were outstanding at 30 June 2018 (2017 - $nil).

Other transactions with key management personnel

There were no other transactions with key management personnel or their related parties during 2018.

At 30 June 2018, the amount outstanding for salaries, superannuation and directors fees was Nil (2017: $ Nil).

Equus Mining LimitedDirectors’ Report

REMUNERATION REPORT – Audited (Con’t)

Movements in shares

The movement during the reporting period in the number of ordinary shares in the Company held directly, indirectly or
beneficially by each key management person, including their related parties, is as follows:

Fully paid ordinary shareholdings and transactions - 2018

Key management personnel

Mark H. Lochtenberg

Edward J. Leschke

Juerg M. Walker

Robert A. Yeates

End of remuneration report.

NON-AUDIT SERVICES

Held at
1 July 2017

27,306,727

34,368,889

8,297,861

2,090,909

Purchases

4,054,054

400,000

500,000

Sales

Held at
30 June 2018

31,360,781

34,768,889

8,297,861

2,590,909

During the year ended 30 June 2018 KPMG, the Group’s auditor, did not perform other services in addition to the audit
and review of the financial statements.

Details of the amounts paid to the auditor of the Group, KPMG, and its network firms for audit and non-audit services
provided during the year are set out below.

Services other than audit and review of financial statements:

Other services

2018
$

2017
$

Audit and review of financial statements

77,700

80,100

77,700

80,100

AUDITOR’S INDEPENDENCE DECLARATION

The lead auditor’s independence declaration is set out on page 26 and forms part of the Directors’ Report for the
financial year ended 30 June 2018.

Signed at Sydney this 24th day of September 2018

in accordance with a resolution of the Board of Directors:

Mark H. Lochtenberg
Chairman

Edward J. Leschke
Managing Director

2018 Annual ReportLead Auditor’s Independence Declaration

Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001

To the Directors of Equus Mining Limited

I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year
ended 30 June 2018 there have been:

ii.

no contraventions of the auditor independence requirements as set out in the Corporations Act
2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.

KPMG

Jason Adams
Partner

Brisbane
24 September 2018

KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity.

Liability limited by a scheme approved under
Profession Standards Legislation.

KPMG, an Australian partnership and a member firm of the KPMG

network of independent member firms affiliated with KPMG

Liability limited by a scheme approved under

Equus Mining LimitedConsolidated Statement of Profit or Loss and
Directors’ Report
Other Comprehensive Income

For the Year Ended 30 June 2018

CONTINUING OPERATIONS

Other income

Expenses

Employee, directors and consultants costs

Impairment exploration expenditure

Travel expenses

Other expenses

Results from operating activities

Finance income

Finance costs

Net finance income/(expense)

Profit/(loss) before tax

Tax benefit/(expense)

Loss for the year

Other comprehensive income for the year

Items that may be classified subsequently to profit or loss:

Exchange differences on translation of foreign operations

Net change in fair value of available-for-sale financial assets

Net change in fair value transferred to profit or loss on disposal of
available-for-sale financial assets

Total other comprehensive income/(loss)

Total comprehensive loss for the year

Loss for the year attributable to:

Equity holders of the Company

Non-controlling Interests

Total comprehensive loss attributable to:

Equity holders of the Company

Non-controlling Interests

Earnings per share

Notes

2018
$

2017
$

52,230

(446,839)

(437,100)

(1,454,070)

(165,878)

(40,572)

(8,319)

(341,138)

(327,486)

(2,230,389)

(938,783)

335,511

(102,424)

233,087

39,607

(372)

39,235

(1,997,302)

(899,548)

(1,997,302)

(899,548)

262,660

30,906

(66,746)

410,741

(239,240)

(34,748)

(54,326)

309,247

(1,942,976)

(590,301)

(1,997,302)

(899,548)

(1,997,302)

(899,548)

(1,942,976)

(590,301)

(1,942,976)

(590,301)

Basic and diluted loss per share attributable to ordinary equity holders
(dollars)

(0.003)

(0.002)

The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction
with the accompanying notes.

Lead Auditor’s Independence Declaration under

Section 307C of the Corporations Act 2001

To the Directors of Equus Mining Limited

I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year

ended 30 June 2018 there have been:

no contraventions of the auditor independence requirements as set out in the Corporations Act

2001 in relation to the audit; and

ii.

no contraventions of any applicable code of professional conduct in relation to the audit.

KPMG

Jason Adams

Partner

Brisbane

24 September 2018

KPMG, an Australian partnership and a member firm of the KPMG

network of independent member firms affiliated with KPMG

Liability limited by a scheme approved under

2018 Annual ReportConsolidated Statement of Financial Position
Directors’ Report

As at 30 June 2018

Current Assets

Cash and cash equivalents

Receivables

Other

Total Current Assets

Non-Current Assets

Available-for-sale financial assets

Exploration and evaluation expenditure

Other

Total Non-Current Assets

Total Assets

Current Liabilities

Payables

Total Current Liabilities

Total Liabilities

Net Assets

Equity

Share capital

Reserves

Foreign currency translation reserve

Accumulated losses

Total Equity

Notes

2018
$

2017
$

658,568

1,120,683

19,095

36,255

1,369

677,663

1,158,307

305,660

403,093

3,689,281

1,897,038

84,978

3,994,941

2,385,109

4,672,604

3,543,416

585,236

367,029

4,087,368

3,176,387

113,833,684

110,921,315

167,659

434,405

(269,665)

(532,325)

(109,644,310)

(107,647,008)

4,087,368

3,176,387

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

Equus Mining LimitedConsolidated Statement of Changes in Equity
Directors’ Report

For the Year Ended 30 June 2018

Share Capital
$

Accumulated
Losses
$

Other Reserves
$

Foreign
Currency
Translation
Reserves
$

Total Equity
$

Balance at 1 July 2016

108,545,219

(106,747,460)

(899,548)

(465,579)

1,332,180

(899,548)

Profit/(Loss) for the year

Total other comprehensive income /
(loss)

Total comprehensive profit/(loss)
for the year

Transactions with owners recorded
directly in equity

375,993

(66,746)

309,247

(899,548)

375,993

(66,746)

(590,301)

Ordinary shares issued

2,600,000

Transaction costs on issue of shares

(223,904)

Share options

58,412

2,600,000

(223,904)

58,412

Balance at 30 June 2017

110,921,315

(107,647,008)

434,405

(532,325)

3,176,387

Balance at 1 July 2017

110,921,315

(107,647,008)

434,405

(532,325)

3,176,387

Profit/(Loss) for the year

Total other comprehensive income /
(loss)

Total comprehensive profit/(loss)
for the year

Transactions with owners recorded
directly in equity

(1,997,302)

(208,334)

262,660

54,326

(1,997,302)

(208,334)

262,660

(1,942,976)

Ordinary shares issued

2,957,336

Transaction costs on issue of shares

(176,703)

Exercise of options

131,736

(58,412)

2,957,336

(176,703)

73,324

Balance at 30 June 2018

113,833,684

(109,644,310)

167,659

(269,665)

4,087,368

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

2018 Annual ReportConsolidated Statement of Cash Flows
Directors’ Report

For the Year Ended 30 June 2018

Cash flows from operating activities

Cash receipts in the course of operations

Cash payments in the course of operations

Net cash used in operations

Interest received

Notes

2018
$

2017
$

(895,347)

18,060

(949,226)

4,487

Net cash used in operating activities

(877,287)

(944,739)

Cash flows from investing activities

Payments for exploration and development expenditure

Proceeds from sale of property

Proceed from sale of financial assets

Net cash used in investing activities

Cash flows from financing activities

Proceeds from share issues

Share issue expenses

Net cash provided by financing activities

Net increase / (decrease) in cash held

Cash and cash equivalents at 1 July

Effects of exchange rate fluctuations on cash held

(2,704,387)

(481,410)

252,382

75,530

17,667

(2,452,005)

(388,213)

3,017,844

2,450,000

(163,887)

(117,492)

2,853,957

2,332,508

(475,335)

1,120,683

13,220

999,556

119,261

1,866

Cash and cash equivalents at 30 June

658,568

1,120,683

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

Equus Mining LimitedNotes to the Consolidated Financial Statements
Directors’ Report

For the Year Ended 30 June 2018

1. REPORTING ENTITY

Equus Mining Limited (the ‘Company’) is a company domiciled in Australia. The address of the Company’s registered
office is Level 2, 66 Hunter Street, Sydney, NSW, 2000. The consolidated financial statements of the Company as at
and for the year ended 30 June 2018 comprises the Company and its subsidiaries (together referred to as the ‘Group’).
The Group is a for-profit entity and is primarily engaged in identifying and evaluating mineral resource opportunities in
southern Chile, South America.

2. BASIS OF PREPARATION

(a) Statement of compliance

The consolidated financial statements are general purpose financial statements which have been prepared in
accordance with Australian Accounting Standards (‘AASBs’) adopted by the Australian Accounting Standards Board
(‘AASB’) and the Corporations Act 2001. The consolidated financial statements comply with International Financial
Reporting Standards (‘IFRSs’) and interpretations adopted by the International Accounting Standards Board (‘IASB’).

The consolidated financial statements were authorised for issue by the Directors on 24 September 2018.

(b) Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis except for available-for-sale
financial assets which are measured at fair value.

These consolidated financial statements are presented in Australian dollars, which is the Company’s functional
currency.

(d) Going concern

The consolidated financial statements have been prepared on a going concern basis, which contemplates the
realisation of assets and settlement of liabilities in the ordinary course of business.

During the year, the Company raised $2,841,140 (net of associated costs) through the issue of ordinary shares via
placements and exercise of options.

The Group recorded a loss attributable to equity holders of the Company of $1,997,302 for the year ended 30 June
2018 and has accumulated losses of $109,644,310 as at 30 June 2018. The Group has cash on hand of $658,568 at 30
June 2018 and used $3,581,674 of cash in operations, including payments for exploration and evaluation, for the year
ended 30 June 2018. Additional funding will be required to meet the Group’s projected cash outflows for a period of 12
months from the date of the directors’ declaration.

These conditions give rise to a material uncertainty that may cast significant doubt upon the Group’s ability to
continue as a going concern. The ongoing operation of the Group is dependent upon the Group raising additional
funding from shareholders or other parties and/or the Group reducing expenditure in-line with available funding.

The Directors have prepared cash flow projections that support the ability of the Group to continue as a going concern.
These cash flow projections assume the Group obtains sufficient additional funding from shareholders or other
parties. If such funding is not achieved, the Group plans to reduce expenditure to the level of funding available.

In the event that the Group does not obtain additional funding and/or reduce expenditure in line with available
funding, it may not be able to continue its operations as a going concern and therefore may not be able to realise its
assets and extinguish its liabilities in the ordinary course of operations and at the amounts stated in the consolidated
financial statements.

2018 Annual ReportNotes to the Consolidated Financial Statements
Directors’ Report

For the Year Ended 30 June 2018

2. BASIS OF PREPARATION (Cont.)

(e) Use of estimates and judgements

The preparation of the consolidated financial statements in conformity with IFRS requires management to make
judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts
of assets, liabilities, income and expenses. Actual results may differ from these estimates.

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

In particular, information about significant areas of estimation uncertainty and critical judgements in applying
accounting policies that have the most significant effect on the amount recognised in the consolidated financial
statements are described in the following notes:

• Note 2(d) - Going concern;
• Note 6 - Unrecognised deferred tax assets; and
• Note 11 - Exploration and evaluation expenditure.

3. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to all periods presented in these consolidated
financial statements, and have been applied consistently by entities in the Group.

(a) Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entities and the
revenue can be reliably measured.

(b) Finance income and finance costs

Finance income comprises interest income on funds invested (including available-for-sale financial assets), dividend
income and gains on the disposal of available-for-sale financial assets. Interest income is recognised as it accrues in
profit or loss, using the effective interest method. Dividend income is recognised in profit or loss on the date that the
Group’s right to receive payment is established, which in the case of quoted securities is the ex-dividend date.

Finance costs comprise interest expense on borrowings, losses on disposal of available-for-sale financial assets and
impairment losses recognised on financial assets. Borrowing costs that are not directly attributable to the acquisition,
construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.

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

Exploration and evaluation expenditure, including the costs of acquiring licences, are capitalised as intangible
exploration and evaluation assets on an area of interest basis, less any impairment losses. Costs incurred before the
Group has obtained the legal rights to explore an area are recognised in profit or loss.

Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either:

•

the expenditures are expected to be recouped through successful development and exploitation of the area of
interest; or
activities in the area of interest have not at the reporting date, reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves and active and significant
operations in, or in relation to, the area of interest are continuing.

Equus Mining LimitedNotes to the Consolidated Financial Statements
Directors’ Report

For the Year Ended 30 June 2018

3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine technical
feasibility and commercial viability and facts and circumstances suggest that the carrying amount exceeds the
recoverable amount. For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-
generating units to which the exploration activity relates. The cash generating unit shall not be larger than the area
of interest.

Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are
demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment
and then reclassified to developing mine properties.

(d) Financial instruments

Non-derivative financial assets

The Group initially recognises loans and receivables on the date that they are originated. All other financial assets
(including assets designated at fair value through profit or loss) are recognised initially on the trade date at which the
Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it
transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially
all the risks and rewards of ownership of the financial asset are transferred. Any interest in such transferred financial
assets that is created or retained by the Group is recognised as a separate asset or liability.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when,
and only when, the Group has a legal right to offset the amounts and intends either to settle them on a net basis or to
realise the asset and settle the liability simultaneously.

The Group classifies non-derivative financial assets into the following categories:

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in
an active market. Such assets are recognised at fair value plus any directly attributable transaction costs. Subsequent
to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less
any impairment losses. They are included in current assets, except for those with maturities greater than 12 months
after the reporting period, which are classified as non-current assets. Loans and receivables comprise cash and cash
equivalents and trade and other receivables.

Available-for-sale financial assets

The Group’s investments in equity securities are classified as available-for-sale financial assets. Available-for-sale
financial assets are non-derivative financial assets that are designated as available-for-sale or are not classified in any
of the above categories of financial assets. Available-for-sale financial assets are recognised initially at fair value plus
any directly attributable transaction costs. Subsequent to initial recognition, they are measured at fair value and
changes therein, other than impairment losses, are recognised in other comprehensive income and presented in the fair
value reserve in equity. When an investment is derecognised, the cumulative gain or loss is reclassified to profit or loss.

Non-derivative financial liabilities

The Group initially recognises debt securities issued and subordinated liabilities on the date that they are originated.
All other financial liabilities are recognised initially on the trade date, which is the date that the Group becomes a party
to the contractual provisions of the instrument.

The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.

Other financial liabilities comprise trade and other payables.

2018 Annual ReportNotes to the Consolidated Financial Statements
Directors’ Report

For the Year Ended 30 June 2018

3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)

(d) Financial instruments (Cont.)

Share Capital

Ordinary Shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are
recognised as a deduction from equity, net of any tax effects.

(e) Basis of consolidation

Subsidiaries

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its power over
the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date
that control commences until the date that control ceases.

Loss of control

When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any
related NCI and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest
retained in the former subsidiary is measured at fair value when control is lost.

Transactions eliminated on consolidation

Intra-group balances and any unrealised gains and losses or income and expenses arising from intragroup transactions,
are eliminated in preparing the consolidated financial statements.

(f) Trade and other receivables and payables

Trade receivables and payables are carried at amortised cost. For receivables and payables with a remaining life of
less than one year, the notional amount is deemed to reflect the fair value. All other receivables and payables are
discounted to determine the fair value.

(g) Impairment

Non-derivative financial assets

A financial asset not classified at fair value through profit or loss is assessed at each reporting date to determine
whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective
evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that
asset.

For an investment in an equity security classified as available-for-sale, a significant or prolonged decline in its fair value
below its cost is objective evidence of impairment. The Group consider a decline of 20 per cent to be significant and a
period of 9 months to be prolonged.

Equus Mining LimitedNotes to the Consolidated Financial Statements
Directors’ Report

For the Year Ended 30 June 2018

3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)

(g) Impairment (Cont.)

Financial assets measured at amortised cost

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

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between
its carrying amount and the present value of the estimated future cash flows discounted at the original effective
interest rate. Losses are recognised within profit or loss. When an event occurring after the impairment was recognised
causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

Available-for-sale financial assets

Impairment losses on available-for-sale financial assets are recognised by reclassifying the losses accumulated in the
fair value reserve in equity to profit or loss. The cumulative loss that is reclassified from equity to profit or loss is the
difference between the acquisition cost and the current fair value, less any impairment loss recognised previously in
profit or loss. Any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognised in
other comprehensive income.

Non-financial assets

An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit (CGU) exceeds
its recoverable amount. The recoverable amount of an asset or CGU is the greater of their fair value less costs to sell
and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to
the asset or CGU. For impairment testing, assets are grouped together into the smallest group of assets that generates
cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Impairment
losses are recognised in profit or loss.

Reversals of impairment

An impairment loss in respect of a financial asset carried at amortised cost is reversed if the subsequent increase in
recoverable amount can be related objectively to an event occurring after the impairment loss was recognised.

In respect of non-financial assets, an impairment loss is reversed if there has been a conclusive change in the estimates
used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying
amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if
no impairment loss had been recognised.

(h) Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or less.

(i) Income tax

Current tax and deferred tax is recognised in profit or loss except to the extent that it relates to a business
combination or items recognised directly in equity or in other comprehensive income.

Current tax

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted
or substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

2018 Annual ReportNotes to the Consolidated Financial Statements
Directors’ Report

For the Year Ended 30 June 2018

3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)

(i) Income tax (Cont.)

Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amount of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:

•

temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit or loss;

temporary differences related to investments in subsidiaries to the extent that the Group is able to control the timing
of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; or

•

taxable temporary differences arising on the initial recognition of goodwill.

The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Group
expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse,
using tax rates enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are offset if
there is a legally enforceable right to offset current tax liabilities and assets and they relate to taxes levied by the same
tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities
and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences to the extent
that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets
are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax
benefit will be realised.

(j) Foreign currency transactions

Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the
functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the
difference between amortised cost in the functional currency at the beginning of the period, adjusted for effective
interest and payments during the period, and the amortised cost in foreign currency translated at the exchange rate at
the end of the reporting period.

Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated
to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency
differences arising on retranslation are recognised in profit or loss, except for differences arising on the retranslation
of available-for-sale equity instruments, a financial liability designated as a hedge of the net investment in a foreign
operation or qualifying cash flow hedges, which are recognised in other comprehensive income. Non-monetary items
that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of
the transaction.

(k) Foreign operations

The assets and liabilities of foreign operations are translated to Australian dollars at foreign exchange rates ruling at the
reporting date. The income and expenses of foreign operations are translated to Australian dollars at rates approximating
the foreign exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on retranslation
are recognised directly in the foreign currency translation reserve (‘FCTR’), a separate component of equity.

Equus Mining LimitedNotes to the Consolidated Financial Statements
Directors’ Report

For the Year Ended 30 June 2018

3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)

(k) Foreign operations (Cont.)

Foreign exchange gains and losses arising from a monetary item receivable or payable to a foreign operation, the
settlement of which is neither planned nor likely in the foreseeable future, are considered to form part of a net
investment in a foreign operation and are recognised directly in the FCTR.

Any references to functional currency, unless otherwise stated, are to the functional currency of the Company,
Australian dollars.

When a foreign operation is disposed of, in part or in full, the relevant amount in the FCTR is transferred to profit or
loss as part of the profit or loss on disposal.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely
in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form
part of a net investment in a foreign operation and are recognised in other comprehensive income, and are presented
within equity in the FCTR.

(l) Segment reporting

Determination and presentation of operating segments

The Group determines and presents operating segments based on the information that is provided internally to the
Managing Director, who is the Group’s chief operating decision maker.

An operating segment is a component of the Group that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s
other components. All operating segments’ operating results are regularly reviewed by the Group’s Managing Director
to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete
financial information is available.

Segment results that are reported to the Managing Director include items directly attributable to a segment as well as
those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets (primarily the
Company’s headquarters), head office expenses, and income tax assets and liabilities.

Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment, and
intangible assets other than goodwill.

(m) Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can
be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current
market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is
recognised as a finance cost.

(n) Goods and services tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is
not recoverable from the Australian Taxation Office. In these circumstances, the GST is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown
inclusive of GST.

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

2018 Annual ReportNotes to the Consolidated Financial Statements
Directors’ Report

For the Year Ended 30 June 2018

3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)

(o) Employee benefits

Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount
expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past
service provided by the employee and the obligation can be estimated reliably.

Share-based payment transactions

The grant-date fair value of share-based payment awards granted is recognised as an employee and consultants expense,
with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the
awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service
and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense
is based on the number of awards that meet the related service and non-market performance conditions at the vesting
date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment
is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

(p) Provision site restoration

In accordance with the Group’s environmental policy and applicable legal requirements, a provision for site restoration
in respect of contaminated land, and the related expense, is recognised when the land is contaminated.

(q) Determination of fair values

A number of the Group’s accounting policies and disclosures require the determination of fair value for both financial
and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes
based on the following methods. When applicable, further information about the assumptions made in determining
fair values is disclosed in the notes specific to that asset or liability.

Investments in equity securities

The fair values of investments in equity securities are determined with reference to the quoted market price that is
most representative of the fair value of the security at the measurement date.

Share-based payment transactions

The fair value of the share options is measured using the Black-Scholes formula. Measurement inputs include share
price on measurement date, exercise price of the instrument, expected volatility (based on weighted average historic
volatility), expected dividends, and the risk-free interest rate (based on government bonds).

The grant-date fair value of share-based payment awards is recognised as an expense, with a corresponding increase in
equity, over the period that the recipient unconditionally become entitled to the awards. The amount recognised as an
expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions
are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards
that meet the related service and non-market performance conditions at the vesting date. For share-based payment
awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such
conditions and there is no true-up for differences between expected and actual outcomes. Service and non-market
performance conditions are not taken into account in determining fair value.

Equus Mining LimitedNotes to the Consolidated Financial Statements
Directors’ Report

For the Year Ended 30 June 2018

3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)

(r) New standards and interpretations not yet adopted

A number of new standards, amendments to standards and interpretations are effective for annual periods beginning
after 1 July 2017, and have not been applied in preparing these financial statements. Those which may be relevant to
the Company are set out below. The Company does not plan to adopt these standards early.

AASB 9 Financial Instruments

AASB 9 replaces the existing guidance in AASB 139 Financial Instruments: Recognition and Measurement. AASB 9
includes revised guidance on the classification and measurement of financial instruments, including a new expected
credit loss model for calculating impairment on financial assets and the new general hedge accounting requirements. It
also carries forward the guidance on recognition and derecognition of financials instruments from AASB 139.

AASB 9 is effective for the Group’s annual reporting period beginning 1 July 2018. The Group has performed an
assessment of the effect these changes will have on the Group’s financial statements on initial adoption on 1 July 2018.
Based on this assessment, the Group does not believe that the new classification requirements will have a material
impact on the accounting for its cash, receivables and payables. At 30 June 2018, the Group had equity investments
classified as available-for-sale with a fair value of $305,660 that are not held for trading. Under AASB 9, the Group has
designated these investments as measured at fair value through other comprehensive income (OCI). Consequently, all
fair value gains and losses will be reported in OCI, no impairment losses will be recognised in profit or loss and no gains
or losses will be reclassified to profit or loss on disposal. Changes in accounting policies resulting from the adoption of
IFRS 9 will generally be applied retrospectively, except that the Group expects it will take advantage of the exemption
allowing it not to restate comparative information for prior periods with respect to classification and measurement
changes.

2018 Annual ReportNotes to the Consolidated Financial Statements
Directors’ Report

For the Year Ended 30 June 2018

4. LOSS FROM OPERATING ACTIVITIES

Other income

Recognised in profit or loss

Gain on disposal of subsidiary (refer note 24)

Other expenses

Administration costs

Audit and review services – KPMG

Accounting and secretarial fees

Legal fees

Commissions

Insurance

ASIC and ASX fees

Share registry fees

Other expenses

5. FINANCE INCOME AND FINANCE COSTS
Recognised in profit and loss

Interest income on cash deposits

Profit on sale of financial assets

Gain on settlement of other financial asset

Foreign exchange gain on available for sale investments

Foreign exchange gain / (loss)

Impairment of available-for-sale investments reclassified to profit or loss

Net finance income/(costs) recognised in profit or loss

2018
$

2017
$

52,230

53,146

77,700

44,610

37,244

10,691

13,915

34,779

17,463

51,590

44,996

80,100

35,771

60,711

186

11,300

19,904

18,291

56,227

341,138

327,486

18,060

239,217

56,895

8,119

13,220

335,511

(102,424)

233,087

4,487

35,120

(372)

39,235

Recognised in other comprehensive income

Net change in fair value of available-for-sale financial assets

30,906

410,741

Net change in fair value transferred to profit or loss on disposal of
available-for-sale financial assets

Finance cost recognised in other comprehensive income, net of tax

(239,240)

(208,334)

(34,748)

375,993

Equus Mining LimitedNotes to the Consolidated Financial Statements
Directors’ Report

6. INCOME TAX EXPENSE

Current tax expense

Current year

Overprovision in prior year

Losses not recognised

Numerical reconciliation of income tax expense to prima facie tax payable:

Loss before tax

Prima facie income tax benefit at the Australian tax rate of 27.5%

Decrease in income tax benefit due to:

- non-deductible expenses

- effect of deferred tax asset (DTA) for capital losses not brought to account

- effect of DTA for tax losses not brought to account

- effect of DTA for temporary differences not brought to account

Income tax expense/(benefit)

Unrecognised deferred tax assets

Deferred tax assets have not been recognised in respect of the following items:

Capital losses

Tax losses

Net deductible temporary differences

Potential tax benefit at 27.5%

For the Year Ended 30 June 2018

2018
$

2017
$

(237,136)

(205,668)

237,136

205,668

1,997,302

899,548

(549,258)

(247,376)

478,563

206,060

237,136

(372,501)

66,934

196,113

(15,671)

6,394,158

6,188,097

3,430,383

3,193,247

68,739

331,582

9,893,280

9,712,926

The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax assets
have not been recognised in respect of these items because it is not probable that future taxable profit will be available
against which the Group can utilise the benefits there-from.

7. CASH AND CASH EQUIVALENTS
Cash at bank

Deposits at call

8. RECEIVABLES
Current

Sundry debtors

Trade and sundry debtors are non-interest bearing and generally on 30-day terms.

9. OTHER ASSETS
Prepayments

Current

Non-current

2018
$

278,934

379,634

658,568

2017
$

80,462

1,040,221

1,120,683

19,095

36,255

1,369

84,978

86,347

2018 Annual ReportNotes to the Consolidated Financial Statements
Directors’ Report

For the Year Ended 30 June 2018

10. INVESTMENTS
Opening balance

Additions

Disposal

Revaluation

Impairment

Foreign currency translation movement

Equity securities - available-for-sale at fair value

2018
$

2017
$

403,093

218,348

(252,382)

30,906

(102,424)

8,119

305,660

27,976

(34,748)

410,741

(876)

403,093

At 30 June 2018 the Group holds 1,396,300 shares (2017: 1,722,550) in Blox Inc., a US over the counter traded company
at which had a closing share price of US$0.1621 at 30 June 2018 (2017: US$0.018).

11. EXPLORATION AND EVALUATION EXPENDITURE

Carbones del Sur

Los Domos gold-silver

Cerro Diablo gold-silver

Net Book Value

Carbones del Sur

Carrying amount at the beginning of the year

Additions

Impairment

Foreign currency translation movement

Net book value

Los Domos gold-silver

Carrying amount at the beginning of the year

Additions

Foreign currency translation movement

Balance carried forward

Cerro Diablo gold-silver

Carrying amount at the beginning of the year

Additions

Foreign currency translation movement

Net book value

Balance carried forward

2018
$

2017
$

1,395,431

3,650,684

501,607

38,597

3,689,281

1,897,038

1,395,431

1,534,227

3,883

61,596

(1,454,070)

(165,878)

54,756

(34,514)

1,395,431

501,607

3,121,704

27,373

3,650,684

38,593

38,597

523,398

(21,791)

501,607

3,689,281

1,897,038

During the year, the Group has recognised $1,454,070 impairment in relation to the Thermal Coal project, Carbones del Sur
because the criteria outlined in note 3(c) to carry forward the expenditure as an exploration asset were no longer satisfied.

During the year, the Company completed the drilling program at Los Domos gold-silver project and earned the rights to
51% interest in the project. The Company expects to complete the formal transfer of the exploration licences for the
Los Domos project to the Group under the terms of the farm-in agreement during the year ending 30 June 2019.

The ultimate recoupment of exploration and evaluation expenditure is dependent on the successful development and
commercial exploitation, or alternatively sale of the respective areas of interest.

Equus Mining LimitedNotes to the Consolidated Financial Statements
Directors’ Report

12. TRADE AND OTHER PAYABLES

Current liabilities

Trade creditors and accruals

Employee leave entitlements

13. ISSUED CAPITAL

For the Year Ended 30 June 2018

2018
$

2017
$

575,496

9,740

585,236

367,029

754,364,363 (2016: 668,206,427) fully paid ordinary shares

113,833,684

110,921,315

2018

2017

Nº

(a) Fully paid ordinary shares

Balance at beginning of financial year

668,206,427

110,921,315

434,873,094

108,545,219

Issued ordinary shares 4 November 2016 for $0.010

Issued ordinary shares 27 March 2017 for $0.012

Issued ordinary shares 3 May 2017 for $0.012

Less cost of issue

Issued ordinary shares 20 September 2017 for $0.020

6,974,618

139,492

Issued ordinary shares 27 October 2017 for $0.037

64,549,828

2,388,344

Issued ordinary shares 15 November 2017 for $0.037

Issued ordinary shares 15 December 2017 for $0.037

Issued ordinary shares 18 December 2017 for $0.020

Issued ordinary shares 1 May 2018 for $0.020

Transfer from other reserves on exercise of options (b)

Less cost of issue

7,054,054

4,554,054

1,743,655

1,281,727

261,000

168,500

34,873

25,634

71,229

(176,703)

100,000,000

1,000,000

43,487,309

521,848

89,846,024

1,078,152

(223,904)

754,364,363

113,833,684

668,206,427

110,921,315

Fully paid ordinary shares carry one vote per share and carry the right to dividends.

Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote
per share at the shareholders meetings. In the event of winding up of the Company, ordinary shareholders rank after
creditors and are fully entitled to any proceeds of liquidation.

(b) Share Options

During the year ended 30 June 2018 the 8,718,273 options granted on 4 November 2016 were exercised and the grant date
fair value of the options totalling $58,412 was transferred from the equity based compensation reserve to share capital.

On 18 April 2018, the Company issued the remaining 1,281,727 unlisted options as part consideration for the capital raising
completed on 4 November 2016. The options vested immediately and expired on 4 May 2018. Each option entitles the
holder to subscribe for and be allotted one ordinary share in Equus Mining Limited at an exercise price of $0.02 per option.

The fair value of the options granted on 18 April 2018 was $12,817 and the Black-Scholes formula model inputs applied
were the Company’s share price of $0.03 at the grant date, a volatility factor of 92.62% based on historic share price
performance, a risk free rate of 2.12% based on government bonds, and a dividend yield of 0%

The options granted on 18 April 2018 were exercised on 1 May 2018 and the grant date fair value of the options
totalling $12,817 was transferred from the equity based compensation reserve to share capital. No options remaining
on issue at 30 June 2018 (30 June 2017: 8,718,273).

2018 Annual ReportNotes to the Consolidated Financial Statements
Directors’ Report

For the Year Ended 30 June 2018

14. RESERVES

Equity based compensation reserve (a)

Fair value reserve (b)

Foreign currency translation reserves (c)

Movements during the period:

(a) Equity based compensation reserve

Balance at beginning of period

Share base payment - vested share options

Exercised options

Balance at end of period

Movements during the period:

(b) Fair value reserve

Balance at beginning of period

Net change in fair value of available-for-sale financial assets

Fair value movement transferred to profit or loss on disposal

Balance at end of period

Balance at beginning of period

Transfer of foreign currency translation reserve to gain on disposal of subsidiary in
profit or loss

Currency translation differences

Balance at end of period continuing operations

Nature and purpose of reserves

Equity based compensation reserve:

2018
$

2017
$

167,659

(269,665)

(102,006)

58,412

375,993

(532,325)

(97,920)

58,412

12,817

(71,229)

58,412

375,993

30,906

(239,240)

167,659

375,993

(532,325)

(465,579)

215,782

46,878

(66,746)

(269,665)

(532,325)

The equity based compensation reserve is used to record the fair value of options issued but not exercised.

Fair value reserve:

The fair value reserve comprises the cumulative net change in the fair value of available-for-sale investments until the
assets are derecognised or impaired.

Foreign currency translation reserve:

The foreign currency translation reserve records the foreign currency differences arising from the translation of the
financial statements of foreign operations where their functional currency is different to the presentation currency of
the reporting entity.

Equus Mining LimitedNotes to the Consolidated Financial Statements
Directors’ Report

For the Year Ended 30 June 2018

2018
$

2017
$

15. LOSS PER SHARE

Basic and diluted loss per share has been calculated using:

Net loss for the year attributable to equity holders of the parent

(1,997,302)

(899,548)

Weighted average number of ordinary shares (basic and diluted)

Issued ordinary shares at beginning of year

Effect of shares issued (Note 13)

Weighted average ordinary shares at the end of the year

668,206,427

434,873,094

56,966,205

90,800,997

725,172,632

525,674,091

As the Group is loss making, none of the potentially dilutive securities are currently dilutive in the calculation of total
earnings per share.

16. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES

Cash flows from operating activities

Loss for the year

Non-cash items

Gain on sale of property

Gain on sale of available for sale financial assets

Impairment of available for sale financial assets

Gain on settlement of other financial asset

Foreign currency exchange loss/(gain)

Impairment of exploration and evaluation expenditure

Gain on disposal of subsidiary

Employee benefit provision

Changes in assets and liabilities

Decrease/(increase) in receivables

Decrease/(increase) in other assets

(Decrease)/Increase in payables

Net cash used in operating activities

Reconciliation of cash

2018
$

2017
$

(1,997,302)

(899,548)

(239,217)

102,424

(56,895)

(21,339)

1,454,070

(52,230)

9,739

(6,011)

(34,748)

5,366

165,878

17,159

86,347

(180,043)

(877,287)

(22,877)

(84,324)

(68,475)

(944,739)

For the purposes of the statement of cash flows, cash includes cash on hand and at
bank and cash on deposit net of bank overdrafts and excluding security deposits.
Cash at the end of the financial year as shown in the statement of cash flows is
reconciled to the related items in the statement of financial position as follows:

Cash and cash equivalents

658,568

1,120,683

2018 Annual ReportNotes to the Consolidated Financial Statements
Directors’ Report

For the Year Ended 30 June 2018

17. RELATED PARTIES

Parent and ultimate controlling party

Equus Mining Limited is both the parent and ultimate controlling party of the Group.

Key management personnel and director transactions

During the year ended 30 June 2018 and 2017, No key management persons, or their related parties, held positions
in other entities that provide material professional services resulting in them having control or joint control over the
financial or operating policies of those entities.

18. KEY MANAGEMENT PERSONNEL DISCLOSURES

Information regarding individual key management personnel’s compensation and some equity instruments disclosures
as permitted by Corporations Act and Corporations Regulations 2M.3.03 are provided in the Remuneration Report
section of the Director’s Report.

Key management personnel compensation

Primary fees/salary

Superannuation

Long service leave

2018
$

2017
$

247,437

17,100

2,302

240,000

17,100

266,839

257,100

At 30 June 2018 $2,500 fees were outstanding (2017 – nil). There were no loans made to key management personnel or
their related parties during the 2018 and 2017 financial years.

The Board reviews remuneration arrangements annually based on services provided. Apart from the details disclosed in
this note, there were no material contracts involving Directors’ interest’s existing at year-end.

19. SHARE BASED PAYMENTS

The Company makes share based payments to consultants and/or service providers from time to time, not under any
specific plan. The Company also may issue options to directors of the parent entity. Specific shareholder approval is
obtained for any share based payments to directors of the parent entity.

Movement of options during the year ended 30 June 2018

Grant date

Outstanding at
the beginning of
the year

Granted
during
the year

Cancelled
during
the year

Exercised
during
the year

Expired
during
the year

Outstanding
at the end of
the year

Exercisable
at the end of
the year

4 November 2016

8,718,273

1,281,727

10,000,000

Options outstanding at 30 June 2018

There were no options outstanding at 30 June 2018.

Movement of options during the year ended 30 June 2017

Grant date

Outstanding at
the beginning of
the year

Granted
during
the year

Cancelled
during
the year

Exercised
during
the year

Expired
during
the year

Outstanding
at the end of
the year

Exercisable
at the end of
the year

4 November 2016

8,718,273

Equus Mining LimitedNotes to the Consolidated Financial Statements
Directors’ Report

For the Year Ended 30 June 2018

19. SHARE BASED PAYMENTS (Cont.)

Options outstanding at 30 June 2017

Grant date

Number of options

Exercise price

Fair value at
grant date

Vesting Date

Expiry date

4 November 2016

8,718,273

$0.02

$0.0067

4 November 2016

4 May 2018

Weighted average exercise price of options

Year

2018

2017

Outstanding at
the beginning of
the year

Granted
during
the year

Forfeited
during
the year

$0.02

Exercised
during
the year

$0.02

Expired
during
the year

Outstanding
at the end of
the year

Exercisable at
the end of
the year

$0.02

Fair value of options

The fair value of options granted is measured at grant date and recognised as an expense over the period during which
the option holder become unconditionally entitled to the options. The fair value of the options granted is measured
using an appropriate option valuation methodology, taking into account the terms and conditions upon which the
options were granted. The amount recognised as an expense is adjusted to reflect the actual number of options that
vest.

During the year ended 30 June 2018, all options were exercised (2017: no options expired unexercised).

The fair value of the 8,718,273 options granted on 4 November 2016 was $58,412. The options were issued to
Bell Potter Nominees Ltd. The options were valued using the Black-Scholes formula. The valuation inputs were
the Company’s share price of $0.014 at the grant date, a volatility factor of 124% (based on historical share price
performance), a life of 18 months, a risk-free interest rate of 1.65% based on the 2 year government bond rate and a
dividend yield of 0%. The exercise price of $0.02. These options had a non-market performance vesting condition and
hence the options fully vested on grant date.

The fair value of the 1,281,727 options granted on 18 April 2018 was $12,817. The options were issued to Bell Potter
Nominees Ltd. The options were valued using the Black-Scholes formula. The valuation inputs were the Company’s
share price of $0.03 at the grant date, a volatility factor of 91.62% (based on historical share price performance), a life
of 16 days, a risk-free interest rate of 2.12% based on the 2 year government bond rate and a dividend yield of 0%. The
exercise price of $0.02. These options had a non-market performance vesting condition and hence the options fully
vested on grant date.

2018 Annual ReportNotes to the Consolidated Financial Statements
Directors’ Report

For the Year Ended 30 June 2018

20. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS DISCLOSURE

The Group’s financial instruments comprise deposits with banks, receivables, trade and other payables and from time
to time short term loans from related parties. The Group does not trade in derivatives.

The main risks arising from the Group’s financial instruments are market risk, credit risk and liquidity risks. This note
presents information about the Group’s exposure to each of these risks, its objectives, policies and processes for
measuring and managing risk, and the Group’s management of capital.

Risk management framework

The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management
framework. Risk management policies are established to identify and analyse the risks faced by the Group, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits. These policies are reviewed regularly
to reflect changes in market conditions and the Group’s activities. The primary responsibility to monitor the financial
risks lies with the Managing Director and the Company Secretary under the authority of the Board.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligation as they fall due. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet
its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to the Group’s reputation.

The Group monitors rolling forecasts of liquidity based on expected fund raisings, trade payables and other
obligations for the ongoing operation of the Group. At balance date, the Group has available funds of $658,568 for its
immediate use.

The following are the contractual maturities of financial liabilities:

Financial liabilities

Carrying
amount

Contractual
cash flows

Less than
6 months

6 to 12
months

1 to 5 years

More than
5 years

Trade and other payables

30 June 2018

30 June 2017

575,496

367,029

(575,496)

(367,029)

It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at
significantly different amounts.

Equus Mining LimitedNotes to the Consolidated Financial Statements
Directors’ Report

For the Year Ended 30 June 2018

20. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS DISCLOSURE (Cont.)

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet
its contractual obligations.

The carrying amount of the Group’s financial assets represents the maximum credit risk exposure as follows:

Cash and cash equivalents

Receivables

Cash and cash equivalents

2018

658,568

19,095

677,663

2017

1,120,683

36,255

1,156,938

At 30 June 2018, the Group held cash and cash equivalents of $658,568 (2017: $1,120,683), which represents its
maximum credit exposure on these assets. The cash and cash equivalents are held with reputable banks and financial
institution counterparties, which are rated AA- to AAA+, based on rating agency ‘Moody’s rating’.

Receivables

For the year ended 30 June 2018, the Group does not hold a significant value of trade receivables, and therefore has
minimal exposure to credit risk.

Market risk

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

Interest Rate Risk

The Group’s income statement is affected by changes in interest rates due to the impact of such changes on interest
income and expenses.

At year-end, the interest rate risk profile of the Group’s interest bearing financial instruments was:

Cash and cash equivalents

There are no fixed rate instruments (2017 - $nil).

2018

2017

658,568

1,120,683

The Group does not have interest rate swap contracts. The Group has two interest bearing accounts from where it
draws cash when required to pay liabilities as they fall due. The Group normally invests its funds in the two interest
bearing accounts to maximise the available interest rates. The Group analyses its interest rate exposure when
considering renewals of existing positions including alternative financing arrangements.

Sensitivity analysis

A change of 100 basis points in interest rates at the current and prior reporting date would have increased/(decreased)
equity and loss for the period by an immaterial amount.

2018 Annual ReportNotes to the Consolidated Financial Statements
Directors’ Report

For the Year Ended 30 June 2018

20. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS DISCLOSURE (Cont.)

Currency risk

The Group is exposed to currency risk on bank account denominated in USD totalling $33,190 at 30 June 2018 (2017
– US$16,926) and equity investments in shares in the United States totalling US$226,340 (2017 – US$310,059). The
Group’s gross financial position exposure to foreign currency risk at balance date was US$259,530 (2017 - US$326,985).

Sensitivity analysis

A 10% strengthening of the Australian dollar against the United States dollar at 30 June 2018 would have decreased
post-tax profit and net assets of the Group by $27,787. A 10% weakening of the Australian dollar against the United
States dollar at 30 June 2018 would have an increased post-tax profit and net assets of the Group by $30,566, on the
basis that all other variables remain constant.

Exchange rates applied:

AUD/USD

Price risk

Reporting date spot rate

2018

0.7405

2017

0.7692

The Group is exposed to equity securities price risk. This arises from investments held by the Group and classified in the
balance sheet as available-for-sale.

The Group’s investments are publicly traded on the Over-The-Counter-Market (‘OTC market’) in the USA.

The table below summarises the impact of increases/decreases of the bid price on the Group’s post-tax profit for the
year and on equity

Blox-Inc. - 10% bid price increase

Blox-Inc. - 10% bid price decrease

Capital management

Impact on post-tax profit

Impact on Total equity

2018

2017

2018

2017

30,566

40,309

(27,786)

(40,309)

Management aim to control the capital of the Group in order to maintain an appropriate debt to equity ratio, provide
the shareholders with adequate returns and ensure that the Group can fund its operations and continue as a going
concern.

The Group’s capital includes ordinary share capital supported by financial assets. There are no externally imposed
capital requirements on the Group.

Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital
structure in response to changes in these risks and in the market. These responses include the management of cash
levels, distributions to shareholders and share issues.

There have been no changes in the strategy adopted by management to control the capital of the Group since the prior
year.

Equus Mining LimitedNotes to the Consolidated Financial Statements
Directors’ Report

For the Year Ended 30 June 2018

20. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS DISCLOSURE (Cont.)

Estimation of Fair Values

The carrying amounts of financial assets and financial liabilities included in the balance sheet approximate fair values.

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have
been defined as follows:

•

Level 1 - fair value measurements are those instruments valued based on quoted prices (unadjusted) in active
markets for identical assets or liabilities.

Level 2 - fair value measurements are those instruments valued based on inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - fair value measurements are those instruments valued based on inputs for the asset or liability that are
not based on observable market data (unobservable inputs).

Available-for-sale financial assets

30 June 2018

30 June 2017

Level 1

Level 2

Level 3

305,660

403,093

Total

305,660

403,093

All available for sale financial assets relate to investments held in quoted equity securities and were designated as
available-for-sale financial assets.

21. CONTROLLED ENTITIES

Parent entity

Equus Mining Limited is an Australian incorporated company listed on the Australian Securities Exchange.

Wholly owned controlled entities

Country of incorporation Ownership Interest

Hotrock Enterprises Pty Ltd (i)

Okore Mining Pty Ltd (ii)

Dataloop Pty Ltd

Equus Resources Pty Ltd (iii)

(i) Subsidiary of Hotrock Enterprises Pty Ltd

Derrick Pty Ltd

Andean Coal Pty Ltd (iv)

(iv) Subsidiary of Andean Coal Pty Ltd

Minera Carbones Del Sur Limitada

(ii) Subsidiary of Okore Mining Pty Ltd

Leo Shield Exploration Ghana Ltd

(iii) Subsidiary of Equus Resources Pty Ltd

Equus Resources Chile SpA (v)

Minera Equus Chile Ltda

Southern Gold SpA

(v) Subsidiary of Equus Resources Chile SpA

Minera Equus Chile Ltda

2018

2017

100

Australia

Chile

99.9

Ghana

100

Chile

100

99.9

100

99.9

100

0.1

2018 Annual ReportNotes to the Consolidated Financial Statements
Directors’ Report

For the Year Ended 30 June 2018

22. COMMITMENTS

Exploration expenditure commitments

The Group does not have any minimum expenditure commitments in relation to its mineral interests in the Magallanes
Basin in southern Chile or at Los Domos Gold-Silver project at the date of this report.

23. OPERATING SEGMENTS

The Group’s chief operating decision maker has considered the requirements of AASB 8, Operating Segments, and
has concluded that, during the year ended 30 June 2018, the Group operated in the mineral exploration within the
geographical segments of Australia and Chile. The Company holds shares in Blox Inc., a US over the counter traded
company and has concluded that during the year ended 30 June 2018, to recognise the investment in Blox Inc., as a
separate operating segment.

30 June 2018

External revenues

Mineral
Exploration

Investing

Total

Reportable segment profit /(loss) before tax

(1,534,295)

162,849

(1,371,446)

Interest income

Interest expense

Other material non-cash items:

Impairment of investment

Reportable segment assets

Reportable segment liabilities

30 June 2017

External revenues

123

17,937

18,060

(102,424)

3,878,076

305,660

4,183,736

459,793

Reportable segment profit /(loss) before tax

(235,613)

39,325

(196,288)

4,407

4,487

2,001,894

403,093

2,404,987

153,478

Interest income

Interest expense

Other material non-cash items:

Impairment of investment

Reportable segment assets

Reportable segment liabilities

Equus Mining LimitedNotes to the Consolidated Financial Statements
Directors’ Report

For the Year Ended 30 June 2018

23. OPERATING SEGMENTS (Cont.)

Reconciliations of reportable segment revenues and profit or loss

2018

2017

Revenues

Total revenue for reportable segments

Total revenue unallocated

Consolidated revenue

Profit or loss

Total loss for reportable segments

Unallocated amounts:

Other income

Net finance income

Net other corporate expenses

Consolidated loss before tax from continuing operations

Assets

Total assets for reportable segments

Unallocated corporate assets

Consolidated total assets

Liabilities

Total liabilities for reportable segments

Unallocated corporate liabilities

Consolidated total liabilities

Geographical information

(1,371,446)

(196,288)

52,230

70,115

(748,201)

(703,260)

(1,997,302)

(899,548)

4,183,736

2,404,987

488,868

1,138,429

4,672,604

3,543,416

459,793

125,443

585,236

153,478

213,551

367,029

In presenting information on the basis of geography, segment revenue and segment assets are based on the
geographical location of the operations.

Australia

All foreign locations

- Chile

- United States of America

2018

2017

Revenue

Non-current
assets

Revenues

3,689,281

305,660

Non-current
assets

1,514,768

403,093

2018 Annual ReportNotes to the Consolidated Financial Statements
Directors’ Report

For the Year Ended 30 June 2018

24. DISPOSAL OF SUBSIDIARY

On 30 September 2017, the Group completed the sale of Leo Shields, the subsidiary located in Ghana. The Group
received consideration totalling $261,465 in exchange for the 100% shareholding of the subsidiary. The consideration
comprised the following:

•

$100,000 deposit received in a prior year and at 30 June 2017 was recognised as income received in advance in payables.

A right to receive 550,000 shares in Blox. Inc. which had a fair value of $161,465 on the date of the disposal. The
shares were issued to Equus Mining Limited during April 2018 with a fair value at that date of $218,348.

On 30 September 2017 the subsidiary had net liabilities of $6,547 and there were $215,782 of foreign currency losses
accumulated in the Foreign Currency Translation Reserve relating to subsidiary. These losses were transferred to the profit
or loss on disposal, and a net gain of $52,230 was recognised in respect of the sale for the period ended 30 June 2018.

25. SUBSEQUENT EVENTS

No other matters or circumstances have 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 or unusual nature likely, in the opinion of the Directors of the
Company, to affect significantly the operations of the Group, the results of those operations, or the state of affairs of
the Group, in future financial years.

26. PARENT ENTITY DISCLOSURES

As at, and throughout, the financial year ending 30 June 2018 the parent entity of the Group was Equus Mining Limited.

Result of the parent entity

Net (loss)/profit

Other comprehensive income

Total comprehensive profit/(loss)

Financial position of the parent entity at year end

Current assets

Non-current assets

Total assets

Current liabilities

Non-current liabilities

Total liabilities

Net assets

Equity

Share capital

Accumulated losses

Reserve

Total equity

Company

2018

2017

(3,304,509)

(1,213,686)

(3,304,509)

(1,213,686)

488,868

305,660

794,528

1,138,429

403,093

1,541,522

125,443

213,551

125,443

669,085

213,551

1,327,971

113,833,684

110,921,315

(113,332,258)

(110,027,749)

167,659

669,085

434,405

1,327,971

The Directors are of the opinion that no commitments or contingent liabilities existed at, or subsequent to year end.

Equus Mining LimitedDirectors’ Declaration
Directors’ Report

In the opinion of the Directors of Equus Mining Limited (the ‘Company’):

(a)

the consolidated financial statements and notes thereto, set out on pages 27 to 54, and the Remuneration
Report as set out on pages 22 to 25 of the Directors’ Report are in accordance with the Corporations Act 2001,
including:

(i) giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its performance, for

the financial year ended on that date;

(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and

(b)

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

The Directors have been given the declarations required under section 295A of the Corporations Act 2001 for the
financial year ended 30 June 2018.

The Director’s draw attention to Note 2(a) to the consolidated financial statements, which includes a statement
of compliance with International Financial Reporting Standards.

Signed at Sydney this 24th day of September 2018 in accordance with a resolution of the Board of Directors:

Mark H. Lochtenberg

Director

Edward J. Leschke

Director

2018 Annual ReportIndependent Auditor’s Report
Directors’ Report

Independent Auditor’s Report

To the Directors of Equus Mining Limited

Report on the audit of the Financial Report

Opinion

We have audited the Financial Report of
Equus Mining Limited (the Company).

In our opinion, the accompanying Financial
Report of the Company is in accordance
with the Corporations Act 2001, including:

• giving a true and fair view of the Group's
financial position as at 30 June 2018 and
of its financial performance for the year
ended on that date; and

• complying with Australian Accounting

Standards and the Corporations
Regulations 2001.

Basis for opinion

The Financial Report comprises:

• Consolidated statement of financial position as at 30

June 2018;

• Consolidated statement of profit or loss and other

comprehensive income, Consolidated statement of
changes in equity, and Consolidated statement of
cash flows for the year then ended;

• Notes including a summary of significant accounting

policies; and

• Directors' Declaration.

The Group consists of the Company and the entities it
controlled at the year-end or from time to time during the
financial year.

We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the Financial Report section of our report.

We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the Financial Report in Australia. We
have fulfilled our other ethical responsibilities in accordance with the Code.

Material uncertainty related to going concern

We draw attention to Note 2(d), “Going Concern” in the financial report. The conditions disclosed in Note
2(d), indicate a material uncertainty exists that may cast significant doubt on the Group’s ability to
continue as a going concern and, therefore, whether it will realise its assets and discharge its liabilities in
the normal course of business, and at the amounts stated in the financial report. Our opinion is not
modified in respect of this matter.

KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity.

Liability limited by a scheme approved under
Profession Standards Legislation.

KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG

International Cooperative (“KPMG International”) a Swiss entity

Liability limited by a scheme approved under

Professional Standards Legislation.

Equus Mining LimitedIndependent Auditor’s Report
Directors’ Report

In concluding there is a material uncertainty related to going concern we evaluated the extent of
uncertainty regarding events or conditions casting significant doubt in the Group’s assessment of going
concern. This included:

• Analysing the cash flow projections by:

- Evaluating the underlying data used to generate the projections for consistency with other
information tested by us, our understanding of the Group’s intentions, and past results and
practices;

- Assessing the planned levels of operating and capital expenditures for consistency of relationships
and trends to the Group’s historical results, results since year end, and our understanding of the
business, industry and economic conditions of the Group;

• Assessing significant non-routine forecast cash inflows and outflows for feasibility, quantum and
timing. We used our knowledge of the client, its industry and current status of those initiatives to
assess the level of associated uncertainty;

• Reading minutes of directors’ meetings and relevant correspondence with the Group’s advisors to

understand the Group’s ability to raise additional shareholder funds, and assess the level of
associated uncertainty; and

• Evaluating the Group’s going concern disclosures in the Financial Report by comparing them to our
understanding of the matter, the events or conditions incorporated into the cash flow projection
assessment, the Group’s plans to address those events or conditions, and accounting standard
requirements. We specifically focused on the principle matters giving rise to the material uncertainty.

Key Audit Matters

Key Audit Matters are those matters that, in our professional judgement, were of most significance in
our audit of the Financial Report of the current period.

These matters were addressed in the context of our audit of the Financial Report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.

In addition to the matter described in the Material uncertainty related to going concern section, we have
determined the matter described below to be the Key Audit Matter.

Exploration and evaluation expenditure ($3,689,281)

Refer to Note 11 to the Financial Report

The key audit matter

How the matter was addressed in our audit

Exploration and evaluation expenditure
capitalised (E&E) is a key audit matter due to:

•

the significance of the activity to the Group’s
business and the balance (being 79% of total
assets); and

the greater level of audit effort to evaluate
the Group’s application of the requirements
of the industry specific accounting standard
AASB 6 Exploration for and Evaluation of
Mineral Resources, in particular the
conditions allowing capitalisation of relevant

Our procedures included:

(cid:120) We evaluated the Group’s accounting policy to
recognise exploration and evaluation assets
using the criteria in the accounting standard;

(cid:120) We assessed the Group’s determination of its
areas of interest for consistency with the
definition in the accounting standard. This
involved analysing the licenses in which the
Group holds an interest and the exploration
programmes planned for those for consistency
with documentation such as license related

2018 Annual ReportIndependent Auditor’s Report
Directors’ Report

expenditure and presence of impairment
indicators. The compliance with these
requirements necessitates a detailed
analysis by the Group and therefore gives
criticality to the scope and depth of our
work. We involved senior team members to
challenge the Group’s determination of its
compliance with the accounting standard.

In assessing the conditions allowing
capitalisation of relevant expenditure, we
focused on:

•

the determination of the areas of interest
(areas);

documentation available regarding rights to
tenure and compliance with relevant
conditions to maintain current rights to an
area of interest with additional complexity
arising in relation to the Los Domos project
where the rights are held under a contractual
agreement;

the Group’s intention and capacity to
continue the relevant E&E activities; and

the Group’s determination of whether the
E&E meets the carry forward conditions of
AASB 6 including whether the E&E is
expected to be recouped through successful
development and exploitation of the area of
interest, or alternatively, by its sale.

In assessing the presence of impairment
indicators, we focused on those that may draw
into question the commercial continuation of
E&E activities for areas of interest where
significant capitalised E&E exists. In addition to
the assessments above, we paid particular
attention to:

(cid:120)

the strategic direction of the Group and their
intent to continue exploration activities in
each area of interest;

the ability of the Group to fund the
continuation of activities in each area of
interest; and

results from latest activities regarding the
existence or otherwise of economically
recoverable reserves for each area of
interest.

Where impairment indicators are present, the
Group’s determination of the recoverable
amount of the area of interest is based on
assessments which require judgement and can

technical conditions, contractual agreements,
and planned work programmes;

(cid:120)

For each area of interest, we assessed the
Group’s current rights to tenure by
corroborating the ownership of the relevant
license to government registries or government
correspondence and evaluating agreements in
place with other parties. We also tested for
compliance with conditions;

(cid:120) We tested the Group’s additions to E&E for the

year by evaluating a statistical sample of
recorded expenditure for consistency to
underlying records, the capitalisation
requirements of the Group’s accounting policy
and the requirements of the accounting
standard;

(cid:120) We evaluated Group documents, such as

minutes of directors’ meetings, for consistency
with their stated intentions for continuing E&E
in certain areas. We corroborated this through
interviews with key operational and finance
personnel;

(cid:120) We obtained project and corporate budgets
identifying areas with existing funding and
those requiring alternate funding sources. We
compared this for consistency with areas with
E&E, for evidence of the ability to fund
continued activities. We identified those areas
relying on alternate funding sources and
evaluated the capacity of the Group to secure
such funding;

(cid:120) We analysed the Group’s activities in each area

of interest, and assessed the Group’s
documentation of planned future activities
including work programmes and project
budgets for each area of interest to determine
whether carry forward conditions of AASB 6
have been satisfied;

(cid:120) We assessed each area of interest for one or
more of the indicators of impairment for areas
of interest that may indicate the carrying value
of capitalised expenditure exceeds its
recoverable amount. We did this through
testing the status of the Group’s tenure and
documented planned future activities,
considering the results of exploration
programmes completed to date, and discussion
with management;

(cid:120) We evaluated the Group’s determination to

Equus Mining LimitedIndependent Auditor’s Report
Directors’ Report

be inherently difficult. In the current year, the
Group determined that there were indicators of
impairment in relation to the Carbones del Sur
area of interest and impaired the carrying value
of the related E&E.

impair the carrying value of the Carbones del
Sur area of interest through testing the status
of the Group’s tenure and documented planned
future activities, reading board minutes,
considering the results of exploration
programmes completed to date, and discussion
with key personnel.

Other Information

Other Information is financial and non-financial information in Equus Mining Limited’s annual reporting
which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are
responsible for the Other Information.

Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.

In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we consider whether the Other Information is materially inconsistent with the Financial Report
or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We are required to report if we conclude that there is a material misstatement of this Other Information,
and based on the work we have performed on the Other Information that we obtained prior to the date
of this Auditor’s Report we have nothing to report.

Responsibilities of the Directors for the Financial Report

The Directors are responsible for:

• preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting

Standards and the Corporations Act 2001

•

implementing necessary internal control to enable the preparation of a Financial Report that gives a
true and fair view and is free from material misstatement, whether due to fraud or error

assessing the Group and Company's ability to continue as a going concern. This includes disclosing,
as applicable, matters related to going concern and using the going concern basis of accounting
unless they either intend to liquidate the Group and Company or to cease operations, or have no
realistic alternative but to do so.

2018 Annual ReportIndependent Auditor’s Report
Directors’ Report

Auditor’s responsibilities for the audit of the Financial Report

Our objective is:

• to obtain reasonable assurance about whether the Financial Report as a whole is free from material

misstatement, whether due to fraud or error; and

• to issue an Auditor’s Report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of the Financial Report.

A further description of our responsibilities for the audit of the Financial Report is located at the Auditing
and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf.
This description forms part of our Auditor’s Report.

Report on the Remuneration Report

Opinion

Directors’ responsibilities

In our opinion, the Remuneration Report
of Equus Mining Limited for the year
ended 30 June 2018, complies with
Section 300A of the Corporations Act
2001.

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 responsibilities

We have audited the Remuneration Report included in
pages 22 to 25 of the Directors’ Report for the year ended
30 June 2018.

Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.

KPMG

Jason Adams
Partner

Brisbane
24 September 2018

Equus Mining Limited

Additional Stock Exchange Information
Directors’ Report

Additional information as at 31 August 2018 required by the Australian Stock Exchange Listing Rules and not disclosed
elsewhere in this report.

Home Exchange

The Company is listed on the Australian Securities Exchange. The Home Exchange is Sydney.

Audit Committee

As at the date of the Directors’ Report, an audit committee of the Board of Directors is not considered warranted due
to the composition of the Board and the size, organisational complexity and scope of operations of the Group.

Class of Shares and Voting Rights

The voting rights attached to ordinary shares, as set out in the Company’s Constitution, are that every member in
person or by proxy, attorney or representative, shall have one vote on a show of hands and one vote for each share held
on a poll.

A member holding partly paid shares is entitled to a fraction of a vote equivalent to the proportion, which the amount
paid up bears to the issue price for the share.

Distribution of Shareholders

The total distribution of fully paid shareholders as at 31 August 2018 was as follows:

Range

1 - 1,000

1,001 - 5,000

5,001 - 10,000

10,001 - 100,000

100,001 and over

Total

Less than Marketable Parcels

Total
Shareholders

274

311

292

848

426

2,151

Total
Number of
Shares

126,352

881,491

2,646,459

29,806,502

720,903,559

754,364,363

On 31 August 2018, 1,119 shareholders held less than marketable parcels of 17,241 shares.

On Market Buy Back

There is no current on-market buy-back.

Substantial Holders

The name of the substantial shareholders in Equus Mining Limited as advised to the Company are set out below.

Norm Seckold

Gerard C Toscan Management Pty Limited

Number of Ordinary
Shares

65,877,420

86,394,672

2018 Annual ReportAdditional Stock Exchange Information
Directors’ Report

Twenty Largest Shareholders

As at 31 August 2018, the twenty largest quoted shareholders held 50.68% of the fully paid ordinary shares as follows:

Name

Permgold Pty Ltd

Gerard C Toscan Management Pty Limited

Augusta Enterprises Pty Ltd

Mark Hamish Lochtenberg & Michael Lochtenberg

HSBC Custody Nominees (Australia) Limited

Peter John Bartter

Altinova Nominees Pty Ltd

JP Morgan Nominees Australia Limited

Gerard C Toscan Management Pty Limited

John Wardman & Associates Pty Ltd

Sambas Energy Pty Ltd

Ringwood Management Pty Limited

Northcliffe Holdings Pty Ltd < Northcliffe Holdings A/C>

Rosignol Pty Ltd

DRYCA Pty Ltd

James Christopher Toscan

Francis William Regan

Kate Elise Cappello and Gavin Maurice Cappello

Serlett Pty Ltd

John Desmond Martin

Number

45,877,420

43,756,964

33,619,471

31,360,781

26,582,952

20,500,000

20,000,000

19,252,472

18,273,427

18,000,000

16,000,000

15,443,113

14,700,000

12,500,000

10,000,000

9,000,000

7,853,521

6,577,000

6,550,000

6,500,000

6.32

5.80

4.46

4.16

3.52

2.72

2.65

2.55

2.42

2.39

2.12

2.05

1.95

1.66

1.33

1.19

1.04

0.88

0.86

0.85

The number of holders in each class of securities

As at 31 August 2018, the numbers of holders in each class of securities on issue were as follows:

Type of security

Ordinary shares

Number of holders

Number of securities

2,151

754,364,363

Substantial Optionholders in the Company

As at 31 August 2018, there were no option holders.

Escrow securities

As at 31 August 2018, there were escrow securities.

Equus Mining LimitedAdditional Stock Exchange Information
Directors’ Report

Group Mineral Concession Interests at 31 August 2018

The Company provides the following information regarding its mining tenements:

Project

Location

Tenement

Ownership

% interest

Type of Tenement

Mina Rica

Rubens

Chile

Mina Rica 12

Minera Carbones Del Sur Limitada

Mina Rica 15

Minera Carbones Del Sur Limitada

Mina Rica 16

Minera Carbones Del Sur Limitada

Mina Rica 19

Minera Carbones Del Sur Limitada

Mina Rica 20

Minera Carbones Del Sur Limitada

Mina Rica 23

Minera Carbones Del Sur Limitada

Mina Rica 26

Minera Carbones Del Sur Limitada

Mina Rica 29

Minera Carbones Del Sur Limitada

Mina Rica 30

Minera Carbones Del Sur Limitada

Mina Rica 31

Minera Carbones Del Sur Limitada

Mina Rica 32

Minera Carbones Del Sur Limitada

Mina Rica 33

Minera Carbones Del Sur Limitada

Mina Rica 34

Minera Carbones Del Sur Limitada

Mina Rica 35

Minera Carbones Del Sur Limitada

Mina Rica 36

Minera Carbones Del Sur Limitada

Mina Rica 37

Minera Carbones Del Sur Limitada

Mina Rica 38

Minera Carbones Del Sur Limitada

Mina Rica 39

Minera Carbones Del Sur Limitada

Mina Rica 40

Minera Carbones Del Sur Limitada

Mina Rica 41

Minera Carbones Del Sur Limitada

Mina Rica 42

Minera Carbones Del Sur Limitada

Mina Rica 43

Minera Carbones Del Sur Limitada

Mina Rica 44

Minera Carbones Del Sur Limitada

Mina Rica 45

Minera Carbones Del Sur Limitada

Mina Rica 46

Minera Carbones Del Sur Limitada

Mina Rica 47

Minera Carbones Del Sur Limitada

Brunswick 3A

Minera Carbones Del Sur Limitada

Brunswick 4A

Minera Carbones Del Sur Limitada

Glo 1

Glo 2

Glo 3

Glo 4

Glo 5

Glo 6

Glo 7

Glo 8

Minera Carbones Del Sur Limitada

100

Exploration

2018 Annual ReportAdditional Stock Exchange Information

Project

Location

Tenement

Ownership

% interest

Type of Tenement

Los Domos

Chile

Electrum 1A

Electrum 2A

Electrum 3A

Electrum 4A

Electrum 5A

Electrum 6A

Electrum 7A

Electrum 8

Electrum 9

Electrum 10

Electrum 11

Terrane Minerals SpA

Electrum 12A

Terrane Minerals SpA

Pedregoso I

Patagonia Gold SC.

Pedregoso VIII

Patagonia Gold SC.

Honda 20

Patagonia Gold SC.

Exploration

Mining Concession

The Company’s wholly owned subsidiary, Southern Gold SpA has an option to acquire 100% of the Los Domos gold-
silver project. The Company has earned the right to 51% interest in the project through the drilling program of 1,000
metres.

As part of Los Domos gold-silver project, Terrane Mineral SpA has an option to acquire 100% of the Mining Concessions
from Patagonia Gold SC.

Equus Mining LimitedE

www.equusmining.com

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Annual General Meeting of members is to be convened at Level 5, 56 Pitt Street,
Sydney, NSW, 2000 on 28 November 2018 at 11 am Eastern Daylight Saving Time (EDST).

AGENDA

ORDINARY BUSINESS

Financial Statements

To receive and consider the Company's Annual Financial Report, the Directors' Report and the Auditor's Report
for the year ended 30 June 2018.

To consider and, if thought fit, pass the following resolutions, with or without amendment:

Resolution 1 Adoption of the Remuneration Report

To consider and, if thought fit, to pass with or without amendment, as an advisory resolution the following:

'That the Remuneration Report for the year ended 30 June 2018 be and is hereby adopted.'

Resolution 2

Re-election of Mr. Mark Lochtenberg as a Director

To consider and, if thought fit, to pass with or without amendment, as an ordinary resolution the following:

'That Mark H. Lochtenberg having retired in accordance with the Company’s Constitution and the Listing Rules,
and being eligible, offers himself for re-election, be re-elected as a Director of the Company with immediate
effect.'

Resolution 3

Ratification of 7,054,054 Shares - Listing Rule 7.4

To consider and, if thought fit, to pass with or without amendment, as an ordinary resolution the following:

'That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, shareholders hereby ratify and approve
the issue and allotment of 7,054,054 fully paid ordinary shares issued under Listing Rule 7.1 on 15 November
2017, on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice of
Meeting.'

Resolution 4

Ratification of 1,281,727 Shares - Listing Rule 7.4

To consider and, if thought fit, to pass with or without amendment, as an ordinary resolution the following:

'That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, shareholders hereby ratify and approve
the issue and allotment of 1,281,727 fully paid ordinary shares issued under Listing Rule 7.1 on 1 May 2018, on
the terms and conditions set out in the Explanatory Memorandum accompanying this Notice of Meeting.'

Equus Mining Limited ABN 44 065 212 679
Level 2, 66 Hunter Street, Sydney NSW 2000, Australia T +61 2 9300 3366 F +61 2 9221 6333
E: info@equusmining.com W: www.equusmining.com

Resolution 5

Ratification of 95,000,000 Shares - Listing Rule 7.4

To consider and, if thought fit, to pass with or without amendment, as an ordinary resolution the following:

'That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, shareholders hereby ratify and approve the
issue and allotment of 95,000,000 fully paid ordinary shares issued under Listing Rule 7.1 on 5 October 2018, on the
terms and conditions set out in the Explanatory Memorandum accompanying this Notice of Meeting.'

Resolution 6 Approval of the Proposed Issue of Shares to Mark Lochtenberg

To consider and, if thought fit, to pass with or without amendment, as an ordinary resolution the following:

'That, for the purposes of ASX Listing Rule 10.11 and for all other purposes, Shareholders approve the issue of up to
5,000,000 Shares to a director, Mr Mark Lochtenberg and/or his nominee, on the terms and conditions set out in the
Explanatory Memorandum accompanying this Notice of Meeting.'

Resolution 7 Approval of the Proposed Issue of Shares

To consider and, if thought fit, to pass with or without amendment, as an ordinary resolution the following:

'That, for the purposes of ASX Listing Rule 7.1 and for all other purposes, shareholders approve the issue and allotment
of 37,500,000 fully paid ordinary shares to Terrane Minerals SpA (‘Terrane’) and/or their nominees, as consideration
to the vendors of Los Domos project on the terms and conditions as set out in the explanatory memorandum
accompanying this Notice of Meeting.

Resolution 8 Approval of 10% Placement Facility

To consider and, if thought fit, to pass with or without amendment, as a special resolution the following:

“That pursuant to and in accordance with Listing Rule 7.1A and for all other purposes, Shareholders approve the issue
of Equity Securities up to 10% of the issued capital of the Company (at the time of issue) on the terms and conditions
set out in the Explanatory Memorandum.”

To transact any other business that may be brought forward in accordance with the Company's Constitution.

By order of the Board
Marcelo Mora
Company Secretary

19 October 2018

Explanatory Memorandum

to the Notice of Annual General Meeting

This Explanatory Memorandum has been prepared to assist members to understand the business to be put to
members at the Annual General Meeting to be held at Level 5, 56 Pitt Street, Sydney, NSW, on Wednesday, 28
November 2018 at 11 am Eastern Daylight Saving Time (EDST).

Financial Report

The Financial Report, Directors' Report and Auditor's Report for the Company for the year ended 30 June 2018 will
be laid before the meeting. There is no requirement for shareholders to approve these reports, however, the Chair
of the meeting will allow a reasonable opportunity to ask the auditor questions about the conduct of the audit and
the content of the Auditor's Report.

Resolution 1 Adoption of Remuneration Report

The Remuneration Report, which forms part of the Directors’ Report in the Company’s 2018 Annual Report, contains
certain prescribed details, sets out the policy adopted by the Board of Directors and discloses the payments to
Directors.

In accordance with section 250R of the Corporations Act, a resolution that the Remuneration Report be adopted
must be put to the vote. The resolution is advisory only and does not bind the Directors or the Company.

Shareholders will be given a reasonable opportunity at the meeting to comment on and ask questions about the
Company’s Remuneration Report.

The Chair intends to exercise all undirected proxies in favour of Resolution 1. If the Chair of the Meeting is appointed
as your proxy and you have not specified the way the Chair is to vote on Resolution 1, by signing and returning the
Proxy Form, you are considered to have provided the Chair with an express authorisation for the Chair to vote the
proxy in accordance with the Chair's intention.

Voting Exclusion Statement

Any member of the key management personnel of the Company’s consolidated group whose remuneration details
are included in the Remuneration Report (or closely related party of any such member), may not vote, and the
Company will disregard any votes cast in favour by or on behalf of such persons on Resolution 1, unless the vote is
cast:

 as a proxy appointed in writing which specifies how the proxy is to vote on Resolution 1; or
 the proxy is the Chairman of the meeting, and;

o
o

the appointment does not specify the way the proxy is to vote on the resolution; and
the appointment expressly authorises the Chairman to exercise the proxy even if the resolution is
connected directly or indirectly with the remuneration of the key management personnel.

The Directors recommend that you vote IN FAVOUR of this advisory Resolution 1.
The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 1.

Resolution 2

Re-election of Mr. Mark Lochtenberg as a Director

In accordance with Article 3.6 of the Company’s Constitution and the Corporations Act, Mark Lochtenberg who retires
by rotation and, being eligible, offers himself for re-election.

Mr Lochtenberg graduated with a Bachelor of Law (Hons) degree from Liverpool University, U.K. and has been actively
involved in the coal industry for more than 30 years.

Mark Lochtenberg is Non-Executive Director of recently listed Nickel Mines Limited and is the former Executive
Chairman and founding Managing Director of ASX-listed Baralaba Coal Company Limited (formerly Cockatoo Coal
Limited). He was a principal architect of Cockatoo’s inception and growth from an early-stage grassroots explorer
through to an emerging mainstream coal producer. He was also formerly the co-head of Glencore International AG’s
worldwide coal division, where he spent 13 years overseeing a range of trading activities including the identification,
due diligence, negotiation, acquisition and aggregation of the coal project portfolio that would become Xstrata Coal.

Prior to this Mark established a coal “swaps” market for Bain Refco, (Deutsche bank) after having served as a senior
coal trader for Hansen Neuerburg AG and as coal marketing manager for Peko Wallsend Limited.

He was Managing Director of Pacific American Coal Limited and has previously been a Director of ASX-listed Cumnock
Coal Limited and of privately held United Collieries Pty Limited and is currently a Director of Australian Transport,
Energy Corridor Pty Limited, (ATEC).

The Directors recommend that you vote IN FAVOUR of Resolution 2.
The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 2.

Resolution 3, 4 and 5 Ratification of Prior Issue of Securities - Listing Rule 7.4

Resolutions 3, 4 and 5 seeks the approval of Shareholders of the prior issues of ordinary shares that have occurred
in the 12 months prior to the date of this Notice that have not already been approved by Shareholders for the
purposes of Listing Rule 7.4.

Under Listing Rule 7.4, an issue of Securities under Listing Rule 7.1 will be treated as having been made
with the approval of Shareholders if the issue did not breach the Listing Rules and Shareholders subsequently
approve the issue of the Securities. The Company confirms that the issue of the Placement Shares did not breach
Listing Rule 7.1.

The Company is now seeking Shareholders ratification for the purposes of ASX Listing Rules 7.4. This ratification will
provide the Company with the ability to raise further funds, if required, will maximise the flexibility of the Company’s
funds management and will facilitate planning for the Company’s ongoing activities.

Details of the issue, as required by ASX Listing Rule 7.5 are as follows:

By way of background, the Company has issued the following Shares under the Company’s 15% placement capacity.

All shares issued rank equally with all other existing ordinary shares.

(a) As announced on 15 November 2017, pursuant to its then available listing rule 7.1 capacity, the Company issued
7,054,054 Shares at $0.037 per share to professional and sophisticated investors (none of whom were related
parties of the Company), the proceeds of which were used in the drilling program at Los Domos Gold-Silver
project in Chile and for general working capital purposes.

Voting Exclusion Statement

The Company will disregard any votes cast in favour on this Resolutions by or on behalf of a person who participated
in the placements and any of their associates.

However, the Company need not disregard a vote if:



it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the
Proxy Form; or
it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with
a direction on the Proxy Form to vote as the proxy decides

The Directors recommend that you vote IN FAVOUR of Resolutions 3.
The Chairman of the Meeting intends to vote undirected proxies IN FAVOUR of Resolutions 3.

(b) As announced on 1 May 2018, pursuant to its then available listing rule 7.1 capacity, the Company issued
1,281,727 Shares from the exercise of 1,281,727 unlisted options at $0.02 per share to a professional and
sophisticated investor (who is not a related party of the Company), the proceeds of which were used in the
drilling program at Los Domos Gold-Silver project in Chile and for general working capital purposes.

Voting Exclusion Statement

The Company will disregard any votes cast in favour on this Resolutions by or on behalf of a person who participated
in the placements and any of their associates.

However, the Company need not disregard a vote if:



The Directors recommend that you vote IN FAVOUR of Resolutions 4.
The Chairman of the Meeting intends to vote undirected proxies IN FAVOUR of Resolutions 4.

(c) As announced on 5 October 2018, pursuant to its then available listing rule 7.1 capacity, the Company issued
95,000,000 Shares at $0.02 per share to professional and sophisticated investors (none of whom were related
parties of the Company), the proceeds will be use to further advance the Company’s Los Domos gold-silver
project toward a JORC defined resource by conducting a drilling campaign of up to 5,000 meters, the preparation
for initial drilling testing at Cerro Diablo project and for general corporate and working capital purposes.

Voting Exclusion Statement
The Company will disregard any votes cast in favour on this Resolutions by or on behalf of a person who participated
in the placements and any of their associates.

However, the Company need not disregard a vote if:



The Directors recommend that you vote IN FAVOUR of Resolutions 5.
The Chairman of the Meeting intends to vote undirected proxies IN FAVOUR of Resolutions 5.

Resolution 6 Approval of Directors Participation in Tranche 2 Placement

Resolutions 6 seeks the approval by shareholders of the issue and allotment of 5,000,000 fully paid ordinary shares
in the Company as soon as practicable after the date of this Annual General Meeting, and in any event, within 1
month of the date of this Annual General Meeting for the purposes of ASX Listing Rule 10.11. If approval is given
under ASX Listing Rule 10.11, approval is not required under ASX Listing Rule 7.1.

This proposed issue, which was announced to the ASX on 27 September 2018 and in conjunction with the placement
as announced to the ASX on 5 October 2018, will provide funding to continue with the drilling program at the Los
Domos Gold-Silver project in Chile, the preparation for initial drilling testing at Cerro Diablo and for general corporate
and working capital purposes.

Shareholder approval is required in accordance with Listing Rule 10.11 and Section 228 of the Corporations Act
because Directors and former Directors of the Company that ceased to be directors in the last 6 months prior to this
notice of meeting are related parties. If approved, the shares are issue on the same terms and conditions as the
placement announced on 27 September 2018.

Furthermore, Shareholder approval of the issue placement to the Directors means that these issues will not reduce
the Company’s 15% placement capacity under Listing Rule 7.1.

Details of the issue, as required by ASX Listing Rule 10.11 are as follows:

 Number of securities
to be allotted:

5,000,000.



Issue price:

$0.02 per share.

Terms:

Fully paid ordinary shares ranking pari passu with existing ordinary shares.

 Names of allottees: Mark Lochtenberg or his nominee 5,000,000 ordinary shares.



Allotment date:

Within one month of the date of this Annual General Meeting.

Intended use of funds: The cash will use for the 5,000 metres drilling program at Los Domos, preparation for
the drilling testing at Cerro Diablo and for general corporate and working capital
purposes.

Voting Exclusion Statement

The Company will disregard any votes cast in favour of Resolutions 6 by Mark Lochtenberg or his nominee any of his
associates.

However, the Company need not disregard a vote if:



The Directors recommend that you vote IN FAVOUR of Resolutions 6.
The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of Resolutions 6.

Resolution 7 Approval to issue 37,500,000 ordinary shares

Resolution 7 seeks the approval by shareholders to issue 37,500,000 fully paid ordinary shares in the capital of Equus
Mining Limited (‘Equus’) to the vendors of the Los Domos gold-silver project, Terrane Minerals SpA or its nominee as
consideration for 49% equity interest in the project. Southern Gold SpA a subsidiary of Equus Mining Limited during
2017 earned the right to 51% interest in the Los Domos gold-silver project by completing a 1,000 metres drilling
campaign.

As announced on 25 October 2016, Equus secured the rights to acquire 100% of Los Domos gold-silver project via an
earn-in and purchase agreement in two tranches. On 10 October 2017 Equus announced that it has met the
requirements of tranche one and earned the right to 51% interest in Los Domos gold-silver project. The Company is
now seeking approval under Listing Rule 7.1 to issue 37,500,000 under tranche two to acquire the remaining 49%
equity interest in the Los Domos gold-silver project.

Details of the issue, as required by ASX Listing Rule 7.3 are as follows:

 Number of securities
to be allotted:

37,500,000.



Issue price:

There is no issue price for the securities as the propose issue is as consideration for
the acquisition of 49% interest in the Los Domos gold-silver project.



Terms:

Fully paid ordinary shares ranking pari passu with existing ordinary shares.

 Names of allottees:

Terrane Minerals SpA or its nominee.



Allotment date:

Within three months of the date of this Annual General Meeting.

Intended use of funds: No funds will be raise, the issue is in consideration for the acquisition of the
remaining 49% interest in the Los Domos gold-silver project.

Voting Exclusion Statement

The Company will disregard any votes cast in favour of Resolution 7 by Terrane Minerals SpA or its nominee and any
of its associates.

However, the Company need not disregard a vote if:



it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the
proxy form; or
it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with
a direction on the Proxy Form to vote as the proxy decides

The Directors recommend that you vote IN FAVOUR of Resolution 7.
The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 7.

Resolution 8 Approval of 10% Placement Facility

ASX Listing Rule 7.1A enables the Company to issue equity securities up to 10% of its issued share capital through
placements over a 12 month period after the AGM ('10% Placement Facility'). The 10% Placement Facility is in
addition to the Company's 15% placement capacity under ASX Listing Rule 7.1. Listed entities with a market cap of
$300 million or less are eligible to seek shareholder approval under Listing Rule 7.1A and the Company’s approximate
market cap at the time of this Notice of Meeting is $ 16.1 million.

Resolution 8, which is a Special Resolution requiring 75% of votes cast to be in favour of the resolution, seeks
shareholder approval for the Company to have the ability to issue equity securities under the 10% Placement Facility
on the following terms:

(a) Placement Period

Shareholder approval of the 10% Placement Facility is valid from the date of the AGM and expires on the earlier of:

(i) the date that is 12 months after the date of the AGM; or

(ii) the date of the approval by shareholders of a transaction under ASX Listing Rules 11.1.2 (a significant

change to the nature or scale of activities) or 11.2 (disposal of main undertaking).

(b) Equity Securities

Any equity securities issued under the 10% Placement Facility must be in the same class as an existing quoted class
of equity securities of the Company which, in the Company's case, are fully paid ordinary shares.

The maximum number of shares that can be issued under the 10% Placement Facility is calculated as follows:

(A x D) - E

Where: A is the number of fully paid ordinary shares on issue 12 months before the date of issue or agreement:

(i) plus the number of fully paid ordinary shares issued in the 12 months under an exception in ASX Listing

Rule 7.2;

(ii) plus the number of partly paid ordinary shares that became fully paid in the 12 months;

(iii) plus the number of fully paid shares issued in the 12 months with approval of holders of shares under Listing

Rule 7.1 and 7.4;

(iv) less the number of fully paid shares cancelled in the 12 months.

D is 10%.

E is the number of fully paid ordinary shares issued or agreed to be issued under ASX Listing Rule 7.1A.2 in the
12 months before the date of the issue or agreement to issue that are not issued with the approval of
shareholders under ASX Listing Rules 7.1 or 7.4.

The current maximum number of shares, as at the date of this notice of meeting, that can be issued under the 10%
Placement Facility is 74,602,858. The Company’s current capacity to issue securities as at the date of this notice
meeting pursuant to listing rule 7.1 is 8,568,506.

(d) Minimum Issue Price

The minimum issue price of equity securities issued for the purpose of Listing Rule 7.1.A.3 must be not less than 75%
of the volume weighted average price of equity securities in the same class calculated over the 15 trading days on
which trades were recorded immediately before:

(i)

the date on which the price at which the equity securities are to be issued is agreed; or

(ii)

if the equity securities are not issued within 5 trading days of the date in paragraph (i) above, the date on
which the equity securities are issued.

(e) Risk of Economic and Voting Dilution

If Resolution 8 is approved by shareholders and the Company issues equity securities under the 10% Placement
Facility, the existing shareholders' voting power in the Company will be diluted as shown in the table below. Further,
there is a risk that:

(i)

the market price for the Company's equity securities may be significantly lower on the date of the issue of
the equity securities than on the date of the AGM; and

(ii) the equity securities may be issued at a price that is at a discount to the market price for the Company's

equity securities on the issue date.

Because Variable A in the formula for calculating 10% Placement Facility, and consequently the number of shares
that can be issued under the 10% Placement Facility, can change during the Placement Period, the table below shows
a matrix of scenarios of the potential dilution of existing shareholders as at the date of the AGM on the basis of:

(i)

the issue price of equity securities being the current approximate market price of fully paid ordinary shares,
plus 50% and minus 50%; and

(ii) the maximum number of shares that can be issued under the 10% Placement Facility in accordance with
the definition of Variable A in the formula for calculating 10% Placement Facility increasing by 50% and
100%.

Variable A in
10% Placement Facility
under ASX Listing Rule
7.1A.2

Voting Dilution
and Placement
Facility Capacity

Current
Variable A
849,364,363 shares

50% increase in current
Variable A
1,274,046,545 shares

100% increase in current
Variable A
1,698,728,726 shares

9.09%
84,936,436
Shares

13.04%
127,404,654
Shares

16.67%
169,872,873
shares

50% Decrease in
Current Approximate
Market Price
$0.010

Issue Price and
Funds Raised
Current
Approximate
Market Price
$0.020*

50% Increase in
Current Approximate
Market Price
$0.030

$849,364

$1,698,729

$2,548,093

$1,274,047

$2,548,093

$3,822,140

$1,698,729

$3,397,457

$5,096,186

As an example, if Variable A is increased to 1,698,728,726 shares, the 10% Placement Facility capacity is 169,872,873
shares and therefore the dilution of existing shares as at the date of the AGM, being 746,028582 shares, is calculated
as:

169,872,873 ÷ (849,364,363 + 169,872,873) = 16.67%

(f) Other Matters

The approval under Listing Rule 7.1A ceases to be valid the date that is 12 months after the date of the AGM or in
the event that shareholders approve a transaction under Listing Rule 11.1.2 or 11.2.

The Company may issue equity securities under the 10% Placement Facility for cash consideration to support the
Company's ongoing exploration activities and working capital or non-cash consideration for the acquisition of
compatible business opportunities which may arise. In such circumstances the Company will provide a valuation of
the non-cash consideration as required by ASX Listing Rule 7.1A.

The Company’s allocation policy is dependent on the prevailing market conditions at the time of any proposed issue
pursuant to the 10% Placement Facility. As there is no issue currently proposed, the identity of the allottees is not
currently known and will be determined on a case-by-case basis at the time of allotment, having regard to factors
including, but not limited to, the following:

(i) the methods of raising funds that are available to the Company, including but not limited to, rights issues

or other issues in which existing security holders can participate;

(ii) the effect of the issue of the equity securities on the control of the Company;

(iii) the financial situation and solvency of the Company; and

(iv) advice from corporate, financial and broking advisers (if applicable).

The allottees under the 10% Placement Facility have not currently been determined but may include existing
substantial shareholders and/or new shareholders who are not related parties or associates of a related party of the
Company.

The Company obtained shareholder approval under ASX Listing Rule 7.1A at its 2017 Annual General Meeting, but no
equity securities have been issued under the 10% Placement Facility during the past 12 months.

The Company issued a total of 102,579,436 equity securities in the past 12 months preceding the date of this notice
of Annual General Meeting which based on the number of Equity Securities on issue at the commencement of that
period represents 13.74% of the Company’s Equity Securities.

Further details of the issues of Equity Securities by the Company during the 12 months period preceding the date of
this notice of meeting are set out in Appendix “A” on page 8 of this Explanatory Memorandum.

Information relating to the issue of Equity Securities in the preceding 12 months is as follows:

 Number of securities issued: 102,579,436;
 Class of securities issued:
 Issued of the Securities:
 Issue price:

Ordinary fully paid shares;
To professional and sophisticated investors and Directors of the Company;
4,554,054 shares were issued at $0.037 per share and the closing price on the
date of the issue was $0.035;
1,743,655 shares were issued at $0.02 per share and the closing price on the
date of the issue was $0.035;
1,281,727 shares were issued at $0.02 per share and the closing price on the
date of the issue was $0.024;
95,000,000 shares were issued at $0.02 per share and the closing price on the
date of the issue was $0.020;
The total cash consideration received was $2,129,008 and 89% was received 5
October 2018, the cash will use for the 5,000 metres drilling program at Los
Domos, preparation for the drilling testing at Cerro Diablo and for general
corporate and working capital purposes.

 The issue was for cash:

Voting Exclusion:

The Company will disregard any votes cast in favour on this Resolution by a person who may participate in the
proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary
securities, if the resolution is passed and any associate of that person.

However, the Company need not disregard a vote if:



The Directors recommend that you vote IN FAVOUR of Resolution 8.
The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 8.

Appendix “A”

Issue of Equity Securities since 30 November 2017

Date

Number of
Equity
Securities

Class of
Equity
Securities and
summary of
terms

Names of
recipients or basis
on which recipients
determined

15
December
2017

4,554,054 Ordinary

Directors of the
Company

15
December
2017

1,743,655 Ordinary

Bell Potter
Nominees Ltd

1 May 2018

1,281,727 Ordinary

Bell Potter
Nominees Ltd

5 October
2018

95,000,000 Ordinary

To professional and
sophisticated
investors who
participated in the
placement the
subject of the
announcement
dated 27/9/2018.

Issue price of
Equity
Securities and
discount to
market price
on the trading
day prior to
the issue

$0.037

Represent a
premium of
5.7% to the
market price

$0.020

Represent a
discount of
42.9% to the
market price

$0.020

Represent a
discount of
16.7% to the
market price

$0.020

There was no
discount or
premium to
the market
price

Form of Consideration

Cash consideration of
$168,500 was used to
further advance the
exploration program of the
Los Domos project in Chile
and for general corporate
and working capital
purposes.

Cash consideration of
$34,873 was used to further
advance the exploration
program of the Los Domos
project in Chile and for
general corporate and
working capital purposes.

Cash consideration of
$25,635 was used to further
advance the exploration
program of the Los Domos
project in Chile and for
general corporate and
working capital purposes.

The total cash consideration
of $1,900,000 will be use for
the second phase of the
drilling program at Los
Domos project, preparation
for the drilling testing at
Cerro Diablo and for general
corporate and working
capital purposes.

At the date of this notice the Company holds 89% of the cash raised attributable to the placement dated 5 October
2018. The balance of the cash received was used on the drilling program undertaken at Los Domos project in Chile
and for general corporate and working capital purposes.

FORM OF PROXY

Sub-Register

ISSUER

HIN/SRN

I/we . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
being a member/members of Equus Mining Limited HEREBY APPOINT

the Chair of the Meeting (mark box)

OR if you are not appointing the Chair of the Meeting as your proxy, please write the name of the person or body corporate
(excluding the registered shareholder) you are appointing as your proxy below

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chair of the meeting, as
my/our proxy to act generally at the Meeting on my/our behalf and to vote in accordance with the following directions (or if no
directions have been given, and to the extent permitted by law, as the proxy sees fit) at the Annual General Meeting of Equus Mining
Limited to be held at Level 5, 56 Pitt Street, Sydney, NSW, 2000 on Wednesday 28 November 2018 at 11 am (AEDT) and at any
adjournment or postponement of that Meeting.

The Chair of the Meeting is authorised to exercise undirected proxies on remuneration related matter (Resolution 1): If I/we have
appointed the Chair of the Meeting as my/our proxy or the Chair of the Meeting becomes my/our proxy by default, by signing and
submitting this form I/we expressly authorise the Chair of the Meeting to exercise my/our proxy in respect of Resolution 1 (except
where I/we have indicated a different voting intention above) even though Resolution 1 is connected directly or indirectly with the
remuneration of a member of key management personnel for Equus Mining Limited, which includes the Chair.

The Chair of the Meeting intends to vote all undirected proxies in favour of each resolution (including Resolution 1). If you have
appointed the Chair of the Meeting as your proxy (or the Chair of the Meeting becomes your proxy by default), and you wish to give
the Chair specific voting directions on an item, you should mark the appropriate box/es opposite those resolutions below (directing
the Chair to vote for, against or to abstain from voting).

If you mark the Abstain box for a particular item, you are directing your proxy not to vote on your behalf on a show of hands or on
a poll and your vote will not be counted in calculating the required majority if a poll is called.

RESOLUTIONS

FOR

AGAINST

ABSTAIN

1. Adoption of the Remuneration Report

2. Re-election of Mr. Mark Lochtenberg as a Director

3. Ratification of 7,054,054 Shares - Listing Rule 7.4

4. Ratification of 1,281,727 Shares- Listing Rule 7.4

5. Ratification of 95,000,000 Shares- Listing Rule 7.4

6. Approval of the Proposed Issue of Shares to Mark Lochtenberg

7. Approval of the Proposed issue of shares to Terrane Minerals SpA

8. Approval of 10% Placement Facility

Signature of Securityholder(s) This section must be completed.

Dated this . . . . . . day of . . . . . . . . . . . . . . . . . . . . . . 2018

Signatures of Securityholder(s)

Individual or Securityholder 1

Securityholder 2

Securityholder 3

Sole Director and
Sole Company Secretary

Director

PROXY INSTRUCTIONS

1. Appointment of a Proxy

If you wish to appoint the Chair of the Meeting as your proxy, mark the box. If the individual or body corporate you wish
to appoint as your proxy is someone other than the Chair of the Meeting please write the full name of that individual or
body corporate in the space provided. If you leave this section blank, or your named proxy does not attend the meeting,
the Chair of the Meeting will be your proxy. A proxy need not be a securityholder of the company.

2. Appointment of a Second Proxy

A member entitled to attend and vote and is entitled to appoint not more than 2 proxies to attend the meeting and vote
on a poll.

Where more than 1 proxy is appointed, each proxy must be appointment to represent a specified proportion of the
member's voting rights. If you appoint 2 proxies and the appointment does not specify the proportion or number of your
votes the proxy may exercise, each proxy may exercise half of the votes.

A proxy need not be a member.

This Proxy form (and the original or certified copy of any power of attorney under which this proxy form is signed) must
be received at an address given below no later than 48 hours before the time appointed for holding the meeting:

3. Voting

The vote on the resolutions will be decided on a show of hands unless a poll is demanded. On a show of hands, every
shareholder who is present in person or by proxy, or by representative or by attorney, will have one vote. Upon a poll,
every shareholder who is present in person or by proxy, or by representative or by attorney, will have one vote for each
Share held by that shareholder.

Signing Instructions
All joint holders must sign.

Where the company has a Sole Director and Company Secretary, that person must sign. Otherwise this form must be
signed by a Director jointly with either another Director or a Company Secretary.

All executors of deceased estates must sign.

5. Persons entitle to attend and vote

The Company has determined, in accordance with regulation 7.11.37 of the Corporations Regulations 2001 (Cth), that
the Company's shares quoted on the ASX Limited at 7.00 pm Sydney time on 26 November 2018 are taken, for the
purposes of the Annual General Meeting to be held by the persons who held them at that time. Accordingly, those
persons are entitled to attend and vote (if not excluded) at the meeting.

6. Corporate Representatives

If a representative of the corporation is to attend the meeting. The representative must bring to the Annual General
Meeting evidence of his or her appointment, including any authority under which it was signed in accordance with
section 253B of the Corporations Act 2001.



in person or by mail at the Company's registered office, Level 2, 66 Hunter Street, Sydney, NSW 2000 Australia; or

by facsimile on +61 2 9221 6333.